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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
(Mark One)
x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SeptemberJune 30, 20172020
OR
o☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number: 001-36065
ACCELERON PHARMA INC.
(Exact name of registrant as specified in its charter)
Delaware
283627-0072226
(State or other jurisdiction of

incorporation or organization)
2836
(Primary Standard Industrial

Classification Code Number)
27-0072226
(I.R.S. Employer

Identification Number)
128 Sidney Street
Cambridge, MA 02139
(617) 649-9200
(Address, including zip code, and telephone number, including
area code, of registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 per shareXLRNThe 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.    Yesx    Noo
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yesx    Noo
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 filerxAccelerated filero
Large accelerated filerxAccelerated filero
Non-accelerated filer
o  (Do not check if a smaller reporting company)
Smaller reporting companyo☐
Emerging growth companyo☐


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.o
 
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 OctoberJuly 31, 2017,2020, there were 45,235,02459,896,848 shares of the registrant’s Common Stock, par value $0.001 per share, outstanding.


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PART I. FINANCIAL INFORMATION
 
Item 1. Financial Statements
 
Acceleron Pharma Inc.
Condensed Consolidated Balance Sheets
(amounts in thousands, except share and per share data)
(unaudited)
September 30, 2017 December 31, 2016June 30, 2020December 31, 2019
Assets   
Assets 
Current assets:   
Current assets: 
Cash and cash equivalents$238,959
 $20,950
Cash and cash equivalents$283,521  $237,677  
Collaboration receivables (all amounts are with related party)2,879
 3,234
Collaboration receivables (all amounts are with a related party)Collaboration receivables (all amounts are with a related party)39,752  8,547  
Prepaid expenses and other current assets3,334
 3,862
Prepaid expenses and other current assets19,388  10,000  
Short-term investments98,266
 118,740
Short-term investments106,289  193,692  
Total current assets343,438
 146,786
Total current assets448,950  449,916  
Property and equipment, net7,211
 5,201
Property and equipment, net7,671  6,812  
Restricted cash1,132
 946
Operating lease - right of use asset, netOperating lease - right of use asset, net21,116  23,908  
Other assets124
 22
Other assets1,698  1,793  
Long-term investments29,372
 94,692
Long-term investments—  22,477  
Total assets$381,277
 $247,647
Total assets$479,435  $504,906  
Liabilities and stockholders’ equity   
Liabilities and stockholders’ equity 
Current liabilities:   
Current liabilities: 
Accounts payable$1,024
 $1,590
Accounts payable$12,927  $2,295  
Accrued expenses14,141
 13,249
Accrued expenses17,966  24,895  
Deferred revenue541
 541
Deferred rent178
 769
Operating lease liability - right of useOperating lease liability - right of use6,467  6,183  
Total current liabilities15,884
 16,149
Total current liabilities37,360  33,373  
Deferred revenue, net of current portion3,297
 3,704
Deferred rent, net of current portion1,628
 953
Operating lease liability - right of use, net of current portionOperating lease liability - right of use, net of current portion16,940  20,201  
Warrants to purchase common stock1,927
 1,244
Warrants to purchase common stock3,516  1,856  
Total liabilities22,736
 22,050
Total liabilities57,816  55,430  
Commitments and contingencies (Note 13)

 

Commitments and contingencies (Note 13)
Stockholders’ equity:   
Stockholders’ equity: 
Undesignated preferred stock, $0.001 par value: 25,000,000 shares authorized and no shares issued or outstanding—
 —
Common stock, $0.001 par value: 175,000,000 shares authorized; 44,414,694 and 38,251,826 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively45
 39
Common stock, $0.001 par value: 175,000,000 shares authorized; 54,166,712 and 53,123,567 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively
Common stock, $0.001 par value: 175,000,000 shares authorized; 54,166,712 and 53,123,567 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively
54  53  
Additional paid-in capital803,907
 590,474
Additional paid-in capital1,202,445  1,160,807  
Accumulated deficit(445,097) (364,491)Accumulated deficit(780,797) (711,407) 
Accumulated other comprehensive loss(314) (425)
Accumulated other comprehensive (loss) incomeAccumulated other comprehensive (loss) income(83) 23  
Total stockholders’ equity358,541
 225,597
Total stockholders’ equity421,619  449,476  
Total liabilities and stockholders’ equity$381,277
 $247,647
Total liabilities and stockholders’ equity$479,435  $504,906  
 
See accompanying notes to these condensed consolidated financial statements.

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Acceleron Pharma Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(amounts in thousands, except per share data)
(unaudited)
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Revenue:   
  
  
Collaboration revenue:   
  
  
License and milestone$135
 $135
 $406
 $15,415
Cost-sharing, net2,879
 2,870
 9,370
 8,987
Total revenue (all amounts are with related party)3,014
 3,005
 9,776
 24,402
Costs and expenses:   
  
  
Research and development21,059
 17,102
 64,387
 49,492
General and administrative7,533
 6,411
 26,735
 19,029
Total costs and expenses28,592
 23,513
 91,122
 68,521
Loss from operations(25,578) (20,508) (81,346) (44,119)
Other (expense) income, net(410) (794) (683) 5,026
Interest income496
 512
 1,474
 1,348
Total other income (expense) net86
 (282) 791
 6,374
Loss before income taxes(25,492) (20,790) (80,555) (37,745)
Income tax benefit41
 20
 29
 20
Net loss applicable to common stockholders$(25,451) $(20,770) $(80,526) $(37,725)
        
Net loss per share applicable to common stockholders-basic and diluted (Note 9)$(0.65) $(0.55) $(2.08) $(1.01)
     

 

Weighted-average number of common shares used in computing net loss per share applicable to common stockholders:39,361
 37,616
 38,804
 37,268
        
Other comprehensive loss:       
Net loss$(25,451) $(20,770) $(80,526) $(37,725)
Net unrealized holding gains (losses) on short-term and long-term investments during the period, net of tax of $59 thousand, $59 thousand, $53 thousand and $53 thousand for the three and nine months ended September 30, 2017 and 2016, respectively100
 (374) 170
 98
Comprehensive loss$(25,351) $(21,144) $(80,356) $(37,627)
 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Revenue:   
Collaboration revenue:   
Milestone$25,000  $25,000  $25,000  $25,000  
Cost-sharing, net3,678  2,666  6,502  5,447  
Royalty11,074  —  12,594  —  
Total revenue (all amounts are with a related party)39,752  27,666  44,096  30,447  
Costs and expenses:   
Research and development38,251  34,765  75,917  67,536  
Selling, general and administrative20,414  14,037  38,663  24,851  
Total costs and expenses58,665  48,802  114,580  92,387  
Loss from operations(18,913) (21,136) (70,484) (61,940) 
Other income, net466  3,230  1,113  6,003  
Loss before income taxes(18,447) (17,906) (69,371) (55,937) 
Income tax (provision) benefit(4) 44  (20) 24  
Net loss$(18,451) $(17,862) $(69,391) $(55,913) 
Other comprehensive (loss) income:
Net unrealized holding gains (losses) on short-term and long-term investments during the period, net of tax161  452  (106) 721  
Comprehensive loss$(18,290) $(17,410) $(69,497) $(55,192) 
Net loss per share- basic and diluted$(0.34) $(0.34) $(1.29) $(1.08) 
Weighted-average number of common shares used in computing net loss per share- basic and diluted53,860  52,689  53,610  51,912  
 
See accompanying notes to these condensed consolidated financial statements.

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Acceleron Pharma Inc.
Condensed Consolidated Statements of Stockholders' Equity
(amounts in thousands, except share and per share data)
(unaudited)

Three and Six Months Ended June 30, 2020
 Common Stock
 Number of
Shares
$0.001 Par
Value
Additional
Paid-In Capital		Accumulated
Deficit		Comprehensive Income (Loss)Total
Stockholders'
Equity
Balance at December 31, 201953,123,567  $53  $1,160,807  $(711,407) $23  $449,476  
Stock-based compensation—  —  6,679  —  —  6,679  
Exercise of stock options295,757  —  8,485  —  —  8,485  
Vesting of restricted stock units, net of shares withheld for taxes77,949  —  (472) —  —  (472) 
Issuance of common stock related to ESPP22,647  —  860  —  —  860  
Unrealized loss on available-for-sale securities, net of tax—  —  —  —  (267) (267) 
Net loss—  —  —  (50,939) —  (50,939) 
Balance at March 31, 202053,519,920  53  1,176,359  (762,346) (244) 413,822  
Stock-based compensation—  —  7,140  —  —  7,140  
Exercise of stock options617,441  1  19,609  —  —  19,610  
Vesting of restricted stock units, net of shares withheld for taxes29,351  —  (663) —  —  (663) 
Unrealized gain on available-for-sale securities—  —  —  —  161  161  
Net loss—  —  —  (18,451) —  (18,451) 
Balance at June 30, 202054,166,712  $54  $1,202,445  $(780,797) (83) $421,619  


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Three and Six Months Ended June 30, 2019
 Common Stock
 Number of
Shares
$0.001 Par
Value
Additional
Paid-In Capital		Accumulated
Deficit		Comprehensive LossTotal
Stockholders'
Equity
Balance at December 31, 201846,260,747  $47  $879,099  $(586,549) $(560) $292,037  
Stock-based compensation—  —  6,992  —  —  6,992  
Issuance of common stock, net of expense $5006,151,163  6  248,124  —  —  248,130  
Exercise of stock options35,919  —  766  —  —  766  
Vesting of restricted stock units, net of shares withheld for taxes75,028  —  (393) —  —  (393) 
Issuance of common stock related to ESPP19,661  —  788  —  —  788  
Unrealized gain on available-for-sale securities, net of tax—  —  —  —  268  268  
Net loss—  —  —  (38,053) —  (38,053) 
Balance at March 31, 201952,542,518  53  1,135,376  (624,602) (292) 510,535  
Stock-based compensation—  —  5,012  —  —  5,012  
Exercise of stock options64,174  —  1,760  —  —  1,760  
Vesting of restricted stock units, net of shares withheld for taxes146,162  —  —  —  —  —  
Unrealized gain on available-for-sale securities, net of tax—  —  —  —  452  452  
Net loss—  —  —  (17,862) —  (17,862) 
Balance at June 30, 201952,752,854  $53  $1,142,148  (642,464) $160  $499,897  

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Acceleron Pharma Inc.
Condensed Consolidated Statements of Cash Flows
(amounts in thousands)
(unaudited)
 Six Months Ended June 30,
 20202019
Operating Activities 
Net loss$(69,391) $(55,913) 
Adjustments to reconcile net loss to net cash used in operating activities: 
Depreciation and amortization1,938  1,942  
Stock-based compensation13,819  12,004  
Other non-cash items1,563  404  
Changes in assets and liabilities: 
Prepaid expenses and other assets(9,293) (2,508) 
Collaboration receivables (all amounts are with a related party)(31,205) 1,592  
Non-cash lease expense2,792  2,502  
Accounts payable10,334  3,129  
Accrued expenses(6,998) (1,744) 
Operating lease obligations(2,977) (1,874) 
Other changes in operating assets and liabilities17  (42) 
Net cash used in operating activities(89,401) (40,508) 
Investing Activities 
Purchases of investments(58,539) (293,913) 
Proceeds from sales and maturities of investments168,385  104,201  
Purchases of property and equipment(2,420) (1,273) 
Net cash provided by (used in) investing activities107,426  (190,985) 
Financing Activities 
Proceeds from issuance of common stock from public offering, net of issuance costs—  248,130  
Net proceeds from exercises and vesting of stock awards, ESPP contributions, and exercise of warrants to purchase common stock27,819  2,920  
Net cash provided by financing activities27,819  251,050  
Net increase in cash, cash equivalents and restricted cash45,844  19,557  
Cash, cash equivalents and restricted cash at beginning of period239,274  145,649  
Cash, cash equivalents and restricted cash at end of period$285,118  $165,206  
Supplemental Disclosure of Non-Cash Investing and Financing Activities: 
Purchase of property and equipment included in accounts payable and accrued expenses$352  $338  
Capitalized follow-on public offering costs included in accrued expenses$423  $—  
 Nine Months Ended September 30,
 2017 2016
Operating Activities   
Net loss$(80,526) $(37,725)
Adjustments to reconcile net loss to net cash used in operating activities:   
Depreciation and amortization2,023
 1,158
Stock-based compensation21,877
 13,387
Change in fair value of warrants683
 (5,026)
Other non-cash items211
 (262)
Changes in assets and liabilities:   
Prepaid expenses and other assets426
 (1,211)
Collaboration receivables355
 609
Accounts payable(566) 1,196
Accrued expenses160
 389
Restricted cash(186) (150)
Deferred revenue(407) (414)
Deferred rent22
 94
Net cash used in operating activities(55,928) (27,955)
Investing Activities   
Purchases of investments(245) (132,565)
Proceeds from sales and maturities of investments86,001
 21,120
Purchases of property and equipment(3,639) (2,246)
Net cash provided by (used in) investing activities82,117
 (113,691)
Financing Activities   
Proceeds from issuance of common stock from public offering, net of issuance costs187,986
 140,697
Payments for withholding taxes on restricted stock units(226) —
Proceeds from exercise of stock options and warrants to purchase common stock3,233
 3,524
Proceeds from issuances of common stock related to employee stock purchase plan827
 658
Net cash provided by financing activities191,820
 144,879
Net increase in cash and cash equivalents218,009
 3,233
Cash and cash equivalents at beginning of period20,950
 27,783
Cash and cash equivalents at end of period$238,959
 $31,016
Supplemental Disclosure of Non-Cash Investing and Financing Activities:   
Purchase of property and equipment included in accounts payable and accrued expenses$395
 $25
Capitalized follow-on public offering costs included in accrued expenses$337

$—




See accompanying notes to these condensed consolidated financial statements.

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Acceleron Pharma Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
 
1. Nature of Business
Acceleron Pharma Inc. (Acceleron or the Company) is a Cambridge, Massachusetts-based clinical stage biopharmaceutical company dedicated to the discovery, development, and commercialization of therapeutics to treat serious and rare diseases. The Company’s leadership in the understanding of TGF-beta biology and protein engineering generates innovative compounds that engage the body’s ability to regulate cellular growth and repair.
The Company is subject to risks common to companies in the biotechnology industry, including, but not limited to, the risk that the Company never achieves profitability or successfully commercializes its products, the need for substantial additional financing, the risk of relying on third parties, risks of clinical trial failures, dependence on key personnel, protection of proprietary technology, and compliance with government regulations.

2. Basis of Presentation
The accompanying interim condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (ASC) and Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB). 
The accompanying interim condensed consolidated financial statements are unaudited. Theunaudited and reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the financial statements. As of June 30, 2020, the Company’s significant accounting policies and estimates, which are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, have not changed, and the unaudited interim financial statements have been prepared on the same basis as the audited annual financial statements as of and for the year ended December 31, 2016 except for the adoption of Accounting Standards Update (ASU) No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting, which did not have a material impact, and, in2019. In the opinion of management, the accompanying interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of SeptemberJune 30, 2017,2020, the results of its operations for the three and ninesix months ended SeptemberJune 30, 20172020 and 2016,2019, and its cash flows for the ninesix months ended SeptemberJune 30, 20172020 and 2016. 2019. 
The accompanying interim condensed consolidated financial statements include the results of operations of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
The results for the three and ninesix months ended SeptemberJune 30, 20172020 are not necessarily indicative of the results to be expected for the year ending December 31, 2017,2020, any other interim periods, or any future year or period. These interim financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2016,2019, and the notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.2019.
The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated as required. The Company has evaluated all subsequent events and determined that there are no material recognized or unrecognized events requiring disclosure, other than those disclosed in this Report on Form 10-Q.
The accompanying interim condensed consolidated financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the financial statements. As of September 30, 2017, the Company’s significant accounting policies and estimates, which are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, have not changed, except for the adoption of Accounting Standards Update (ASU) No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting, which is discussed further in Note 16. 
3. Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts expensed during the reporting period.
Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these consolidated financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including: expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether

historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. This process may result in actual results differing materially from those estimated amounts used in the preparation of the consolidated financial statements if these results differ from historical experience, or other assumptions do not turn out to be substantially accurate, even if such assumptions are reasonable when made. In preparing these consolidated financial statements, management used significant estimates in the following areas, among others: revenue recognition,accrued and prepaid clinical
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expenses, contract manufacturing expense, stock-based compensation expense, the determination of the fair value of stock-based awards, the fair value of liability-classified warrants, accrued expenses,revenue recognition and the recoverability of the Company’sCompany's net deferred tax assets and related valuation allowance.

4. Segment Information
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the chief executive officer. The Company and the chief executive officer view the Company’s operations and manage its business as one1 operating segment, which is the discovery, development, and commercialization of highly innovative therapeutics to treat serious and rare diseases. All material long-lived assets of the Company reside in the United States. The Company does use contract research organizations (CROs) and research institutions located outside the United States. Some of these expenses are subject to collaboration reimbursement which is presented as a component of cost sharing, net in the consolidated statements of operations and comprehensive loss.

5. Cash Equivalents and Short-term and Long-term Investments
The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents. Cash and cash equivalents include cash held in banks and amounts held in interest-bearing money market accounts. Cash equivalents are carried at cost, which approximates their fair market value.
The Company determines the appropriate classification of marketable securities at the time of purchase and reevaluates such designation at each balance sheet date. The Company has classified all of its marketable securities at SeptemberJune 30, 20172020 as “available-for-sale” pursuant to ASC 320, Investments – Debt and Equity Securities. The Company records available-for-sale securities at fair value, with the unrealized gains and losses included in accumulated other comprehensive income (loss) in stockholders’ equity. There were no realized gains or losses on marketable securities for the three and nine months ended September 30, 2017 and 2016.
Investments not classified as cash equivalents are presented as either short-term or long-term investments based on both their maturities as well as the time period the Company intends to hold such securities.

The Company adjusts the cost of available-for-sale debt securities for amortization of premiums and accretion of discounts to maturity. The Company includes such amortization and accretion in interest income. The cost of securities sold is based on the specific identification method. The Company includes in interest income interest and dividends on securities classified as available-for-sale.
In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments-Credit Losses. The new standard requires an estimate of expected credit losses only when the fair value of an available-for-sale debt security is below its amortized cost basis, and credit losses are limited to the amount by which the security’s amortized cost basis exceeds its fair value. Credit-related impairment is recognized as an allowance for credit losses on the balance sheet with a corresponding adjustment to earnings.

The standard additionally requires an investor to determine whether a decline in the fair value below the amortized cost basis of an available-for-sale debt security is due to credit-related factors or noncredit-related factors. Any impairment that is not credit related is recognized in other comprehensive income, net of applicable taxes. The Company reviewsadopted ASU 2016-13 effective January 1, 2020, with no material impact on its consolidated financial statements and related disclosures.

The following is a summary of available-for-sale securities with unrealized losses as of June 30, 2020 (in thousands):
Less than 12 months
 Fair ValueUnrealized Losses
Corporate obligations21,330  (6) 
U.S. government agency securities49,984  (3) 
Total available-for sale securities in an unrealized loss position$71,314  $(9) 

There were no securities in an unrealized loss for greater than 12 months as of June 30, 2020. The unrealized losses on the Company's available-for-sale securities were caused by central bank and market interest rate decreases on securities purchased at a premium. The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. The Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases. The Company did not record an allowance for credit losses as of June 30, 2020.
Prior to January 1, 2020, the Company reviewed marketable securities for other-than-temporary impairment whenever the fair value of a marketable security iswas less than the amortized cost and evidence indicatesindicated that a marketable security’s carrying amount iswas not recoverable within a reasonable period of time. Other-than-temporary impairments of investments arewere recognized in the consolidated statements of operations if the Company hashad experienced a credit loss, hashad the intent to sell the
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marketable security, or if it iswas more likely than not that the Company willwould be required to sell the marketable security before recovery of the amortized cost basis. Evidence considered in this assessment includesincluded reasons for the impairment, compliance with the Company’s investment policy, the severity and the duration of the impairment and changes in value subsequent to the end of the period.
The aggregate fair value of securities held by the Company in an unrealized loss position for less than twelve months as of September 30, 2017 and December 31, 20162019 was $53.1 million and $172.2 million, respectively.$35.8 million. The aggregate fair value of securities held by the Company in an unrealized loss position for more than twelve months as of September 30, 2017 and December 31, 20162019 was $55.8 million and $5.5 million, respectively.0. The aggregate unrealized loss for those securities in an unrealized loss position for more than twelve months is $0.1 million and $2 thousand, respectively. As a result, thewas 0. The Company determined it did not hold any investments with any other-than-temporary impairment as of September 30, 2017 and December 31, 2016.

2019.
The following is a summary of cash, cash equivalents and available-for-sale securities as of SeptemberJune 30, 20172020 and December 31, 20162019 (in thousands):
 June 30, 2020
 Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair Value
Cash and cash equivalents due in 90 days or less$283,522  $—  $(1) $283,521  
Available-for-sale securities:
Corporate obligations56,828  162  (6) 56,984  
U.S. Treasury securities49,026  33  (3) 49,056  
Certificates of deposit245  4  —  249  
Total available-for-sale securities$106,099  $199  $(9) $106,289  
Total cash, cash equivalents and available-for-sale securities$389,621  $199  $(10) $389,810  
 September 30, 2017
 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value
Cash and cash equivalents due in 90 days or less$238,959
 $—
 $—
 $238,959
Available-for-sale securities:       
Corporate obligations due in one year or less44,789
 1
 (47) 44,743
Corporate obligations due in more than one year11,560
 —
 (47) 11,513
U.S. Treasury securities due in one year or less10,004
 —
 (31) 9,973
U.S. Treasury securities due in more than one year4,021
 —
 (27) 3,994
Certificates of deposit due in one year or less9,092
 —
 —
 9,092
Certificates of deposit due in more than one year1,904
 —
 —
 1,904
Mortgage and other asset backed securities due in one year or less34,497
 —
 (39) 34,458
Mortgage and other asset backed securities due in more than one year12,026
 —
 (65) 11,961
Total available-for-sale securities$127,893
 $1
 $(256) $127,638
Total cash, cash equivalents and available-for-sale securities$366,852
 $1
 $(256) $366,597
 December 31, 2019
 Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated Fair Value
Cash and cash equivalents due in 90 days or less$237,677  $—  $—  $237,677  
Available-for-sale securities:
Corporate obligations124,676  219  (15) 124,880  
U.S. Treasury securities78,230  98  (1) 78,327  
Certificates of deposit490  3  —  493  
Mortgage and other asset backed securities12,476  5  (12) 12,469  
Total available-for-sale securities$215,872  $325  $(28) $216,169  
Total cash, cash equivalents and available-for-sale securities$453,549  $325  $(28) $453,846  

 December 31, 2016
 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value
Cash and cash equivalents due in 90 days or less$20,950
 $—
 $—
 $20,950
Available-for-sale securities:       
Corporate obligations due in one year or less45,839
 1
 (58) 45,782
Corporate obligations due in more than one year42,895
 —
 (185) 42,710
U.S. Treasury securities due in one year or less22,490
 —
 (10) 22,480
U.S. Treasury securities due in more than one year11,541
 —
 (53) 11,488
Certificates of deposit due in one year or less13,562
 —
 —
 13,562
Certificates of deposit due in more than one year9,811
 —
 —
 9,811
Mortgage and other asset backed securities due in one year or less36,948
 —
 (32) 36,916
Mortgage and other asset backed securities due in more than one year30,771
 —
 (88) 30,683
Total available-for-sale securities$213,857
 $1
 $(426) $213,432
Total cash, cash equivalents and available-for-sale securities$234,807
 $1
 $(426) $234,382

6. Restricted Cash
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheet that sum to the total of the same such amounts shown in the statements of cash flows (in thousands):
 June 30,
 20202019
Cash and cash equivalents$283,521  $163,609  
Restricted cash1,597  1,597  
Total cash, cash equivalents and restricted cash shown in the statement of cash flows$285,118  $165,206  
As of SeptemberJune 30, 20172020 and December 31, 2016,2019, the Company maintained letters of credit totaling $1.1$1.6 million and $0.9 million, respectively, held in the form of certificates of deposit and money market funds as collateral for the Company's facility lease obligation and its credit cards.

7. Concentrations of Credit Risk and Off-Balance Sheet Risk
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The Company has no off-balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash, cash equivalents, restricted cash, short-term and long-term investments, and collaboration receivables. The Company maintains its cash and cash equivalent balances and short-term and long-term investments with financial institutions that management believes are creditworthy. Short-term and long-term investments consist of investment grade corporate obligations, treasury notes, asset backed securities, and certificates of deposit. The Company’s investment policy includes

guidelines on the quality of the institutions and financial instruments and defines allowable investments that the Company believes minimizes the exposure to concentrations of credit risk.
The Company routinely assesses the creditworthiness of its customers and collaboration partners.partner. The Company has not experienced any material losses related to receivables from individual customers and collaboration partners, or groups of customers. The Company does not require collateral. Due to these factors, no additional0 allowance for credit risk beyond amounts providedlosses has been recorded for collection losses is believed by management to be probable in the Company’sCompany's collaboration receivables.receivables as of June 30, 2020.

8. Fair Value Measurements
The following tables set forth the Company’s financial instruments carried at fair value using the lowest level of input applicablethat is significant to each financial instrument as of SeptemberJune 30, 20172020 and December 31, 20162019 (in thousands):
September 30, 2017 June 30, 2020
Quoted Prices
in Active Markets
for Identical Items
(Level 1)
 
Significant Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 Total Quoted Prices
in Active Markets
for Identical Items
(Level 1)		Significant Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Total
Assets: 
  
  
  
Assets:    
Money market funds$224,053
 $—
 $—
 $224,053
Money market funds$232,582  $—  $—  $232,582  
Corporate obligations—
 56,256
 —
 56,256
Corporate obligations—  60,982  —  60,982  
U.S. Treasury securities—
 13,967
 —
 13,967
U.S. Treasury securities—  64,054  —  64,054  
Certificates of deposit—
 10,997
 —
 10,997
Certificates of deposit—  249  —  249  
Mortgage and other asset backed securities—
 46,419
 —
 46,419
Restricted cash1,132
 —
 —
 1,132
Total assets$225,185
 $127,639
 $—
 $352,824
Total assets$232,582  $125,285  $—  $357,867  
Liabilities: 
  
  
  
Liabilities:    
Warrants to purchase common stock$—
 $—
 $1,927
 $1,927
Warrants to purchase common stock$—  $—  $3,516  $3,516  
Total liabilities$—
 $—
 $1,927
 1,927
Total liabilities$—  $—  $3,516  $3,516  
December 31, 2016 December 31, 2019
Quoted Prices
in Active Markets
for Identical Items
(Level 1)
 
Significant other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 Total Quoted Prices
in Active Markets
for Identical Items
(Level 1)		Significant other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Total
Assets: 
  
  
  
Assets:    
Money market funds$19,818
 $—
 $—
 $19,818
Money market funds$193,867  $—  $—  $193,867  
Corporate obligations—
 88,492
 —
 88,492
Corporate obligations—  138,369  —  138,369  
U.S. Treasury securities—
 33,968
 —
 33,968
U.S. Treasury securities—  83,819  —  83,819  
Certificates of deposit—
 23,373
 —
 23,373
Certificates of deposit—  493  —  493  
Mortgage and other asset backed securities—
 67,599
 —
 67,599
Mortgage and other asset backed securities—  12,470  —  12,470  
Restricted cash946
 —
 —
 946
Total assets$20,764
 $213,432
 $—
 $234,196
Total assets$193,867  $235,151  $—  $429,018  
Liabilities: 
  
  
  
Liabilities:    
Warrants to purchase common stock$—
 $—
 $1,244
 $1,244
Warrants to purchase common stock$—  $—  $1,856  $1,856  
Total liabilities$—
 $—
 $1,244
 $1,244
Total liabilities$—  $—  $1,856  $1,856  
The money market funds noted above are included in cash and cash equivalents in the accompanying condensed consolidated balance sheets. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the
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reporting period. There were no transfers within the hierarchy during the ninesix months ended SeptemberJune 30, 20172020 or the year ended December 31, 2016.2019.
Items measured at fair value on a recurring basis include short-term and long-term investments (Note 5), and warrants to purchase common stock (Note 12). During the periods presented, the Company has not changed the manner in which it values assets and liabilities that are measured at fair value using Level 3 inputs.

The following table sets forth a summary of changes in the fair value of the Company’s common stock warrant liabilities, which represent a recurring measurement that is classified within Level 3 of the fair value hierarchy, wherein fair value is estimated using significant unobservable inputs (in thousands):
Nine Months Ended September 30, Six Months Ended June 30,
2017 2016 20202019
Beginning balance$1,244
 $17,187
Beginning balance$1,856  $1,491  
Change in fair value683
 (5,026)Change in fair value1,660  (102) 
Ending balance$1,927
 $12,161
Ending balance$3,516  $1,389  
The fair value of the warrants to purchase common stock on the date of issuance and on each re-measurement date for those warrants classified as liabilities was estimated using either the Monte Carlo simulation framework, which incorporates future financing events over the remaining life of the warrants to purchase common stock, or for certain re-measurement dates, due to the warrants being deeply in the money, the Black-Scholes option pricing model. Due to the nature of these inputs, the valuation of the warrants is considered a Level 3 measurement. At each reporting period, the Company evaluates the best valuation methodology. At SeptemberJune 30, 2017,2020, the Black-Scholes option pricing model was used.
The Company measures eligible assets and liabilities at fair value, with changes in value recognized in earnings. Fair value treatment may be elected either upon initial recognition of an eligible asset or liability or, for an existing asset or liability, if an event triggers a new basis of accounting. The Company did not elect to re-measure any of its existing financial assets or liabilities, and did not elect the fair value option for any financial assets and liabilities transacted in the nine months ended September 30, 2017 or the year ended December 31, 2016.
9. Net Loss Per Share
The following common stock equivalents were excluded from the calculation of diluted net loss per share for the periods indicated because their inclusion would have had an anti-dilutive effect (in thousands):
Three Months Ended 
 
June 30,		Six Months Ended 
 
June 30,
 2020201920202019
Outstanding stock options3,680  3,995  3,680  3,995  
Common stock warrants39  39  39  39  
Shares issuable under employee stock purchase plan13  13  13  13  
Outstanding restricted stock units (1)532  461  532  461  
 4,264  4,508  4,264  4,508  
(1)This balance is comprised of both the restricted stock units and performance-based restricted stock units described in Note 15.


 Three Months Ended
September 30,		 Nine Months Ended 
 September 30,
 2017 2016 2017 2016
Outstanding stock options3,459
 3,193
 3,459
 3,193
Common stock warrants64
 397
 64
 397
Shares issuable under employee stock purchase plan19
 18
 19
 18
Outstanding restricted stock units551
 670
 551
 670
 4,093
 4,278
 4,093
 4,278
10. Comprehensive Loss
Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions, other events, and circumstances from non-owner sources. Comprehensive loss consists of net loss and other comprehensive loss,(loss) income, which includes certain changes in equity that are excluded from net loss. Comprehensive loss has been disclosed in the accompanying consolidated statements of operations and comprehensive loss. Accumulated other comprehensive loss(loss) income is presented separately on the consolidated balance sheets and consists entirely of unrealized holding gains and losses on investments as of SeptemberJune 30, 20172020 and December 31, 2016.2019.

11. Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies and adopted by the Company asRecently Adopted

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Table of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.Contents
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes all existing revenue recognition requirements, including most industry-specific guidance. The new standard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The new standard will be effective for the Company on January 1, 2018. Topic 606 allows for either a full retrospective application, in which the standard is applied to all periods presented, or a modified retrospective application, in which the standard is applied to the most current period presented in the financial

statements. As of September 30, 2017, revenue is generated exclusively from the Company's collaboration agreement with Celgene. The Company is currently evaluating the potential impact that Topic 606 may have on its financial position and results of operations as it relates to this single arrangement, and expects to elect the modified retrospective application as its transition method.
In FebruaryJune 2016, the FASB issued ASU 2016-02, Leases (Topic 842), Amendments2016-13, Financial Instruments-Credit Losses. The new standard requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. For available-for-sale debt securities with unrealized losses, the standard requires allowances to be recorded instead of reducing the amortized cost of the investment. The standard limits the amount of credit losses to be recognized for available-for-sale debt securities to the FASB Accounting Standards Codification, amount by which replaces the existing guidance for leases. ASU 2016-02carrying value exceeds fair value and requires the identificationreversal of arrangements that should be accounted for as leases by lessees. In general, for lease arrangements exceeding a twelve month term, these arrangements must now bepreviously recognized as assetscredit losses if fair value increases. On January 1, 2020 the Company adopted ASU 2016-13. For discussion regarding the impact of this accounting pronouncement and liabilities onits amendments, refer to Note 5 within the balance sheet of the lessee. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The balance sheet amount recorded for existing leases at the date of adoption of ASU 2016-02 must be calculated using the applicable incremental borrowing rate at the date of adoption. In addition, ASU 2016-02 requires the use of the modified retrospective method, which will require adjustmentnotes to all comparative periods presented in theour consolidated financial statements.statements appearing elsewhere in this Quarterly Report on Form 10-Q.

In June 2018, the FASB issued ASU 2018-15, Intangible-Goodwill and Other Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. This guidanceamendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is effectivea service contract with the requirements for annual and interim periods beginning after December 15, 2018 and requires retrospective application. Thecapitalizing implementation costs incurred to develop or obtain internal-use software. On January 1, 2020, the Company is currently assessing theadopted ASU 2018-15 on a prospective basis, with no material impact that adopting ASU 2016-02 will have on its consolidated financial statements and related disclosures.

In November 2016,December 2019, the FASB issued ASU 2016-18, Statement2019-12, Simplifying the Accounting for Income Taxes. The ASU simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740, Income Taxes, related to the approach for allocating income tax expense or benefit for the year to continuing operations, discontinued operations, other comprehensive income, and other charges or credits recorded directly to shareholders’ equity; the methodology for calculating income taxes in an interim period; and the recognition of Cash Flows - Restricted Cash (Topic 230). This new standard requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts showndeferred tax liabilities for outside basis differences. On January 1, 2020, the Company early adopted ASU 2019-12 on the statement of cash flows. This guidance is effective for annual and interim reporting periods beginning after December 15, 2017, and requires retrospective application. The Company is currently assessing thea prospective basis, with no material impact that adopting ASU 2016-18 will have on its consolidated financial statements and related disclosures.


In March 2017, the FASB issued ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. This new standard shortens the amortization period for certain callable debt securities held at a premium. Specifically, the amendment requires the premium to be amortized to the earliest call date. The amendment does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The guidance is effective for annual and interim periods beginning after December 15, 2018, and early adoption is permitted. The amendment should be applied on a modified retrospective basis, with the cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently assessing the impact that adopting ASU 2017-08 will have on its consolidated financial statements and related disclosures.

12. Warrants
Below is a summary of the number of shares issuable upon exercise of outstanding warrants and the terms and accounting treatment for the outstanding warrants (in thousands, except per share data):
 Warrants as of   
   Weighted-
Average
Exercise		 Balance Sheet
Classification
 June 30, 2020December 31, 2019Price Per
Share		ExpirationJune 30, 2020December 31, 2019
Warrants to purchase common stock39  39  $5.88  July 9, 2020LiabilityLiability
 Warrants as of        
     
Weighted-
Average
Exercise
   
Balance Sheet
Classification
 September 30, 2017 December 31, 2016 
Price Per
Share
 Expiration September 30, 2017 December 31, 2016
Warrants to purchase common stock61
 61
 $5.88
 June 10, 2020 - July 9, 2020 Liability Liability
Warrants to purchase common stock3
 4
 7.40
 December 31, 2017 Equity(1) (2) Equity(1) (2)
All warrants64
 65
 $5.94
      


(1)In March 2017, warrant holders exercised warrants to purchase 1,187 shares of Common Stock on a net basis, resulting in the issuance of 1,014 shares of Common Stock.

(2)Warrants to purchase common stock were issued in connection with various debt financing transactions that were consummated in periods prior to our initial public offering.
In connection with the Series E redeemable convertible preferred stock (Series E Preferred Stock) financing transactions that took place in June 2010 and July 2010, the Company issued warrants to purchase up to 871,580 shares of common stock. Each warrant was immediately exercisable and expires ten years from the original date of issuance. The warrants to purchase shares of the Company’s common stock have an exercise price equal to the estimated fair value of the underlying instrument as

of the initial date such warrants were issued. Each warrant is exercisable on either a physical settlement or net share settlement basis from the date of issuance. The warrant agreement contains a provision requiring an adjustment to the number of shares in the event the Company issues common stock, or securities convertible into or exercisable for common stock, at a price per share lower than the warrant exercise price. The Company concluded the anti-dilution feature required the warrants to be classified as liabilities under ASC Topic 815, Derivatives and Hedging—Contracts in Entity’s Own Equity (ASC 815). The warrants are measured at fair value, with changes in fair value recognized as a gain or loss to other income (expense) in the statements of operations and comprehensive loss for each reporting period thereafter. The fair value of the common stock warrants was recorded as a discount to the preferred stock issued, and the preferred stock was accreted to the redemption value. At the end of each reporting period, the Company re-measured the fair value of the outstanding warrants, using current assumptions, resulting in an increase in fair value of $0.4 million and $0.8 million for the three months ended September 30, 2017 and 2016, respectively, and an increase in fair value of $0.7 million and a decrease of $5.0 million for the nine months ended September 30, 2017 and 2016, respectively, which was recorded in other (expense) income in the accompanying consolidated statements of operations and comprehensive loss. The Company will continue to re-measure the fair value of the liability associated with the warrants to purchase common stock at the end of each reporting period until the earlier of the exercise or the expiration of the applicable warrants. All remaining outstanding warrants were fully vested and exercisable as of September 30, 2017 and December 31, 2016.automatically cashless exercised in full upon their expiration on July 9, 2020.

13. Commitments and Contingencies
Legal Proceedings
The Company, from time to time, may be party to litigation arising in the ordinary course of its business. The Company was not subject to any material legal proceedings during the three months ended SeptemberJune 30, 2017,2020, and, to the best of its knowledge, no material legal proceedings are currently pending or threatened.
99 Erie Street Operating Lease
On March 16, 2017, the Company entered into an approximately six and a half year lease for approximately 11,825 square feet of rentable office and lab space located at 99 Erie Street, Cambridge, Massachusetts. The lease commenced on May 1, 2017 and ends on September 30, 2023. Excluding operating costs and real estate taxes, rent for the first year is $0.7 million with annual rent escalations thereafter. The total operating lease obligation for the term of this agreement, excluding operating costs and real estate taxes, is $5.1 million. The Company has the option to extend the lease by an additional three years. In accordance with the lease, the Company entered into a cash-collateralized, irrevocable standby letter of credit in the amount of $0.2 million, naming the landlord as beneficiary.

On July 27, 2017, the Company entered into a one-year sublease with Rubius Therapeutics, Inc. (the "sublessee") under which Rubius will sublease approximately 11,825 square feet of office and lab space at 99 Erie Street, Cambridge, Massachusetts (the "sublease"). The sublease commenced on August 1, 2017 and ends on July 31, 2018. The sublessee has the right to extend the sublease by an additional five months. The total operating lease obligation, excluding operating costs and real estate taxes, for the term of this agreement is approximately $0.7 million. In connection with this sublease, we recognized a loss of $0.1 million during the third quarter of 2017, which represents the difference between the Company's lease obligation to the landlord and the sublessee's lease obligation to the Company and other expenses associated with the sublease.

128/149 Sidney Street Operating Leases

On July 18, 2017, the Company entered into a five-year lease extension for approximately 37,700 square feet of office, manufacturing and lab space located at 128 Sidney Street, Cambridge, Massachusetts, our principal headquarters and manufacturing facility. The lease commences on October 1, 2018 and ends on September 30, 2023. The total operating lease obligation for the term of this agreement, excluding operating costs and real estate taxes, is approximately $13.0 million. The Company has the option to extend the lease by an additional five years.

On July 18, 2017, the Company entered into a five-year lease extension for approximately 37,116 square feet of office and lab space located at 149 Sidney Street, Cambridge, Massachusetts. The lease commences on October 1, 2018 and ends on September 30, 2023. The total operating lease obligation for the term of this agreement, excluding operating costs and real estate taxes, is approximately $12.8 million. The Company has the option to extend the lease by an additional five years.
Other
The Company is also party to various agreements, principally relating to licensed technology, that require future payments relating to milestones which had not been met at SeptemberJune 30, 20172020 and December 31, 2016,2019, or royalties on future sales of

specified products. No milestones or royalty payments under these agreements are expected to be payable in the immediate future. See Note 14 for discussion of these arrangements. 
The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to the agreements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners or customers, in connection with any U.S. patent or any copyright or other intellectual property infringement claim by any third party with respect to the Company’s products. The term of these indemnification agreements is generally perpetual any time after execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is
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unlimited. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements.

14. Significant Agreements
CelgeneBMS (Bristol Myers Squibb Company)
Overview
On February 20, 2008, the Company entered into a collaboration, license, and optionan agreement with Celgene, Corporation (Celgene)which was acquired by BMS in November 2019 and is now referred to herein as BMS, relating to sotatercept (the Original Sotatercept Agreement), which the Company and Celgenewas amended on August 2, 2011 (as amended, the OriginalAmended Sotatercept Agreement), and then. The Company further amended and restated the Original Sotatercept Agreement in its entirety on September 18, 2017 (as amended(the Restated Sotatercept Agreement) and restated,clarified certain responsibilities of the Company and BMS in a letter agreement to the Restated Sotatercept Agreement).Agreement on March 10, 2020. On August 2, 2011, the Company entered into a second collaboration, license and option agreement with CelgeneBMS for luspaterceptREBLOZYL® (luspatercept-aamt) (the REBLOZYL Agreement, formerly the Luspatercept Agreement). These agreements provide Celgene an exclusive license to luspatercept in all indications, an exclusive license to sotatercept outside of the pulmonary hypertension (PH) field, as well as exclusive rights to obtain a license to certain future compounds.
Since December 31, 2016,2019, there have been no material changes to the key terms of the Luspatercept Agreement, and the material changes to the Original Sotatercept Agreement pursuant to the Restated Sotatercept Agreement are described below.above agreements. For further information on the terms of the agreements, as well as the historical accounting analysis, please see the notes to the consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2016.2019.
Restated Sotatercept AgreementAccounting Analysis
Under
Upon adoption of ASC 606, all of the Restated Sotatercept Agreement, Celgene grantedCompany’s performance obligations pursuant to its arrangements with BMS were completed and all remaining potential milestone payments were fully constrained as they relate to future regulatory events that are outside of the Company worldwide rights to developCompany’s control, and commercialize sotatercept fortherefore the treatment, prevention, modulation and diagnosisrisk of pulmonary hypertension in humans. In addition, Celgene agreed not to develop or commercializesignificant reversal in the fieldamount of pulmonary hypertension any compound developed undercumulative revenue had not been resolved. As of June 30, 2020, the Restated Sotatercept Agreementfinal regulatory milestone payment for REBLOZYL would be $20.0 million and would result from approval by a regulatory authority in Asia (as defined in the REBLOZYL Agreement) of a Biologics License Application (BLA) or the Luspatercept Agreement, and the Company agreed not to developequivalent for luspatercept-aamt in either myelodysplastic syndromes or commercialize any compound developed under the Restated Sotatercept Agreement or the Luspatercept Agreement in any field outside of pulmonary hypertension. The Company has the right to license, transfer or sell its rights to develop and commercialize sotatercept in pulmonary hypertension, subject to Celgene’s right of first negotiation.
The Company is responsible for 100% of the costs related to the Company’s development and commercialization of sotatercept in pulmonary hypertension. The Company is not required to make any upfront payments or milestone payments to Celgene in connectionbeta-thalassemia. In accordance with the Company’s development and commercialization of sotaterceptCompany's accounting policy regarding revenue recognition as described in pulmonary hypertension. If sotatercept is commercializedNote 2 to treat pulmonary hypertension andits Annual Report on Form 10-K, the Company recognizes such revenue then Celgeneassociated with this milestone will be eligible to receive a royalty in the low 20% range on global net sales. In certain circumstances Celgene may recognize revenue related to the commercialization of sotatercept in pulmonary hypertension, and in this scenario, the Company will be eligible to receive a royalty from Celgene suchrecognized once it is probable that the economic position ofapplication is approved by the parties is equivalent toregulatory authority. Milestone payments that are not within the scenario in which the Company recognizes such revenue. With respect to the development and commercialization of sotatercept outside of pulmonary hypertension or the development and commercialization of any other compound under the Restated Sotatercept Agreement, the terms of the Original Sotatercept Agreement remain unchanged, and Celgene will continue to have responsibility to fund and conduct all such development and commercialization activities, with the Company eligible to receive tiered royalty payments in the low-to-mid 20% range on global net sales.
 Pursuant to the Restated Sotatercept Agreement, Celgene will provide to the Company certain quantities of Celgene’s existing clinical supply of sotatercept at no cost to the Company. For clinical or commercial supply of sotatercept in excess of that which is agreed under the Restated Sotatercept Agreement, Celgene can elect to provide the Company with such clinical and commercial supply of sotatercept at a negotiated price or provide a tech transfer to the Company to enable the Company to manufacture on its own behalf. The conduct of the collaboration is managed by a Joint Development Committee and Joint Commercialization Committee. In the event of a deadlock of a committee, the Company shall determine the resolution of issues specifically related to the development or commercialization of sotatercept in pulmonary hypertension (other than pricing which shall be determined by consensus), and Celgene shall determine the resolution of all other issues. The Joint

Commercialization Committee will oversee commercialization of sotatercept and sotatercept pricing will be determined by mutual agreementcontrol of the Company and Celgene inor the Joint Commercialization Committee.
licensee are not considered probable of being achieved until those approvals are received. The Restated Sotatercept Agreementapproval of the application is terminable by either party upon a breach that is uncured and continuing or by Celgene for convenience on a country by country or product by product basis, or in its entirety. Celgene may also terminatenot within the Restated Sotatercept Agreement, in its entirety or on a product by product basis, for failurecontrol of a product to meet a development or clinical trial endpoint. Termination for cause by us or termination by Celgene for convenience or failure to meet an endpoint will have the effect of terminating the applicable license to Celgene and the rights granted to the Company with respect toor the developmentlicensee, and therefore, as of sotatercept in pulmonary hypertension shall become irrevocable. Termination for cause by either party shall result in reducing the remaining royalties due to the breaching party by a certain percentage. Upon termination by Celgene for convenience or for failure to meet an endpoint, Celgene andJune 30, 2020, the Company cannot determine if it is probable that a regulatory agency will enter into a termination agreement pursuantapprove the applications.

In June 2020, the European Commission, which has the authority to which, among other things, Celgene will continue to be eligible to receive a royalty in the low 20% range on global net sales of sotatercept in pulmonary hypertension.
The Company and Celgene will continue to collaborate worldwideapprove medicines for the joint development and commercialization of sotatercept outsideEuropean Union, approved REBLOZYL based on the recommendation of the pulmonary hypertension field. The Company also previously granted Celgene an option to license three discovery stage compounds under the Original Sotatercept Agreement.
The Company retained responsibility for research and development of sotatercept outside of the pulmonary hypertension field through the end of Phase 2a clinical trials, as well as manufacturing the clinical supplies for these trials. These activities were substantially completed in 2011. Outside of pulmonary hypertension, Celgene will also be responsible for any Phase 3 clinical trials, as well as additional Phase 2 clinical trials, and will be responsible for overseeing the manufacture of Phase 3 and commercial supplies by third party contract manufacturing organizations.
Through September 30, 2017, the Company has received $44.1 million in research and development funding and milestone payments for sotatercept under the original and amended and restated agreements. The next likely clinical milestone payment would be $10.0 million and result from Celgene’s start of a Phase 3 study.

Luspatercept Agreement
Under the terms of the Luspatercept Agreement, the Company and Celgene collaborate worldwide for the joint development and commercialization of luspatercept. The Company also granted Celgene an option for future products for which the Company files an Investigational New Drug applicationEuropean Medicines Agency, or EMA, for the treatment of anemia. The Company has not yet identified additional compoundsadult patients with transfusion-dependent anemia due to very low-, low- and intermediate-risk MDS with ring sideroblasts, who had an unsatisfactory response or are ineligible for the treatment of anemia. Accordingly, there is no assurance that the Company will generate future value from additional programs.
The Company retains responsibility for researcherythropoietin-based therapy, and development throughadult patients with transfusion-dependent anemia associated with beta-thalassemia. As a result, the end of Phase 1 and initial Phase 2 clinical trials, as well as manufacturing the clinical supplies for these studies. Celgene will conduct any subsequent Phase 2 and Phase 3 clinical studies. The Company will manufacture luspatercept for the Phase 1 and Phase 2 clinical trials and Celgene will be responsible for overseeing the manufacture of Phase 3 and commercial supplies by third party contract manufacturing organizations.
Through September 30, 2017, the Company has received $96.6 million in research and development funding and milestone payments for luspatercept. The next likely milestone payment would be $25.0 million and resultmilestone from U.S. Food and Drug Administration or European Medical Association acceptanceMedicines Agency (EMA) approval of a Biologics Licensing Application (BLA) or equivalent for luspatercept in either myelodysplastic syndromes or beta-thalassemia.
Both Agreements
Under both agreements, CelgeneREBLOZYL is responsible for paying 100% of worldwide development costs and 100% ofno longer constrained. As the Company does not have any commercialization costs worldwide for sotatercept (outside of the pulmonary hypertension field) and luspatercept. The Company has the right to co-promote sotatercept (outside of the pulmonary hypertension field), luspatercept and future products in North America. The Company will receive tiered royalties in the low-to-mid 20% range on net sales of sotatercept (outside of the pulmonary hypertension field) and luspatercept, and these royalty schedules are the same for both agreements. 
Accounting Analysis
As a result of the changes to the economic termsremaining performance obligations under the Restated Sotatercept Agreement,agreement with BMS, the Company concluded the modification did not represent a material modification under ASU 2009-13. Further, the Company concluded there are no new deliverables which arise from the agreement. There have been no material changes to the accounting under the Luspatercept Agreement, or the Original Sotatercept Agreement pursuant to the Restated Sotatercept Agreement. For further information on

the historical accounting analysis, please see the notes to the consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2016.
Duringfull $25.0 million was recognized as revenue during the three months ended SeptemberJune 30, 2017 and 2016,2020.

Through June 30, 2020, under all BMS arrangements, the Company recognized $0.1has received net cost-share payments, milestones, and royalties of $219.6 million and $0.1$44.9 million respectively,for REBLOZYL and during the nine months ended September 30, 2017 and 2016, $0.4 million and $0.4 million, respectively, of the total deferred revenue as license and milestone revenue in the accompanying consolidated statements of operations and comprehensive loss.
As noted above, under the terms of the Luspatercept Agreement the Company retained responsibility for certain research and development activities. In November 2013, the Company agreed to conduct additional activities for the benefit of the luspatercept program including certain clinical and non-clinical services. These activities are reimbursed under the same terms and rates of the existing Agreements and are accounted for as the services are delivered. 
Pursuant to the terms of the agreements, Celgene and the Company shared development costs incurred by either party, with Celgene responsible for substantially more than half of the costs for sotatercept, and luspatercept until December 31, 2012. Beginning January 1, 2013, Celgene is responsible for 100% of the costs for luspatercept and for sotatercept outside of the pulmonary hypertension field. Payments from Celgene with respect to research and development costs incurred by the Company are recorded as cost-sharing revenue.respectively. The Company recorded net cost-sharingcollaboration revenue of $2.9$39.8 million and $2.9$27.7 million during the three months ended SeptemberJune 30, 20172020 and 2016,2019, respectively, and $9.4$44.1 million and $9.0$30.4 million during the ninesix months ended SeptemberJune 30, 20172020 and 2016,2019, respectively.
Other Agreements
Other
In 2004, the Company entered into a license agreement with a non-profit institution for an exclusive, sublicensable, worldwide, royalty-bearing license to certain patents developed by the institution (Primary Licensed Products). In addition, the Company was granted a non-exclusive, non-sub-licensable license for Secondary Licensed Products. As compensation for the licenses, the Company issued 62,500 shares of its common stock to the institution, the fair value of which was $25 thousand, and was expensed during 2004 to research and development expense. The Company also agreed to pay specified development milestone payments totaling up to $2.0 million for sotatercept and $0.7 million for luspatercept.REBLOZYL. In addition, the Company is obligated to pay milestone fees based on the Company’s research and development progress, and U.S. sublicensing revenue ranging from 10%-25%, as well as a royaltyroyalties ranging from 1.0%-3.5% of net sales on any products under the licenses. During the three months ended SeptemberJune 30, 20172020 and 2016,2019, the Company expensed zero$2.1 million and zero,$1.6 million, respectively, and during the ninesix months ended SeptemberJune 30, 20172020 and 2016, respectively,2019, the Company expensed $0.1$2.4 million and $1.0 $1.6
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million, respectively, of milestones, fees and royalties. Milestones and fees defined under the agreement.associated with development related activities are recorded as research and development expense. Costs related to royalties on sales of commercial products are recorded as selling, general and administrative expense.
In May 2014, the Company executed a collaboration agreement with a research technology company.company, and such collaboration agreement was amended and restated in March 2019. The Company paid an upfront research fee of $0.3 million upon execution of the original agreement. The Company also received an option to obtain a commercial license to the molecules developed during the collaboration. During the three months ended SeptemberJune 30, 20172020 and 2016,2019, the Company expensed $0.9$0.5 million and $0.4$1.7 million, respectively, and during the ninesix months ended SeptemberJune 30, 20172020 and 2016,2019, the Company expensed $1.2$0.5 million and $0.9$1.9 million, respectively, of milestones and fees, which is recorded as research and development expense.
15. Stockholders' Equity

On September 25, 2017,In December 2019, the Company completed its underwritten public offeringexecuted a license and collaboration agreement with Fulcrum Therapeutics to identify small molecules designed to modulate specific pathways associated with a targeted indication within the pulmonary disease space. The Company paid an upfront research fee of 5,405,406 shares$10.0 million upon execution of common stock atthis agreement, which was expensed to research and development. The Company also agreed to pay specified research, development and commercial milestone payments of up to $295.0 million for a public offering pricefirst product commercialized and up to a maximum of $37.00 per share. The aggregate$143.5 million in additional milestone payments for all subsequent products commercialized. Fulcrum will additionally receive tiered royalty payments in the mid-single-digit to low double-digit range on net proceeds received bysales, as well as reimbursement for relevant research and development costs. During the three months ended June 30, 2020 and 2019, the Company after underwriting discountsexpensed $0.8 million and other estimated offering expenses, were approximately $187.60, respectively, and during the six months ended June 30, 2020 and 2019, the Company expensed $1.1 million. and 0, respectively, of milestones and fees, which is recorded as research and development expense.


On October 4, 2017, in connection with the public offering of common stock on September 20, 2017, the underwriters of the Company's public offering fully exercised their over-allotment option to purchase an additional 810,810 shares of the Company's common stock at the public offering price of $37.00 per share, less underwriting discounts and commissions, resulting in additional net proceeds of approximately $28.2 million.

16.15. Stock-Based Compensation
The Company recognized stock-based compensation expense related to the 2003 Stock Option and Restricted Stock Plan (the 2003 Plan), the 2013 Equity Incentive Plan (the 2013 Plan), and the 2013 Employee Stock Purchase Plan (the 2013 ESPP) totaling $5.7 million, $4.6 million, $21.9 million, and $13.4 million during the three months ended September 30, 2017 and 2016 and the nine months ended September 30, 2017 and 2016, respectively.

Total compensation cost recognized for all stock-based compensation awards in the consolidated statements of operations and comprehensive loss isduring the three and six months ended June 30, 2020 and 2019, respectively, as follows (in thousands):
 Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
 2017 2016 2017 2016
Research and development$3,173
 $1,942
 $10,268
 $5,617
General and administrative2,533
 2,646
 11,609
 7,770
 $5,706
 $4,588
 $21,877
 $13,387
On January 1, 2017, the Company adopted ASU 2016-09, which identifies areas for simplification involving several aspects of accounting for share-based payments, including income tax consequences, classification of awards as either equity or liabilities, an option to make a policy election to recognize gross share based compensation expense with actual forfeitures recognized as they occur as well as certain classification changes on the statement of cash flows. In connection with the adoption of this standard, the Company changed its accounting policy to record actual forfeitures as they occur, rather than estimating forfeitures by applying a forfeiture rate. The provisions of the standard related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements and forfeitures were adopted using a modified retrospective transition method. Accordingly, a cumulative adjustment of $0.1 million was booked to retained earnings for the impact of the forfeitures. The Company also recorded $21.5 million for the excess tax benefit related to equity awards, which was offset by a $21.5 million increase to the valuation allowance. The provisions of the standard related to the recognition of the excess tax benefits in the income statement and classification in the statement of cash flows were adopted prospectively and prior periods were not retrospectively adjusted.
In December 2016, the Company entered into a consulting agreement with its former Chief Executive Officer. In accordance with the 2003 Plan and 2013 Plan, any vested shares remain exercisable and any outstanding and unvested options and restricted stock units will continue to vest in accordance with their terms so long as he continues to provides services as a non-employee consultant. During the three and nine months ended September 30, 2017, the Company recognized $1.0 million and $3.1 million of stock-based compensation expense within research and development expense associated with these awards.
In April 2017, the Company amended the employment agreement with its former Chief Operating Officer as a result of his diagnosis of amyotrophic lateral sclerosis (ALS). The amended agreement modified the vesting conditions of his stock options and restricted stock units in the event his termination of employment as a result of death or disability and extended the post termination exercise period of the options. These modifications resulted in zero and $3.6 million of stock-based compensation, recognized within general and administrative expense during the three and nine months ended September 30, 2017, respectively.
 Three Months Ended 
 
June 30,		Six Months Ended 
 
June 30,
 2020201920202019
Research and development$3,259  $2,006  $6,400  $5,505  
Selling, general and administrative3,881  3,006  7,419  6,499  
 $7,140  $5,012  $13,819  $12,004  
Stock Options
The fair value of each stock option issued to employees was estimated aton the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:
Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,		Three Months Ended 
 
June 30,		Six Months Ended 
 
June 30,
2017 2016 2017 2016 2020201920202019
Expected volatility65.1% 65.4% 65.8% 64.5%Expected volatility57.9 %58.3 %55.4 %59.0 %
Expected term (in years)6.0
 6.0
 6.0
 5.9
Expected term (in years)6.06.06.06.0
Risk-free interest rate1.9% 1.2% 2.1% 1.4%Risk-free interest rate0.4 %2.2 %1.5 %2.6 %
Expected dividend yield—% —% —% —%Expected dividend yield— %— %— %— %
The following table summarizes the stock option activity under the Company’s 2003 Plan and 2013 Planstock option plans during the ninesix months ended SeptemberJune 30, 20172020 (in thousands, except per share amounts and years):

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Number
of Stock Options		Weighted-
Average
Exercise
Price
Per Share		Weighted-
Average
Contractual
Life (in years)		Aggregate
Intrinsic
Value(1)
Number
of Stock Options
 
Weighted-
Average
Exercise
Price
Per Share
 
Weighted-
Average
Contractual
Life (in years)
 
Aggregate
Intrinsic
Value(1)
Outstanding at December 31, 20163,316
 $25.96
 7.03  
Outstanding at December 31, 2019Outstanding at December 31, 20193,820  $36.26  6.81 
Granted669
 $30.51
    
Granted926  $58.36    
Exercised(442) $7.32
    
Exercised(913) $30.77    
Canceled or forfeited(84) $34.16
    
Canceled or forfeited(153) $42.20    
Outstanding at September 30, 20173,459
 $29.02
 6.99 $32,169
Exercisable at September 30, 20171,907
 $25.88
 5.55 $24,324
Outstanding at June 30, 2020Outstanding at June 30, 20203,680  $42.94  7.48$192,690  
Exercisable at June 30, 2020Exercisable at June 30, 20201,882  $36.53  6.18$110,552  
(1)
(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the common stock for the options that were in the money at September 30, 2017.
During the nine months ended September 30, 2017, the Company granted stock options to purchase an aggregate of 669,184 shares of its common stock, with a weighted-average grant date fair value of the common stock for the options granted of $18.44 per share. 
Duringthat were in the nine months ended Septembermoney at June 30, 2017, current and former employees of the Company exercised a total of 441,842 options, resulting in total proceeds of $3.2 million. 2020.
The aggregate intrinsic value of options exercised during the ninesix months ended SeptemberJune 30, 20172020 was $9.5$53.5 million. 
As of SeptemberJune 30, 2017,2020, there was $25.4$43.7 million of unrecognized compensation expense related to unvested stock options that is expected to be recognized over a weighted-average period of 2.572.72 years. 
Restricted Stock Units
The following table summarizes the restricted stock unit (RSU) activity under the 2013 Plan during the ninesix months ended SeptemberJune 30, 20172020 (in thousands, except per share amounts):
 Number
of Stock Units		Weighted-
Average
Grant Date Fair Value Per Share
Unvested balance at December 31, 2019397  $39.20  
Granted214  57.25  
Vested(123) 37.76  
Forfeited(31) 42.57  
Unvested balance at June 30, 2020457  $47.80  
 Number
of RSUs		 Weighted-
Average
Grant Date Fair Value Per Share
Unvested balance at December 31, 2016732
 $31.55
Granted129
 $29.53
Vested(289) $31.00
Forfeited(21) $32.27
Unvested balance at September 30, 2017551
 $31.34
During the nine months ended September 30, 2017, the Company issued 100,692 RSUs to employees which are subject to time-based vesting. As of SeptemberJune 30, 2017, 214,120 of these restricted stock units remained unvested and outstanding, and2020, there was approximately $4.7$17.4 million of related unrecognized compensation cost, which the Company expects to recognize over a remaining weighted-average period of 1.631.90 years.
During the nine months ended September 30, 2017,Performance-Based Restricted Stock Units
On January 22, 2020, the Company issued 28,333 RSUs to employees which are subject togranted performance-based restricted stock units (PSU) whereby vesting conditions, and vesting acceleratesdepends upon the occurrence of certain milestone events. In September 2019, anyevents by December 31, 2022. As of these unvested RSUs will vest. As a result, whenJune 30, 2020, none of the PSU milestones had been achieved. When achievement of a milestone becomes probable, compensation cost iswill be recognized from the grant date throughover the estimated date of achievement. If achievement is not considered probable, the expense is recognized from the grant date through September 2019.requisite service period. As of SeptemberJune 30, 2017, 337,1222020, no related compensation cost had been recognized. The following table summarizes PSU activity under the 2013 Plan during the six months ended June 30, 2020 (in thousands, except per share amounts):
 Number
of Stock Units		Weighted-
Average
Grant Date Fair Value Per Share
Unvested balance at December 31, 2019—  $—  
Granted (1)78  52.99  
Vested—  —  
Forfeited(3) 52.99  
Unvested balance at June 30, 202075  $52.99  
(1)Pursuant to the terms of these performance-based RSUs remained outstanding,the awards granted on January 22, 2020, the actual number of awards earned could range between 0% and 200% of the number of awards granted.
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As of June 30, 2020, there was approximately $5.6$4.0 million of related unrecognized compensation cost, whichcost. Depending on the Company expects to recognize over a remaining weighted-average periodactual number of 1.66 years.awards earned, the actual expense recognized could range between 0% and 200% of this amount.
Employee Stock Purchase Plan
The Company recorded stock-based compensation expense related to the ESPP Plan during the three months ended September 30, 2017 and 2016 of $0.1 million and $0.1 million, respectively, and during the nine months ended September 30, 2017 and 2016 of $0.2 million and $0.2 million, respectively.

17.16. Income Taxes
For
Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the three months and nine months ended September 30, 2017, the Company recognized an income tax benefit of $41 thousand and $29 thousandfinancial reporting and tax expense in other comprehensive lossbasis of $59 thousandassets and $59 thousand related to the unrealized gain on available-for-sale securities. At September 30, 2017, the Companyliabilities using statutory rates. A valuation allowance is recorded an accrued tax provision of $17 thousand related to this tax benefit included within accrued expenses and other current liabilities in the condensed consolidated balance sheet, which is expected to be generated from continuing operations.
For the three and nine months ended September 30, 2016, the Company recognized an income tax benefit of $20 thousand and $20 thousand and tax expense in other comprehensive loss of $53 thousand and $53 thousand related to the unrealized gain on available-for-sale securities. At September 30, 2016, the Company recorded an accrued tax provision of $17 thousand related to this tax benefit included within accrued expenses and other current liabilities in the condensed consolidated balance sheet, which is expected to be generated from continuing operations.
The Company has evaluated the positive and negative evidence bearing upon the realizability of itsagainst deferred tax assets. Based on the Company’s history of operating losses, the Company has concluded thatassets if it is more likely than not that the benefitsome or all of itsthe deferred tax assets will not be realized. Accordingly,Due to the uncertainty surrounding the realization of the favorable tax attributes in future tax returns, the Company has providedrecorded a full valuation allowance foragainst the Company’s otherwise recognizable net deferred tax assets as of September 30, 2017 and December 31, 2016.assets. 
The Company files income tax returns in the United States, and various state jurisdictions. The federal and state income tax returns are generally subject to tax examinations for the tax years ended December 31, 2013 through December 31, 2016. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service or state taxing authorities to the extent utilized in a future period.
The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. As of September 30, 2017 and December 31, 2016, the Company did not have any significant uncertain tax positions.
18.17. Related Party Transactions
Celgene CorporationBMS
In connection with the Company's September 2017 public offering, Celgene purchased 745,592 shares of common stock. In connection with thisBMS owned 11.8% and prior transactions, Celgene owned 12.7% and 12.9%12.0% of the Company’s fully diluted equity as of SeptemberJune 30, 20172020 and December 31, 2016,2019, respectively. Refer to Note 14 for additional information regarding this collaboration arrangement.
During the three and ninesix months ended SeptemberJune 30, 20172020 and 2016,2019, all revenue recognized by the Company was recognized under the CelgeneBMS collaboration arrangementarrangement.
18. Subsequent Events
The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The Company has evaluated all subsequent events and determined that there are no material recognized or unrecognized subsequent events requiring disclosure except as of September 30, 2017,described below.
On July 6, 2020, the Company had $3.8 millioncompleted the sale in an underwritten public offering of deferred revenue related5,594,593 shares of common stock, including 729,729 shares of common stock sold pursuant to the Celgene collaboration arrangement.underwriter's full exercise of their option to purchase additional shares, at a public offering price of $92.50 per share, resulting in net proceeds to the Company of $492.5 million.


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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following information should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2016.2019.
Certain matters discussed in this Quarterly Report on Form 10-Q may be deemed to be forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. In this Quarterly Report on Form 10-Q, words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "intend," "may," "plan," "potential," "project," "should," "strategy," "target," "vision," "will," "would," or, in each case, the negative or other variations thereon or other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
The forward-looking statements in this Quarterly Report on Form 10-Q include, among other things, statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things:
•the impact on our business of the COVID-19 pandemic and the government’s efforts to contain it;
•our ongoing and planned preclinical studies and clinical trials;
•clinical trial data and the timing of results of our ongoing clinical trials; 
•our plans to develop and commercialize ACE-083sotatercept in pulmonary hypertension and our other preclinicalpotential therapeutic candidates, candidates;
•our and Celgene’sBristol Myers Squibb's, or BMS's, plans to develop and commercialize luspaterceptREBLOZYL® (luspatercept-aamt) and sotatercept; sotatercept outside of pulmonary hypertension; 
•the potential benefits of strategic partnership agreements and our ability to enter into selective strategic partnership arrangements; 
•the timing of anticipated milestone payments under our collaboration agreements with Celgene;BMS;
•the timing of, and our and Celgene’sBMS's ability to, obtain and maintain regulatory approvals for our therapeutic candidates; 
•the rate and degree of market acceptance and clinical utility of any approved therapeutic candidate, particularly in specific patient populations; 
•our ability to quickly and efficiently identify and develop therapeutic candidates; 
•our commercialization, marketing and manufacturing capabilities and strategy;
•our plans for commercialization and marketing;
•our intellectual property position; and 
•our estimates regarding our operating capital requirements, results of operations, financial condition, liquidity, capital requirements, prospects, growth and strategies. 
By their nature, forward-looking statements involve risks and uncertainties because they relate to events, competitive dynamics, and industry changes and depend on the economic circumstances that may or may not occur in the future or may occur on longer or shorter timelines than anticipated. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and events in the industry in which we operate may differ materially from the forward-looking statements contained herein.
Any forward-looking statements that we make in this Quarterly Report on Form 10-Q speak only as of the date of such statements, and we undertake no obligation to update such statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect the occurrence of unanticipated events.
You should also read carefully the factors described in the section “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 20162019 and Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020 to better understand the risks and uncertainties inherent in our business and underlying any forward-looking statements.
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You are advised, however, to consult any further disclosures we make on related subjects in our subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, press releases, and our website.
You should read the following discussion and analysis of financial condition and results of operations together with Part I Item 1“Financial Statements” and related notes included elsewhere in this Quarterly Report on Form 10-Q.

Overview
We are a leading biopharmaceutical company indedicated to the discovery, development and developmentcommercialization of TGF-beta therapeutics to treat serious and rare diseases. Our research focuses on key natural regulators of cellular growth and repair, particularly the transforming growth factor-beta,Transforming Growth Factor-Beta, or TGF-beta, protein superfamily. By combining our discovery and development expertise, including our proprietary knowledge of the TGF-beta superfamily, and our internal protein engineering and manufacturing capabilities, we have generated severalgenerate innovative therapeutic candidates, all of which encompass novel potential first-in-class mechanisms of action. We have focused and prioritized our research and development activities within three key therapeutic areas: hematology, neuromuscular and pulmonary. If successful, these candidates could have the potential to significantly improve clinical outcomes for patients across these areas of high, unmet need.
Luspatercept,We focus and prioritize our lead program,commercialization, research and sotatercept, are partnered with Celgene Corporation, or Celgene. Luspaterceptdevelopment activities within two key therapeutic areas: hematology and pulmonary.
Hematology
Our first commercial product, REBLOZYL® (luspatercept-aamt), is a first-in-class erythroid maturation agent designed to promote red blood cell, or RBC, production through a novel mechanism, and is being developedpartnered with BMS (which acquired Celgene Corporation, or Celgene, in 2019). In November 2019, the U.S. Food and Drug Administration, or FDA, approved REBLOZYL for the treatment of anemia in adult patients with beta-thalassemia who require regular RBC transfusions. In April 2020, the FDA also approved REBLOZYL for the treatment of anemia failing an erythropoiesis stimulating agent and requiring two or more RBC units per eight weeks in adult patients with very low- to treat chronic anemia and associated complications inintermediate-risk myelodysplastic syndromes, or MDS, beta-thalassemia,with ring sideroblasts or with a myelodysplastic/myeloproliferative neoplasm with ring sideroblasts and myelofibrosis. Celgene is currently conducting two Phase 3 clinical trials with luspatercept; onethrombocytosis. In June 2020, the European Commission, which has the authority to approve medicines for the European Union, approved REBLOZYL based on the recommendation of the European Medicines Agency, or EMA, for the treatment of patients with lower risk MDS, known as the "MEDALIST" trial, and another for the treatment ofadult patients with transfusion-dependent beta-thalassemia, also known as the "BELIEVE" trial. Celgene recently initiatedanemia due to very low-, low- and intermediate-risk MDS with ring sideroblasts, who had an unsatisfactory response or are ineligible for erythropoietin-based therapy, and adult patients with transfusion-dependent anemia associated with beta-thalassemia.
BMS is currently conducting a Phase 2 clinical trial for the treatment of patients with myelofibrosis, a rare bone marrow disorder, and we expect Celgene to enroll the first patient in this study by the end of this year. We further expect Celgene to initiate a Phase 3 clinical trial, the "COMMANDS" trial, in first-line, lower-risk MDS patients in first half of 2018. In addition, a Phase 2 trialluspatercept-aamt in non-transfusion-dependent beta-thalassemia patients, referred to as the "BEYOND"BEYOND trial, is in the planning stages and we expect Celgene to initiate the BEYOND trialwith topline results currently expected by the end of 2020 or early 2021, and a Phase 3 clinical trial, the COMMANDS trial, in first-line, lower-risk MDS patients, with topline results expected in or after 2022. In myelofibrosis, BMS is conducting a Phase 2 clinical trial in patients with myelofibrosis-associated anemia, and initial results from this year.trial were presented in December 2019 at the 61st American Society of Hematology Annual Meeting and Exposition showing that luspatercept-aamt improved anemia in patients receiving and not receiving RBC transfusions, with more profound effects in patients treated with ruxolitinib, a small molecule JAK inhibitor. Based on these data, we and BMS announced plans to initiate by the end of 2020 or early 2021 the Phase 3 INDEPENDENCE study in patients with myelofibrosis-associated anemia who are being treated with JAK inhibitor therapy and require RBC transfusions.
ForWe believe that there is an annual peak sales opportunity for REBLOZYL in excess of $2 billion in lower-risk MDS and beta-thalassemia, and upon successful development and approval in the United States and Europe, an additional $1 billion in myelofibrosis and other future development opportunities. We and BMS are evaluating luspatercept-aamt for the treatment of anemia in potential new indications that could provide additional sales opportunities.
BMS is responsible for paying 100% of the development costs for all clinical trials for luspatercept-aamt. We may receive a maximum of $100.0 million for remaining potential regulatory and commercial milestone payments. We have a co-promotion right in North America and our commercialization costs provided in the commercialization plan and budget approved by the Joint Commercialization Committee, or JCC, are entirely funded by BMS. Activities that we elect to conduct outside of the approved development or commercialization budgets to support REBLOZYL are at our own expense. We are eligible to receive tiered royalty payments from BMS on net sales of REBLOZYL in the low-to-mid 20% range.
Pulmonary
We are actively developing our lead pulmonary program, sotatercept, for the treatment of patients with pulmonary arterial hypertension, or PAH. Sotatercept is generally partnered with BMS, but we recently announced that Celgene grantedretain the exclusive rights to us to fund, develop, and lead the global commercialization of sotatercept in pulmonary arterial hypertension, orwhich we refer to as the PH field, and that includes PAH. PAH is a rare and chronic, rapidly progressing disorder characterized by the constriction of small pulmonary arteries, resulting in abnormally high blood pressure in the pulmonary arteries. We expect to initiate a

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In June 2020, we presented topline results of the PULSAR Phase 2 trial of sotatercept in patients with PAH on stable background PAH-specific therapies during the "Breaking News: Clinical Trials in Pulmonary Medicine" session of the American Thoracic Society, or ATS, 2020 Virtual Conference. Study investigators reported that the trial met its primary endpoint, pulmonary vascular resistance, and its key secondary endpoint, six-minute walk distance, and showed concordance of results across multiple additional endpoints and regardless of baseline characteristics. Sotatercept was generally well tolerated in the trial and adverse events observed in the study were generally consistent with previously published data on sotatercept in clinical trials in other patient populations. The 18-month extension period of the PULSAR trial is ongoing.
We are currently enrolling an exploratory study called SPECTRA to provide us with greater understanding of sotatercept's potential impact on PAH, with preliminary results expected in the first half of 2021. We also recently announced that the FDA has granted Breakthrough Therapy designation to sotatercept for the treatment of patients with PAH, inand that the first half of 2018.
Celgene is responsible for paying 100% of the development costs for all clinical trials for luspatercept as well as clinical trials withEMA has granted Priority Medicines, or PRIME, designation to sotatercept outside of pulmonary hypertension. We may receive a maximum of $545.0 million for the potential development, regulatory and commercial milestone payments. If luspatercept and, outsidetreatment of pulmonary hypertension, sotatercept, are commercialized, we are eligible to receive a royalty on net sales in the low-to-mid 20% range. We have the right to co-promote luspatercept and, outside of pulmonary hypertension, sotatercept, if approved, in North America, for which our commercialization costs will be entirely funded by Celgene. With regard to sotatercept in pulmonary hypertension, we have the right to fund and conduct all development and commercialization activities. patients with PAH.
If sotatercept is commercialized to treat pulmonary hypertensionPAH and we recognize such revenue, then Celgenewe will be eligible to receiveowe BMS a royalty in the low 20% range on global net sales. In certain circumstances, CelgeneBMS may recognize revenue related to the commercialization of sotatercept in pulmonary hypertension,PAH, and in this scenario we will be eligible to receive a royalty from CelgeneBMS such that the economic position of the parties is equivalent to the scenario in which we recognize such revenue.
We are independently developing our wholly-owned neuromuscular candidate, ACE-083. ACE-083 is designed for the treatment of focal muscle loss disorders,Funding and we are currently conducting a Phase 2 clinical trial with ACE-083 in patients with facioscapulohumeral dystrophy, or FSHD, as well as a Phase 2 clinical trial with ACE-083 in patients with Charcot-Marie-Tooth disease, or CMT. We expect to report part 1 preliminary results from dose cohort 1 of our Phase 2 clinical trial in patients with FSHD in January 2018, and we expect to report preliminary results from part 1 of all dose-escalation cohorts in both of our Phase 2 clinical trials with ACE-083 in 2018. We previously reported data from the Phase 1 clinical trial of ACE-083 showing marked increases in the volume of muscles treated with ACE-083, measured using magnetic resonance imaging or MRI.
In addition to our clinical programs, we are conducting research within our three focused disease areas-hematologic, neuromuscular and pulmonary-in order to identify new therapeutic candidates to advance into clinical trials. To this end, we expanded our discovery efforts with our proprietary platform technology, IntelliTrap™. We have nominated an IntelliTrap™ molecule, ACE-2494, a systemic muscle agent, as a candidate for clinical development, and we expect to initiate a Phase 1 healthy volunteer study by the end of 2017.Expense
As of SeptemberJune 30, 2017,2020, our operations have been primarily funded by $105.1 million in equity investments from venture investors, $509.7$773.8 million from public investors, $123.7$154.1 million in equity investments from our collaboration partners and $270.8$394.6 million in upfront payments, milestones, royalties, and net research and development payments from our collaboration partners. On July 6, 2020, we completed the sale in an underwritten public offering of 5,594,593 shares of common stock, including 729,729 shares of common stock sold pursuant to the underwriter's full exercise of their option to purchase additional shares, at a public offering price of $92.50 per share, resulting in net proceeds to us of $492.5 million.
We expect to continue to incur significant expenses and increasing operating losses over at least the next several years. We expect our expenses will increase substantially in connection with our ongoing activities, if and as we:

•conduct clinical trials for ACE-083, sotatercept ACE-2494in the PH field or any future therapeutic candidates;
•prepare for the potential launch and commercialization of sotatercept in the PH field;
•continue our preclinical studies and potential clinical development efforts of our existing preclinical therapeutic candidates;
•continue research activities for the discovery of new therapeutic candidates;
•manufacture therapeutic candidates for our preclinical studies and clinical trials;trials, and potentially for commercialization;
•establish and maintain a sales, marketing and distribution infrastructure to commercialize any products for which we have or may obtain regulatory approval;
•acquire or in-license other therapeutic candidates and patents;
•seek regulatory approval for our therapeutic candidates; and
operate as a public company.•attract and retain skilled personnel.
We will not generate revenue from product sales unless and until we or a partner successfully complete development and obtain regulatory approval for one or more of our therapeutic candidates. We expect that this will take a number of years and is subject to significant uncertainty. All current and future development and commercialization costs for luspatercept and, outside of pulmonary hypertension, sotatercept, are paid by Celgene. If we obtain regulatory approval for ACE-083, sotatercept ACE-2494,in the PH field, or any future therapeutic candidate, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution to the extent that such costs are not paid by future partners. We will seek to fund our operations through royalty revenue from the sale of our first and only commercial product, REBLOZYL, and potentially from the sale of equity, debt financings or other sources, including potential additional collaborations. However, we may not generate sufficient royalty revenue and may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms, or at all. If we fail to generate significant revenue or raise capital, or enter into such other arrangements as, and when, needed, we may have to significantly delay, scale back or discontinue the development or commercialization of one or more of our therapeutic candidates.
To date, we have only generated limited revenue from royalties on the sale of REBLOZYL since receiving our first regulatory approval from the FDA in November 2019. Our ability to generate product revenue and become profitable depends upon our and our partners’ ability to successfully commercialize products. We expect to incur losses for the foreseeable future, and we expect theseour losses to increase as we continue our development of, and seek regulatory approvals for, our therapeutic candidates and potentially begin to commercialize any additional approved products. For a description of the numerous risks and uncertainties associated with product development,
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see “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016.2019 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.

Financial Operations Overview
Impact of COVID-19 on our Business
A novel strain of coronavirus (COVID-19) was declared a global pandemic by the World Health Organization (WHO) in March 2020 and has caused an economic downturn on a global scale, as well as significant volatility in the financial markets. As of June 30, 2020, we have not experienced a significant financial or supply chain impact directly related to the pandemic, but have experienced some disruptions to clinical operations with regard to timelines to complete patient enrollment in our ongoing clinical trials, and commercialization efforts for REBLOZYL with regard to customer engagement and in-person promotion. In addition, as various geographies in the United States and worldwide reopen and then shut down due to surging COVID-19 infections, we may experience additional setbacks to our operations that could have a material impact on our business.
For a discussion of the risks presented by the COVID-19 pandemic to our results, see Risk Factors in Part II, Item 1A of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020.
Revenue
Collaboration Revenue
We have not generated any revenue from the sale of products. Our revenue to date has been predominantly derived from collaboration revenue, which includes license and milestone revenuesrevenue, cost-sharing revenue, and cost sharing revenue,royalties, generated through collaboration and license agreements with partners for the development and commercialization of our therapeutic candidates. Cost sharingCost-sharing revenue represents amounts reimbursed by our collaboration partners for expenses incurred by us for research and development activities and potentially, co-promotion activities under our collaboration agreements. Cost sharingCost-sharing revenue is recognized in the period that the related activities are performed. We recognize revenue from royalties when the related sales occur.
Costs and Expenses
Research and Development Expenses
Research and development expenses consist primarily of costs directly incurred by us for the development of our therapeutic candidates, which include:
•direct employee-related expenses, including salaries, benefits, travel and stock-based compensation expense of our research and development personnel;
•expenses incurred under agreements with clinical research organizations, or CROs, and investigative sites that will conduct our clinical trials;
•the cost of acquiring and manufacturing preclinical and clinical study materials and developing manufacturing processes;
•allocated facilities, depreciation, and other expenses, which include rent and maintenance of facilities, insurance and other supplies;
•expenses associated with obtaining and maintaining patents; and

•costs associated with preclinical activities and regulatory compliance.
Research and development costs are expensed as incurred. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and our clinical sites.
We cannot determine with certainty the duration and completion costs of the current or future clinical trials of our therapeutic candidates or if, when, or to what extent we will generate revenues from the commercialization and sale of any of our therapeutic candidates for which we or any partner obtain regulatory approval. We or our partners may never succeed in achieving regulatory approval for any of our therapeutic candidates.candidates beyond the initial approvals of REBLOZYL. The duration, costs and timing of clinical trials and development of our therapeutic candidates will depend on a variety of factors, including:
•the scope, rate of progress, and expense of our ongoing, as well as any additional, clinical trials and other research and development activities;
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•future clinical trial results;
•potential changes in government regulation; and
•the timing and receipt of any regulatory approvals.
A change in the outcome of any of these variables with respect to the development of a therapeutic candidate could mean a significant change in the costs and timing associated with the development of that therapeutic candidate. For example, if the U.S. Food and Drug Administration,FDA, or another regulatory authority were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of the clinical development of our therapeutic candidates, or if we experience significant delays in the enrollment in any clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development.
From inception through SeptemberJune 30, 2017,2020, we have incurred $529.5$888.6 million in research and development expenses. We plan to increase our research and development expenses for the foreseeable future as we continue the development of our TGF-beta platform therapeutic candidates, the discovery and development of preclinical therapeutic candidates, and the development of our clinical programs. ExpensesResearch and development expenses associated with luspaterceptluspatercept-aamt, and, outside of pulmonary hypertension,the PH field, sotatercept, are generally reimbursed 100% by Celgene.BMS. These reimbursements are recorded as revenue. We are expensing the costs of eight Phase 2 clinical trials for luspatercept, dalanterceptluspatercept-aamt, sotatercept, and ACE-083, of which the four for luspaterceptluspatercept-aamt trials are reimbursed by Celgene and the twoBMS. Our Phase 2 clinical trials for dalanterceptACE-083 are being discontinued. With respect to the luspatercept Phase 3luspatercept-aamt clinical trials directly conducted by Celgene,BMS, we do not incur and are not reimbursed for expenses related to these development activities.
We manage certain activities such as clinical trial operations, manufacture of therapeutic candidates, and preclinical animal toxicology studies through third-party CROs. The only costs we track by each therapeutic candidate are external costs such as services provided to us by CROs, manufacturing of preclinical and clinical drug product, and other outsourced research and development expenses. We do not assign or allocate to individual development programs internal costs such as salaries and benefits, facilities costs, lab supplies and the costs of preclinical research and studies.studies, except for luspatercept-aamt costs for the purposes of billing BMS. Our external research and development expenses during the three and ninesix months ended SeptemberJune 30, 20172020 and 20162019 are as follows:
  Three Months Ended 
 September 30,		 Nine Months Ended 
 September 30,
(in thousands) 2017 2016 2017 2016
Luspatercept(1) $1,329
 $1,693
 $4,783
 $5,012
Dalantercept(2) 939
 1,128
 3,688
 5,215
ACE-083 2,249
 1,820
 7,434
 3,434
ACE-2494 1,139
 —
 3,586
 —
Total direct research and development expenses 5,656
 4,641
 19,491
 13,661
Other expenses(3) 15,403
 12,461
 44,896
 35,831
Total research and development expenses $21,059
 $17,102
 $64,387
 $49,492
 Three Months Ended 
 
June 30,		Six Months Ended 
 
June 30,
(in thousands)2020201920202019
Luspatercept-aamt(1)$927  $921  $1,346  $2,260  
Sotatercept(2)8,744  3,915  17,724  8,138  
ACE-083(3)2,338  6,117  6,524  10,550  
Total direct research and development expenses12,009  10,953  25,594  20,948  
Other expenses(4)26,242  23,812  50,323  46,588  
Total research and development expenses$38,251  $34,765  $75,917  $67,536  

(1)These expenses associated with luspatercept-aamt are reimbursed 100% by BMS.
(1)Expenses associated with luspatercept are reimbursed 100% by Celgene.


(2)Development of dalantercept is being discontinued.

(2)These expenses are associated with our development of sotatercept in PAH.
(3)Other expenses include unallocated employee and contractor-related expenses, facility expenses, lab supplies, and miscellaneous expenses.

(3)Development of ACE-083 is being discontinued. We expect to incur all remaining material expense by the end of 2020.

(4)Other expenses include employee and unallocated contractor-related expenses, facility expenses, lab supplies, and miscellaneous research expenses, including expenses associated with preclinical and other development programs.
Selling, General and Administrative Expenses
GeneralSelling, general and administrative expenses consist primarily of salaries and related costs for personnel, including stock-based compensation and travel expenses for our employees in executive, commercial, operational, finance and human resource functions, and other selling, general and administrative expenses including directors’ fees, and professional fees for accounting and legal services.
We continue to incur expenses related to audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and Securities and Exchange Commission, or SEC, requirements, director and officer insurance premiums, and investor relations costs associated with being a public company.
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We anticipate that our selling, general and administrative expenses will increase in the future as we increase our headcount to support our continued research and development and potential commercialization of our therapeutic candidates. Additionally, if and when we believe regulatory approval of a therapeutic candidate appears likely, to the extent that we are undertaking commercialization of such therapeutic candidate ourselves, we anticipate an increase in payroll and related expenses as a result of our preparation for commercial operations.
Other Income (Expense) Income,, Net
Other income (expense) income,, net consists primarily of the re-measurement gain or loss associated with the change in the fair value of our common stock warrant liabilities and interest income earned on cash, cash equivalents and investments.
To estimate the fair value of our liability classified warrants, we use either the Monte Carlo simulation framework, which incorporates future financing events over the remaining life of the warrants to purchase common stock, or for certain re-measurement dates, due to the warrants being deeply in the money, the Black-Scholes option pricing model. We base the estimates in the pricing models, in part, on subjective assumptions, including stock price volatility, risk-free interest rate, dividend yield, and the fair value of the common stock underlying the warrants. The Black-Scholes option pricing model was used at SeptemberJune 30, 2017.2020.
Critical Accounting Policies and Estimates
Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition and accrued expenses and stock-based compensation. We also utilize significant estimates and assumptions in determining the fair value of our liability-classified warrants to purchase common stock.clinical expenses. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
ThereDuring the three and six months ended June 30, 2020, there have been no material changes to our critical accounting policies sinceas reported in our Annual Report on the Form 10-K for the year ended December 31, 2016.2019. For further information on our critical and other significant accounting policies, including the adoption of ASC 326, see the notes to the condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2016.2019.

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Results of Operations
Comparison of the Three Months Ended SeptemberJune 30, 20172020 and 2016
  Three Months Ended 
 September 30,		 Increase
(in thousands) 2017 2016 (Decrease)
Revenue:    
  
Collaboration revenue:    
  
License and milestone $135
 $135
 $—
Cost-sharing, net 2,879
 2,870
 9
Total revenue 3,014
 3,005
 9
Costs and expenses:    
  
Research and development 21,059
 17,102
 3,957
General and administrative 7,533
 6,411
 1,122
Total costs and expenses 28,592
 23,513
 5,079
Loss from operations (25,578) (20,508) (5,070)
Other income (expense), net 86
 (282) 368
Loss before income taxes (25,492) (20,790) (4,702)
Income tax benefit 41
 20
 21
Net loss $(25,451) $(20,770) $(4,681)
2019
 Three Months Ended 
 
June 30,		Increase
(in thousands)20202019(Decrease)
Revenue:  
Collaboration revenue:  
Milestone$25,000  $25,000  $—  
Cost-sharing, net3,678  2,666  1,012  
Royalty11,074  —  11,074  
Total revenue (all amounts are with a related party)39,752  27,666  12,086  
Costs and expenses:  
Research and development38,251  34,765  3,486  
Selling, general and administrative20,414  14,037  6,377  
Total costs and expenses58,665  48,802  9,863  
Loss from operations(18,913) (21,136) 2,223  
Other income, net466  3,230  (2,764) 
Loss before income taxes(18,447) (17,906) (541) 
Income tax (provision) benefit(4) 44  (48) 
Net loss$(18,451) $(17,862) $(589) 
Revenue.  We recognized revenue of $3.0$39.8 million in the three months ended SeptemberJune 30, 2017,2020, compared to $3.0$27.7 million in the same period in 2016.2019. All of the revenue in both periods was derived from the CelgeneBMS agreements. This $12.1 million increase is primarily related to royalty revenue from REBLOZYL sales recognized in 2020.
Research and Development Expenses.  Research and development expenses were $21.1$38.3 million in the three months ended SeptemberJune 30, 2017,2020, compared to $17.1$34.8 million in the same period in 2016.2019. This $4.0$3.5 million increase wasis primarily duerelated to an increasegrowth in personnel expenses totaling $2.8 million,order to support development of our wholly ownedwholly-owned therapeutic candidates and preclinical programs which includes and includes:
•an increase in stock-based compensationpersonnel and facilities-related expense of $1.2 million. Other increases include$2.4 million related to increased headcount to support our growth;
•an increase in contract manufacturing, drug supply, and toxicology of $4.3 million related to our ongoing clinical and preclinical programs; and
•an increase in miscellaneous research expense of $0.9 million; offset by
•a decrease in external clinical trial expense of $4.2 million due to the discontinuation of our ACE-083 program and toxicology expenseswind down of $1.4 million.our luspatercept-aamt clinical programs and transfer to BMS.
Selling, General and Administrative Expenses.  General  Selling, general and administrative expenses were $7.5$20.4 million in the three months ended SeptemberJune 30, 2017,2020, compared to $14.0 million in the same period in 2019. The $6.4 million increase is primarily due to the following factors:
•an increase in personnel expense and facilities-related expense of $4.6 million related to increased headcount to support our growth; and
•an increase in selling expense of $1.8 million to continue supporting the launch of REBLOZYL, our first commercial product, which was approved for its second indication by the FDA in April 2020, as well as market research and market development activities for sotatercept.
Other Income, Net.  Other income, net was $0.5 million in the three months ended June 30, 2020, compared to $3.2 million for the same period in 2016.2019. This $1.1$2.7 million increase was primarily due to an increase in personnel expense of $1.0 million.
Other Income (Expense), Net.  Other income, net was $0.1 million in the three months ended September 30, 2017, compared to other expense, net of $0.3 million for the same period in 2016. This $0.4 million changedecrease was primarily due to a $0.4 million decrease in the lossexpense associated with marking the common warrant liability to market and a $2.3 million decrease in each period.the interest earned on our investment portfolio as a result of a decrease in interest rates.
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Income Tax Benefit.Provision. Income tax benefitprovision is attributable to the realization of current year losses that offset unrealized gains recognized in other comprehensive income, from our investment portfolio.

Comparison of the NineSix Months Ended SeptemberJune 30, 20172020 and 2016
2019
 Nine Months Ended 
 September 30,		 Increase Six Months Ended 
 
June 30,		Increase
(in thousands) 2017 2016 (Decrease)(in thousands)20202019(Decrease)
Revenue:      Revenue:  
Collaboration revenue:      Collaboration revenue:  
License and milestone $406
 $15,415
 $(15,009)
MilestoneMilestone$25,000  $25,000  $—  
Cost-sharing, net 9,370
 8,987
 383
Cost-sharing, net6,502  5,447  1,055  
Total revenue 9,776
 24,402
 (14,626)
RoyaltyRoyalty12,594  —  12,594  
Total revenue (all amounts are with a related party)Total revenue (all amounts are with a related party)44,096  30,447  13,649  
Costs and expenses:      Costs and expenses:
Research and development 64,387
 49,492
 14,895
Research and development75,917  67,536  8,381  
General and administrative 26,735
 19,029
 7,706
Selling, general and administrativeSelling, general and administrative38,663  24,851  13,812  
Total costs and expenses 91,122
 68,521
 22,601
Total costs and expenses114,580  92,387  22,193  
Loss from operations (81,346) (44,119) (37,227)Loss from operations(70,484) (61,940) (8,544) 
Other income, net 791
 6,374
 (5,583)Other income, net1,113  6,003  (4,890) 
Loss before income taxes (80,555) (37,745) (42,810)Loss before income taxes(69,371) (55,937) (13,434) 
Income tax benefit 29
 20
 9
Income tax (provision) benefitIncome tax (provision) benefit(20) 24  (44) 
Net loss $(80,526) $(37,725) $(42,801)Net loss$(69,391) $(55,913) $(13,478) 
Revenue.  We recognized revenue of $9.8$44.1 million in the ninesix months ended SeptemberJune 30, 2017,2020, compared to $24.4$30.4 million in the same period in 2016.2019. All of the revenue in both periods was derived from the CelgeneBMS agreements. This $14.6$13.7 million decrease was primarily due to the receipt of a $15 million milestone payment from Celgene for the initiation of a Phase 3 clinical trial with luspatercept in 2016, offset in part by an increase in cost sharing revenue of $0.4 millionis primarily related to an increaseroyalty revenue from REBLOZYL sales recognized in reimbursement for personnel compared to the prior year.2020.
Research and Development Expenses.  Research and development expenses were $64.4$75.9 million in the ninesix months ended SeptemberJune 30, 2017,2020, compared to $49.5$67.5 million in the same period in 2016.2019. This $14.9$8.4 million increase wasis primarily duerelated to an increasegrowth in personnel expenses totaling $9.3 millionorder to support development of our wholly ownedwholly-owned therapeutic candidates and preclinical programs which includes and includes:
•an increase in stock-based compensationpersonnel and facilities-related expense of $4.7 million. Other increases include clinical trial$4.0 million related to increased headcount to support our growth;
•an increase in contract manufacturing, drug supply and toxicology expenses of $6.0 million. These increases were partially$10.8 million related to our ongoing clinical and preclinical programs; and
•an increase in miscellaneous research expense of $1.3 million; offset by
•a decrease in licensingexternal clinical trial expense relatedof $7.7 million due to payments that we made in connection with the achievementdiscontinuation of a milestone in 2016 totaling $0.9 million.our ACE-083 program and wind down of our luspatercept-aamt clinical programs and transfer to BMS.
Selling, General and Administrative Expenses.  General  Selling, general and administrative expenses were $26.7$38.7 million in the ninesix months ended SeptemberJune 30, 2017,2020, compared to $19.0$24.9 million in the same period in 2019. The $13.8 million increase is primarily due to the following factors:
•an increase in personnel expense and facilities-related expense of $9.8 million related to increased headcount to support our growth;
•an increase in selling expense of $3.4 million to continue supporting the launch of REBLOZYL, our first commercial product, which was approved for its second indication by the FDA in April 2020, as well as market research and market development activities for sotatercept; and
•an increase in other miscellaneous expenses of $0.6 million.
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Other Income, Net.  Other income, net was $1.1 million in the six months ended June 30, 2020, compared to $6.0 million for the same period in 2016.2019. This $7.7 million increase was primarily due to an increase in personnel expense of $7.9 million, which includes an increase in stock-based compensation expense of $3.8 million, primarily due to modifications of a former executive officer’s equity awards, which was announced in May 2017.
Other Income, Net.  Other income, net was $0.8 million in the nine months ended September 30, 2017, compared to $6.4 million for the same period in 2016. This $5.6$4.9 million decrease was primarily due to a $5.7$1.8 million decrease in the gainexpense associated with marking the common warrant liability to market.market and a $3.1 million decrease in the interest earned on our investment portfolio as a result of a decrease in interest rates.
Income Tax Benefit.Provision. Income tax benefitprovision is attributable to the realization of current year losses that offset unrealized gains recognized in other comprehensive income, from our investment portfolio.

Liquidity and Capital Resources
We have incurred losses and cumulative negative cash flows from operations since our inception in June 2003, and as of SeptemberJune 30, 2017,2020, we had an accumulated deficit of $445.1$780.8 million. We anticipate that we will continue to incur losses for at least the next several years. We expect that our research and development and selling, general and administrative expenses will continue to increase and, as a result, we willmay need additional capital to fund our operations, which we may raise through a combination of the sale of equity, debt financings or other sources, including potential additional collaborations.
As of SeptemberJune 30, 2017,2020, our operations have been primarily funded by $105.1 million in equity investments from venture investors, $509.7$773.8 million from public investors, $123.7$154.1 million in equity investments from our collaboration partners, and $270.8$394.6 million in upfront payments, milestones, royalties, and net research and development payments from our collaboration partners.

On July 6, 2020, we completed the sale in an underwritten public offering of 5,594,593 shares of common stock, including 729,729 shares of common stock sold pursuant to the underwriter's full exercise of their option to purchase additional shares, at a public offering price of $92.50 per share, resulting in net proceeds to us of $492.5 million.
As of SeptemberJune 30, 2017,2020, we had $366.6$389.8 million in cash, cash equivalents and investments. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation. We believe that our existing cash, cash equivalents and investments, including the net proceeds from the offering and the exercise of the underwriters' over-allotment, will be sufficient to fund our projected operating requirements into 2021.
Cash Flows
The following table sets forth the primary sources and uses of cash for each of the periods set forth below (in thousands):
 Six Months Ended June 30,
(in thousands)20202019
Net cash (used in) provided by: 
Operating activities$(89,401) $(40,508) 
Investing activities107,426  (190,985) 
Financing activities27,819  251,050  
Net increase in cash, cash equivalents and restricted cash$45,844  $19,557  
  Nine Months Ended September 30,
(in thousands) 2017 2016
Net cash (used in) provided by:    
Operating activities $(55,928) $(27,955)
Investing activities 82,117
 (113,691)
Financing activities 191,820
 144,879
Net increase in cash and cash equivalents $218,009
 $3,233
Operating Activities
Net cash used in operating activities was $55.9$89.4 million for the ninesix months ended SeptemberJune 30, 20172020, compared to $28.0$40.5 million during the same period in 2016. The change was driven primarily by 2019. Significant factors in this $48.9 million increase include:
•an increase in net loss of $42.8$13.5 million which includes lower revenue due to a $15.0 million milestone recognizedan increase in 2016operating expenses related to increased headcount and a $5.7 million decreasefacilities, external expenses for contract manufacturing, consulting, and other external expenses to support our wholly-owned therapeutic programs, as well as expenses for commercial activities for REBLOZYL, offset by an increase in the gainroyalty revenue associated with marking the common warrants to market. Operating expenses increased by $22.6 million for 2017, including an $8.5 millionsales of REBLOZYL;
•a net increase in operating assets and liabilities of $38.4 million, consisting primarily of an increase in collaboration receivables of $32.8 million and an increase in accrued expenses of $5.3 million; and
•a net increase in other non-cash expenses of $3.0 million largely related to an increase in stock-based compensation expense in part due to modificationsand fair value of the equity awards of our former Chief Operating Officer.common stock warrants.
Investing Activities
Net cash provided by investing activities was $82.1$107.4 million for the ninesix months ended SeptemberJune 30, 20172020, compared to net cash used in investing activities of $113.7$191.0 million forduring the nine months ended September 30, 2016. This increasesame period in net2019. Net cash provided by and used in investing activities was primarily dueconsisted of the following amounts relating to activity within our investment portfolio:
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•for the six months ended June 30, 2020, net proceeds from sales and maturities of our investments of $85.8$109.8 million during the nine months ended September 30, 2017 in connection with managing theour investment portfolio to meet our projected cash requirements, compared torequirements; and
•for the six months ended June 30, 2019, net purchases of $111.4investments of $189.7 million indue to the nine months ended September 30, 2016, in connection with implementingexecution of our investment policy.strategy in accordance with our policy as we began to invest the money raised in our January 2019 public offering in marketable securities.
Financing Activities
Net cash provided by financing activities was $191.8$27.8 million for the ninesix months ended SeptemberJune 30, 20172020, compared to $144.9$251.1 million forduring the same period in 2016. The increase is2019. Net cash provided by financing activities consisted primarily attributableof the following:
•for the six months ended June 30, 2020, $27.8 million in cash proceeds from the exercise of stock options and the issuance of common stock related to $187.6the employee stock purchase plan; and
•for the six months ended June 30, 2019, $248.1 million of proceeds received from our January 2019 public offering and the underwriters full exercise of the over-allotment option in September 2017, comparedthe offering, as well as $2.9 million in cash proceeds from the exercise of stock options and the issuance of common stock related to $140.3 million of proceeds received during the comparable period in 2016 from our public offering.employee stock purchase plan.
Operating Capital Requirements
To date, we have notonly generated anylimited revenue from royalties on the sale of our first and only commercial product, sales. We do not know when, or if, we will generate any revenue from product sales. We will not generate revenue from product sales unless and until we orREBLOZYL, since receiving our partners obtainfirst regulatory approval of and commercialize one of our current or future therapeutic candidates.from the FDA in November 2019. We anticipate that weour expenses will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue the development of, and seek and obtain regulatory approvals for, ACE-083, sotatercept ACE-2494in the PH field and any future therapeutic candidates, and begin to commercialize any approved products. We are subject to all of the risks inherent in the development of therapeutic candidates, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. We have incurred,

Based on our current operating plan and expect to continue to incur, additional costs associated with operating as a public company. We anticipate thatprojections, we will need additional funding in connection with our continuing operations.
We believe that our existingcurrent cash, cash equivalents and investments, includingtogether with the net proceeds from theour July 2020 public offering and the exercise of the underwriters' over-allotment option,expected royalty revenue from REBLOZYL sales, will be sufficient to fund our projected operating requirements into 2021. However, we will require additional capital for the further development of our existing therapeutic candidates and may also need to raise additional funds sooner to pursue other development activities related to additional therapeutic candidates.foreseeable future.

Until we can generate a sufficient amount of revenue from our products, if ever, we expect to fund our operations through a combination of equity offerings, debt financings or other sources, including potential additional collaborations. Additional

capital may not be available on favorable terms, if at all. If we are unable to generate sufficient revenue or raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of one or more of our therapeutic candidates. If we raise additional funds through the issuance of additional debt or equity securities, it could result in dilution to our existing stockholders and increased fixed payment obligations, and these securities may have rights senior to those of our common stock. If we incur indebtedness, we could become subject to covenants that would restrict our operations and potentially impair our competitiveness, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. We may not be able to enter into new collaboration arrangements for any of our proprietary therapeutic candidates. Any of these events could significantly harm our business, financial condition and prospects.
Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to:
•the achievement of milestones under our agreement with Celgene;BMS;


•the amount of royalties we receive on sales of REBLOZYL;

•the terms and timing of any other collaborative, licensing and other arrangements that we may establish;


•the initiation, progress, timing and completion of preclinical studies and clinical trials for our therapeutic candidates and potential therapeutic candidates;


•the number and characteristics of therapeutic candidates that we pursue;


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•the progress, costs and results of our clinical trials;


•the outcome, timing and cost of regulatory approvals;


•delays that may be caused by changing regulatory requirements;


•the cost and timing of hiring new employees to support our continued growth;


•the costs involved in filing and prosecuting patent applications and enforcing and defending patent claims;


•the costs and timing of procuring clinical and commercial supplies of our therapeutic candidates;


•the costs of preparing for the potential launch and commercialization of sotatercept or our other therapeutic candidates;

•the extent to which we acquire or invest in businesses, products or technologies; and


•the costs involved in defending and prosecuting litigation regarding in-licensed intellectual property.
Net Operating Loss (NOL) Carryforwards
We had net deferred tax assets of approximately $136.5$226.0 million as of December 31, 2016,2019, which have been fully offset by a valuation allowance due to uncertainties surrounding our ability to realize these tax benefits. The deferred tax assets are primarily composed of federal and state tax net operating loss, or NOL, carryforwards, research and development tax credit carryforwards, and deferred revenue, accruals, and other temporary differences. As of December 31, 2016,2019, we had federal NOL carryforwards of approximately $339.3$666.3 million and state NOL carryforwards of $293.7$689.8 million available to reduce future taxable income, if any.  TheseOf these federal and state NOL carryforwards, $438.0 million and $689.4 million, respectively, will expire at various times through 2036.2039. The federal NOL of $228.3 million and state NOL of $0.4 million generated beginning in 2018 can be carried forward indefinitely. In general, if we experience a greater than 50 percent aggregate change in ownership of certain significant stockholders over a three-year period, or a Section 382 ownership change, utilization of our pre-change NOL carryforwards are subject to an annual limitation under Section 382 of the Internal Revenue Code of 1986, as amended, and similar state laws. Such limitations may result in expiration of a portion of the NOL carryforwards before utilization and may be substantial. If we experience a Section 382 ownership change in connection with our public offerings or as a result of future changes in our stock ownership, some of which changes are outside our control, the tax benefits related to the NOL carryforwards may be limited or lost. For additional information about our taxes, see Note 13 to the financial statements in our Annual Report on Form 10-K for the year ended December 31, 2016.2019.

Contractual Obligations and Commitments
During the three months ended SeptemberJune 30, 2017,2020, there were no material changes to our contractual obligations and commitments described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2016 except as described in Note 13 of the notes to the condensed consolidated financial statements appearing elsewhere in this Quarterly Report on the Form 10-Q.2019.
Recent Accounting Pronouncements
For information on recent accounting pronouncements, see Recently Issued and AdoptedRecent Accounting StandardsPronouncements in the notes to the condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

Off-Balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the Securities and Exchange Commission.
Item 3. Quantitative and Qualitative Disclosures About Market Risks
We are exposed to market risk related to changes in interest rates. As of SeptemberJune 30, 20172020 and December 31, 2016,2019, we had cash, cash equivalents and investments of $366.6$389.8 million and $234.4$453.8 million, respectively. Our cash equivalents are invested primarily in bank deposits and money market mutual funds. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. Our investments are subject to interest rate risk and could fall in value if market interest rates increase. Due to the duration of our investment portfolio and the low risk profile of our investments, we do not believe an immediate 100 basis point change in interest rates would have a material effect on the fair market value of our portfolio. We have the ability to hold our investments until maturity, and therefore we would not expect our
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operating results or cash flows to be affected to any significant degree by the effect of a change in market interest rates on our investments.
We contract with CROs and manufacturers internationally. Transactions with these providers are predominantly settled in U.S. dollars and, therefore, we believe that we have only minimal exposure to foreign currency exchange risks. We do not hedge against foreign currency risks.
Item 4. Controls and Procedures
Management’s Evaluation of our Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, or the Exchange Act, is (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.
As of SeptemberJune 30, 2017,2020, management, with the participation of our Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of SeptemberJune 30, 2017,2020, the design and operation of our disclosure controls and procedures were effective.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended SeptemberJune 30, 2017,2020, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION
 
Item 1. Legal Proceedings
While we are not currently a party to any material legal proceedings, we could become subject to legal proceedings in the ordinary course of business. We do not expect any such potential items to have a significant impact on our financial position.
Item 1A. Risk Factors
There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016.2019 and the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020.
Item 6. Exhibits
The exhibits filed as part
Exhibit NumberDescription of Exhibit
31.1 
31.2 
32.1 
101.INSXBRL Instance Document
101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
104 Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101)





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Table of this Quarterly Report on Form 10-Q are set forth on the Exhibit Index, which is incorporated herein by reference.Contents

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ACCELERON PHARMA INC.
Date: November 7, 2017August 6, 2020By:/s/ HABIB J. DABLE
Habib J. Dable
Chief Executive Officer President and DirectorPresident
Date: November 7, 2017August 6, 2020By:/s/ KEVIN F. MCLAUGHLIN
Kevin F. McLaughlin
Senior Vice President, Chief Financial Officer and Treasurer



EXHIBIT INDEX

Exhibit NumberDescription of Exhibit
10.1
First Amendment to Lease, dated as of July 18, 2017, between MIT 128 Sidney Leasehold LLC and Acceleron Pharma Inc. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (001-36065), filed on July 19, 2017)
10.2+
Amended and Restated Collaboration, License and Option Agreement between Acceleron Pharma Inc. and Celgene Corporation, dated as of September 18, 2017
31.1
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INSXBRL Instance Document
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document

+Confidential treatment has been granted by, or is being requested from, the Securities and Exchange Commission as to certain portions of this Exhibit, which portions have been omitted and filed separately with the Securities and Exchange Commission as part of an application for confidential treatment pursuant to the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, as applicable.


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