Xencor (XNCR) 10-Q 7 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 04, 2018
Document and Entity Information
Entity Registrant Name	Xencor Inc
Entity Central Index Key	1,326,732
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		55,625,022
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1

Balance Sheets

Balance Sheets $ in Thousands	Mar. 31, 2018USD ($)
Current assets
Cash and cash equivalents	$ 251,572
Marketable securities	210,838
Accounts receivable	1,098
Income tax receivable	762
Prepaid expenses and other current assets	6,649
Total current assets	470,919
Property and equipment, net	8,921
Patents, licenses, and other intangible assets, net	11,316
Marketable securities - long term	120,089
Income tax receivable	762
Other assets	265
Total assets	612,272
Current liabilities
Accounts payable	8,523
Accrued expenses	4,611
Current portion of deferred rent	179
Deferred revenue	60,118
Total current liabilities	73,431
Deferred rent, less current portion	1,177
Total liabilities	74,608
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.01 par value: 10,000,000 authorized shares; -0- issued and outstanding shares at March 31, 2018 and December 31, 2017
Common stock, $0.01 par value: 200,000,000 authorized shares at December 31, 2017; 47,002,488 issued and outstanding at December 31, 2017	556
Additional paid-in capital	821,670
Accumulated other comprehensive loss	(2,201)
Accumulated deficit	(282,361)
Total stockholders' equity	537,664
Total liabilities and stockholders' equity	$ 612,272

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Condensed Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	55,616,875	47,002,488
Common stock, shares outstanding	55,616,875	47,002,488

Statements of Comprehensive Inc

Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Revenue
Collaborations, licenses and milestones		$ 3,500
Operating expenses
Research and development	$ 26,087	15,048
General and administrative	4,562	4,811
Total operating expenses	30,649	19,859
Loss from operations	(30,649)	(16,359)
Other income (expenses)
Interest income	1,158	1,057
Interest expense	(4)	(3)
Other income	2
Total other income, net	1,156	1,054
Loss before income taxes	(29,493)	(15,305)
Income tax expense		170
Net loss	(29,493)	(15,475)
Other comprehensive loss
Net unrealized gain (loss) on marketable securities	(393)	245
Comprehensive loss	$ (29,886)	$ (15,230)
Net loss per share attributable to common shareholders:
Basic and diluted net loss (in dollars per share)	$ (0.62)	$ (0.33)
Weighted average shares used to compute net loss per share attributable to common stockholders:
Basic and diluted (in shares)	47,753,922	46,598,797

Statement of Stockholders' Equi

Statement of Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total
Balance (Scenario, Previously Reported) at Dec. 31, 2017	$ 470	$ 570,670	$ (1,808)	$ (287,286)	$ 282,046
Balance at Dec. 31, 2017	$ 470	570,670	(1,808)	(252,868)	316,464
Balance (in shares) (Scenario, Previously Reported) at Dec. 31, 2017	47,002,488
Balance (in shares) at Dec. 31, 2017	47,002,488
Increase (Decrease) in Stockholders' Equity
Adoption of ASC 606 | ASU 2014-09				34,418	34,418
Balance, revised	$ 470	570,670	(1,808)	(252,868)	316,464
Sale of common stock, net of issuance cost	$ 84	245,421			245,505
Sale of common stock, net of issuance cost (in shares)	8,395,000
Issuance of common stock upon exercise and vesting of stock awards	$ 2	1,108			1,110
Issuance of common stock upon exercise and vesting of stock awards (in shares)	219,387
Comprehensive loss			(393)	(29,493)	(29,886)
Stock-based compensation expense		4,471			4,471
Balance at Mar. 31, 2018	$ 556	$ 821,670	$ (2,201)	$ (282,361)	$ 537,664
Balance (in shares) at Mar. 31, 2018	55,616,875

Statements of Cash Flows

Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities
Net loss	$ (29,493)	$ (15,475)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	730	410
Amortization of premium on marketable securities	480	659
Stock-based compensation	4,471	3,158
Abandonment of capitalized intangible assets	5	9
Changes in operating assets and liabilities:
Accounts receivable	44	1,678
Interest receivable	(309)	(505)
Prepaid expenses and other assets	(1,043)	(1,465)
Accounts payable	1,654	395
Accrued expenses	(869)	(190)
Income taxes	(157)	110
Deferred rent	242	(30)
Deferred revenue		700
Net cash used in operating activities	(24,245)	(10,546)
Cash flows from investing activities
Purchase of marketable securities	(31,697)	(6,988)
Purchase of intangible assets	(389)	(702)
Purchase of property and equipment	(2,346)	(494)
Proceeds from sale and maturities of marketable securities	47,020	16,911
Loan receivable	86	(174)
Net cash provided by investing activities	12,674	8,553
Cash flows from financing activities
Proceeds from issuance of common stock upon exercise of stock awards	1,110	1,026
Proceeds from issuance of common stock	260,245
Common stock issuance cost	(14,740)
Net cash provided by financing activities	246,615	1,026
Net increase (decrease) in cash and cash equivalents	235,044	(967)
Cash and cash equivalents, beginning of period	16,528	14,528
Cash and cash equivalents, end of period	251,572	13,561
Cash paid during the period for:
Interest	3	3
Taxes	170	60
Supplemental disclosures of non-cash investing activities
Unrealized gain (loss) on marketable securities, net of tax	$ (393)	$ 245

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2018
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	1. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim financial statements for Xencor, Inc. (the Company) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. Certain amounts in the prior period financial statements have been revised to conform to the presentation of the current period financial statements. See “Recent Accounting Pronouncements – Pronouncements Adopted in 2018. ” The financial statements include all adjustments (consisting only of normal recurring adjustments) that the management of the Company believes are necessary for a fair presentation of the periods presented. The preparation of interim financial statements requires the use of management’s estimates and assumptions that affect reported amounts of assets and liabilities at the date of the interim financial statements and the reported revenues and expenditures during the reported periods. These interim financial results are not necessarily indicative of the results expected for the full fiscal year or for any subsequent interim period. The accompanying unaudited interim financial statements and related notes should be read in conjunction with the audited financial statements and notes thereto included in the Company’s 2017 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 28, 2018. Use of Estimates The preparation of interim financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, other comprehensive gain (loss) and the related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to its accrued clinical trial and manufacturing development expenses, stock-based compensation expense, intangible assets and related amortization. Significant estimates in these interim financial statements include estimates made for accrued research and development expenses, stock based compensation expenses, intangible assets and related amortization. Intangible Assets The Company maintains definite-lived intangible assets related to certain capitalized costs of acquired licenses and third-party costs incurred in establishing and maintaining its intellectual property rights to its platform technologies and development candidates. These assets are amortized over their useful lives, which are estimated to be the remaining patent life or the contractual term of the license. The straight-line method is used to record amortization expense. The Company assesses its intangible assets for impairment if indicators are present or changes in circumstances suggest that impairment may exist. There were no impaired intangible assets at March 31, 2018. Marketable Securities The Company has an investment policy that includes guidelines on acceptable investment securities, minimum credit quality, maturity parameters and concentration and diversification. The Company invests its excess cash primarily in marketable securities issued by investment grade institutions. The Company considers its marketable securities to be available-for-sale. These assets are carried at fair value and the unrealized gains and losses are included in accumulated other comprehensive income (loss). Accrued interest on marketable securities is included in marketable securities. If a decline in the value of a marketable security in the Company’s investment portfolio is deemed to be other-than-temporary, the Company writes down the security to its current fair value and recognizes a loss as a charge against income. The Company reviews its portfolio of marketable securities, using both quantitative and qualitative factors, to determine if declines in fair value below cost are other-than-temporary. Recent Accounting Pronouncements Pronouncements Adopted in 2018 Effective January 1, 2018, the Company adopted Accounting Standards Codification Topic 606 (ASC 606), Revenue from Contracts with Customers , using the full retrospective transition method. Under this method, the Company is presenting its financial statements for the years ended December 31, 2016 and 2017 and applicable interim periods within the year ended 2017 as if ASC 606 had been effective for those periods. Under ASC 606 an entity recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. A five-step model is used to achieve the core principle: (1) identify the customer contract, (2) identify the contract’s performance obligations, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations and (5) recognize revenue when or as a performance obligation is satisfied. The Company applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. The new guidance provides that revenue recognition for performance obligations related to delivery of certain goods or services occurs when control over the good or service is transferred to the customer. In addition, the timing of revenue recognition from licensing of our intellectual property that are functional and are distinct performance obligations changed from being recognized over the term of access to our license or technology to being recognized at a point in time. See Note 11 “Prior Period Financial Statements” for a complete discussion of the impact of adopting the new standard. Effective January 1 2018, the Company adopted ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The standard clarifies when cash receipts and cash payments have aspects of more than one class of cash flows and cannot be separated. Classification will depend on the predominant source or use. The adoption did not have an effect on its statements of cash flow. Effective January 1, 2018, the Company adopted ASU No. 2017-09, Compensation – Stock Compensation (Topic 718) . The standard applies when a company changes the terms of a stock compensation award previously granted to an employee where modification accounting applies. According to the standard, modification accounting is not required if (1) the fair value of the modified award (or the award’s calculated value or intrinsic value as appropriate) is the same as the value immediately prior to its modification, (2) the vesting conditions of the modified award are the same as the vesting conditions of the award immediately prior to its modification; and (3) the award’s classification as an equity or liability is the same after the modification as it was immediately prior to its modification. The Company did not have any modifications upon adopting the new standard; therefore, adoption had no effect on the Company’s financial statements. Pronouncements Not Yet Effective In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which amends the guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses rather than as a direct write-down to the security. The amendment is effective for fiscal years beginning after December 15, 2019 including interim periods within those fiscal years. The Company will apply the standard’s provision as a cumulative effect adjustment to retained earnings as of the beginning of the first effective reporting period. The Company does not expect the adoption to have a material impact on its results of operations or financial position. In March 2017, the FASB issued ASU No. 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities, which amends the guidance on the amortization period of premiums on certain purchased callable debt securities by shortening the amortization period of premiums to the earliest call date. The amendment affects all entities that hold investments in callable debt securities that have an amortized cost basis in excess of the amount that is repayable by the issuer at the earliest call date. The amendment is effective for fiscal years beginning after December 31, 2018 with early adoption permitted. The Company will review the requirements of the standard but does not anticipate it will have a significant impact on its financial statements. In February 2018, the FASB issued ASU No. 2018-02. Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , an amendment which permits companies to reclassify the income tax effects of the 2017 Tax Cut and Jobs Act (TCJA) on items within accumulated other comprehensive income to retained earnings. The standard also requires new disclosures about these stranded tax effects and is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted and can be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized. The Company does not anticipate the new guidance will have a significant impact in its financial statements due to its net operating losses. There have been no other material changes to the significant accounting policies previously disclosed in the Company’s 2017 Annual Report on Form 10-K.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	3 Months Ended
	Mar. 31, 2018
Fair Value of Financial Instruments
Fair Value of Financial Instruments	2. Fair Value of Financial Instruments Financial instruments included in the financial statements include cash equivalents, marketable securities, accounts receivable, accounts payable and accrued expenses. Marketable securities and cash equivalents are carried at fair value. The fair value of the other financial instruments closely approximates their fair value due to their short term maturities. The Company accounts for recurring and non-recurring fair value measurements in accordance with FASB Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures . ASC 820 defines fair value, establishes a fair value hierarchy for assets and liabilities measured at fair value, and requires expanded disclosure about fair value measurements. The ASC 820 hierarchy ranks the quality of reliable inputs, or assumptions, used in the determination of fair value and requires assets and liabilities carried at fair value to be classified and disclosed in one of the following three categories: Level 1— Fair Value is determined by using unadjusted quoted prices that are available in active markets for identical assets or liabilities. Level 2— Fair Value is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in markets that are not active. Related inputs can also include those used in valuation or other pricing models, such as interest rates and yield curves that can be corroborated by observable market data. Level 3— Fair value is determined by inputs that are unobservable and not corroborated by market data. Use of these inputs involves significant and subjective judgments to be made by the reporting entity –e.g. determining an appropriate discount factor for illiquidity associated with a given security. The Company measures the fair value of financial assets using the highest level of inputs that are reasonably available as of the measurement date. The assets recorded at fair value are classified within the hierarchy as follows for the periods reported (in thousands): March 31, 2018 December 31, 2017 Total Total Fair Value Level 1 Level 2 Fair Value Level 1 Level 2 Money Market Funds $ 247,682 $ 247,682 $ — $ 5,175 $ 5,175 $ — Corporate Securities 112,648 — 112,648 123,270 — 123,270 Government Securities 218,279 — 218,279 223,530 — 223,530 $ 578,609 $ 247,682 $ 330,927 $ 351,975 $ 5,175 $ 346,800 Our policy is to record transfers of assets between Level 1 and Level 2 at their fair values as of the end of each reporting period, consistent with the date of the determination of fair value. During the three months ended March 31, 2018 and 2017, there were no transfers between Level 1 and Level 2. The Company does not have any Level 3 assets or liabilities.

Net Income (Loss) Per Share

Net Income (Loss) Per Share	3 Months Ended
	Mar. 31, 2018
Net Income (Loss) Per Share
Net Income (Loss) Per Share	3. Net Income (Loss) Per Share We compute net income (loss) per common share by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration of common stock equivalents. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common stock equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of the Company’s stock option grants. Potentially dilutive securities consisting of stock issuable under options and our 2013 Employee Stock Purchase Plan (ESPP) are not included in the diluted net loss per common share calculation where the inclusion of such shares would have had an antidilutive effect. Basic and diluted net income (loss) per common share is computed as follows (in thousands except share and per share data): Three Months Ended March 31, 2018 2017 (As Revised) (in thousands, except share and per share data) Numerator: Net loss attributable to common stockholders $ (29,493) $ (15,475) Denominator: Weighted-average common shares outstanding used in computing basic and diluted net loss 47,753,922 46,598,797 Basic and diluted net loss per common share $ (0.62) $ (0.33) For each of the three months ended March 31, 2018 and 2017 all outstanding potentially dilutive securities have been excluded from the calculation of diluted net loss per common share as the effect of including such securities would have been antidilutive.

Comprehensive Income (Loss)

Comprehensive Income (Loss)	3 Months Ended
	Mar. 31, 2018
Comprehensive Income (Loss)
Comprehensive Income (Loss)	4. Comprehensive Income (Loss) Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss). For the three months ended March 31, 2018 and 2017, the only component of other comprehensive loss is net unrealized gains (loss) on marketable securities. There were no material reclassifications out of accumulated other comprehensive income (loss) during the three months ended March 31, 2018 and 2017.

Marketable Securities

Marketable Securities	3 Months Ended
	Mar. 31, 2018
Marketable Securities
Marketable Securities	5. Marketable Securities The Company’s marketable securities held as of March 31, 2018 and December 31, 2017 are summarized below: Gross Gross Amortized Unrealized Unrealized March 31, 2018 Cost Gains Losses Fair Value (in thousands) Money Market Funds $ 247,682 $ — $ — $ 247,682 Corporate Securities 113,478 — (830) 112,648 Government Securities 219,640 — (1,361) 218,279 $ 580,800 $ — $ (2,191) $ 578,609 Reported as Cash and cash equivalents $ 247,682 Marketable securities 330,927 Total investments $ 578,609 Gross Gross Amortized Unrealized Unrealized December 31, 2017 Cost Gains Losses Fair Value (in thousands) Money Market Funds $ 5,175 $ — $ — $ 5,175 Corporate Securities 123,860 — (590) 123,270 Government Securities 224,739 — (1,209) 223,530 $ 353,774 $ — $ (1,799) $ 351,975 Reported as Cash and cash equivalents $ 5,175 Marketable securities 346,800 Total investments $ 351,975 The maturities of the Company’s marketable securities are as follows: Amortized Estimated March 31, 2018 Cost Fair Value (in thousands) Mature in one year or less $ 211,774 $ 210,838 Mature within two years 121,344 120,089 $ 333,118 $ 330,927 The unrealized losses on available-for-sale investments and their related fair values as of March 31, 2018 and December 31, 2017 are as follows: Less than 12 months 12 months or greater March 31, 2018 Fair value Unrealized losses Fair value Unrealized losses (in thousands) Corporate Securities $ 74,174 $ (276) $ 38,474 $ (554) Government Securities 136,664 (660) 81,615 (701) $ 210,838 $ (936) $ 120,089 $ (1,255) Less than 12 months 12 months or greater December 31, 2017 Fair value Unrealized losses Fair value Unrealized losses (in thousands) Corporate Securities $ 79,290 $ (137) $ 43,980 $ (453) Government Securities 128,313 (461) 95,217 (748) $ 207,603 $ (598) $ 139,197 $ (1,201) The unrealized losses from the listed securities are due to a change in the interest rate environment and not a change in the credit quality of the securities.

Sale of Additional Common Stock

Sale of Additional Common Stock	3 Months Ended
	Mar. 31, 2018
Sale of Additional Common Stock
Sale of Additional Common Stock	6. Sale of Additional Common Stock In March 2018, we completed the sale of 8,395,000 shares of common stock which included shares issued pursuant to our underwriters’ exercise of their over-allotment option pursuant to a follow-on financing. We received net proceeds of $245.5 million after underwriting discounts, commissions and offering expenses.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2018
Stock-Based Compensation
Stock-Based Compensation	7. Stock Based Compensation Our Board of Directors and the requisite stockholders previously approved the 2010 Equity Incentive Plan (the 2010 Plan). In October 2013, our Board of Directors approved the 2013 Equity Incentive Plan (the 2013 Plan) and in November 2013 our stockholders approved the 2013 Plan. The 2013 Plan became effective as of December 3, 2013, the date of the Company’s initial public offering (IPO). As of December 2, 2013, we suspended the 2010 Plan and no additional awards may be granted under the 2010 Plan. Any shares of common stock covered by awards granted under the 2010 Plan that terminate after December 2, 2013 by expiration, forfeiture, cancellation or other means without the issuance of such shares will be added to the 2013 Plan reserve. As of March 31, 2018, the total number of shares of common stock available for issuance under the 2013 Plan is 10,187,177, which includes 2,684,456 of common stock that were available for issuance under the 2010 Plan as of the effective date of the 2013 Plan. Unless otherwise determined by the Board, beginning January 1, 2014, and continuing until the expiration of the 2013 Plan, the total number of shares of common stock available for issuance under the 2013 Plan will automatically increase annually on January 1 of each year by 4% of the total number of issued and outstanding shares of common stock as of December 31 of the immediate preceding year. Pursuant to approval by our board on January 1, 2018, the total number of shares of common stock available for issuance under the 2013 Plan was increased by 1,880,100 shares. As of March 31, 2018, a total of 6,339,000 options have been issued under the 2013 Plan. In November 2013, our Board of Directors and stockholders approved the 2013 Employee Stock Purchase Plan (ESPP), which became effective as of December 5, 2013. We have reserved a total of 581,286 shares of common stock for issuance under the ESPP. Unless otherwise determined by our Board, beginning on January 1, 2014, and continuing until the expiration of the ESPP, the total number of shares of common stock available for issuance under the ESPP will automatically increase annually on January 1 by the lesser of (i) 1% of the total number of issued and outstanding shares of common stock as of December 31 of the immediately preceding year, or (ii) 621,814 shares of common stock. Pursuant to approval by our board, there was no increase in the number of authorized shares in the ESPP in 2018. As of March 31, 2018, we have issued a total of 292,393 shares of common stock under the ESPP. During the three months ended March 31, 2018, the Company awarded 33,933 Restricted Stock Units (RSUs) to certain employees. Vesting of these awards will be in three equal annual installments and is contingent on continued employment terms. The fair value of these awards is determined based on the intrinsic value of the stock on the date of grant and will be recognized as stock-based compensation expense over the requisite service period. Total employee, director and non-employee stock-based compensation expense recognized for the three months ended March 31, 2018 and 2017 are as follows (in thousands): Three Months Ended March 31, 2018 2017 General and administrative $ 1,617 $ 1,467 Research and development 2,854 1,691 $ 4,471 $ 3,158 Three Months Ended March 31, 2018 2017 Stock options $ 4,276 $ 3,039 ESPP 163 119 Restricted stock units 32 — $ 4,471 $ 3,158 The following table summarizes option activity under our stock plans and related information: Weighted Weighted Average Average Number of Exercise Remaining Aggregate Shares subject Price Contractual Intrinsic to outstanding (Per Term Value options Share) (in years) (in thousands) Balances at December 31, 2017 5,093,442 $ 15.32 7.62 Options granted 1,393,650 $ 24.41 Options forfeited (15,720) $ 21.34 Options exercised (219,387) $ 5.06 Balance at March 31, 2018 6,251,985 $ 17.69 8.04 $ 77,152 Exercisable 2,845,609 $ 13.07 6.87 $ 48,121 We calculate the intrinsic value as the difference between the exercise price of the options and the closing price of common stock of $29.98 per share as of March 31, 2018. Weighted average fair value of options granted during the three-month periods ended March 31, 2018 and 2017 was $16.12 and $16.95 per share, respectively. There were 1,135,600 options granted during the three-month period ended March 31, 2017. We estimated the fair value of each stock option using the Black-Scholes option-pricing model based on the date of grant of such stock option with the following weighted average assumptions for the three months ended March 31, 2018 and 2017: Options Three Months Ended March 31, 2018 2017 Expected term (years) 6.1 6.2 Expected volatility 73.1 % 89.2 % Risk-free interest rate 2.50 % 2.07 % Expected dividend yield — % — % ESPP Three Months Ended March 31, 2018 2017 Expected term (years) 0.5 - 2.0 0.5 - 2.0 Expected volatility 71.4 % 67.8 - 79.8 % Risk-free interest rate 1.47% - 1.80 % .55 - .93 % Expected dividend yield — % — % As of March 31, 2018, the unamortized compensation expense related to unvested stock options was $49.8 million. The remaining unamortized compensation expense will be recognized over the next three years. As of March 31, 2018, the unamortized compensation expense under our ESPP was $162,894. The remaining unamortized expense will be recognized over the next 1.7 years. The following table summarizes the restricted stock unit activity for the three-month period ended March 31, 2018: Weighted Restricted Average Grant Stock Date Fair Value Units (Per unit) Unvested at December 31, 2017 — $ — Granted 33,933 $ 27.64 Vested — $ — Forfeited — $ — Unvested at March 31, 2018 33,933 $ 27.64

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies
Commitments and Contingencies	8. Commitments and Contingencies Operating Leases The Company leases office and laboratory space in Monrovia, CA through June 2020. In July 2017, the Company entered into an amended lease agreement for additional space in the same building. The amended lease has a 64-month term with an option to renew for an additional five years. The lease terms for the original space were not amended. The Company also leases office space in San Diego, CA through June 2020. In June 2017, the Company entered into a new lease agreement for additional office space. The new lease has a 61-month term beginning from the date of occupancy and includes an option to renew for an additional five years. At March 31, 2018 the future minimum lease payments under the operating leases were as follows: Years ending December 31, For the remainder of the fiscal year $ 1,990 2019 2,726 2020 2,388 2021 1,980 2022 1,406 Rent expense for the three months ended March 31, 2018 and 2017 was $624,000 and $189,000 respectively. Contingencies From time to time, the Company may be subject to various litigation and related matters arising in the ordinary course of business. The Company does not believe it is currently subject to any material matters where there is at least a reasonable possibility that a material loss may be incurred. We are obligated to make future payments to third parties under in‑license agreements, including sublicense fees, royalties, and payments that become due and payable on the achievement of certain development and commercialization milestones. As the amount and timing of sublicense fees and the achievement and timing of these milestones are not probable and estimable, such commitments have not been included on our balance sheet. We have also entered into agreements with third party vendors which will require us to make future payments upon the delivery of goods and services in future periods.

Collaboration and Licensing Agr

Collaboration and Licensing Agreements	3 Months Ended
	Mar. 31, 2018
Collaboration and Licensing Agreements
Collaboration and Licensing Agreements	9. Collaboration and Licensing Agreements Following is a summary description of the material revenue arrangements, including arrangements that generated revenue in the three months ended March 31, 2018 and 2017. The revenue reported for each agreement has been adjusted to reflect the adoption of ASC 606 for each period presented. Novartis In June 2016, the Company entered into a Collaboration and License Agreement (the Novartis Agreement) with Novartis Institutes for BioMedical Research, Inc. (Novartis), to develop and commercialize bispecific and other Fc modulated antibody drug candidates using the Company’s proprietary XmAb® technologies and drug candidates. Pursuant to the Novartis Agreement: · The Company granted Novartis certain exclusive rights to research, develop and commercialize XmAb14045 and XmAb13676, two development stage products that incorporate the Company’s bispecific Fc technology, · The Company will apply its bispecific technology in up to four target pair antibodies identified by Novartis (each a Global Discovery Program), and · The Company will provide Novartis with a non-exclusive license to certain of its Fc technologies to apply against up to ten targets identified by Novartis. The Company received a non-refundable upfront payment under the Novartis Agreement of $150 million in July 2016 and is eligible to receive up to $2.4 billion in future development, regulatory and sales milestones in total for all programs that could be developed under the Novartis Agreement. The Company evaluated the Novartis Agreement under the new revenue recognition standard ASC 606 and concluded that Novartis is a customer. The Company identified the following performance obligations that it deemed to be distinct at the inception of the contract: · License to certain rights to Xencor’s XmAb14045 and XmAb13676; · Develop four bispecific drug candidates against four targets identified by Novartis (Global discovery program); and · License to Xencor’s Fc technologies for up to 10 targets identified and selected by Novartis. The Company considered the licenses as functional intellectual property as Novartis has the right to access its technology and such technology is functional to Novartis at the time that it has access to it. Under the Novartis Agreement, Novartis has substitution rights under each discovery program provided it has not advanced to filing an investigational new drug (IND) application. The Company’s obligation to provide services related to the discovery programs, and Novartis’ right to substitute programs is limited to the five-year period from the date of the Novartis agreement. The Company determined the transaction price at inception is the $150 million upfront payment to be allocated to the performance obligations. The Novartis agreement includes variable consideration for potential future milestones and royalties that were contingent on future success factors for development programs. The Company used the “most likely” method to determine the variable consideration. None of the development, regulatory or sales milestones or royalties were included in the transaction price. The Company will re-evaluate the transaction price in each reporting period as uncertain events are resolved or other changes in circumstances occur. In allocating the transaction price determined at inception, the Company determined that ASC 606 provides the use of a standalone selling price which is comparable to the relative selling price methodology used in the original accounting treatment for the transaction. The transaction price of $150 million was allocated to the performance obligations as follows: * $27.1 million to certain rights to the XmAb14045 Program, * $31.4 million to certain rights to the XmAb13676 Program, * $20.05 million to each of the four Global Discovery Programs, and * $11.3 million to the Fc licenses Under historical accounting guidance, the Company recognized as licensing revenue the amount of the total allocable consideration allocated to the rights to the XmAb13676 and XmAb14045 programs upon delivery of the exclusive licenses to Novartis, both of which were transferred as of the effective date of the Novartis Agreement. For each Global Discovery Program accepted by Novartis, the Company will recognize collaboration revenue of $20.05 million. Since Novartis has substitution rights for up to four target pair antibodies, revenue recognition would be delayed until the earlier that Novartis has filed an IND for a delivered discovery Program or the right to substitute the target pair lapses. For the license to the Fc technology the Company was recognizing as licensing revenue the amount of the total consideration allocated to the Fc license over the five-year research term beginning from the effective date of the Agreement. Under ASC 606, there was no change in the amount or timing of revenue recognized for the licenses for XmAb13676 and XmAb14045. ASC 606 changed the timing of revenue being recognized for the Global Discovery Programs. Under historical accounting guidance, no revenue is recognized on initial delivery of a discovery program as Novartis has the right to substitute a program and revenue is delayed until such substitution rights are exercised or lapse. Under ASC 606, revenue is recognized at the time that the Company delivers the initial discovery program. Xencor delivered a discovery program to Novartis in 2017 and is recognizing $20.05 million of revenue in the period of delivery, the third quarter of 2017. ASC 606 also changed the timing of revenue that is being recognized for the license to the Fc technology. Under historical accounting guidance, revenue was being recognized over the five-year research term and under ASC 606 the entire amount of revenue allocated to the license is being recognized at inception of the agreement, the second quarter of 2016. The change in revenue recognition resulted in a decrease in revenue of $0.6 million for the three months ended March 31, 2017. During the three months ended March 31, 2018 and 2017, we did not recognize any revenue related to the Novartis agreement. As discussed above, we decreased the revenue for the three months ended March 31, 2017 by $0.6 million in accordance with ASC 606. As of March 31, 2018, there is $60.1 million in deferred revenue related to the arrangement. Amgen, Inc. In September 2015, the Company entered into a research and license agreement (the Amgen Agreement) with Amgen, Inc. (Amgen) to develop and commercialize bispecific antibody product candidates using the Company’s proprietary XmAb® bispecific Fc technology. Under the Amgen Agreement, the Company granted an exclusive license to Amgen to develop and commercialize bispecific drug candidates from the Company’s preclinical program that bind the CD38 antigen and the cytotoxic T-cell binding domain CD3 (the CD38 Program). The Company also agreed to apply its bispecific technology to five previously identified Amgen provided targets (each a Discovery Program). The Company received a $45.0 million upfront payment from Amgen and is eligible to receive up to $1.7 billion in future development, regulatory and sales milestones in total for all six programs and is eligible to receive royalties on any global net sales of products. Under the Amgen Agreement, for each of the five Discovery Programs, the Company will apply its bispecific technology to antibody molecules provided by Amgen that bind Discovery Program Targets and return the bispecific product candidates to Amgen for further testing, development and commercialization. Amgen has the right to substitute up to three of the previously identified targets during the research term provided that Amgen has not initiated non-human primate studies with the Xencor provided bispecific candidate. The initial research term is three years from the date of the agreement but Amgen, at its option, may request an extension of one year if Xencor has not completed delivery of all five Discovery Program bispecific candidates to Amgen. Amgen will assume full responsibility for development and commercialization of product candidates under each of the Discovery Programs. The Company evaluated the Amgen Agreement under the new revenue recognition standard, ASC 606, and determined that it is a customer and that the CD38 Program and each of the five Discovery Programs represent the performance obligations under the contract. The Company determined the transaction price at inception is the $45 million upfront payment to be allocated to the performance obligations. The Amgen Agreement includes variable consideration for potential future milestones and royalties that were contingent on future success factors for development programs. The Company used the “most likely” method to determine the variable consideration. The Company included the $10 million development milestone that was received in the fourth quarter of 2017 in the transaction price as uncertainty associated with it has been resolved. No other development, regulatory or sales milestones or royalties were included in the transaction price. The Company will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur. In allocating the transaction price determined at inception, the Company determined that ASC 606 provides the use of a standalone selling price which is comparable to the relative selling price methodology used in the original accounting treatment for the transaction. The transaction price of $55 million was allocated to the performance obligations as follows: * $23.75 million to the CD38 Program and * $6.25 million to each of the five Discovery Programs Under historical accounting guidance, the Company recognized as collaboration revenue the amount of consideration allocated to the CD38 Programs upon delivery of the CD38 research material and data to Amgen in the fourth quarter of 2015. The Company recognized as milestone revenue $10 million in the fourth quarter of 2017 in connection with Amgen advancing a CD38 candidate to IND stage of development. During 2016, the Company recognized as collaboration revenue the amount of consideration for delivery of three Discovery Programs. The Company completed delivery of bispecific antibody candidates for all five Discovery Programs by September 15, 2016. Amgen elected to substitute one of the originally identified antibody candidates in the first quarter of 2016. Amgen exercised its option to substitute one of the originally identified candidates and its option to substitute a third candidate lapsed in September 2017; the Company recognized revenue related to a discovery program in the third quarter of 2017 upon the lapsing of the remaining substitution right. The Company completed delivery of the substituted discovery program in the first quarter of 2018. Under ASC 606, there is no change to the timing or the amount of revenue recognized for the CD38 program; the amount of upfront proceeds allocated to the CD38 program is recognized at the inception of the contract and the $10 million milestone revenue is recognized in the period that the uncertainty regarding the event is resolved, i.e., when the milestone event occurred. ASC 606 changed the timing of revenue recognized for the discovery programs. The Company’s performance obligation for the five discovery programs was fulfilled in 2016 when all five of the original discovery programs were delivered to Amgen. Under ASC 606 the substitution rights are not separate purchase obligations and do not delay recognition of revenue if control of the discovery program has been transferred. Accordingly, pursuant to ASC 606 the Company is recognizing $31.25 million of revenue for delivery of the five discovery programs in 2016. Under historical accounting guidance, the Company would have recognized $6.25 million and zero of revenue related to the Amgen arrangement for the three months ended March 31, 2018 and March 31, 2017, respectively. Under ASC 606, the Company is not recognizing any revenue for each of the three months ended March 31, 2018 and 2017. There is no deferred revenue as of March 31, 2018 related to this arrangement. Merck Sharp & Dohme Corporation In July 2013, we entered into a license agreement (the Merck Agreement) with Merck Sharp & Dohme Corp (Merck). Under the terms of the agreement, we provided Merck with a non-exclusive commercial license to certain patent rights to our Fc domains to apply to one of their compounds. The Merck Agreement provided for an upfront payment of $1.0 million and annual maintenance fees totaling $0.5 million. We are also eligible to receive future milestones and royalties as Merck advances the compound into clinical development. Under historical accounting guidance, the upfront payment and the annual maintenance fees were being recognized as licensing revenue over the five-year research term. Under ASC 606, the Company determined Merck to be a customer. The Company determined that the performance obligation under this agreement was the non-exclusive commercial license which we considered distinct and a functional intellectual property. The non-exclusive option did not provide a discount for future services and does not grant a material right. Therefore, the total transaction price at inception included the upfront payment and the present value of the five annual maintenance fees. Revenue recognized during the three months ended March 31, 2017 was decreased by $25,000. In February 2018, Merck notified the Company that it was terminating the Agreement and all future obligations were terminated. During each of the three months ended March 31, 2018 and 2017 there were no revenues recognized. There is no deferred revenue related to this arrangement at March 31, 2018. Alexion Pharmaceuticals, Inc. In January 2013, we entered into an option and license agreement with Alexion Pharmaceuticals, Inc. (Alexion). Under the terms of the agreement, we granted to Alexion an exclusive research license, with limited sublicensing rights, to make and use our Xtend technology to evaluate and advance compounds against six different target programs during a five-year research term under the agreement, up to completion of the first multi-dose human clinical trial for each target compound. Under the agreement, we received an upfront payment of $3.0 million and four annual maintenance fees of $0.5 million during the research term. In addition, we are eligible to receive development, regulatory and commercial milestones. If licensed products are successfully commercialized, we are also entitled to receive royalties based on a percentage of net sales of such products sold by Alexion, its affiliates or its sub licensees, which percentage is in the low single digits. Alexion’s royalty obligations continue on a product‑by‑product and country‑by‑ country basis until the expiration of the last‑to‑expire valid claim in a licensed patent covering the applicable product in such country. In the third quarter of 2014, Alexion achieved a Phase 1 milestone with ALXN1210. In the fourth quarter of 2015, Alexion exercised its option to take an exclusive commercial license to ALXN1210 and achieved a Phase 2 clinical development milestone for ALXN1210. In December 2016, Alexion achieved a Phase 3 clinical development milestone for ALXN1210. Under historical accounting guidance, the upfront payment and the annual licensing fees were being recognized over the five-year research term and each of the option payment and clinical milestones were recognized as revenue in the period that each event occurred. Under ASC 606, the Company determined Alexion to be a customer. The license of Xencor’s Xtend intellectual property is functional intellectual property, distinct and is the only performance obligation. The upfront fee, the net present value of the four $500,000 annual fees, the option exercise fee of $4 million and milestone payments of $8.5 million already received represent the total transaction price at inception. The $4 million option does not provide a discount on future services and does not grant a material right. The timing of revenue recognition for the option and milestones did not change under ASC 606 and have no effect on revised periods. Under ASC 606 the upfront payment and the present value of the annual licensing fees are recognized at inception of the agreement when Alexion is provided access to the technology. The adoption of ASC 606 resulted in a decrease in revenue of $250,000 for the three months ended March 31, 2017. During each of the three months ended March 31, 2018 and 2017, no revenue was recognized under this arrangement. There is no deferred revenue related to this arrangement at March 31, 2018. CSL Limited In February 2009, we entered into a research license and commercialization agreement with CSL Limited (CSL). Under the agreement, we provided CSL with a research license to our Fc Cytotoxic technology and options to non-exclusive commercial licenses. CSL elected to exercise one commercial license for a compound, CSL362. In 2013 CSL sublicensed CSL362 (now called talacotuzumab) to Janssen Biotech Inc. (Janssen Biotech). In March 2017, CSL, through its sub-licensee, Janssen Biotech, initiated a Phase 3 clinical trial for CSL362 and we received a milestone payment of $3.5 million. There is no change to the timing or amount of revenue recognized under this arrangement for the earlier periods presented as a result of adopting ASC 606. During the three months ended March 31, 2018 and 2017 we recognized zero and $3.5 million of revenue, respectively, under the arrangement. There is no deferred revenue related to this arrangement at March 31, 2018.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2018
Income Taxes
Income Taxes	10. Income taxes There is no provision for income taxes for the three-month periods ended March 31, 2018 as the Company sustained a loss and no income tax benefit can be recognized due to uncertainty about the Company’s ability to generate taxable income in future periods. The provision for income taxes for the three months period ended March 31, 2017 represents the interim period tax allocation of the federal and state alternative minimum tax based on the Company’s projected year-end effective income tax rates which cannot be offset by the Company’s net operating loss carryforwards. The Company has federal income tax receivable of $1.5 million at March 31, 2018 related to refundable alternative minimum tax credits. As of March 31, 2018, the Company’s deferred income tax assets, consisting primarily of net operating loss and tax credit carryforwards, have been fully offset by a valuation allowance.

Prior-Period Financial Statemen

Prior-Period Financial Statements	3 Months Ended
	Mar. 31, 2018
Prior-Period Financial Statements
Prior-Period Financial Statements	11. Prior-Period Financial Statements The Company adopted ASC 606 on January 1, 2018 using the full retrospective method and as a result the Company has revised its comparative financial statements for the prior period as if ASC 606 had been in effect for that period. The most significant changes to revenue recognition under ASC 606 relate to the timing of revenue recognized for arrangements that include licensing of our technologies. Under ASC 606 revenue related to licensing of access to our technologies is recognized at inception of the agreement, generally the effective date of the agreement. For existing licensing arrangements, the effect of ASC 606 is to shift revenue to earlier periods. Approximately $11.3 million of licensing revenue that was being recognized over the five-year period 2016-2021 is being recognized in the second quarter of 2016. The other significant change under ASC 606 relates to the timing of collaboration revenue when the Company delivers drug candidates to its collaboration partners after applying its technologies. For existing collaborations, the effect of ASC 606 is to accelerate revenue recognition to earlier periods. Approximately $6.25 million of collaboration revenue recognized in 2017 and 2018 under historical accounting guidance is being recognized in 2016 under ASC 606. An additional $20.5 million of collaboration revenue that would be recognized in 2018 is being recognized in 2017. The following tables summarize the effects of adopting ASC topic 606 on our financial statements. As Reported Effect of Adoption of As Revised 2017 ASC 606 2017 Assets Current assets Cash and cash equivalents $ 16,528 $ — $ 16,528 Marketable securities 207,603 — 207,603 Accounts receivable 1,142 — 1,142 Prepaid expenses and other current assets 5,606 — 5,606 Total current assets 230,879 — 230,879 Property and equipment, net 7,088 — 7,088 Patents, licenses, and other intangible assets, net 11,148 — 11,148 Marketable securities - long term 139,198 — 139,198 Income tax receivable 1,524 — 1,524 Loan receivable — 86 86 Interest receivable — 14 14 Other assets 265 — 265 Total assets $ 390,102 $ 100 $ 390,202 Liabilities and stockholders’ equity Current liabilities Accounts payable $ 6,869 $ — $ 6,869 Accrued expenses 5,480 — 5,480 Current portion of deferred rent 26 — 26 Current portion of deferred revenue 88,813 (28,695) 60,118 Income taxes 157 — 157 Total current liabilities 101,345 (28,695) 72,650 Deferred rent, less current portion 1,088 — 1,088 Deferred revenue, less current portion 5,623 (5,623) — Total liabilities 108,056 (34,318) 73,738 Commitments and contingencies Stockholders’ equity Preferred stock, $0.01 par value: 10,000,000 authorized shares; -0- issued and outstanding shares at December 31, 2017 — — — Common stock, $0.01 par value: 200,000,000 authorized shares at December 31, 2017; 47,002,488 issued and outstanding at December 31, 2017 470 — 470 Additional paid-in capital 570,670 — 570,670 Accumulated other comprehensive income loss (1,808) — (1,808) Accumulated deficit (287,286) 34,418 (252,868) Stockholders’ equity 282,046 34,418 316,464 Total liabilities and stockholders’ equity $ 390,102 $ 100 $ 390,202 As Reported As Revised Three Months Ended Effect of Three Months Ended March 31, Adoption of March 31, 2017 ASC 606 2017 Revenue Collaborations, licenses and milestones $ 4,340 $ (840) $ 3,500 Operating expenses Research and development 15,048 — 15,048 General and administrative 4,811 — 4,811 Total operating expenses 19,859 — 19,859 Loss from operations (15,519) (840) (16,359) Other income (expenses) Interest income 1,057 — 1,057 Interest expense (3) — (3) Total other income, net 1,054 — 1,054 Loss before income tax expense (14,465) (840) (15,305) Income tax expense 170 — 170 Net loss (14,635) (840) (15,475) Other comprehensive income (loss) Net unrealized gain on marketable securities 245 — 245 Comprehensive loss $ (14,390) $ (840) $ (15,230) Basic and diluted net loss per common share $ (0.31) $ (0.02) $ $ (0.33) Accumulated Additional Other Total Common Stock Paid Comprehensive Accumulated Stockholders’ Stockholders’ Equity Shares Amount in-Capital Loss Deficit Equity Balance, December 31, 2016 as originally reported 46,567,978 $ 466 $ 552,889 $ (1,441) $ (237,960) $ 313,954 Adoption of ASU 2016-09 — — 401 — (401) — Adoption of ASC 606 — — — — 23,979 23,979 Balance, December 31, 2016 as revised 46,567,978 466 553,290 (1,441) (214,382) 337,933 Issuance of common stock upon exercise of stock awards 363,603 4 2,793 — — 2,797 Issuance of common stock under the Employee Stock Purchase Plan 70,907 — 936 — — 936 Comprehensive loss — — — (367) (48,925) (49,292) Stock-based compensation — — 13,651 — — 13,651 Balance, December 31, 2017 47,002,488 $ 470 $ 570,670 $ (1,808) $ (263,307) $ 306,025 Adoption of ASC topic 606 — — — — 10,439 10,439 Balance, December 31, 2017 as revised 47,002,488 $ 470 $ 570,670 $ (1,808) $ (252,868) $ 316,464 As Reported As Revised Three Months Ended Effect of Three Months Ended March 31, Adoption of March 31, 2017 ASC 606 2017 Cash flows from operating activities Net loss $ (14,635) $ (840) $ (15,475) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 410 — 410 Amortization of premium on marketable securities 659 — 659 Stock-based compensation 3,158 — 3,158 Abandonment of capitalized intangible assets 9 — 9 Changes in operating assets and liabilities: Accounts receivable 1,678 — 1,678 Interest receivable (479) (26) (505) Prepaid expenses and other assets (1,465) — (1,465) Accounts payable 395 — 395 Accrued expenses (190) — (190) Income taxes 110 — 110 Deferred rent (30) — (30) Deferred revenue (340) 1,040 700 Net cash used in operating activities (10,720) 174 (10,546) Cash flows from investing activities Purchase of marketable securities (6,988) — (6,988) Purchase of intangible assets (702) — (702) Purchase of property and equipment (494) — (494) Proceeds from sale and maturities of marketable securities 16,911 — 16,911 Repayment of loan — (174) (174) Net cash provided by investing activities 8,727 (174) 8,553 Cash flows from financing activities Proceeds from issuance of common stock upon exercise of stock awards 1,026 — 1,026 Net cash provided by financing activities 1,026 — 1,026 Net decrease in cash and cash equivalents (967) — (967) Cash and cash equivalents , beginning of period 14,528 — 14,528 Cash and cash equivalents , end of period $ 13,561 $ — $ 13,561

Summary of Significant Accoun18

Summary of Significant Accounting Policies (Polices)	3 Months Ended
	Mar. 31, 2018
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The accompanying unaudited interim financial statements for Xencor, Inc. (the Company) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. Certain amounts in the prior period financial statements have been revised to conform to the presentation of the current period financial statements. See “Recent Accounting Pronouncements – Pronouncements Adopted in 2018. ” The financial statements include all adjustments (consisting only of normal recurring adjustments) that the management of the Company believes are necessary for a fair presentation of the periods presented. The preparation of interim financial statements requires the use of management’s estimates and assumptions that affect reported amounts of assets and liabilities at the date of the interim financial statements and the reported revenues and expenditures during the reported periods. These interim financial results are not necessarily indicative of the results expected for the full fiscal year or for any subsequent interim period. The accompanying unaudited interim financial statements and related notes should be read in conjunction with the audited financial statements and notes thereto included in the Company’s 2017 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 28, 2018.
Use of Estimates	Use of Estimates The preparation of interim financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, other comprehensive gain (loss) and the related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to its accrued clinical trial and manufacturing development expenses, stock-based compensation expense, intangible assets and related amortization. Significant estimates in these interim financial statements include estimates made for accrued research and development expenses, stock based compensation expenses, intangible assets and related amortization.
Intangible Assets	Intangible Assets The Company maintains definite-lived intangible assets related to certain capitalized costs of acquired licenses and third-party costs incurred in establishing and maintaining its intellectual property rights to its platform technologies and development candidates. These assets are amortized over their useful lives, which are estimated to be the remaining patent life or the contractual term of the license. The straight-line method is used to record amortization expense. The Company assesses its intangible assets for impairment if indicators are present or changes in circumstances suggest that impairment may exist. There were no impaired intangible assets at March 31, 2018.
Marketable Securities	Marketable Securities The Company has an investment policy that includes guidelines on acceptable investment securities, minimum credit quality, maturity parameters and concentration and diversification. The Company invests its excess cash primarily in marketable securities issued by investment grade institutions. The Company considers its marketable securities to be available-for-sale. These assets are carried at fair value and the unrealized gains and losses are included in accumulated other comprehensive income (loss). Accrued interest on marketable securities is included in marketable securities. If a decline in the value of a marketable security in the Company’s investment portfolio is deemed to be other-than-temporary, the Company writes down the security to its current fair value and recognizes a loss as a charge against income. The Company reviews its portfolio of marketable securities, using both quantitative and qualitative factors, to determine if declines in fair value below cost are other-than-temporary.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Pronouncements Adopted in 2018 Effective January 1, 2018, the Company adopted Accounting Standards Codification Topic 606 (ASC 606), Revenue from Contracts with Customers , using the full retrospective transition method. Under this method, the Company is presenting its financial statements for the years ended December 31, 2016 and 2017 and applicable interim periods within the year ended 2017 as if ASC 606 had been effective for those periods. Under ASC 606 an entity recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. A five-step model is used to achieve the core principle: (1) identify the customer contract, (2) identify the contract’s performance obligations, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations and (5) recognize revenue when or as a performance obligation is satisfied. The Company applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. The new guidance provides that revenue recognition for performance obligations related to delivery of certain goods or services occurs when control over the good or service is transferred to the customer. In addition, the timing of revenue recognition from licensing of our intellectual property that are functional and are distinct performance obligations changed from being recognized over the term of access to our license or technology to being recognized at a point in time. See Note 11 “Prior Period Financial Statements” for a complete discussion of the impact of adopting the new standard. Effective January 1 2018, the Company adopted ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The standard clarifies when cash receipts and cash payments have aspects of more than one class of cash flows and cannot be separated. Classification will depend on the predominant source or use. The adoption did not have an effect on its statements of cash flow. Effective January 1, 2018, the Company adopted ASU No. 2017-09, Compensation – Stock Compensation (Topic 718) . The standard applies when a company changes the terms of a stock compensation award previously granted to an employee where modification accounting applies. According to the standard, modification accounting is not required if (1) the fair value of the modified award (or the award’s calculated value or intrinsic value as appropriate) is the same as the value immediately prior to its modification, (2) the vesting conditions of the modified award are the same as the vesting conditions of the award immediately prior to its modification; and (3) the award’s classification as an equity or liability is the same after the modification as it was immediately prior to its modification. The Company did not have any modifications upon adopting the new standard; therefore, adoption had no effect on the Company’s financial statements. Pronouncements Not Yet Effective In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which amends the guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses rather than as a direct write-down to the security. The amendment is effective for fiscal years beginning after December 15, 2019 including interim periods within those fiscal years. The Company will apply the standard’s provision as a cumulative effect adjustment to retained earnings as of the beginning of the first effective reporting period. The Company does not expect the adoption to have a material impact on its results of operations or financial position. In March 2017, the FASB issued ASU No. 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities, which amends the guidance on the amortization period of premiums on certain purchased callable debt securities by shortening the amortization period of premiums to the earliest call date. The amendment affects all entities that hold investments in callable debt securities that have an amortized cost basis in excess of the amount that is repayable by the issuer at the earliest call date. The amendment is effective for fiscal years beginning after December 31, 2018 with early adoption permitted. The Company will review the requirements of the standard but does not anticipate it will have a significant impact on its financial statements. In February 2018, the FASB issued ASU No. 2018-02. Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , an amendment which permits companies to reclassify the income tax effects of the 2017 Tax Cut and Jobs Act (TCJA) on items within accumulated other comprehensive income to retained earnings. The standard also requires new disclosures about these stranded tax effects and is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted and can be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized. The Company does not anticipate the new guidance will have a significant impact in its financial statements due to its net operating losses. There have been no other material changes to the significant accounting policies previously disclosed in the Company’s 2017 Annual Report on Form 10-K.

Fair Value of Financial Instr19

Fair Value of Financial Instruments (Tables)	3 Months Ended
	Mar. 31, 2018
Fair Value of Financial Instruments
Schedule of assets recorded at fair value	The assets recorded at fair value are classified within the hierarchy as follows for the periods reported (in thousands): March 31, 2018 December 31, 2017 Total Total Fair Value Level 1 Level 2 Fair Value Level 1 Level 2 Money Market Funds $ 247,682 $ 247,682 $ — $ 5,175 $ 5,175 $ — Corporate Securities 112,648 — 112,648 123,270 — 123,270 Government Securities 218,279 — 218,279 223,530 — 223,530 $ 578,609 $ 247,682 $ 330,927 $ 351,975 $ 5,175 $ 346,800

Net Income (Loss) Per Share (Ta

Net Income (Loss) Per Share (Tables)	3 Months Ended
	Mar. 31, 2018
Net Income (Loss) Per Share
Schedule of basic and diluted net income (loss) per common share	Basic and diluted net income (loss) per common share is computed as follows (in thousands except share and per share data): Three Months Ended March 31, 2018 2017 (As Revised) (in thousands, except share and per share data) Numerator: Net loss attributable to common stockholders $ (29,493) $ (15,475) Denominator: Weighted-average common shares outstanding used in computing basic and diluted net loss 47,753,922 46,598,797 Basic and diluted net loss per common share $ (0.62) $ (0.33)

Marketable Securities (Tables)

Marketable Securities (Tables)	3 Months Ended
	Mar. 31, 2018
Marketable Securities
Schedule of marketable securities	Gross Gross Amortized Unrealized Unrealized March 31, 2018 Cost Gains Losses Fair Value (in thousands) Money Market Funds $ 247,682 $ — $ — $ 247,682 Corporate Securities 113,478 — (830) 112,648 Government Securities 219,640 — (1,361) 218,279 $ 580,800 $ — $ (2,191) $ 578,609 Reported as Cash and cash equivalents $ 247,682 Marketable securities 330,927 Total investments $ 578,609 Gross Gross Amortized Unrealized Unrealized December 31, 2017 Cost Gains Losses Fair Value (in thousands) Money Market Funds $ 5,175 $ — $ — $ 5,175 Corporate Securities 123,860 — (590) 123,270 Government Securities 224,739 — (1,209) 223,530 $ 353,774 $ — $ (1,799) $ 351,975 Reported as Cash and cash equivalents $ 5,175 Marketable securities 346,800 Total investments $ 351,975
Schedule of maturities of marketable securities	Amortized Estimated March 31, 2018 Cost Fair Value (in thousands) Mature in one year or less $ 211,774 $ 210,838 Mature within two years 121,344 120,089 $ 333,118 $ 330,927
Schedule of unrealized losses on available-for-sale investments	The unrealized losses on available-for-sale investments and their related fair values as of March 31, 2018 and December 31, 2017 are as follows: Less than 12 months 12 months or greater March 31, 2018 Fair value Unrealized losses Fair value Unrealized losses (in thousands) Corporate Securities $ 74,174 $ (276) $ 38,474 $ (554) Government Securities 136,664 (660) 81,615 (701) $ 210,838 $ (936) $ 120,089 $ (1,255) Less than 12 months 12 months or greater December 31, 2017 Fair value Unrealized losses Fair value Unrealized losses (in thousands) Corporate Securities $ 79,290 $ (137) $ 43,980 $ (453) Government Securities 128,313 (461) 95,217 (748) $ 207,603 $ (598) $ 139,197 $ (1,201)

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2018
Stock-Based Compensation
Schedule of total employee, director and non-employee stock-based compensation expense recognized	Three Months Ended March 31, 2018 2017 General and administrative $ 1,617 $ 1,467 Research and development 2,854 1,691 $ 4,471 $ 3,158 Three Months Ended March 31, 2018 2017 Stock options $ 4,276 $ 3,039 ESPP 163 119 Restricted stock units 32 — $ 4,471 $ 3,158
Summary of stock option activity	Weighted Weighted Average Average Number of Exercise Remaining Aggregate Shares subject Price Contractual Intrinsic to outstanding (Per Term Value options Share) (in years) (in thousands) Balances at December 31, 2017 5,093,442 $ 15.32 7.62 Options granted 1,393,650 $ 24.41 Options forfeited (15,720) $ 21.34 Options exercised (219,387) $ 5.06 Balance at March 31, 2018 6,251,985 $ 17.69 8.04 $ 77,152 Exercisable 2,845,609 $ 13.07 6.87 $ 48,121
Schedule of weighted average assumptions used for estimation of fair value of stock options	Options Three Months Ended March 31, 2018 2017 Expected term (years) 6.1 6.2 Expected volatility 73.1 % 89.2 % Risk-free interest rate 2.50 % 2.07 % Expected dividend yield — % — %
Schedule of weighted average assumptions used for estimation of fair value of ESPP	ESPP Three Months Ended March 31, 2018 2017 Expected term (years) 0.5 - 2.0 0.5 - 2.0 Expected volatility 71.4 % 67.8 - 79.8 % Risk-free interest rate 1.47% - 1.80 % .55 - .93 % Expected dividend yield — % — %
Summary of restricted stock unity activity	Weighted Restricted Average Grant Stock Date Fair Value Units (Per unit) Unvested at December 31, 2017 — $ — Granted 33,933 $ 27.64 Vested — $ — Forfeited — $ — Unvested at March 31, 2018 33,933 $ 27.64

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies
Schedule of future minimum payments for non-cancellable operating leases	Years ending December 31, For the remainder of the fiscal year $ 1,990 2019 2,726 2020 2,388 2021 1,980 2022 1,406

Prior-Period Financial Statem24

Prior-Period Financial Statements (Tables)	3 Months Ended
	Mar. 31, 2018
ASU 2014-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Summary of effect of adopting new accounting pronouncement	The following tables summarize the effects of adopting ASC topic 606 on our financial statements. As Reported Effect of Adoption of As Revised 2017 ASC 606 2017 Assets Current assets Cash and cash equivalents $ 16,528 $ — $ 16,528 Marketable securities 207,603 — 207,603 Accounts receivable 1,142 — 1,142 Prepaid expenses and other current assets 5,606 — 5,606 Total current assets 230,879 — 230,879 Property and equipment, net 7,088 — 7,088 Patents, licenses, and other intangible assets, net 11,148 — 11,148 Marketable securities - long term 139,198 — 139,198 Income tax receivable 1,524 — 1,524 Loan receivable — 86 86 Interest receivable — 14 14 Other assets 265 — 265 Total assets $ 390,102 $ 100 $ 390,202 Liabilities and stockholders’ equity Current liabilities Accounts payable $ 6,869 $ — $ 6,869 Accrued expenses 5,480 — 5,480 Current portion of deferred rent 26 — 26 Current portion of deferred revenue 88,813 (28,695) 60,118 Income taxes 157 — 157 Total current liabilities 101,345 (28,695) 72,650 Deferred rent, less current portion 1,088 — 1,088 Deferred revenue, less current portion 5,623 (5,623) — Total liabilities 108,056 (34,318) 73,738 Commitments and contingencies Stockholders’ equity Preferred stock, $0.01 par value: 10,000,000 authorized shares; -0- issued and outstanding shares at December 31, 2017 — — — Common stock, $0.01 par value: 200,000,000 authorized shares at December 31, 2017; 47,002,488 issued and outstanding at December 31, 2017 470 — 470 Additional paid-in capital 570,670 — 570,670 Accumulated other comprehensive income loss (1,808) — (1,808) Accumulated deficit (287,286) 34,418 (252,868) Stockholders’ equity 282,046 34,418 316,464 Total liabilities and stockholders’ equity $ 390,102 $ 100 $ 390,202 As Reported As Revised Three Months Ended Effect of Three Months Ended March 31, Adoption of March 31, 2017 ASC 606 2017 Revenue Collaborations, licenses and milestones $ 4,340 $ (840) $ 3,500 Operating expenses Research and development 15,048 — 15,048 General and administrative 4,811 — 4,811 Total operating expenses 19,859 — 19,859 Loss from operations (15,519) (840) (16,359) Other income (expenses) Interest income 1,057 — 1,057 Interest expense (3) — (3) Total other income, net 1,054 — 1,054 Loss before income tax expense (14,465) (840) (15,305) Income tax expense 170 — 170 Net loss (14,635) (840) (15,475) Other comprehensive income (loss) Net unrealized gain on marketable securities 245 — 245 Comprehensive loss $ (14,390) $ (840) $ (15,230) Basic and diluted net loss per common share $ (0.31) $ (0.02) $ $ (0.33) Accumulated Additional Other Total Common Stock Paid Comprehensive Accumulated Stockholders’ Stockholders’ Equity Shares Amount in-Capital Loss Deficit Equity Balance, December 31, 2016 as originally reported 46,567,978 $ 466 $ 552,889 $ (1,441) $ (237,960) $ 313,954 Adoption of ASU 2016-09 — — 401 — (401) — Adoption of ASC 606 — — — — 23,979 23,979 Balance, December 31, 2016 as revised 46,567,978 466 553,290 (1,441) (214,382) 337,933 Issuance of common stock upon exercise of stock awards 363,603 4 2,793 — — 2,797 Issuance of common stock under the Employee Stock Purchase Plan 70,907 — 936 — — 936 Comprehensive loss — — — (367) (48,925) (49,292) Stock-based compensation — — 13,651 — — 13,651 Balance, December 31, 2017 47,002,488 $ 470 $ 570,670 $ (1,808) $ (263,307) $ 306,025 Adoption of ASC topic 606 — — — — 10,439 10,439 Balance, December 31, 2017 as revised 47,002,488 $ 470 $ 570,670 $ (1,808) $ (252,868) $ 316,464 As Reported As Revised Three Months Ended Effect of Three Months Ended March 31, Adoption of March 31, 2017 ASC 606 2017 Cash flows from operating activities Net loss $ (14,635) $ (840) $ (15,475) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 410 — 410 Amortization of premium on marketable securities 659 — 659 Stock-based compensation 3,158 — 3,158 Abandonment of capitalized intangible assets 9 — 9 Changes in operating assets and liabilities: Accounts receivable 1,678 — 1,678 Interest receivable (479) (26) (505) Prepaid expenses and other assets (1,465) — (1,465) Accounts payable 395 — 395 Accrued expenses (190) — (190) Income taxes 110 — 110 Deferred rent (30) — (30) Deferred revenue (340) 1,040 700 Net cash used in operating activities (10,720) 174 (10,546) Cash flows from investing activities Purchase of marketable securities (6,988) — (6,988) Purchase of intangible assets (702) — (702) Purchase of property and equipment (494) — (494) Proceeds from sale and maturities of marketable securities 16,911 — 16,911 Repayment of loan — (174) (174) Net cash provided by investing activities 8,727 (174) 8,553 Cash flows from financing activities Proceeds from issuance of common stock upon exercise of stock awards 1,026 — 1,026 Net cash provided by financing activities 1,026 — 1,026 Net decrease in cash and cash equivalents (967) — (967) Cash and cash equivalents , beginning of period 14,528 — 14,528 Cash and cash equivalents , end of period $ 13,561 $ — $ 13,561

Summary of Significant Accoun25

Summary of Significant Accounting Policies - Intangibles (Details)	3 Months Ended
	Mar. 31, 2018USD ($)
Summary of Significant Accounting Policies
Intangible assets impaired	$ 0

Fair Value of Financial Instr26

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Fair Value of Financial Instruments
Money Market Funds	$ 251,572	$ 16,528	$ 13,561	$ 14,528
Total Fair Value	578,609	351,975
Transfers from level 1 to level 2	0		0
Transfers from level 2 to level 1	0		$ 0
Money Market Funds
Fair Value of Financial Instruments
Money Market Funds	247,682	5,175
Corporate Securities
Fair Value of Financial Instruments
Securities	112,648	123,270
Government Securities
Fair Value of Financial Instruments
Securities	218,279	223,530
Level 1
Fair Value of Financial Instruments
Total Fair Value	247,682	5,175
Level 1 | Money Market Funds
Fair Value of Financial Instruments
Money Market Funds	247,682	5,175
Level 2
Fair Value of Financial Instruments
Total Fair Value	330,927	346,800
Level 2 | Corporate Securities
Fair Value of Financial Instruments
Securities	112,648	123,270
Level 2 | Government Securities
Fair Value of Financial Instruments
Securities	$ 218,279	$ 223,530

Net Income (Loss) Per Share (De

Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Numerator:
Net loss attributable to common stockholders	$ (29,493)	$ (15,475)
Denominator:
Weighted-average common shares outstanding used in computing basic and diluted net loss	47,753,922	46,598,797
Basic and diluted net loss (in dollars per share)	$ (0.62)	$ (0.33)

Marketable Securities (Details)

Marketable Securities (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities
Cash and cash equivalents	$ 251,572	$ 16,528	$ 13,561	$ 14,528
Investments, amortized cost	580,800	353,774
Investments	578,609	351,975
Total amortized cost	333,118
Gross unrealized losses	(2,191)	(1,799)
Securities	330,927
Marketable securities
Schedule of Available-for-sale Securities
Securities	330,927	346,800
Money Market Funds
Schedule of Available-for-sale Securities
Cash and cash equivalents	247,682	5,175
Corporate Securities
Schedule of Available-for-sale Securities
Total amortized cost	113,478	123,860
Gross unrealized losses	(830)	(590)
Securities	112,648	123,270
Government Securities
Schedule of Available-for-sale Securities
Total amortized cost	219,640	224,739
Gross unrealized losses	(1,361)	(1,209)
Securities	218,279	223,530
Cash and Cash Equivalents
Schedule of Available-for-sale Securities
Cash and cash equivalents	$ 247,682	$ 5,175

Marketable Securities - Maturit

Marketable Securities - Maturities (Details) $ in Thousands	Mar. 31, 2018USD ($)
Amortized Cost
Maturing in one year or less	$ 211,774
Maturing after one year	121,344
Total amortized cost	333,118
Estimate Fair Value
Maturing in one year or less	210,838
Maturing after one year	120,089
Total estimated fair value	$ 330,927

Marketable Securities - Unreali

Marketable Securities - Unrealized losses (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Fair value
Fair value, less than 12 months	$ 210,838	$ 207,603
Fair value, 12 months or greater	120,089	139,197
Unrealized losses
Unrealized losses, Less than 12 months	(936)	(598)
Unrealized losses, 12 months or greater	(1,255)	(1,201)
Corporate Securities
Fair value
Fair value, less than 12 months	74,174	79,290
Fair value, 12 months or greater	38,474	43,980
Unrealized losses
Unrealized losses, Less than 12 months	(276)	(137)
Unrealized losses, 12 months or greater	(554)	(453)
Government Securities
Fair value
Fair value, less than 12 months	136,664	128,313
Fair value, 12 months or greater	81,615	95,217
Unrealized losses
Unrealized losses, Less than 12 months	(660)	(461)
Unrealized losses, 12 months or greater	$ (701)	$ (748)

Sale of Additional Common Sto31

Sale of Additional Common Stock (Details) - Common Stock - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2018
Sale of common stock	8,395,000	8,395,000
Net proceeds	$ 245.5

Stock Based Compensation (Detai

Stock Based Compensation (Details) - shares	Dec. 02, 2013	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Stock-based compensation
Common stock, shares issued		55,616,875		47,002,488
Employee stock options
Stock-based compensation
Options granted (in shares)		1,393,650	1,135,600
ESPP
Stock-based compensation
Total number of shares of common stock available for issuance		581,286
Awards issued under the plan (in shares)		292,393
Annual increase in shares of common stock available for issuance (in shares)		0
ESPP | Maximum
Stock-based compensation
Annual percentage increase in shares of common stock available for issuance		1.00%
Annual increase in shares of common stock available for issuance (in shares)		621,814
Restricted stock units
Stock-based compensation
Vesting period		3 years
The 2013 Plan
Stock-based compensation
Total number of shares of common stock available for issuance		10,187,177
Annual percentage increase in shares of common stock available for issuance		4.00%
Awards issued under the plan (in shares)		6,339,000
Increase in shares of common stock available for issuance (in shares)		1,880,100
The 2010 Plan
Stock-based compensation
Total number of shares of common stock available for issuance		2,684,456
Options granted (in shares)	0

Stock-Based Compensation - Empl

Stock-Based Compensation - Employee expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	$ 4,471	$ 3,158
Employee stock options
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	4,276	3,039
ESPP
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	163	119
Restricted stock units
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	32
General and administrative
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	1,617	1,467
Research and development
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	$ 2,854	$ 1,691

Stock-Based Compensation - Opti

Stock-Based Compensation - Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	Dec. 02, 2013	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Employee stock options
Number of Shares subject to outstanding options
Balance at the beginning of the period (in shares)		5,093,442
Options granted (in shares)		1,393,650	1,135,600
Options forfeited (in shares)		(15,720)
Options exercised (in shares)		(219,387)
Balance at the end of the period (in shares)		6,251,985		5,093,442
Exercisable options (in shares)		2,845,609
Weighted Average Exercise Price (Per Share)
Balance at the beginning of the period (in dollars per share)		$ 15.32
Options granted (in dollars per share)		24.41
Options forfeited (in dollars per share)		21.34
Options exercised (in dollars per share)		5.06
Balance at the end of the period (in dollars per share)		17.69		$ 15.32
Exercisable (in dollars per share)		$ 13.07
Weighted-average remaining contractual life		8 years 15 days		7 years 7 months 13 days
Weighted-average remaining contractual life of awards exercisable		6 years 10 months 13 days
Aggregate intrinsic value of options outstanding		$ 77,152
Aggregate intrinsic value of options exercisable		$ 48,121
Closing price of common stock (in dollars per share)		$ 29.98
Weighted average fair value of options granted (in dollars per share)		$ 16.12	$ 16.95
The 2010 Plan
Number of Shares subject to outstanding options
Options granted (in shares)	0

Stock-Based Compensation - FV o

Stock-Based Compensation - FV of employee stock options (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Employee stock options
Weighted average assumptions for estimated fair value of employee stock options
Expected volatility (as a percent)	73.10%	89.20%
Risk-free interest rate (as a percent)	2.50%	2.07%
Expected term (years)	6 years 1 month 6 days	6 years 2 months 12 days
Unamortized compensation expense related to unvested options	$ 49,800,000
Period to recognize unamortized compensation expense	3 years
ESPP
Weighted average assumptions for estimated fair value of employee stock options
Expected volatility, low end of range (as a percent)		67.80%
Expected volatility, high end of range (as a percent)		79.80%
Expected volatility (as a percent)	71.40%
Risk-free interest rate, low end of range (as a percent)	1.47%	0.55%
Risk-free interest rate, high end of range (as a percent)	1.80%	0.93%
Unamortized compensation expense related to unvested options	$ 162,894
Period to recognize unamortized compensation expense	1 year 8 months 12 days
ESPP | Minimum
Weighted average assumptions for estimated fair value of employee stock options
Expected term (years)	6 months	6 months
ESPP | Maximum
Weighted average assumptions for estimated fair value of employee stock options
Expected term (years)	2 years	2 years

Stock Based Compensation - Rest

Stock Based Compensation - Restricted Stock Units (Details) - Restricted stock units	3 Months Ended
	Mar. 31, 2018$ / sharesshares
Stock-based compensation
Granted | shares	33,933
Ending balance | shares	33,933
Weighted Average Grant Date Fair Value, Granted | $ / shares	$ 27.64
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares	$ 27.64

Commitments and Contingencies37

Commitments and Contingencies (Details) - USD ($)	1 Months Ended		3 Months Ended
	Jul. 31, 2017	Jun. 30, 2017	Mar. 31, 2018	Mar. 31, 2017
Operating Leases
For the remainder of the fiscal year			$ 1,990,000
2,019			2,726,000
2,020			2,388,000
2,021			1,980,000
2,022			1,406,000
Net rent expense			$ 624,000	$ 189,000
Monrovia
Lease term	64 months
Renewal term	5 years
San Diego
Lease term		61 months
Renewal term		5 years

Collaboration and Licensing A38

Collaboration and Licensing Agreements (Details)

1 Months Ended

3 Months Ended

9 Months Ended

12 Months Ended

Jul. 31, 2016USD ($)

Jun. 30, 2016USD ($)productitem

Sep. 30, 2015USD ($)item

Jul. 31, 2013USD ($)item

Jan. 31, 2013USD ($)item

Feb. 28, 2009item

Mar. 31, 2018USD ($)item

Dec. 31, 2017USD ($)

Sep. 30, 2017USD ($)

Mar. 31, 2017USD ($)

Sep. 30, 2016item

Mar. 31, 2016item

Sep. 30, 2016item

Dec. 31, 2016USD ($)

Dec. 31, 2013USD ($)

License Agreement | Merck Sharp & Dohme Corp.

Collaboration research and licensing agreements

Nonrefundable upfront payment

$ 1,000,000

Revenue recognized

$ 0

$ 0

Research license term

5 years

Annual maintenance fees

$ 500,000

Number of annual maintenance fees | item

5

Deferred revenue

$ 0

Number of compounds | item

1

License Agreement | Merck Sharp & Dohme Corp. | ASU 2014-09

Collaboration research and licensing agreements

Revenue recognized

(25,000)

Option and license agreement | Alexion Pharmaceuticals, Inc.

Collaboration research and licensing agreements

Nonrefundable upfront payment

$ 3,000,000

Revenue recognized

0

0

Number of different target programs | item

6

Research license term

5 years

Annual maintenance fees

$ 500,000

Number of annual maintenance fees | item

4

Milestone payment received

8,500,000

Deferred revenue

0

Option fee

4,000,000

Option and license agreement | Alexion Pharmaceuticals, Inc. | ASU 2014-09

Collaboration research and licensing agreements

Revenue recognized

(250,000)

2009 Research License and Commercialization Agreement | CSL Limited

Collaboration research and licensing agreements

Revenue recognized

0

3,500,000

$ 3,500,000

Deferred revenue

0

Number of commercial licenses | item

1

Collaboration And License Agreement | Novartis

Collaboration research and licensing agreements

Nonrefundable upfront payment

$ 150,000,000

Deferred revenue

60,100,000

Milestones or royalties in transaction price

0

Collaboration And License Agreement | Novartis | Maximum

Collaboration research and licensing agreements

Potential milestone payment

$ 2,400,000,000

Collaboration And License Agreement | Novartis | Bispecific FC Technologies

Collaboration research and licensing agreements

Number of development stage products | product

2

Collaboration And License Agreement | Novartis | Bispecific FC Technologies | XmAb14045

Collaboration research and licensing agreements

Allocation of consideration to deliverables

$ 27,100,000

Collaboration And License Agreement | Novartis | Bispecific FC Technologies | XmAb13676

Collaboration research and licensing agreements

Allocation of consideration to deliverables

31,400,000

Collaboration And License Agreement | Novartis | Global Discovery Program

Collaboration research and licensing agreements

Number of bispecific drug candidates | item

4

Allocation of consideration to deliverables

$ 20,050,000

Number of discovery programs | item

4

Right to substitute identified target period

5 years

Number of substitution rights | item

4

Collaboration And License Agreement | Novartis | Global Discovery Program | ASU 2014-09

Collaboration research and licensing agreements

Revenue recognized

$ 20,050,000

Collaboration And License Agreement | Novartis | Global Discovery Program | As Reported Before ASC Topic 606 | ASU 2014-09

Collaboration research and licensing agreements

Revenue recognized

$ 0

Collaboration And License Agreement | Novartis | Global Discovery Program | Maximum

Collaboration research and licensing agreements

Number of antibody targets for which bispecific technology applied | item

4

Collaboration And License Agreement | Novartis | FC Licenses

Collaboration research and licensing agreements

Research license term

5 years

Allocation of consideration to deliverables

$ 11,300,000

Collaboration And License Agreement | Novartis | FC Licenses | ASU 2014-09

Collaboration research and licensing agreements

Revenue recognized

(600,000)

Collaboration And License Agreement | Novartis | FC Licenses | Maximum

Collaboration research and licensing agreements

Number of targets against which non-exclusive license is provided | item

10

Research and License Agreement 2015 | Amgen, Inc.

Collaboration research and licensing agreements

Nonrefundable upfront payment

$ 45,000,000

Potential milestone payment

$ 1,700,000,000

Revenue recognized

$ 10,000,000

Number of different target programs | item

6

Allocation of consideration to deliverables

$ 55,000,000

Deferred revenue

0

Milestones or royalties in transaction price

$ 0

Research and License Agreement 2015 | Amgen, Inc. | As Reported Before ASC Topic 606 | ASU 2014-09

Collaboration research and licensing agreements

Revenue recognized

6,250,000

$ 0

Research and License Agreement 2015 | Amgen, Inc. | CD38 Program

Collaboration research and licensing agreements

Allocation of consideration to deliverables

$ 23,750,000

Research and License Agreement 2015 | Amgen, Inc. | Discovery Program

Collaboration research and licensing agreements

Number of previously identified products | item

3

Research license term

3 years

Number of bispecific product candidates delivered | item

5

3

Allocation of consideration to deliverables

$ 6,250,000

Number of discovery programs | item

5

Exercised substitutions | item

1

Additional research term

1 year

Previous targets which bispecific technology will be applied | item

5

Research and License Agreement 2015 | Amgen, Inc. | Discovery Program | ASU 2014-09

Collaboration research and licensing agreements

Revenue recognized

$ 31,250,000

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2018
Reconciliation of federal statutory income tax to effective income tax
Income tax expense	$ 170
Federal
Reconciliation of federal statutory income tax to effective income tax
Income tax receivable		$ 1,500

Prior-Period Financial Statem40

Prior-Period Financial Statementss - (Details) - USD ($) $ in Thousands	3 Months Ended			12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Jun. 30, 2016	Dec. 31, 2017	Dec. 31, 2016
Revenue
Collaborations, licenses and milestones		$ 3,500
ASU 2014-09 | As Reported Before ASC Topic 606
Revenue
Collaborations, licenses and milestones		4,340
ASU 2014-09 | Effect of Adoption of ASC Topic 606
Revenue
Collaborations, licenses and milestones		$ (840)
ASU 2014-09 | Collaboration
Revenue
Collaborations, licenses and milestones				$ 20,500	$ 6,250
ASU 2014-09 | License
Revenue
Period revenue recognized	5 years
Collaborations, licenses and milestones			$ 11,300

Prior-Period Financial Statem41

Prior-Period Financial Statements - Balance Sheet (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 251,572	$ 16,528	$ 13,561	$ 14,528
Marketable securities	210,838	207,603
Accounts receivable	1,098	1,142
Prepaid expenses and other current assets	6,649	5,606
Total current assets	470,919	230,879
Property and equipment, net	8,921	7,088
Patents, licenses, and other intangible assets, net	11,316	11,148
Marketable securities - long term	120,089	139,198
Income tax receivable	762	1,524
Loan receivable		86
Interest receivable		14
Other assets	265	265
Total assets	612,272	390,202
Current liabilities
Accounts payable	8,523	6,869
Accrued expenses	4,611	5,480
Current portion of deferred rent	179	26
Current portion of deferred revenue	60,118	60,118
Income taxes		157
Total current liabilities	73,431	72,650
Deferred rent, less current portion	1,177	1,088
Total liabilities	74,608	73,738
Commitments and contingencies
Preferred stock, $0.01 par value: 10,000,000 authorized shares; -0- issued and outstanding shares at December 31, 2017
Common stock, $0.01 par value: 200,000,000 authorized shares at December 31, 2017; 47,002,488 issued and outstanding at December 31, 2017	556	470
Additional paid-in capital	821,670	570,670
Accumulated other comprehensive loss	(2,201)	(1,808)
Accumulated deficit	(282,361)	(252,868)
Stockholders' equity	537,664	316,464
Total liabilities and stockholders' equity	$ 612,272	390,202
As Reported Before ASC Topic 606
Current liabilities
Stockholders' equity		306,025		337,933
ASU 2014-09 | As Reported Before ASC Topic 606
Current assets
Cash and cash equivalents		16,528	$ 13,561	$ 14,528
Marketable securities		207,603
Accounts receivable		1,142
Prepaid expenses and other current assets		5,606
Total current assets		230,879
Property and equipment, net		7,088
Patents, licenses, and other intangible assets, net		11,148
Marketable securities - long term		139,198
Income tax receivable		1,524
Other assets		265
Total assets		390,102
Current liabilities
Accounts payable		6,869
Accrued expenses		5,480
Current portion of deferred rent		26
Current portion of deferred revenue		88,813
Income taxes		157
Total current liabilities		101,345
Deferred rent, less current portion		1,088
Deferred revenue, less current portion		5,623
Total liabilities		108,056
Common stock, $0.01 par value: 200,000,000 authorized shares at December 31, 2017; 47,002,488 issued and outstanding at December 31, 2017		470
Additional paid-in capital		570,670
Accumulated other comprehensive loss		(1,808)
Accumulated deficit		(287,286)
Stockholders' equity		282,046
Total liabilities and stockholders' equity		390,102
ASU 2014-09 | Effect of Adoption of ASC Topic 606
Current assets
Loan receivable		86
Interest receivable		14
Total assets		100
Current liabilities
Current portion of deferred revenue		(28,695)
Total current liabilities		(28,695)
Deferred revenue, less current portion		(5,623)
Total liabilities		(34,318)
Accumulated deficit		34,418
Stockholders' equity		34,418
Total liabilities and stockholders' equity		$ 100

Prior-Period Financial Statem42

Prior-Period Financial Statements - Balance Sheet Stock Information (Details) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Condensed Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	55,616,875	47,002,488
Common stock, shares outstanding	55,616,875	47,002,488

Prior-Period Financial Statem43

Prior-Period Financial Statements - Comprehensive Income (Loss) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Revenue
Collaborations, licenses and milestones		$ 3,500
Operating expenses
Research and development	$ 26,087	15,048
General and administrative	4,562	4,811
Total operating expenses	30,649	19,859
Loss from operations	(30,649)	(16,359)
Other income (expenses)
Interest income	1,158	1,057
Interest expense	(4)	(3)
Other income	2
Total other income, net	1,156	1,054
Loss before income taxes	(29,493)	(15,305)
Income tax expense		170
Net loss	(29,493)	(15,475)
Other comprehensive income
Net unrealized gain (loss) on marketable securities	(393)	245
Comprehensive loss	$ (29,886)	$ (15,230)
Basic and diluted net loss (in dollars per share)	$ (0.62)	$ (0.33)
As Reported Before ASC Topic 606
Other comprehensive income
Comprehensive loss			$ (49,292)
ASU 2014-09 | As Reported Before ASC Topic 606
Revenue
Collaborations, licenses and milestones		$ 4,340
Operating expenses
Research and development		15,048
General and administrative		4,811
Total operating expenses		19,859
Loss from operations		(15,519)
Other income (expenses)
Interest income		1,057
Interest expense		(3)
Total other income, net		1,054
Loss before income taxes		(14,465)
Income tax expense		170
Net loss		(14,635)
Other comprehensive income
Net unrealized gain (loss) on marketable securities		245
Comprehensive loss		$ (14,390)
Basic and diluted net loss (in dollars per share)		$ (0.31)
ASU 2014-09 | Effect of Adoption of ASC Topic 606
Revenue
Collaborations, licenses and milestones		$ (840)
Operating expenses
Loss from operations		(840)
Other income (expenses)
Loss before income taxes		(840)
Net loss		(840)
Other comprehensive income
Comprehensive loss		$ (840)
Basic and diluted net loss (in dollars per share)		$ (0.02)

Prior-Period Financial Statem44

Prior-Period Financial Statements - Stockholders' Equity (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	Dec. 31, 2016
Increase (Decrease) in Stockholders' Equity
Balance		$ 316,464
Balance, revised				$ 316,464
Sale of common stock, net of issuance cost		245,505
Issuance of common stock upon exercise and vesting of stock awards		1,110
Comprehensive income (loss)		(29,886)	$ (15,230)
Stock-based compensation expense		4,471
Balance	$ 537,664	537,664		316,464
As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance		306,025	337,933	337,933
Issuance of common stock upon exercise and vesting of stock awards				2,797
Issuance of common stock under the Employee Stock Purchase Plan				936
Comprehensive income (loss)				(49,292)
Stock-based compensation expense				13,651
Balance				306,025
Effect of Adoption of ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Adoption of ASC 606				10,439
ASU 2014-09
Increase (Decrease) in Stockholders' Equity
Adoption of ASC 606				34,418
ASU 2014-09 | As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance		282,046
Adoption of ASC 606					$ 23,979
Comprehensive income (loss)			(14,390)
Balance				282,046
ASU 2014-09 | Effect of Adoption of ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance		34,418
Comprehensive income (loss)			(840)
Balance				34,418
Common Stock
Increase (Decrease) in Stockholders' Equity
Balance		$ 470
Balance (in shares)		47,002,488
Balance, revised				470
Sale of common stock, net of issuance cost		$ 84
Sale of common stock, net of issuance cost (in shares)	8,395,000	8,395,000
Issuance of common stock upon exercise and vesting of stock awards		$ 2
Issuance of common stock upon exercise and vesting of stock awards (in shares)		219,387
Balance	$ 556	$ 556		$ 470
Balance (in shares)	55,616,875	55,616,875		47,002,488
Common Stock | As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance		$ 470	$ 466	$ 466
Balance (in shares)		47,002,488	46,567,978	46,567,978
Issuance of common stock upon exercise and vesting of stock awards				$ 4
Issuance of common stock upon exercise and vesting of stock awards (in shares)				363,603
Issuance of common stock under the Employee Stock Purchase Plan (in shares)				70,907
Balance				$ 470
Balance (in shares)				47,002,488
Additional Paid-in Capital
Increase (Decrease) in Stockholders' Equity
Balance		$ 570,670
Balance, revised				$ 570,670
Sale of common stock, net of issuance cost		245,421
Issuance of common stock upon exercise and vesting of stock awards		1,108
Stock-based compensation expense		4,471
Balance	$ 821,670	821,670		570,670
Additional Paid-in Capital | As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance		570,670	$ 553,290	553,290
Issuance of common stock upon exercise and vesting of stock awards				2,793
Issuance of common stock under the Employee Stock Purchase Plan				936
Stock-based compensation expense				13,651
Balance				570,670
Additional Paid-in Capital | ASU 2016-09 | As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Adoption of ASC 606					401
Accumulated Other Comprehensive Loss
Increase (Decrease) in Stockholders' Equity
Balance		(1,808)
Balance, revised				(1,808)
Comprehensive income (loss)		(393)
Balance	(2,201)	(2,201)		(1,808)
Accumulated Other Comprehensive Loss | As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance		(1,808)	(1,441)	(1,441)
Comprehensive income (loss)				(367)
Balance				(1,808)
Accumulated Deficit
Increase (Decrease) in Stockholders' Equity
Balance		(252,868)
Balance, revised				(252,868)
Comprehensive income (loss)		(29,493)
Balance	$ (282,361)	(282,361)		(252,868)
Accumulated Deficit | As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance		(263,307)	(214,382)	(214,382)
Comprehensive income (loss)				(48,925)
Balance				(263,307)
Accumulated Deficit | Effect of Adoption of ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Adoption of ASC 606				10,439
Accumulated Deficit | ASU 2016-09 | As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Adoption of ASC 606					(401)
Accumulated Deficit | ASU 2014-09
Increase (Decrease) in Stockholders' Equity
Adoption of ASC 606				34,418
Accumulated Deficit | ASU 2014-09 | As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Adoption of ASC 606					$ 23,979
Scenario, Previously Reported
Increase (Decrease) in Stockholders' Equity
Balance		282,046
Balance				282,046
Scenario, Previously Reported | As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance			313,954	313,954
Scenario, Previously Reported | Common Stock
Increase (Decrease) in Stockholders' Equity
Balance		$ 470
Balance (in shares)		47,002,488
Balance				$ 470
Balance (in shares)				47,002,488
Scenario, Previously Reported | Common Stock | As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance			$ 466	$ 466
Balance (in shares)			46,567,978	46,567,978
Scenario, Previously Reported | Additional Paid-in Capital
Increase (Decrease) in Stockholders' Equity
Balance		$ 570,670
Balance				$ 570,670
Scenario, Previously Reported | Additional Paid-in Capital | As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance			$ 552,889	552,889
Scenario, Previously Reported | Accumulated Other Comprehensive Loss
Increase (Decrease) in Stockholders' Equity
Balance		(1,808)
Balance				(1,808)
Scenario, Previously Reported | Accumulated Other Comprehensive Loss | As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance			(1,441)	(1,441)
Scenario, Previously Reported | Accumulated Deficit
Increase (Decrease) in Stockholders' Equity
Balance		$ (287,286)
Balance				(287,286)
Scenario, Previously Reported | Accumulated Deficit | As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance			$ (237,960)	$ (237,960)

Prior-Period Financial Statem45

Prior-Period Financial Statements - Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities
Net loss	$ (29,493)	$ (15,475)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	730	410
Amortization of premium on marketable securities	480	659
Stock-based compensation	4,471	3,158
Abandonment of capitalized intangible assets	5	9
Changes in operating assets and liabilities:
Accounts receivable	44	1,678
Interest receivable	(309)	(505)
Prepaid expenses and other assets	(1,043)	(1,465)
Accounts payable	1,654	395
Accrued expenses	(869)	(190)
Income taxes	(157)	110
Deferred rent	242	(30)
Deferred revenue		700
Net cash used in operating activities	(24,245)	(10,546)
Cash flows from investing activities
Purchase of marketable securities	(31,697)	(6,988)
Purchase of intangible assets	(389)	(702)
Purchase of property and equipment	(2,346)	(494)
Proceeds from sale and maturities of marketable securities	47,020	16,911
Repayments of loan	86	(174)
Net cash provided by investing activities	12,674	8,553
Cash flows from financing activities
Proceeds from issuance of common stock upon exercise of stock awards	1,110	1,026
Proceeds from issuance of common stock	260,245
Common stock issuance cost	(14,740)
Net cash provided by financing activities	246,615	1,026
Net increase (decrease) in cash and cash equivalents	235,044	(967)
Cash and cash equivalents, beginning of period	16,528	14,528
Cash and cash equivalents, end of period	251,572	13,561
ASU 2014-09 | As Reported Before ASC Topic 606
Cash flows from operating activities
Net loss		(14,635)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		410
Amortization of premium on marketable securities		659
Stock-based compensation		3,158
Abandonment of capitalized intangible assets		9
Changes in operating assets and liabilities:
Accounts receivable		1,678
Interest receivable		(479)
Prepaid expenses and other assets		(1,465)
Accounts payable		395
Accrued expenses		(190)
Income taxes		110
Deferred rent		(30)
Deferred revenue		(340)
Net cash used in operating activities		(10,720)
Cash flows from investing activities
Purchase of marketable securities		(6,988)
Purchase of intangible assets		(702)
Purchase of property and equipment		(494)
Proceeds from sale and maturities of marketable securities		16,911
Net cash provided by investing activities		8,727
Cash flows from financing activities
Proceeds from issuance of common stock upon exercise of stock awards		1,026
Net cash provided by financing activities		1,026
Net increase (decrease) in cash and cash equivalents		(967)
Cash and cash equivalents, beginning of period	$ 16,528	14,528
Cash and cash equivalents, end of period		13,561
ASU 2014-09 | Effect of Adoption of ASC Topic 606
Cash flows from operating activities
Net loss		(840)
Changes in operating assets and liabilities:
Interest receivable		(26)
Deferred revenue		1,040
Net cash used in operating activities		174
Cash flows from investing activities
Repayments of loan		(174)
Net cash provided by investing activities		$ (174)