Reata Pharmaceuticals (RETA) 10-Q 11 May 20 2020 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	May 05, 2020
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Trading Symbol	RETA
Entity Registrant Name	Reata Pharmaceuticals, Inc.
Entity Central Index Key	0001358762
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Current Reporting Status	Yes
Entity File Number	001-37785
Entity Tax Identification Number	11-3651945
Entity Address, Address Line One	5320 Legacy Drive
Entity Address, City or Town	Plano
Entity Address, State or Province	TX
Entity Address Postal Zip Code	75024
City Area Code	972
Local Phone Number	865-2219
Document Quarterly Report	true
Document Transition Report	false
Title of 12(b) Security	Class A Common Stock, Par Value $0.001 Per Share
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes
Entity Incorporation, State or Country Code	DE
Common Stock A
Document Information [Line Items]
Entity Common Stock Shares Outstanding		28,167,193
Common Stock B
Document Information [Line Items]
Entity Common Stock Shares Outstanding		5,070,178

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Assets
Cash and cash equivalents	$ 624,488	$ 664,324
Prepaid expenses and other current assets	5,150	4,952
Income tax receivable	22,218
Total current assets	651,856	669,276
Property and equipment, net	3,898	2,996
Other assets	8,443	10,148
Total assets	664,197	682,420
Liabilities and stockholders’ equity (deficit)
Accounts payable	12,627	1,908
Accrued direct research liabilities	19,906	23,774
Other current liabilities	13,606	11,631
Current portion of payable to collaborators	150,000	150,000
Current portion of deferred revenue	4,701	4,701
Total current liabilities	200,840	192,014
Other long-term liabilities	7,245	6,982
Term loan, net of current portion and debt issuance costs	155,506	155,017
Payable to collaborators, net of current portion	68,440	66,862
Deferred revenue, net of current portion	3,519	4,688
Total noncurrent liabilities	234,710	233,549
Commitments and contingencies
Stockholders’ (deficit) equity:
Additional paid-in capital	988,046	967,317
Accumulated deficit	(759,432)	(710,493)
Total stockholders’ equity	228,647	256,857
Total liabilities and stockholders’ equity	664,197	682,420
Common Stock A
Stockholders’ (deficit) equity:
Common stock value	28	28
Total stockholders’ equity	28	28
Common Stock B
Stockholders’ (deficit) equity:
Common stock value	5	5
Total stockholders’ equity	$ 5	$ 5

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
Common Stock A
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	28,166,652	27,878,550
Common stock, shares outstanding	28,166,652	27,878,550
Common Stock B
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	5,070,271	5,318,157
Common stock, shares outstanding	5,070,271	5,318,157

Unaudited Consolidated Statemen

Unaudited Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Collaboration revenue
Collaboration revenue	$ 1,353	$ 7,770
Expenses
Research and development	47,653	26,114
General and administrative	20,787	10,038
Depreciation	278	170
Total expenses	68,718	36,322
Other income (expense), net	(3,814)	(600)
Loss before taxes on income	(71,179)	(29,152)
(Benefit from) provision for taxes on income	(22,240)	2
Net loss	$ (48,939)	$ (29,154)
Net loss per share—basic and diluted	$ (1.47)	$ (0.98)
Weighted-average number of common shares used in net loss per share basic and diluted	33,222,085	29,830,114
License and milestone
Collaboration revenue
Collaboration revenue	$ 1,169	$ 7,726
Other revenue
Collaboration revenue
Collaboration revenue	$ 184	$ 44

Unaudited Consolidated Statem_2

Unaudited Consolidated Statements of Stockholders' (Deficit) Equity - USD ($) $ in Thousands	Total	Common Stock A	Common Stock B	Additional Paid-In Capital	Total Accumulated Deficit
Balance, value at Dec. 31, 2018	$ 15,159	$ 24	$ 6	$ 435,452	$ (420,323)
Balance, shares at Dec. 31, 2018		24,000,683	5,728,175
Net loss	(29,154)				(29,154)
Compensation expense related to stock options	4,227			4,227
Exercise of options, value	5,051			5,051
Exercise of options, shares			314,285
Conversion of common stock Class B to Class A, shares		402,794	(402,794)
Other shareholder transactions	107			107
Balance, value at Mar. 31, 2019	(4,610)	$ 24	$ 6	444,837	(449,477)
Balance, shares at Mar. 31, 2019		24,403,477	5,639,666
Balance, value at Dec. 31, 2019	256,857	$ 28	$ 5	967,317	(710,493)
Balance, shares at Dec. 31, 2019		27,878,550	5,318,157
Net loss	(48,939)				(48,939)
Compensation expense related to stock options	19,307			19,307
Exercise of options, value	$ 1,422			1,422
Exercise of options, shares	40,216		40,216
Conversion of common stock Class B to Class A, shares		288,102	(288,102)
Balance, value at Mar. 31, 2020	$ 228,647	$ 28	$ 5	$ 988,046	$ (759,432)
Balance, shares at Mar. 31, 2020		28,166,652	5,070,271

Unaudited Consolidated Statem_3

Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Operating activities
Net loss	$ (48,939)	$ (29,154)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	278	170
Amortization of debt issuance costs and implied interest	489	339
Stock-based compensation expense	19,307	4,227
Changes in operating assets and liabilities:
Income tax receivable	(22,218)	0
Prepaid expenses and other current assets	(198)	67
Other assets	1,007	6
Accounts payable	10,668	(522)
Accrued direct research, other current, and long-term liabilities	(1,976)	3,861
Payable to collaborators	1,578	0
Deferred revenue	(1,169)	(7,726)
Net cash used in operating activities	(41,173)	(28,732)
Investing activities
Purchases of property and equipment	(85)	(1,160)
Net cash used in investing activities	(85)	(1,160)
Financing activities
Exercise of options	1,422	5,051
Other shareholder transactions	0	107
Net cash provided by financing activities	1,422	5,158
Net decrease in cash and cash equivalents	(39,836)	(24,734)
Cash and cash equivalents at beginning of year	664,324	337,790
Cash and cash equivalents at end of period	624,488	313,056
Supplemental disclosures
Cash paid for interest	3,174	2,052
Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations	0	9,636
Purchases of equipment in accounts payable, accrued direct research, other current, and long-term liabilities	$ 1,398	$ 750

Description of Business

Description of Business	3 Months Ended
	Mar. 31, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Description of Business	1. Description of Business The Company’s mission is to identify, develop, and commercialize innovative therapies that change patients’ lives for the better. The Company focuses on small-molecule therapeutics with novel mechanisms of action for the treatment of severe, life-threatening diseases with few or no approved therapies. The Company’s lead programs are in rare forms of chronic kidney disease (CKD) and a rare neurological disease. The Company announced positive topline data from registrational studies for both of its lead product candidates, bardoxolone methyl (bardoxolone) in patients with CKD caused by Alport syndrome, and omaveloxolone in patients with a neurological disorder called Friedreich’s ataxia (FA). Both bardoxolone and omaveloxolone activate the transcription factor Nrf2 to normalize mitochondrial function, restore redox balance, and resolve inflammation. Because mitochondrial dysfunction, oxidative stress, and inflammation are features of many diseases, the Company believes bardoxolone and omaveloxolone have many potential clinical applications. Reata possesses exclusive, worldwide rights to develop, manufacture and commercialize bardoxolone, omaveloxolone, and our next-generation Nrf2 activators, excluding certain Asian markets for bardoxolone in certain indications, which are licensed to Kyowa Kirin Co., Ltd. (KKC). The Company’s consolidated financial statements include the accounts of all majority-owned subsidiaries. Accordingly, the Company’s share of net earnings and losses from these subsidiaries is included in the consolidated statements of operations. Intercompany profits, transactions, and balances have been eliminated in consolidation.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2020
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The consolidated balance sheet at December 31, 2019, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, refer to the annual consolidated financial statements and footnotes thereto of the Company. Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Topic 842, amended by ASU 2018-11, Leases In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements Revenue from Contracts with Customers

Collaboration Agreements

Collaboration Agreements	3 Months Ended
	Mar. 31, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Collaboration Agreements	3. Collaboration Agreements AbbVie In September 2010, the Company entered into a license agreement with AbbVie Inc. (AbbVie) (the AbbVie License Agreement) for an exclusive license to develop and commercialize bardoxolone in the Licensee Territory (as defined in the AbbVie License Agreement). In December 2011, the Company entered into a collaboration agreement with AbbVie (the AbbVie Collaboration Agreement) to jointly research, develop, and commercialize the Company’s portfolio of second and later generation oral Nrf2 activators. On October 9, 2019, the Company and AbbVie entered into an Amended and Restated License Agreement (the Reacquisition Agreement) pursuant to which the Company reacquired the development, manufacturing, and commercialization rights concerning its proprietary Nrf2 activator product platform originally licensed to AbbVie in the AbbVie License Agreement, and the AbbVie Collaboration Agreement. In exchange for such rights, the Company agreed to pay AbbVie $330.0 million, of which $100.0 million was paid as of December 31, 2019, $150.0 million will be payable on June 30, 2020, and $80.0 million will be payable on November 30, 2021. Additionally, the Company will pay AbbVie an escalating, low single-digit royalty on worldwide net sales, on a product-by-product basis, of omaveloxolone and certain next-generation Nrf2 activators. The Company recognized interest expense related to the Reacquisition Agreement of approximately $1.6 million and $0 million, during the three months ended March 31, 2020 and 2019, respectively, and has a current portion of payable to collaborators of $150.0 million and payable to collaborators, net of current portion, of $80.0 million, at its present value of $68.4 million as of March 31, 2020. The execution of the Reacquisition Agreement ended our performance obligations under the AbbVie Collaboration Agreement and included the write off of the related deferred revenue balance. Accordingly, the Company recognized revenue related to the AbbVie Collaboration Agreement totaling approximately $0 million, and $6.6 million, during the three months ended March 31, 2020 and 2019, respectively, and had a deferred revenue balance of $0 million as of March 31, 2020. KKC In December 2009, the Company entered into an exclusive license with KKC (the KKC Agreement) to develop and commercialize bardoxolone in the licensed territory. The Company received a nonrefundable, up-front license fee of $35.0 million in 2009 and regulatory milestones totaling $45.0 million in 2010, 2012, and 2018 and could receive additional regulatory milestones of $52.0 million and commercial milestones of $140.0 million, as well as tiered royalties ranging from the low teens to the low 20 percent range, depending on the country of sale and the amount of annual net sales, on net sales by KKC in the licensed territory. The up-front payment and regulatory milestones are accounted for as a single unit of accounting. Revenue is being recognized ratably through December 2021, which is the estimated minimum period that is needed to complete the deliverables under the terms of the KKC Agreement. The Company began recognizing revenue related to the up-front payment upon execution of the KKC Agreement. During each of the three months ended March 31, 2020 and 2019, the Company recognized approximately $1.2 million as collaboration revenue. As of March 31, 2020, the Company recorded deferred revenue totaling approximately $8.2 million of which approximately $4.7 million is reflected as the current portion of deferred revenue.

Other Income (Expense), Net

Other Income (Expense), Net	3 Months Ended
	Mar. 31, 2020
Other Income And Expenses [Abstract]
Other Income (Expense), Net	4. Other Income (Expense), Net Three Months Ended March 31 2020 2019 Other income (expense), net Investment income $ 2,055 $ 1,797 Interest expense (5,869 ) (2,397 ) Total other income (expense), net $ (3,814 ) $ (600 ) Investment Income Interest income consists primarily of interest generated from our cash and cash equivalents. Interest Expense Interest expense consists primarily of interest on our borrowing activities under our loan agreements and the imputed interest from amount due to AbbVie under the Reacquisition Agreement. Other income (expense) Other income (expense) consists primarily of gains and losses on foreign currency exchange and sales of assets.

Term Loan

Term Loan	3 Months Ended
	Mar. 31, 2020
Debt Disclosure [Abstract]
Term Loan	5. Term Loan On October 9, 2019, the Company entered into the First Amendment to Amended and Restated Loan and Security Agreement (the Amended Restated Loan Agreement). Under the Amended Restated Loan Agreement, the Term B Loan availability was increased from $45.0 million to $75.0 million (collectively with the Term A Loan, the Term Loans). On December 20, 2019, the Company borrowed $75.0 million under the Term B Loan. All outstanding Term Loans will mature on June 1, 2023. The Company will make interest-only payments for 36 months through June 1, 2021. The interest-only payment period will be followed by 24 equal monthly payments of principal and interest payments. The Term Loans will bear interest at a floating per annum rate calculated as 7.79% plus the greater of the 30-day U.S. Dollar LIBOR rate reported in The Wall Street Journal on the last business day of the month that immediately precedes the month in which the interest will accrue or 1.91%, with a minimum rate of 9.7% and maximum rate of 12.29%. Under the Term A Loan, the Company has the option to prepay all, but not less than all, of the borrowed amounts, provided that the Company will be obligated to pay a prepayment fee equal to (a) the aggregate amount of interest that the Company would have paid through the maturity date if prepayment is made on or before the first anniversary of the funding date of the Term A Loan, (b) 4.0% of the outstanding principal balance of the Term A Loan if prepayment is made after the first anniversary date and on or before the second anniversary of the funding date of the Term A Loan, (c) 3.0% of the outstanding principal balance of the Term A Loan if prepayment is made after second anniversary date and on or before the third anniversary of the funding date of the Term A Loan, or (d) 1.5% of the outstanding principal balance of the Term A Loan if prepayment is made after the third anniversary date and on or before the fourth anniversary of the funding date of the Term A Loan. Under the Term B Loan, the Company will be obligated to pay a prepayment fee equal to (a) 4.0% of the outstanding principal balance of the Term B Loan if prepayment is made on or before the first anniversary of the funding date of the Term B Loan, (b) 3.0% of the outstanding principal balance of the Term B Loan if prepayment is made after the first anniversary date and on or before the second anniversary of the funding date of the Term B Loan, (c) 1.5% of the outstanding principal balance of the Term B Loan if prepayment is made after second anniversary date and on or before the third anniversary of the funding date of the Term B Loan, and (d) 0.0% of the outstanding principal balance of the Term B Loan if prepayment is made after the third anniversary date of the funding date of the Term B Loan and prior to the maturity date of the Term B Loan. The Company will also be required to make a final exit fee payment of 6.5% of the principal balance of the Term A Loan and 2.0% of the Term B Loan, payable on the earliest of the prepayment of the Term Loans, acceleration of any Term Loan, or at maturity of the Term Loans. As of March 31, 2020, the Term Loans have current effective interest rates of 10.29% excluding debt issuance costs and final exit fee and 12.17% including debt issuance costs and final exit fee. The Company is in compliance with all covenants under the Amended Restated Loan Agreement as of March 31, 2020. The Company may use the proceeds from the Term Loans for working capital and to fund its general business requirements. The Company’s obligations under the Restated Loan Agreement are secured by substantially all of its current and future assets, including its owned intellectual property. The Term Loans and unamortized issuance cost balance are as follows: As of March 31, 2020 As of December 31, 2019 (in thousands) Principal Amount 155,000 155,000 Exit Fee 6,700 6,700 Less unamortized issuance cost 6,194 6,683 Total long-term debt, net of debt issuance cost $ 155,506 $ 155,017 The future principal payments by fiscal year for the Company’s Term Loans: As of March 31, 2020 (in thousands) 2020 (remaining nine months) $ — 2021 45,208 2022 77,500 2023 32,292 $ 155,000

Leases

Leases	3 Months Ended
	Mar. 31, 2020
Leases [Abstract]
Leases	6. Leases The Company’s headquarters are located in Plano, Texas, where it leases approximately 122,000 square feet of office space. The Company leases additional office and laboratory space of approximately 34,890 square feet located in Irving, Texas. The lease terms for the Irving and Plano offices extend through October 31, 2022 with an option to renew up to six months and through April 30, 2022 with four successive three-month The Company has an additional lease of a single-tenant and build-to-suit building of approximately 327,400 square feet of office and laboratory space located in Plano, Texas with an initial lease term of 16 years. The Company entered into the lease agreement on October 15, 2019 (the Lease Agreement), and at the Company’s option, it may renew the lease for two consecutive five-year renewal periods or one ten-year renewal period. The Company does not have control of the space or the construction prior to completion of construction. Therefore, no right-of-use or lease liabilities were recorded in connection with the Lease Agreement as of March 31, 2020. Per the Lease Agreement, the landlord will fund the Company's leasehold improvements up to $25.6 million, of which the Company has recorded a leasehold incentive obligation of approximately $1.1 million as other long-term liabilities as of March 31, 2020. At March 31, 2020, the weighted average incremental borrowing rate and the weighted average remaining lease term for the operating leases held by the Company were 9.6% and 2.6 years, respectively. During the three months ended March 31, 2020, cash paid for amounts included for the measurement of lease liabilities was $0.9 million. During the three months ended March 31, 2020 the Company recorded operating lease expense of $0.9 million. The Company has elected to net the amortization of the right-of-use assets and the reduction of the lease liabilities principal in accrued direct research and other current and long-term liabilities in the consolidated statements of cash flows. Supplemental balance sheet information related to the Company’s operating leases is as follows: Balance Sheet Classification As of March 31, 2020 (in thousands) Non-current right-of-use assets Other assets $ 8,369 Current lease liabilities Other current liabilities 3,367 Non-current lease liabilities Other long-term liabilities 6,107 Maturities of lease liabilities by fiscal year for the Company’s operating leases: As of March 31, 2020 (in thousands) 2020 (remaining nine months) $ 3,093 2021 4,142 2022 3,500 Total lease payments 10,735 Less: Imputed interest (1,261 ) Present value of lease liabilities $ 9,474

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2020
Income Tax Disclosure [Abstract]
Income Taxes	7. Income Taxes On March 27, 2020, the United States enacted the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act). The CARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and to provide assistance to individuals, families, and businesses affected by COVID-19. Accordingly, under its provisions, for the three months ended March 31, 2020, the Company recognized a tax benefit and receivable of $22.1 million associated with the ability to carryback an applicable prior year’s net operating losses to a preceding year to generate a refund. For the three months ended March 31, 2020, the Company’s effective tax rate was a benefit of 31.3% compared to 0.0% for the three months ended March 31, 2019. The Company’s effective tax rate for the three months ended March 31, 2020 varies with the statutory rate primarily due to the favorable impact associated with the CARES Act and the changes in valuation allowance related to certain deferred tax assets generated or utilized in the applicable period. The Company’s deferred tax assets have been fully offset by a valuation allowance at March 31, 2020, and the Company expects to maintain this valuation allowance until there is sufficient evidence that future earnings can be achieved, which is uncertain at this time.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock-Based Compensation	8. Stock-Based Compensation The following table summarizes stock-based compensation expense reflected in the consolidated statements of operations: Three Months Ended March 31 2020 2019 (in thousands) Research and development $ 11,516 $ 1,691 General and administrative 7,791 2,536 $ 19,307 $ 4,227 Restricted Stock Units (RSUs) The following table summarizes RSUs as of March 31, 2020, under the Second Amended and Restated Long Term Incentive Plan (LTIP Plan) agreement and standalone option agreements: Number of RSUs Weighted-Average Grant Date Fair Value Outstanding at January 1, 2020 50,000 72.70 Granted 14,651 208.94 Vested — — Forfeited — — Outstanding at March 31, 2020 64,651 103.57 As of March 31, 2020, the performance targets for the performance-based RSUs have not been met. Accordingly, the fair value related to these performance-based RSUs of approximately $3.6 million has not been recognized. During the quarter ended March 31, 2020, the Company recognized $0.1 million in compensation expense related to time-based RSUs. Stock Options The following table summarizes stock option activity as of March 31, 2020, and changes during the three months ended March 31, 2020, under the LTIP and standalone option agreements: Number of Options Weighted-Average Exercise Price Outstanding at January 1, 2020 4,038,949 41.24 Granted 913,516 207.52 Exercised (40,216 ) 35.09 Forfeited (50,824 ) 115.72 Outstanding at March 31, 2020 4,861,425 71.76 Exercisable at March 31, 2020 1,975,609 29.73 At March 31, 2020, the performance targets for the performance-based stock options have not been met. Accordingly, the fair value related to these performance-based stock options of approximately $36.1 million has not been recognized. The Company recorded an additional $5.1 million in research and development compensation expense related to accelerated vesting of stock options, as a result of the death of an executive in February 2020. The total intrinsic value of all outstanding options and exercisable options at March 31, 2020 was $412.8 million and $228.3 million, respectively.

Net Loss per Share

Net Loss per Share	3 Months Ended
	Mar. 31, 2020
Earnings Per Share [Abstract]
Net Loss per Share	9. Net Loss per Share The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders: Three Months Ended March 31 2020 2019 (in thousands, except share and per share data) Numerator Net loss $ (48,939 ) $ (29,154 ) Denominator Weighted-average number of common shares used in net loss per share – basic 33,222,085 29,830,114 Dilutive potential common shares — — Weighted-average number of common shares used in net loss per share – diluted 33,222,085 29,830,114 Net loss per share – basic $ (1.47 ) $ (0.98 ) Net loss per share – diluted $ (1.47 ) $ (0.98 ) The number of weighted average options that were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive represented 4,861,425 and 3,780,764 shares for the three months ended March 31, 2020 and 2019, respectively.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2020
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The consolidated balance sheet at December 31, 2019, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, refer to the annual consolidated financial statements and footnotes thereto of the Company.
Recent Accounting Pronouncements	Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Topic 842, amended by ASU 2018-11, Leases In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements Revenue from Contracts with Customers

Other Income (Expense), Net (Ta

Other Income (Expense), Net (Tables)	3 Months Ended
	Mar. 31, 2020
Other Income And Expenses [Abstract]
Summary of Other Income (Expense), Net	Three Months Ended March 31 2020 2019 Other income (expense), net Investment income $ 2,055 $ 1,797 Interest expense (5,869 ) (2,397 ) Total other income (expense), net $ (3,814 ) $ (600 )

Term Loan (Tables)

Term Loan (Tables) - Term Loan A	3 Months Ended
	Mar. 31, 2020
Debt Instrument [Line Items]
Schedule of Terms Loan and Unamortized Issuance Cost Balance	The Term Loans and unamortized issuance cost balance are as follows: As of March 31, 2020 As of December 31, 2019 (in thousands) Principal Amount 155,000 155,000 Exit Fee 6,700 6,700 Less unamortized issuance cost 6,194 6,683 Total long-term debt, net of debt issuance cost $ 155,506 $ 155,017
Schedule of Future Principal Payments by Fiscal Year for Term Loans	The future principal payments by fiscal year for the Company’s Term Loans: As of March 31, 2020 (in thousands) 2020 (remaining nine months) $ — 2021 45,208 2022 77,500 2023 32,292 $ 155,000

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2020
Leases [Abstract]
Summary of Supplemental Balance Sheet Information Related to Operating Leases	Supplemental balance sheet information related to the Company’s operating leases is as follows: Balance Sheet Classification As of March 31, 2020 (in thousands) Non-current right-of-use assets Other assets $ 8,369 Current lease liabilities Other current liabilities 3,367 Non-current lease liabilities Other long-term liabilities 6,107
Schedule of Maturities of Lease Liabilities	Maturities of lease liabilities by fiscal year for the Company’s operating leases: As of March 31, 2020 (in thousands) 2020 (remaining nine months) $ 3,093 2021 4,142 2022 3,500 Total lease payments 10,735 Less: Imputed interest (1,261 ) Present value of lease liabilities $ 9,474

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Summary of Stock Based Compensation Expense	The following table summarizes stock-based compensation expense reflected in the consolidated statements of operations: Three Months Ended March 31 2020 2019 (in thousands) Research and development $ 11,516 $ 1,691 General and administrative 7,791 2,536 $ 19,307 $ 4,227
Summary of Restricted Stock Units	The following table summarizes RSUs as of March 31, 2020, under the Second Amended and Restated Long Term Incentive Plan (LTIP Plan) agreement and standalone option agreements: Number of RSUs Weighted-Average Grant Date Fair Value Outstanding at January 1, 2020 50,000 72.70 Granted 14,651 208.94 Vested — — Forfeited — — Outstanding at March 31, 2020 64,651 103.57
Summary of Stock Option Activity	The following table summarizes stock option activity as of March 31, 2020, and changes during the three months ended March 31, 2020, under the LTIP and standalone option agreements: Number of Options Weighted-Average Exercise Price Outstanding at January 1, 2020 4,038,949 41.24 Granted 913,516 207.52 Exercised (40,216 ) 35.09 Forfeited (50,824 ) 115.72 Outstanding at March 31, 2020 4,861,425 71.76 Exercisable at March 31, 2020 1,975,609 29.73

Net Loss per Share (Tables)

Net Loss per Share (Tables)	3 Months Ended
	Mar. 31, 2020
Earnings Per Share [Abstract]
Computation of Basic and Diluted Net Loss per Share	The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders: Three Months Ended March 31 2020 2019 (in thousands, except share and per share data) Numerator Net loss $ (48,939 ) $ (29,154 ) Denominator Weighted-average number of common shares used in net loss per share – basic 33,222,085 29,830,114 Dilutive potential common shares — — Weighted-average number of common shares used in net loss per share – diluted 33,222,085 29,830,114 Net loss per share – basic $ (1.47 ) $ (0.98 ) Net loss per share – diluted $ (1.47 ) $ (0.98 )

Collaboration Agreements - Addi

Collaboration Agreements - Additional Information (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Dec. 31, 2009	Mar. 31, 2020	Mar. 31, 2019	Nov. 30, 2021	Jun. 30, 2020	Dec. 31, 2019	Oct. 31, 2019
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Current portion of payable to collaborators		$ 150,000				$ 150,000
Payable to collaborators, net of current portion		68,440				66,862
Collaboration revenue		1,353	$ 7,770
Current portion of deferred revenue		4,701				4,701
Deferred revenue, current		4,701				4,701
AbbVie
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Payable to collaborators		68,400				$ 100,000	$ 330,000
Interest expense		1,600	0
Current portion of payable to collaborators		150,000
Payable to collaborators, net of current portion		80,000
AbbVie | Collaborative Arrangement
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Collaboration revenue		0	$ 6,600
Current portion of deferred revenue		0
Deferred revenue, current		0
AbbVie | Forecast
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Payable to collaborators				$ 80,000	$ 150,000
KKC Agreement | License Agreement Terms
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Collaboration revenue		1,200
Current portion of deferred revenue		4,700
Upfront license fee received	$ 35,000
Collaboration revenue, total milestone payments received in 2010, 2012, 2018		45,000
Collaboration revenue, potential milestone payments		52,000
Collaboration revenue, additional potential commercial milestone payments		$ 140,000
Deferred revenue, expected timing of recognition		2021-12
Deferred Revenue		$ 8,200
Deferred revenue, current		$ 4,700

Other Income (Expense), Net - S

Other Income (Expense), Net - Summary of Other Income (Expense), Net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Other income (expense), net
Investment income	$ 2,055	$ 1,797
Interest expense	(5,869)	(2,397)
Total other income (expense), net	$ (3,814)	$ (600)

Term Loan - Additional Informat

Term Loan - Additional Information (Details) - USD ($)	Dec. 20, 2019	Mar. 31, 2020	Oct. 09, 2019
Debt Instrument [Line Items]
Debt instrument, effective interest rate before debt issuance costs and final exit fee		10.29%
Debt instrument, effective interest rate including debt issuance costs and final exit fee		12.17%
Amended and Restated Loan and Security Agreement | Term Loan B
Debt Instrument [Line Items]
Current borrowing capacity			$ 45,000,000
Debt instrument, interest only payments period		36 months through June 1, 2021
Debt instrument, prepayment terms		Under the Term B Loan, the Company will be obligated to pay a prepayment fee equal to (a) 4.0% of the outstanding principal balance of the Term B Loan if prepayment is made on or before the first anniversary of the funding date of the Term B Loan, (b) 3.0% of the outstanding principal balance of the Term B Loan if prepayment is made after the first anniversary date and on or before the second anniversary of the funding date of the Term B Loan, (c) 1.5% of the outstanding principal balance of the Term B Loan if prepayment is made after second anniversary date and on or before the third anniversary of the funding date of the Term B Loan, and (d) 0.0% of the outstanding principal balance of the Term B Loan if prepayment is made after the third anniversary date of the funding date of the Term B Loan and prior to the maturity date of the Term B Loan.
Debt instrument final exit fee payment percentage		2.00%
Amended and Restated Loan and Security Agreement | Term Loan B | Loan Prepayment After First Anniversary
Debt Instrument [Line Items]
Debt instrument prepayment fee percentage		3.00%
Amended and Restated Loan and Security Agreement | Term Loan B | Loan Prepayment After Second Anniversary
Debt Instrument [Line Items]
Debt instrument prepayment fee percentage		1.50%
Amended and Restated Loan and Security Agreement | Term Loan B | Loan Prepayment After Third Anniversary
Debt Instrument [Line Items]
Debt instrument prepayment fee percentage		0.00%
Amended and Restated Loan and Security Agreement | Term Loan B | Loan Prepayment After First Anniversary
Debt Instrument [Line Items]
Debt instrument prepayment fee percentage		4.00%
Amended and Restated Loan and Security Agreement | Term Loans
Debt Instrument [Line Items]
Debt instrument, payment terms		All outstanding Term Loans will mature on June 1, 2023.  The Company will make interest-only payments for 36 months through June 1, 2021.  The interest-only payment period will be followed by 24 equal monthly payments of principal and interest payments.
Debt instrument, maturity date		Jun. 1, 2023
Debt instrument, interest rate terms		The Term Loans will bear interest at a floating per annum rate calculated as 7.79% plus the greater of the 30-day U.S. Dollar LIBOR rate reported in The Wall Street Journal on the last business day of the month that immediately precedes the month in which the interest will accrue or 1.91%, with a minimum rate of 9.7% and maximum rate of 12.29%.
Debt instrument, annual interest rate		7.79%
Debt instrument, basis spread on variable rate		1.91%
Amended and Restated Loan and Security Agreement | Term Loans | Minimum
Debt Instrument [Line Items]
Debt instrument, annual interest rate		9.70%
Amended and Restated Loan and Security Agreement | Term Loans | Maximum
Debt Instrument [Line Items]
Debt instrument, annual interest rate		12.29%
Amended and Restated Loan and Security Agreement | Term Loan A
Debt Instrument [Line Items]
Debt instrument, prepayment terms		Under the Term A Loan, the Company has the option to prepay all, but not less than all, of the borrowed amounts, provided that the Company will be obligated to pay a prepayment fee equal to (a) the aggregate amount of interest that the Company would have paid through the maturity date if prepayment is made on or before the first anniversary of the funding date of the Term A Loan, (b) 4.0% of the outstanding principal balance of the Term A Loan if prepayment is made after the first anniversary date and on or before the second anniversary of the funding date of the Term A Loan, (c) 3.0% of the outstanding principal balance of the Term A Loan if prepayment is made after second anniversary date and on or before the third anniversary of the funding date of the Term A Loan, or (d) 1.5% of the outstanding principal balance of the Term A Loan if prepayment is made after the third anniversary date and on or before the fourth anniversary of the funding date of the Term A Loan.
Debt instrument final exit fee payment percentage		6.50%
Amended and Restated Loan and Security Agreement | Term Loan A | Loan Prepayment After First Anniversary
Debt Instrument [Line Items]
Debt instrument prepayment fee percentage		4.00%
Amended and Restated Loan and Security Agreement | Term Loan A | Loan Prepayment After Second Anniversary
Debt Instrument [Line Items]
Debt instrument prepayment fee percentage		3.00%
Amended and Restated Loan and Security Agreement | Term Loan A | Loan Prepayment After Third Anniversary
Debt Instrument [Line Items]
Debt instrument prepayment fee percentage		1.50%
Amended Restated Loan Agreement | Term Loan B
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 75,000,000
Proceeds from long-term debt	$ 75,000,000

Term Loan - Schedule of Term Lo

Term Loan - Schedule of Term Loans and Unamortized Issuance Cost Balance (Details) - Term Loans - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Principal Amount	$ 155,000	$ 155,000
Exit Fee	6,700	6,700
Less unamortized issuance cost	6,194	6,683
Total long-term debt, net of debt issuance cost	$ 155,506	$ 155,017

Term Loan - Schedule of Future

Term Loan - Schedule of Future Principal Payments by Fiscal Year for Term Loans (Details) - Term Loans - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
2020 (remaining nine months)	$ 0
2021	45,208
2022	77,500
2023	32,292
Term Loan	$ 155,000	$ 155,000

Leases - Additional Information

Leases - Additional Information (Details)	Oct. 15, 2019USD ($)ft²	Mar. 31, 2020USD ($)ft²
Lessee Lease Description [Line Items]
Operating lease right-of-use asset		$ 8,369,000
Operating lease liability		$ 9,474,000
Weighted-average remaining lease term		2 years 7 months 6 days
Weighted average incremental borrowing rate		9.60%
Cash paid for amounts included in the measurement of lease liabilities		$ 900,000
Operating lease, expense		$ 900,000
Plano Texas
Lessee Lease Description [Line Items]
Operating lease, existence of option to extend		true
Operating lease, option to extend		through April 30, 2022
Lease expiration date		Apr. 30, 2022
Operating lease, renewal Term		3 months
Plano Texas | Office Space
Lessee Lease Description [Line Items]
Area of real estate property | ft²		122,000
Plano Texas | Office And Laboratory Space | 2019 Lease Agreement
Lessee Lease Description [Line Items]
Area of real estate property | ft²	327,400
Lease initial term	16 years
Lessor, operating lease, existence of option to extend	true
Renewal lease term, option one	two consecutive five-year renewal periods
Renewal lease term, option two	one ten-year renewal period
Operating lease right-of-use asset		$ 0
Operating lease liability		0
Leasehold improvement maximum amount funded by landlord	$ 25,600
Leasehold incentive obligation included in other long-term liabilities		$ 1,100
Irving Texas
Lessee Lease Description [Line Items]
Operating lease, existence of option to extend		true
Operating lease, option to extend		extend through October 31, 2022
Lease expiration date		Oct. 31, 2022
Irving Texas | Maximum
Lessee Lease Description [Line Items]
Operating lease, renewal Term		6 months
Irving Texas | Office And Laboratory Space
Lessee Lease Description [Line Items]
Area of real estate property | ft²		34,890

Leases - Summary of Supplementa

Leases - Summary of Supplemental Balance Sheet Information Related to Operating Leases (Details) $ in Thousands	Mar. 31, 2020USD ($)
Leases [Abstract]
Non-current right-of-use assets	$ 8,369
Current lease liabilities	3,367
Non-current lease liabilities	$ 6,107

Leases - Schedule of Maturities

Leases - Schedule of Maturities of Lease Liabilities (Details) $ in Thousands	Mar. 31, 2020USD ($)
Leases [Abstract]
2020 (remaining nine months)	$ 3,093
2021	4,142
2022	3,500
Total lease payments	10,735
Less: Imputed interest	(1,261)
Present value of lease liabilities	$ 9,474

Income Taxes - Additional Infor

Income Taxes - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Income Tax Disclosure [Abstract]
Income tax receivable as per CARES Act	$ 22.1
Effective income tax rate	(31.30%)	0.00%

Stock-Based Compensation - Summ

Stock-Based Compensation - Summary of Stock Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 19,307	$ 4,227
Research and development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	11,516	1,691
General and administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 7,791	$ 2,536

Stock-Based Compensation - Su_2

Stock-Based Compensation - Summary of Restricted Stock Units (Details) - Restricted Stock Unit (RSUs)	3 Months Ended
	Mar. 31, 2020$ / sharesshares
Number of RSUs
Number of RSUs - Beginning balance | shares	50,000
Number of RSUs, Granted | shares	14,651
Number of RSUs, Vested | shares	0
Number of RSUs, Forfeited | shares	0
Number of RSUs - Ending balance | shares	64,651
Weighted-Average Grant Date Fair Value
Weighted-Average Grant Date Fair Value - Beginning balance | $ / shares	$ 72.70
Weighted-Average Grant Date Fair Value, Granted | $ / shares	208.94
Weighted-Average Grant Date Fair Value, Vested | $ / shares	0
Weighted-Average Grant Date Fair Value, Forfeited | $ / shares	0
Weighted-Average Grant Date Fair Value - Ending balance | $ / shares	$ 103.57

Stock-Based Compensation - Addi

Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 19,307	$ 4,227
Total intrinsic value of outstanding options	412,800
Total intrinsic value of exercisable options	228,300
Research and development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Compensation expense related to accelerated vesting of stock options	5,100
Performance-based Restricted Stock Unit (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Fair value of performance-based restricted stock units, performance targets not met	3,600
Time-based Restricted Stock Unit (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	100
Performance-based Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation expense	$ 36,100

Stock-Based Compensation - Su_3

Stock-Based Compensation - Summary of Stock Option Activity (Details)	3 Months Ended
	Mar. 31, 2020$ / sharesshares
Number of Options, Abstract
Number of Options, Outstanding - Beginning balance | shares	4,038,949
Number of Options, Granted | shares	913,516
Number of Options, Exercised | shares	(40,216)
Number of Options, Forfeited | shares	(50,824)
Number of Options, Outstanding - Ending balance | shares	4,861,425
Number of Options, Exercisable | shares	1,975,609
Weighted Average Exercise Price, Abstract
Weighted-Average Exercise Price, Outstanding - Beginning balance | $ / shares	$ 41.24
Weighted-Average Exercise Price, Granted | $ / shares	207.52
Weighted-Average Exercise Price, Exercised | $ / shares	35.09
Weighted-Average Exercise Price, Forfeited | $ / shares	115.72
Weighted-Average Exercise Price, Outstanding - Ending balance | $ / shares	71.76
Weighted-Average Exercise Price, Exercisable | $ / shares	$ 29.73

Net Loss per Share - Computatio

Net Loss per Share - Computation of Basic and Diluted Net (Loss) Income per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Numerator
Net loss	$ (48,939)	$ (29,154)
Denominator
Weighted-average number of common shares used in net loss per share – basic	33,222,085	29,830,114
Dilutive potential common shares	0	0
Weighted-average number of common shares used in net loss per share – diluted	33,222,085	29,830,114
Net loss per share – basic	$ (1.47)	$ (0.98)
Net loss per share – diluted	$ (1.47)	$ (0.98)

Net Loss per Share - Additional

Net Loss per Share - Additional Information (Details) - shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Earnings Per Share [Abstract]
Weighted average anti-dilutive shares excludes from computation of earnings per share	4,861,425	3,780,764