Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 08, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | NGM | |
Entity Registrant Name | NGM BIOPHARMACEUTICALS INC | |
Entity Central Index Key | 0001426332 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 66,654,589 | |
Entity File Number | 001-38853 | |
Entity Tax Identification Number | 261679911 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Address, Address Line One | 333 Oyster Point Boulevard | |
Entity Address, City or Town | South San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94080 | |
City Area Code | (650) | |
Local Phone Number | 243-5555 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 303,016 | $ 56,923 |
Short-term marketable securities | 53,557 | 149,710 |
Related party receivable from collaboration | 3,669 | |
Prepaid expenses and other current assets | 7,747 | 4,255 |
Total current assets | 364,320 | 214,557 |
Property and equipment, net | 20,485 | 23,893 |
Restricted cash | 1,874 | 2,249 |
Deferred IPO costs | 0 | 2,292 |
Other non-current assets | 3,936 | 3,094 |
Total assets | 390,615 | 246,085 |
Current liabilities: | ||
Accounts payable | 4,457 | 5,775 |
Accrued liabilities | 18,605 | 14,003 |
Deferred rent, current | 2,792 | 2,683 |
Deferred revenue, current | 14,624 | 19,025 |
Total current liabilities | 40,478 | 41,486 |
Deferred rent, non-current | 10,118 | 12,221 |
Deferred revenue, non-current | 3,942 | |
Early exercise stock option liability | 833 | 1,559 |
Convertible preferred stock warrant liability | 198 | |
Total liabilities | 51,429 | 59,406 |
Commitments and contingencies (Note 7) | ||
Convertible preferred stock, $0.001 par value; 96,268,206 shares authorized as of September 30, 2019 and December 31, 2018; zero and 47,267,466 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively; aggregate liquidation preference of $0 and $277,774 at September 30, 2019 and December 31, 2018, respectively | 294,874 | |
Stockholders' equity (deficit): | ||
Common stock, $0.001 par value; 129,000,000 shares authorized as of September 30, 2019 and December 31, 2018; 66,155,613 and 6,937,890 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | 66 | 7 |
Additional paid-in capital | 519,224 | 39,258 |
Accumulated other comprehensive gain (loss) | 99 | (267) |
Accumulated deficit | (180,203) | (147,193) |
Total equity (deficit) | 339,186 | (108,195) |
Total liabilities, convertible preferred stock and stockholders' equity (deficit) | $ 390,615 | $ 246,085 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Convertible preferred stock, par value | $ 0.001 | $ 0.001 |
Convertible preferred stock, shares authorized | 96,268,206 | 96,268,206 |
Convertible preferred stock, shares issued | 0 | 47,267,466 |
Convertible preferred stock, shares outstanding | 0 | 47,267,466 |
Convertible preferred stock, aggregate liquidation preference | $ 0 | $ 277,774 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 129,000,000 | 129,000,000 |
Common stock, shares issued | 66,155,613 | 6,937,890 |
Common stock, shares outstanding | 66,155,613 | 6,937,890 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Related party revenue | $ 21,568 | $ 20,815 | $ 72,461 | $ 61,546 |
Operating expenses: | ||||
Research and development | 28,953 | 24,473 | 87,299 | 66,773 |
General and administrative | 5,612 | 4,811 | 17,208 | 12,143 |
Total operating expenses | 34,565 | 29,284 | 104,507 | 78,916 |
Loss from operations | (12,997) | (8,469) | (32,046) | (17,370) |
Interest income | 1,984 | 966 | 5,138 | 2,609 |
Other income (expense), net | 96 | (14) | 54 | 103 |
Net loss | $ (10,917) | $ (7,517) | $ (26,854) | $ (14,658) |
Net loss per common share, basic and diluted | $ (0.17) | $ (1.15) | $ (0.60) | $ (2.33) |
Weighted average shares used to compute net loss per common share, basic and diluted | 65,948,207 | 6,525,660 | 44,828,596 | 6,285,905 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net Loss | $ (10,917) | $ (7,517) | $ (26,854) | $ (14,658) |
Other comprehensive gain (loss), net of tax: | ||||
Net unrealized gain (loss) on available-for-sale marketable securities | (3) | 161 | 366 | 94 |
Total comprehensive loss | $ (10,920) | $ (7,356) | $ (26,488) | $ (14,564) |
CONDENSED CONSOLIDATED CONVERTI
CONDENSED CONSOLIDATED CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) $ in Thousands | Total | Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Other Comprehensive Gain (Loss) | Accumulated Deficit |
Balance at Dec. 31, 2017 | $ (120,978) | $ 294,874 | $ 6 | $ 26,147 | $ (431) | $ (146,700) |
Balance, shares at Dec. 31, 2017 | 47,267,000 | 6,105,000 | ||||
Issuance of common stock upon exercise of stock options | 71 | 71 | ||||
Issuance of common stock upon exercise of stock options, shares | 35,000 | |||||
Vesting of common stock from early exercises | 108 | 108 | ||||
Vesting of common stock from early exercises, shares | 35,000 | |||||
Repurchase of common stock | (185) | (185) | ||||
Repurchase of common stock, shares | (23,000) | |||||
Stock-based compensation expense | 2,179 | 2,179 | ||||
Changes in unrealized gain (loss) on available-for-sale securities | (223) | (223) | ||||
Net loss | (3,941) | (3,941) | ||||
Balance at Mar. 31, 2018 | (122,969) | $ 294,874 | $ 6 | 28,320 | (654) | (150,641) |
Balance, shares at Mar. 31, 2018 | 47,267,000 | 6,152,000 | ||||
Balance at Dec. 31, 2017 | (120,978) | $ 294,874 | $ 6 | 26,147 | (431) | (146,700) |
Balance, shares at Dec. 31, 2017 | 47,267,000 | 6,105,000 | ||||
Net loss | (14,658) | |||||
Balance at Sep. 30, 2018 | (125,594) | $ 294,874 | $ 7 | 36,094 | (337) | (161,358) |
Balance, shares at Sep. 30, 2018 | 47,267,000 | 6,621,000 | ||||
Balance at Mar. 31, 2018 | (122,969) | $ 294,874 | $ 6 | 28,320 | (654) | (150,641) |
Balance, shares at Mar. 31, 2018 | 47,267,000 | 6,152,000 | ||||
Issuance of common stock to participants in 401(k) Plan, shares | 11,000 | |||||
Issuance of common stock upon exercise of stock options | 164 | $ 1 | 163 | |||
Issuance of common stock upon exercise of stock options, shares | 81,000 | |||||
Vesting of common stock from early exercises | 108 | 108 | ||||
Vesting of common stock from early exercises, shares | 31,000 | |||||
Stock-based compensation expense | 2,292 | 2,292 | ||||
Changes in unrealized gain (loss) on available-for-sale securities | 156 | 156 | ||||
Net loss | (3,200) | (3,200) | ||||
Balance at Jun. 30, 2018 | (123,449) | $ 294,874 | $ 7 | 30,883 | (498) | (153,841) |
Balance, shares at Jun. 30, 2018 | 47,267,000 | 6,275,000 | ||||
Issuance of common stock upon exercise of stock options | 1,986 | 1,986 | ||||
Issuance of common stock upon exercise of stock options, shares | 296,000 | |||||
Vesting of common stock from early exercises | 250 | 250 | ||||
Vesting of common stock from early exercises, shares | 50,000 | |||||
Stock-based compensation expense | 2,975 | 2,975 | ||||
Changes in unrealized gain (loss) on available-for-sale securities | 161 | 161 | ||||
Net loss | (7,517) | (7,517) | ||||
Balance at Sep. 30, 2018 | (125,594) | $ 294,874 | $ 7 | 36,094 | (337) | (161,358) |
Balance, shares at Sep. 30, 2018 | 47,267,000 | 6,621,000 | ||||
Balance at Dec. 31, 2018 | (108,195) | $ 294,874 | $ 7 | 39,258 | (267) | (147,193) |
Balance, shares at Dec. 31, 2018 | 47,267,000 | 6,733,000 | ||||
Issuance of common stock to participants in 401(k) Plan | 98 | 98 | ||||
Issuance of common stock to participants in 401(k) Plan, shares | 8,000 | |||||
Issuance of common stock upon exercise of stock options | 279 | 279 | ||||
Issuance of common stock upon exercise of stock options, shares | 80,000 | |||||
Vesting of common stock from early exercises | 237 | 237 | ||||
Vesting of common stock from early exercises, shares | 34,000 | |||||
Stock-based compensation expense | 2,605 | 2,605 | ||||
Changes in unrealized gain (loss) on available-for-sale securities | 222 | 222 | ||||
Net exercise of preferred stock warrant to Series A preferred stock | $ 198 | |||||
Net exercise of preferred stock warrant to Series A preferred stock, shares | 16,000 | |||||
Cumulative effect adjustment upon adoption of ASU 2014-09 | (6,156) | (6,156) | ||||
Net loss | (8,268) | (8,268) | ||||
Balance at Mar. 31, 2019 | (119,178) | $ 295,072 | $ 7 | 42,477 | (45) | (161,617) |
Balance, shares at Mar. 31, 2019 | 47,283,000 | 6,855,000 | ||||
Balance at Dec. 31, 2018 | $ (108,195) | $ 294,874 | $ 7 | 39,258 | (267) | (147,193) |
Balance, shares at Dec. 31, 2018 | 47,267,000 | 6,733,000 | ||||
Issuance of common stock upon exercise of stock options, shares | 282,342 | |||||
Net loss | $ (26,854) | |||||
Balance at Sep. 30, 2019 | 339,186 | $ 66 | 519,224 | 99 | (180,203) | |
Balance, shares at Sep. 30, 2019 | 66,047,000 | |||||
Balance at Mar. 31, 2019 | (119,178) | $ 295,072 | $ 7 | 42,477 | (45) | (161,617) |
Balance, shares at Mar. 31, 2019 | 47,283,000 | 6,855,000 | ||||
Conversion of Series A, B, C, D, E convertible preferred stock to common stock | 295,072 | $ (295,072) | $ 47 | 295,025 | ||
Conversion of Series A, B, C, D, E convertible preferred stock to common stock, shares | (47,283,000) | |||||
Conversion of Series A, B, C, D, E convertible preferred stock to common stock, shares | 47,283,000 | |||||
Issuance of common stock upon initial public offering, net of issuance cost | 107,756 | $ 8 | 107,748 | |||
Issuance of common stock upon initial public offering, net of issuance cost, shares | 7,521,000 | |||||
Issuance of common stock upon private placement | 65,947 | $ 4 | 65,943 | |||
Issuance of common stock upon private placement, shares | 4,122,000 | |||||
Issuance of common stock upon exercise of stock options | 258 | 258 | ||||
Issuance of common stock upon exercise of stock options, shares | 86,000 | |||||
Vesting of common stock from early exercises | 245 | 245 | ||||
Vesting of common stock from early exercises, shares | 32,000 | |||||
Stock-based compensation expense | 3,552 | 3,552 | ||||
Changes in unrealized gain (loss) on available-for-sale securities | 147 | 147 | ||||
Net loss | (7,669) | (7,669) | ||||
Balance at Jun. 30, 2019 | 346,130 | $ 66 | 515,248 | 102 | (169,286) | |
Balance, shares at Jun. 30, 2019 | 65,899,000 | |||||
Issuance of common stock upon exercise of stock options | 643 | 643 | ||||
Issuance of common stock upon exercise of stock options, shares | 116,000 | |||||
Vesting of common stock from early exercises | 244 | 244 | ||||
Vesting of common stock from early exercises, shares | 32,000 | |||||
Stock-based compensation expense | 3,089 | 3,089 | ||||
Changes in unrealized gain (loss) on available-for-sale securities | (3) | (3) | ||||
Net loss | (10,917) | (10,917) | ||||
Balance at Sep. 30, 2019 | $ 339,186 | $ 66 | $ 519,224 | $ 99 | $ (180,203) | |
Balance, shares at Sep. 30, 2019 | 66,047,000 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Cash flows from operating activities | |||||
Net loss | $ (10,900) | $ (7,500) | $ (26,854) | $ (14,658) | |
Adjustments to reconcile net loss to net cash used in operating activities | |||||
Depreciation | 1,900 | 1,900 | 5,838 | 5,332 | |
Amortization of discount on marketable securities | (1,024) | (456) | |||
Stock-based compensation expenses | 9,360 | 7,449 | |||
Early exercised stock options | 1,885 | ||||
Change in fair value of convertible preferred stock warrant liability | 77 | ||||
Other non-cash expenses | 98 | ||||
Changes in operating assets and liabilities | |||||
Receivable from related party collaboration | 3,669 | ||||
Prepaid expenses and other assets | (4,334) | (647) | |||
Accounts payable | (1,318) | 968 | |||
Accrued expenses and other liabilities | 4,485 | 549 | |||
Deferred rent | (1,994) | (1,305) | |||
Deferred revenue | (14,499) | (13,799) | |||
Net cash used in operating activities | (26,573) | (14,605) | |||
Cash flows from investing activities | |||||
Purchase of marketable securities | (75,224) | (102,948) | |||
Proceeds from sales and maturities of marketable securities | 172,767 | 143,932 | |||
Purchase of property and equipment | (2,430) | (5,737) | |||
Net cash provided by investing activities | 95,113 | 35,247 | |||
Cash flows from financing activities | |||||
Proceeds from issuance of common stock upon initial public offering, net of issuance costs | 110,078 | ||||
Proceeds from issuance of common stock upon completion of private placement | 65,947 | ||||
Proceeds from issuance of common stock upon exercise of stock options | 1,153 | 2,220 | |||
Repurchase of common stock | (185) | ||||
Deferred IPO costs | (779) | ||||
Net cash provided by financing activities | 177,178 | 1,256 | |||
Net increase in cash and cash equivalents | 245,718 | 21,898 | |||
Cash, cash equivalents and restricted cash at beginning of period | 59,172 | 27,842 | $ 27,842 | ||
Cash, cash equivalents and restricted cash at end of period | 304,890 | 49,740 | 304,890 | 49,740 | 59,172 |
Reconciliation of cash, cash equivalents and restricted cash to condensed consolidated balance sheets: | |||||
Cash and cash equivalents | 303,016 | 47,491 | 303,016 | 47,491 | 56,923 |
Restricted cash | 1,874 | 2,249 | 1,874 | 2,249 | 2,249 |
Cash, cash equivalents and restricted cash at end of period | $ 304,890 | $ 49,740 | 304,890 | 49,740 | $ 59,172 |
Non-cash investing and financing activities: | |||||
Net exercise of convertible preferred stock warrant to Series A preferred stock | 198 | ||||
Vesting of common stock from early exercises | $ 726 | 466 | |||
Cost of property and equipment in accounts payable and accrued liabilities | $ 109 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business NGM Biopharmaceuticals, Inc. and its wholly-owned subsidiary (collectively referred to as the “Company”) is a research-driven, clinical-stage biopharmaceutical company committed to discovering and developing first-in-class therapeutics for major diseases with an initial focus on cardio-metabolic and liver diseases. The Company’s current portfolio is composed of six product candidates (aldafermin (NGM282), NGM313, NGM120, NGM217, NGM621 and NGM395) focused on non-alcoholic steatohepatitis (“NASH”), diabetes, oncology, age-related macular degeneration and metabolic disease. The Company was incorporated in Delaware on December 20, 2007 and its headquarters are located at 333 Oyster Point Blvd., South San Francisco, California 94080. The Company operates in one business segment Stock Split On March 22, 2019, the Company filed an amendment to the Company’s amended and restated certificate of incorporation to effect a reverse split of shares of the Company’s common stock on a two-for-one basis (the “Reverse Stock Split”). In connection with the Reverse Stock Split, the conversion ratio for the Company’s outstanding convertible preferred stock was proportionately adjusted such that the common stock issuable upon conversion of such preferred stock was decreased in proportion to the Reverse Stock Split. The par value of the common stock was not adjusted as a result of the Reverse Stock Split. All references to common stock, options to purchase common stock, early exercised options, share data, per share data, convertible preferred stock (to the extent presented on an as-converted to common stock basis) and related information contained in these condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented Initial Public Offering On April 3, 2019, the Company’s registration statement on Form S-1 was declared effective by the United States Securities and Exchange Commission (“SEC”) for its initial public offering (“IPO”) of its common stock. The Company’s shares of common stock started trading on the Nasdaq Global Select Market on April 4, 2019 and the transaction closed on April 8, 2019. In connection with the IPO, the Company sold an aggregate of 7,521,394 shares of common stock, which included 6,666,667 shares of common stock and 854,727 shares of common stock sold pursuant to the underwriters’ exercise of their option to purchase additional shares, at a public offering price of $16.00 per share. The aggregate net proceeds received by the Company from the offering were $107.8 million, net of underwriting discounts, commissions and offering expenses of $4.1 million, of which $2.3 million were paid in 2018. Upon the closing of the IPO, 47,283,839 Concurrent with the closing of the IPO, the Company also issued 4,121,683 shares of its common stock to Merck Sharp & Dohme Corp. (“Merck”) in a private placement at a price of $16.00 per share for proceeds of $65.9 million, which resulted in Merck owning approximately 19.9% of the Company’s outstanding shares of common stock (Note 6). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and Regulation S-X for interim consolidated financial information. These unaudited condensed consolidated financial statements include the consolidated accounts of the Company and its wholly-owned foreign subsidiary in Australia. All intercompany balances and transactions have been eliminated upon consolidation. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make judgments, assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. Specific accounts that require management estimates include, but are not limited to, stock-based compensation, research and development periods under multiple element agreements, the valuation of convertible preferred stock warrants, the fair value of convertible preferred and common stock, contract manufacturing accruals, clinical trial accruals and revenue in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers ( “ ASC 606 ” ). Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from those estimates. Need for Additional Capital Since inception, the Company has incurred net losses and negative cash flow from operations. ompany incurred net losses of $10.9 million and $26.9 million, respectively, compared to net losses of $7.5 million and $14.7 million for the three and nine months ended September 30, 2018, respectively. As of September 30, 2019, the Company had an accumulated deficit of $180.2 million and does not expect to experience positive cash flows from operations in the near future. The Company had $356.6 million of cash, cash equivalents and marketable securities as of September 30, 2019, and therefore the Company expects that its cash and cash equivalents and marketable securities will be sufficient to fund its operations for a period of at least one year from the date these unaudited condensed consolidated financial statements are filed with the SEC. To fully implement the Company’s business plan and fund its operations, the Company may raise capital through the issuance of equity securities or debt financings, collaborations, strategic alliances and licensing arrangements, government or other third-party funding or a combination of these. Deferred Initial Public Offering Costs Costs incurred in connection with the IPO primarily consisted of direct incremental legal, printing and accounting fees. IPO costs were capitalized as incurred and offset against proceeds upon completion of the IPO. As of September 30, 2019 and , deferred IPO costs included on the accompanying condensed consolidated balance sheets were zero and $2.3 million, respectively. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, the related party receivables from collaboration and other current assets and liabilities approximate their respective fair values because of the short-term nature of those instruments. Fair value accounting is applied to the convertible preferred stock warrant liabilities that are recorded at their estimated fair value in the condensed consolidated financial statements. Cash and Cash Equivalents Cash and cash equivalents are stated at fair value. Cash equivalents are related to securities having an original maturity of three months or less at the time of purchase. The Company limits its credit risk associated with cash and cash equivalents by placing its investments with a bank it believes is highly creditworthy and with highly rated money market funds. As of September 30, 2019 and , cash and cash equivalents consisted of bank deposits and investments in money market funds. Marketable Securities The appropriate classification of the Company’s marketable securities is determined at the time of purchase and such designations are re-evaluated at each balance sheet date. All of the Company’s securities are considered as available-for-sale and carried at estimated fair values and reported in cash equivalents, short-term marketable securities or long-term marketable securities. Unrealized gains and losses on available-for-sale securities are excluded from net loss and reported in accumulated other comprehensive loss as a separate component of stockholders’ equity (deficit). Other income (expense), net, includes interest, amortization of purchase premiums and accretion of purchase discounts, realized gains and losses on sales of securities and other-than-temporary declines in the fair value of securities, if any. The cost of securities sold is based on the specific identification method. The Company’s investments are regularly reviewed for other-than-temporary declines in fair value. This review includes the consideration of the cause of the impairment, including the creditworthiness of the security issuers, the number of securities in an unrealized loss position, the severity and duration of the unrealized losses, whether the Company has the intent to sell the securities and whether it is more likely than not that the Company will be required to sell the securities before the recovery of their amortized cost basis. When the Company determines that the decline in fair value of an investment is below its carrying value and this decline is other-than-temporary, the Company reduces the carrying value of the security it holds and records a loss for the amount of such decline. Restricted Cash The Company’s restricted cash represents collateral in connection with the lease on the Company’s headquarters entered into in 2015 and is classified as a non-current asset on the condensed consolidated balance sheets as the collateral will not be returned to the Company in less than 12 months (Note 7). Concentration of Credit and Other Risks Cash and cash equivalents and marketable securities from the Company’s available-for-sale and marketable security portfolio potentially subject the Company to concentrations of credit risk. The Company is invested in money market funds and marketable securities through custodial relationships with major U.S. and Australian banks. Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. Related party receivables from collaborations (Notes 5 and 6) are typically unsecured. Accordingly, the Company may be exposed to credit risk generally associated with its current collaboration agreement with Merck ( “Collaboration Agreement”) and any future collaboration agreements with other collaboration partners. To date, the Company has not experienced any losses related to these receivables. Merck accounted for 100% of the Company’s revenue for the three and nine months ended September 30, 2019 and 2018. Property and Equipment, Net Property and equipment is recorded at cost and consists of computer equipment, laboratory equipment and office furniture and leasehold improvements. Maintenance and repairs, and training on the use of equipment, are charged to expense as incurred. Costs that improve assets or extend their economic lives are capitalized. Depreciation is recognized using the straight-line method based on an estimated useful life of the asset, which is as follows: Computer equipment 3 years Laboratory equipment and office furniture 3 years Leasehold improvement Shorter of life of asset or lease term Leases The Company’s lease agreement for its laboratory and office facilities are classified as operating leases. Rent expense is recognized on a straight-line basis over the term of the lease. Incentives granted under the Company’s facilities leases, including allowances to fund leasehold improvements and rent holidays, are capitalized and are recognized as reductions to rental expense on a straight-line basis over the term of the lease. Impairment of Long-Lived Assets Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. As of September 30, 2019 and , no revision to the remaining useful lives or write-down of long-lived assets was required. Income Taxes Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and the operating loss and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Deferred tax assets and liabilities are measured at the balance sheet date using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period such tax rate changes are enacted. Convertible Preferred Stock Warrant Freestanding warrants to purchase the Company’s convertible preferred stock were classified as a liability on the condensed consolidated balance sheet were contingently redeemable, which could have obligated the Company to transfer assets at some point in the future to settle the warrants. The convertible preferred stock warrants are recorded as a liability and subject to remeasurement at each balance sheet date, with changes in estimated fair value recorded in the Company’s consolidated statements of operations as a component of total other income (expense), net. On February 3, 2019, all convertible preferred stock warrants were automatically exercised on a net basis into 16,380 shares of Series A convertible preferred stock at a fair value of $0.2 million As of , there were no convertible preferred stock warrants outstanding. Revenue Recognition On January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), and subsequent amendments, using the modified retrospective transition method applied to those contracts that were not completed as of January 1, 2019. ASC 606 supersedes all prior revenue recognition guidance. Results for operating periods beginning after January 1, 2019 are presented under ASC 606, while prior period amounts have not been adjusted and continue to be reported in accordance with previous accounting rules under Accounting Standards Codification Topic 605, Revenue Recognition (“ASC 605”). The core principle in ASC 606 requires an entity to recognize revenue upon the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company applies the following five-step revenue recognition model outlined in ASC 606 to adhere to this core principle: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the Company satisfies a performance obligation. All of the Company’s revenue to date has been generated from its collaboration agreements. The terms of these agreements generally require the Company to provide (i) license options for its compounds, (ii) research and development services and (iii) non-mandatory services in connection with participation in research or steering committees. Payments received under these arrangements may include non-refundable upfront license fees, partial or complete reimbursement of research and development costs, contingent consideration payments based on the achievement of defined collaboration objectives and royalties on sales of commercialized products. In some agreements, the collaboration partner is solely responsible for meeting defined objectives that trigger contingent or royalty payments. Often the partner only pursues such objectives subsequent to exercising an optional license on compounds identified as a result of the research and development services performed under the collaboration agreement. The Company assesses whether the promises in its arrangements, including any options provided to the customer, are considered distinct performance obligations that should be accounted for separately. Judgment is required to determine whether the license to a compound is distinct from research and development services or participation in steering committees, as well as whether options create material rights in the contract. The transaction price in each arrangement is generally comprised of a non-refundable upfront fee and variable consideration related to the performance of research and development services. The Company typically submits a budget for the research and development services to the customer in advance of performing the services. The transaction price is allocated to the identified performance obligations based on the standalone selling price (“SSP”) of each distinct performance obligation. Judgment is required to determine SSP. In instances where SSP is not directly observable, such as when a license or service is not sold separately, SSP is determined using information that may include market conditions and other observable inputs. The Company utilizes judgment to assess the nature of its performance obligations to determine whether they are satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress toward completion. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company’s collaboration agreements may include contingent payments related to specified development and regulatory milestones or contingent payments for royalties based on sales of a commercialized product. Milestones can be achieved for such activities in connection with progress in clinical trials, regulatory filings in various geographical markets and marketing approvals from regulatory authorities. Sales-based royalties are generally related to the volume of annual sales of a commercialized product. At the inception of each agreement that includes such payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price by using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s or its customer’s control, such as those related to regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation based on a relative SSP basis. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of each such milestone and any related constraint and, if necessary, adjusts its estimate of the overall transaction price. Pursuant to the guidance in ASC 606, sales-based royalties are not included in the transaction price. Instead, royalties are recognized at the later of when the performance obligation is satisfied or partially satisfied, or when the sale that gives rise to the royalty occurs. Prior to the adoption of ASC 606, the Company’s revenue from collaboration agreements was recognized when the Company determined that persuasive evidence of an arrangement exists, services had been rendered, the price was fixed or determinable and collectability was reasonably assured. The Company would record amounts received prior to satisfying the above revenue recognition criteria as deferred revenue until all applicable revenue recognition criteria were met. Revenue allocated to research activities was generally recognized in the period the services were performed, and revenue allocated to licenses was generally recognized on a straight-line basis over the contractual term. Allocations to non-contingent elements were based on the relative selling price of each element using vendor-specific objective evidence or third-party evidence, where available. In the absence of either of these measures, the Company used the best estimate of selling price for that deliverable. The most significant change to the Company’s policies upon the adoption of ASC 606 is the estimation of an arrangement’s total transaction price, which would include any variable consideration and the recognition of that transaction price based on a cost-based input method that requires significant estimates to determine, at each reporting period, the percentage of completion based on the estimated total effort required to complete the project and the total transaction price. Given the differences in revenue recognition policies, the revenue recognized in prior years is not strictly comparable to revenue recorded in the quarter ending September 30, 2019 or in future periods (see Recently Adopted Accounting Pronouncements). Research and Development Research and development costs are expensed as incurred. Research and development expenses primarily include salaries and benefits for medical, clinical, quality, preclinical, manufacturing and research personnel, costs related to research activities, preclinical studies, clinical trials, drug manufacturing expenses and allocated overhead and facility occupancy costs. The Company accounts for non-refundable advance payments for goods or services that will be used in future research and development activities as expenses when the goods have been received or when the service has been performed rather than when the payment is made. Clinical trial costs are a component of research and development expenses. The Company expenses costs for its clinical trial activities performed by third parties, including clinical research organizations (“CROs”) and other service providers, as they are incurred, based upon estimates of the work completed over the life of the individual study in accordance with associated agreements. The Company uses information it receives from internal personnel and outside service providers to estimate the clinical trial costs incurred. Stock-Based Compensation The Company’s stock-based compensation programs include stock options and shares that will be issued under the Company’s 2019 Employee Stock Purchase Plan ("ESPP"). Stock-based compensation to employees is valued on the grant date of each award using the Black-Scholes option-pricing model, and its estimated fair value is recognized over the period during which the employee is required to provide service in exchange for the award, which is generally the vesting period of each award. Subsequent to the adoption of ASU 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, stock-based compensation expense for non-employee stock-based awards is also measured based on the fair value on grant date with its estimated fair value recorded over the period for which the non-employee is required to provide service in exchange for the award. As non-cash stock-based compensation expense is based on awards ultimately expected to vest, it is reduced by an estimate for future forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from estimates. Foreign Currency Transactions The functional currency of NGM Biopharmaceuticals Australia Pty Ltd., a wholly-owned subsidiary, is the U.S. Dollar. Accordingly, all monetary assets and liabilities of the subsidiary are remeasured into U.S. Dollars at the current period-end exchange rates and non-monetary assets are remeasured using historical exchange rates. Income and expense elements are remeasured to U.S. Dollars using the average exchange rates in effect during the period. Remeasurement gains and losses are recorded as other income (expense), net on the condensed consolidated statements of operations. The Company is subject to foreign currency risk with respect to its clinical and manufacturing contracts denominated in currencies other than the U.S. Dollar, primarily British Pounds, Swiss Francs, Australian Dollars and the Euro. Payments on contracts denominated in foreign currencies are made at the spot rate on the day of payment. Changes in the exchange rate between billing dates and payment dates are recorded within other income (expense), net on the condensed consolidated statements of operations. Comprehensive Loss Comprehensive loss is comprised of net loss and certain changes in equity that are excluded from net loss. For the three and nine months ended September 30, 2019 and 2018, the difference between comprehensive loss and net loss consisted , respectively. Net Loss per Common Share Basic net loss per common share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period, less shares subject to repurchase, and excludes any dilutive effects of stock-based awards and warrants. Diluted net loss per common share is computed giving effect to all potentially dilutive common shares, including common stock issuable upon exercise of stock options, and unvested restricted common stock and stock units. As the Company had net losses for the three and nine months ended September 30, 2019 and 2018, all potential common shares were determined to be anti-dilutive. The following table sets forth the computation of net loss per common share (in thousands, except share and per share): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Numerator: Net loss $ (10,917 ) $ (7,517 ) $ (26,854 ) $ (14,658 ) Denominator: Weighted-average number of common shares used in calculating net income per share—basic and diluted 65,948,207 6,525,660 44,828,596 6,285,905 Net loss per share—basic and diluted $ (0.17 ) $ (1.15 ) $ (0.60 ) $ (2.33 ) Potential gross dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows: September 30, 2019 2018 Convertible preferred stock — 47,267,466 Options to purchase common stock 11,328,508 9,915,997 Warrants to purchase convertible preferred stock — 19,637 Shares committed under ESPP 429,369 — Total 11,757,877 57,203,100 Segment and Geographical Information The Company operates in one segment. Substantially all of the Company’s long-lived assets, primarily comprised of property and equipment, are based in the United States. For the three and nine months ended September 30, 2019 and 2018, the Company’s revenues were entirely within the United States Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on our condensed consolidated financial statements upon adoption. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), we meet the definition of an emerging growth company, and have elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. Recently Adopted Accounting Pronouncements In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Non-Employee Share-Based Payment Accounting as part of the FASB simplification initiative. The new standard expands the scope of Topic 718, allowing the Company to apply the requirements of Topic 718 to certain non-employee awards issued in exchange for the acquisition of goods and services from non-employees. ASU 2018-07 is intended to supersede Subtopic 505-50, Equity-Based Payments to Non-Employees and is effective for the Company for fiscal years beginning after December 15, 2019. Effective January 1, 2019, the Company early adopted this ASU using the modified retrospective transition method in which all previously issued equity-classified share-based payment awards to non-employees were remeasured at fair value as of the adoption date. Newly issued equity-classified share-based payments awards to non-employees are measured at fair value as of grant date. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 replaced existing revenue recognition guidance and permits the use of either the full retrospective or modified retrospective transition method. Additionally, in March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the implementation guidance on principal versus agent considerations in ASU 2014-09. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarifies certain aspects of identifying performance obligations and licensing implementation guidance. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which relates to disclosures of remaining performance obligations, as well as other amendments to guidance on collectability, non-cash consideration and the presentation of sales and other similar taxes collected from customers. For the Company, these standards (collectively, ASC 606) have the same effective date and transition date of January 1, 2019. The Company adopted ASC 606 on January 1, 2019, using the modified retrospective transition method and, therefore, evaluated its contract with Merck under ASC 606. The Company recorded adjustments upon the adoption of ASC 606 as a result of the Company concluding that licenses and research and development services promised in the agreement are a single combined performance obligation. This determination impacts the timing of recognition of both the non-refundable upfront fee and the payments related to the services. Under previous guidance, the upfront fee was recognized ratably over the contract term, and fees related to the services were recognized in the period the services were performed. Under ASC 606, revenue for the single performance obligation is recognized over time using a cost-based input method to measure progress toward completion of the single combined performance obligation. The adoption of ASC 606 impacted the Company’s contract liabilities and accumulated deficit balance as of January 1, 2019 as follows (in thousands): December 31, 2018 Adjustments due to the Adoption of ASC 606 January 1, 2019 Deferred revenue, current $ 19,025 $ 5,171 $ 24,196 Deferred revenue, noncurrent 3,942 985 4,927 Accumulated deficit (147,193 ) (6,156 ) (153,349 ) The impact of the adoption of ASC 606 on the condensed condensed consolidated statement of operations and cash flows for the nine months ended September 30, 2019 was as follows (in thousands): September 30, 2019 Amount Under ASC 605 Adjustments As Reported Under ASC 606 Deferred revenue, current $ 11,212 $ 3,412 $ 14,624 Accumulated deficit (176,791 ) (3,412 ) (180,203 ) Three Months Ended September 30, 2019 Amount Under ASC 605 Adjustments As Reported Under ASC 606 Related party revenue $ 20,826 $ 742 $ 21,568 Loss from operations (13,739 ) 742 (12,997 ) Net loss (11,659 ) 742 (10,917 ) Net loss per common share, basic and diluted (0.18 ) (0.17 ) Nine Months Ended September 30, 2019 Amount Under ASC 605 Adjustments As Reported Under ASC 606 Related party revenue $ 69,717 $ 2,744 $ 72,461 Loss from operations (34,790 ) $ 2,744 (32,046 ) Net loss (29,598 ) $ 2,744 (26,854 ) Net loss per common share, basic and diluted (0.66 ) (0.60 ) Nine Months Ended September 30, 2019 Amount Under ASC 605 Adjustments As Reported Under ASC 606 Cash flows from operating activities: Net loss $ (29,598 ) $ 2,744 $ (26,854 ) Changes in operating assets and liabilities: Deferred revenue (11,755 ) (2,744 ) (14,499 ) Recent Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which increases lease transparency and comparability among organizations. Under the new standard, lessees will be required to recognize all assets and liabilities arising from leases on the balance sheet, with the exception of leases with a term of 12 months or less, which permits a lessee to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities. In March 2018, the FASB approved an alternative transition method to the modified retrospective approach, which eliminates the requirement to restate prior period financial statements and allows the cumulative effect of the retrospective allocation to be recorded as an adjustment to the opening balance of retained earnings at the date of adoption. The Company is currently assessing the timing of adoption and the impact that the adoption of ASU 2016-02 will have on its condensed consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement as part of the FASB’s disclosure framework project. This ASU modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement by removing the requirement to disclose amounts of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and the valuation process for Level 3 fair value measurements. This ASU also modifies existing disclosure requirements by clarifying that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date, and it adds required disclosures for the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This ASU will be effective for the Company for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently assessing the impact of this ASU on its condensed consolidated financial statements. In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (ASC 808): Clarifying the Interaction between ASC 808 and ASC 606, which clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under ASC 606 when then collaborative arrangement participant is a customer in the context of a unit of account. In those situations, all the guidance in ASC 606 should be applied, including recognition, measurement, presentation and disclosure requirements. This ASU adds unit- |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements Financial assets and liabilities are recorded at fair value. The carrying amount of certain financial instruments, including cash and cash equivalents, receivable from collaboration, related party receivable from collaboration and other current assets and liabilities approximate fair value due to their relatively short maturities. Assets and liabilities recorded at fair value on a recurring basis in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value accounting is applied to the convertible preferred stock warrant liabilities that are recorded at their estimated fair value in the condensed consolidated financial statements. The FASB has defined fair value as the exchange price that would be received for an asset or paid to transfer a liability, or an exit price, in the principal or most advantageous market for that asset or liability in an orderly transaction between market participants on the measurement date, and established a fair value hierarchy that requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value. The FASB set forth three levels of inputs that may be used to measure fair value: Level 1 : Quoted prices in active markets for identical assets or liabilities. Level 2 : Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 : Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. To date, the Company has not recorded any impairment charges on marketable securities other-than-temporary declines in market value. In determining whether a decline is other than temporary, the Company considers various factors including the length of time and extent to which the market value has been less than cost, the financial condition and near-term prospects of the issuer and the Company’s intent and ability to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value. The Company estimates the fair values of investments in corporate agency bond securities, commercial paper and government agencies securities using level 2 inputs, by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data and other observable inputs. Cash and cash equivalents and marketable securities, all of which are classified as available-for-sale securities consisted of the following (in thousands): Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value As of September 30, 2019 Money market funds $ 298,057 $ — $ — $ 298,057 Corporate and agency bonds 39,750 79 — 39,829 Commercial paper 5,746 — — 5,746 U.S. government agencies securities 7,962 20 — 7,982 Total $ 351,515 $ 99 — $ 351,614 Classified as: Cash and cash equivalents $ 298,057 Short-term marketable securities (amortized cost of $53,458) 53,557 Total cash equivalents and marketable securities $ 351,614 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value As of December 31, 2018 Money market funds $ 34,983 $ — $ — $ 34,983 Corporate and agency bonds 68,323 — (241 ) 68,082 Commercial paper 17,904 — — 17,904 U.S. government agencies securities 63,751 — (26 ) 63,725 Total $ 184,961 $ — $ (267 ) $ 184,694 Classified as: Cash and cash equivalents $ 34,984 Short-term marketable securities (amortized cost of $149,978) 149,710 Total cash equivalents and marketable securities $ 184,694 Cash and cash equivalents in the table above excludes cash on deposit with banks of $5.0 million and $21.9 million as of September 30, 2019 and December 31, 2018 . As of September 30, 2019 and December 31, 2018 , the Company’s marketable securities had remaining contractual maturities less than one year. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table sets forth the estimated fair value of the Company’s financial assets and liabilities that were measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018 (in thousands): Fair Value Measurements As of September 30, 2019 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 298,057 $ — $ — $ 298,057 Corporate and agency bonds — 39,829 — 39,829 Commercial paper — 5,746 — 5,746 U.S. government agencies securities — 7,982 — 7,982 $ 298,057 $ 53,557 $ — $ 351,614 Fair Value Measurements As of December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 34,983 $ — $ — $ 34,983 Corporate and agency bonds — 68,082 — 68,082 Commercial paper — 17,904 — 17,904 U.S. government agencies securities — 63,725 — 63,725 $ 34,983 $ 149,711 $ — $ 184,694 Liabilities: Convertible preferred stock warrant liability $ — $ — $ 198 $ 198 $ — $ — $ 198 $ 198 There were no transfers of assets or liabilities between the fair value measurement levels during the nine months ended September 30, 2019 and year ended December 31, 2018 . The following table provides a summary of changes in the fair value of the Company’s convertible preferred stock warrant liability (in thousands): Fair Value Using Level 3 Inputs Amounts Balance at December 31, 2017 $ 121 Change in fair value of warrant liability included in other income (expense), net 77 Balance at September 30, 2018 $ 198 Balance at December 31, 2018 $ 198 Net exercise of preferred stock warrant to Series A preferred stock (198 ) Balance at September 30, 2019 $ — On February 3, 2019, all of the warrants were automatically exercised on a net basis into shares of Series A preferred stock. There were no convertible preferred stock warrants outstanding as of September 30, 2019 |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
Sep. 30, 2019 | |
Statement Of Financial Position [Abstract] | |
Balance Sheet Components | 4. Balance Sheet Components Property and Equipment Property and equipment consist of the following (in thousands): September 30, December 31, 2019 2018 Computer equipment $ 1,131 $ 1,123 Laboratory equipment and office furniture 21,471 18,977 Leasehold improvements 25,836 25,314 Construction in process 36 679 Total property and equipment, gross 48,474 46,093 Less: accumulated depreciation and amortization (27,989 ) (22,200 ) Total property and equipment, net $ 20,485 $ 23,893 Depreciation expense for the three and nine months ended September 30, 2019 was approximately $1.9 million and $5.8 million, respectively. For the three and nine months ended September 30, 2018, depreciation expense was $1.9 million and $5.3 million, respectively. Accrued Liabilities Accrued liabilities consist of the following (in thousands): September 30, December 31, 2019 2018 Accrued expenses $ 1,640 $ 2,595 Clinical trials and research and development costs 8,887 4,844 Personnel-related costs 5,072 4,148 Manufacturing costs 3,006 2,416 Total accrued liabilities $ 18,605 $ 14,003 |
Research Collaboration and Lice
Research Collaboration and License Agreements | 9 Months Ended |
Sep. 30, 2019 | |
Collaboration And License Agreement Disclosure [Abstract] | |
Research Collaboration and License Agreements | 5. Research Collaboration and License Agreements Merck In February 2015, the Company entered into the Collaboration Agreement with Merck, covering the discovery, development and commercialization of novel therapies across a range of therapeutic areas. Pursuant to this agreement, the Company received an upfront payment of $94.0 million in April 2015. Concurrent with entry into the Collaboration Agreement, the parties entered into a Stock Purchase Agreement in which Merck agreed to purchase 8,833,333 shares of Series E convertible preferred stock at a price of $12.00 per share, resulting in net proceeds of approximately $106.0 million. The Company considered the ASC 606 criteria for combining contracts and determined that the Collaboration Agreement and Stock Purchase Agreement should be combined into a single contract. The Company accounted for the overall agreement based on the fair values of the assets and services exchanged, resulting in $106.0 million allocated to the equity component and $94.0 million allocated to the revenue components. The Collaboration Agreement became effective in March 2015 and has a non-cancellable five-year term running through March 16, 2020. The agreement included an exclusive worldwide license to our GDF15 receptor agonist program. On March 15, 2019, Merck exercised its option to extend the research phase of the collaboration through March 16, 2022. Merck terminated its license to the GDF15 receptor agonist program effective May 31, 2019. The collaboration also includes a broad, multiyear drug discovery and early development program financially supported by Merck but scientifically directed by the Company with input from Merck. The Company determines the scientific direction and areas of therapeutic interest, with input from Merck, and is primarily responsible for the conduct of all research, preclinical and early clinical development activities, through human proof of concept. The Company makes the final determinations as to which compounds to advance into and through initial clinical trials, which to progress into human proof-of-concept studies and the design of any such studies, with input from Merck through various governance committees. The Company may terminate its participation in any of the governance committees by providing written notice to Merck of its intention to disband and no longer participate. Merck will fund both the internal and external costs of the Company’s research and early development activities up to $75.0 million each year of the initial five-year term and during the extended two-year research period. Upon completion of a human proof-of-concept study for a particular compound, regardless of the results of such study, Merck has the one-time option, at a cost of $20.0 million, to obtain an exclusive, worldwide license, on specified terms, to that compound, as well as to other molecules that are directed against the same target in the same manner (“Optioned Program”). If Merck exercises its option, Merck will be responsible, at its own cost, for any further development and commercialization activities for compounds within that Optioned Program. Upon such exercise by Merck, the Company in turn has the right, at the start of the first Phase 3 clinical study for that compound, to elect to participate in a worldwide cost and profit share with Merck, as well as the option to co-detail the compound in the United States, or the Company can elect instead to receive milestones and royalties from Merck based on Merck’s further development and commercialization of the compound. If the Company elects to participate in the cost and profit share, subject to certain limitations, Merck will provide the Company with financial assistance in the form of interest bearing advances of the Company’s share of the overall development costs, which Merck will recoup from the Company’s share of any profit ultimately resulting from sales of the compound and other compounds that reach commercialization. If the Company does not opt in to the cost and profit sharing option, then the Company is eligible to receive development and regulatory milestone payments upon the achievement of specific clinical development or regulatory events with respect to the licensed compound indications in the United States, the European Union and Japan of up to an aggregate of $449.0 million. The Company may also receive commercial milestone payments up to $125.0 million and royalty payments of varying percentages based on the achievement of certain levels of net sales. Under the Collaboration Agreement, the Company also granted Merck a worldwide, exclusive right to conduct research and development on small molecule compounds generated by Merck that have specified activity against any target that the Company is researching or developing under the research phase and about which the Company has generated unique biological insights. If Merck ultimately does not exercise its license option to the compound the Company has taken through a human proof-of-concept study that is directed to any such target, Merck’s research license for its own small molecule program will become non-exclusive, but it will retain an exclusive license to any small molecule compounds that it has, as of that time, identified and developed. Merck has sole responsibility for the research and development of any of these small molecule compounds, at its own cost. The Company is eligible to receive milestone and royalty payments on small molecule compounds that are developed by Merck under the Company’s license, in some cases at the same rates as those the Company is eligible to receive from Merck for a licensed program originating from the Company’s own research and development efforts, provided that, but for use of the Company’s proprietary information, Merck would not have discovered such small molecule compounds. However, the Company will not have the option to cost and profit share or the option to co-detail those small molecule products. The research and early development program has an initial term of five years, until March 16, 2020. On March 15, 2019, Merck exercised its option to extend the research phase of the collaboration through March 16, 2022. In connection with this extension, Merck agreed to continue to fund the Company’s research and development efforts during the two-year extension period at the same levels as during the initial term and, in lieu of a $20.0 million extension fee that would have otherwise been payable to the Company, Merck will make additional payments totaling up to $20.0 million in support of the Company’s research and development program activities across 2021 and the first quarter of 2022. Under the terms of the agreement, Merck is required to pay a $20.0 million extension fee if it elects to exercise its second option to extend the research phase of the collaboration through March 16, 2024. At the end of the research phase, Merck has the right to either require the Company to continue to conduct research and development activities with respect to certain of the then-existing programs for up to three years, which we call the tail period, by agreeing to pay all its internal and external costs for related work, or to take over such selected programs and conduct such research and development activities itself, at its own cost. The Company evaluated the Collaboration Agreement with Merck under ASC 606. The Company identified the following promised goods or services at the inception of the Collaboration Arrangement: (i) license to GDF15 receptor agonist program; (ii) license to pursue research and development (“R&D”) and commercialization of small molecule compounds; (iii) performance of R&D services for five years; (iv) two options to extend performance of the R&D services, each for two additional years; and (v) options to obtain licenses to additional compounds after proof of concept trials. The Company determined the GDF15 receptor agonist program license and small molecule program license are not distinct from the R&D services, resulting in these items being combined into a single performance obligation. The Company considered whether the options created material rights in the contract and concluded that the fee attached to the exercise of such options approximated the standalone selling price of the promised goods or services included in the options. Therefore, the options do not give rise to material rights, are not performance obligations in the Collaboration Agreement and, if and when exercised, will be accounted for as separate arrangements under ASC 606. The transaction price consists of the $94.0 million upfront fee and the potential funding amounts of up to $75.0 million per year for each of the first five years of the Collaboration Agreement. No milestones or other forms of consideration are included in the transaction price as those amounts are contingent upon Merck exercising an option for licenses on additional compounds and would, therefore, be pursuant to separate arrangements and are not part of the Collaboration Agreement estimated transaction price. Additionally, if a separate arrangement is created by the exercise of an option, such amounts would then be contingent on events outside of either party’s control, such as products proving to be commercially viable and governmental agencies granting regulatory approval. Such contingencies and uncertainties result in the amounts being constrained and withheld from inclusion in the estimated transaction price of a separate arrangement. Consequently, the estimated transaction price related to the Collaboration Agreement is comprised of the up-front payment and the ongoing R&D reimbursements. Any fees associated with options, including upfront fees, funding fees, milestones, etc., are not included in the transaction price as they are associated with options that are not material rights and, thus, are not performance obligations within the Collaboration Agreement. This includes the $20.0 million license fee associated with Merck’s exercise of its option on NGM313. That amount was recognized in the period of exercise (i.e., fourth quarter of 2018) as the Company has no further obligations related to that license. Merck exercised its option on the NGM313 compound and paid the Company the $20.0 million option exercise fee in November 2018. The Phase 3 clinical study for NGM313 has not begun, and the Company has not made an election as to whether it will participate in the cost and profit share or receive milestone and royalty payments. The amounts do not impact the estimated transaction price associated with the single performance obligation identified in the Collaboration Agreement. As there is only one performance obligation in the Collaboration Agreement, the transaction price was allocated entirely to that performance obligation. The Company uses a cost-based input method to measure proportional performance and calculate the corresponding amount of revenue to recognize. The Company believes this is the best measure of progress given that other measures do not reflect how the Company transfers its performance obligation to Merck. In applying the cost-based input measure of revenue recognition, the Company measures actual costs incurred relative to budgeted costs to fulfill the combined performance obligation. These costs consist of full-time equivalent (“FTE”) hours plus allowable external (third-party) costs incurred. Revenue is recognized based on actual costs incurred as a percentage of total budgeted costs as the Company completes its performance obligation. The Company re-evaluates the estimate of expected costs to satisfy the performance obligation each reporting period and makes adjustments for any significant changes. On May 31, 2019, Merck terminated its license to the GDF15 receptor agonist program. The Collaboration Agreement R&D services are not affected by the GDF15 receptor agonist program license termination and are expected to continue through the remainder of the research program term. As of September 30, 2019 and December 31, 2018 , deferred revenue related to the single performance obligation in the Collaboration Agreement was $14.6 million and $23.0 million, respectively. Of the amount recognized for the adoption of ASC 606 in the reporting period ended September 30, 2019, $6.2 million was in deferred revenue at the end of the prior reporting period. As of December 31, 2018 , $3.7 million was due from Merck under the Collaboration Agreement. To date, the Company has recognized revenue of approximately $337.0 million related to the single performance obligation in the Collaboration Agreement. In connection with the Series E convertible preferred stock purchase agreement, the Company and Merck entered into an agreement whereby Merck agreed to purchase 4,121,683 shares of our common stock in a separate private placement concurrent with the completion of the Company’s IPO at a price per share equal to the public offering price of $16.00, resulting in Merck owning approximately 19.9% of the Company’s outstanding shares of common stock following the completion of the IPO. In addition, during the period that ends on the earlier of the end of the initial five-year research term, termination of the Collaboration Agreement or the date on which Merck’s ownership of the Company’s securities drops below 5%, Merck has agreed to vote its shares in favor of the Company’s nominees to the board of directors, increases in the authorized capital stock of the Company and amendments to the Company’s equity plans approved by the board of directors, in each case as recommended by the chairman of the Company’s board of directors. Merck has also agreed, during the period of the initial five-year research phase, not to sell any of its shares of the Company’s capital stock (subject to certain limited exceptions). The Company is also eligible to receive additional payments specific to Merck opting into an Optioned Program. Each Optioned Program is eligible to receive a one-time payment of $20.0 million upon Merck’s exercise of its one-time option to obtain an exclusive, worldwide license to a compound following its completion of a human proof-of-concept study. In addition, if the Company does not opt into the cost and profit sharing option, then the Company is eligible to receive an aggregate of $449.0 million in milestone payments, of which $77.7 million relates to the potential achievement of specific clinical development events and $371.3 million relates to the potential achievement of certain regulatory events with respect to the licensed compounds for the first three indications in the United States, the European Union and Japan. A breakout of the milestone payments in connection with the potential achievement of certain clinical development events is as follows (in thousands): First Indication Second Indication Third Indication Upon administration of an applicable product to the first patient in the first Phase 3 clinical trial for such product for the given indication $ 35,000 $ 25,250 $ 17,500 A breakout of the milestone payments in connection with the potential achievement of certain regulatory events for each of the three indications, for each of the three geographic areas, is as follows (in thousands): First Indication Second Indication Third Indication Total United States $ 75,000 $ 56,250 $ 37,500 $ 168,750 European Union 60,000 45,000 30,000 135,000 Japan 30,000 22,500 15,000 67,500 $ 165,000 $ 123,750 $ 82,500 $ 371,250 Summary of Collaboration Revenue The Company recognized revenue from its collaboration and license agreements as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Related party revenue $ 21,568 $ 20,815 $ 72,461 $ 61,546 The Company recognized collaboration and license revenue under the Collaboration Agreement of $21.6 million and $72.5 million for the three and nine months ended September 30, 2019, respectively, of which $5.4 million and $16.8 million was recognized from the upfront license fee by applying the cost-based input measure of revenue recognition in those periods, respectively. The Company recognized collaboration and license revenue under the Collaboration Agreement of $20.8 million and $61.5 million for the three and nine months ended September 30, 2018, respectively, of which $4.7 million and $14.1 million was the amortization of upfront license fee, respectively, with the remaining balance related to research and development services reimbursed by Merck provided under the Collaboration Agreement. The Company is also eligible to receive commercial milestone payments of up to $125.0 million payable for each licensed product. In addition, the Company is eligible to receive royalties at ascending low-double digit to mid-teen percentage rates, depending on the level of net sales Merck achieves worldwide for each licensed compound. Contract Assets and Liabilities Changes in contract liabilities under ASC 606 were as follows (in thousands): Amounts Balance at December 31, 2018 $ 22,967 Adoption of ASC 606 6,156 Balance at January 1, 2019 29,123 Revenue recognized included in the contract liability balance at the beginning of the period (16,844 ) Increases as a result of research and development expenses to be earned under the Collaboration Agreement 2,345 Balance at September 30, 2019 $ 14,624 There were no contract assets for all the periods presented |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 6. Related Party Transactions Revenues from related parties refer to the Collaboration Agreement with Merck. For the three and nine months ended September 30, 2019 and 2018, the Company recognized related party revenues of $21.6 million and $72.5 million and $20.8 million and $61.5 million, respectively. As of September 30, 2019 and December 31, 2018 , the Company had deferred revenue from the Collaboration Agreement of $14.6 million and $23.0 million, respectively Other related party transactions include the Company’s assignment of its operating lease of 630 Gateway to Merck (Note 7) and the Company’s private placement with Merck that occurred concurrently with the Company’s IPO (Note 1). |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Operating Lease and Lease Guarantee In September 2009, the Company entered into an operating lease for a corporate office space and laboratory facility at 630 Gateway Blvd, in South San Francisco, California (“630 Gateway”) for approximately 50,000 square feet, as amended in June 2014 (“2014 Lease Amendment”), which expires in November 2020. The 2014 Lease Amendment provided for tenant improvement allowances of $0.8 million. The 2014 Lease Amendment contains scheduled rent increases over the lease term and has an option for the Company to extend the lease for an additional three-year term. In December 2015, the Company entered into a new operating lease for its corporate office space and laboratory facility at 333 Oyster Point Blvd, South San Francisco, California (“333 Oyster Point”) for approximately 122,000 square feet that expires in December 2023. The lease provided a tenant improvement allowance of $15.2 million that the Company used in 2016 towards $22.3 million in total leasehold improvements that are amortized over the lease term of seven years. The 333 Oyster Point lease agreement required a letter of credit in the amount of $2.3 million as a security deposit to the lease, which the Company has recorded as non-current restricted cash on the condensed consolidated balance sheets. The Company has the right to reduce the letter of credit amount by $0.4 million on each of the third anniversary and fourth anniversary of the rent commencement date. For the three months ended September 30, 2019, the Company reduced its letter of credit by $0.4 million and reclassified that amount from restricted cash to cash and cash equivalents on the condensed consolidated balance sheets. In July 2016, the Company assigned its operating lease of 630 Gateway to Merck, as part of the Company’s relocation to 333 Oyster Point. As part of the assignment of the lease, the Company is liable to the lessor if Merck defaults on its lease obligations. Therefore, in substance, the Company has guaranteed the lease payments for 630 Gateway, including lease-related expenses such as utilities, property tax and common area maintenance without any limitations. The Company assessed the need for a potential guarantee liability on the assigned lease, and concluded that the value of the guarantee was insignificant as of September 30, 2019 due to the short duration of the remaining lease term through November 2020, and Merck’s credit rating of AA/A1 and subsequent investment in tenant improvements to the facility. As of September 30, 2019 and 2018, the remaining lease payment obligations that are due for 630 Gateway were approximately $2.4 million and $4.2 million, respectively, which are to be paid directly from Merck to the lessor. The Company recognizes rent expense on a straight-line basis over the lease period with the difference recorded as deferred rent. In addition, tenant improvement allowances recorded are amortized as a reduction to rent expense on a straight-line basis over the lease term. Rent expense under these facility operating leases was approximately $0.5 million for the quarters ended September 30, 2019 and 2018 and $1.6 million for the nine months ended September 30, 2019 and 2018. Future minimum payments under the unassigned lease obligations described above are as follows as of September 30, 2019 (in thousands): Year Ending December 31, 2019 $ 1,230 2020 4,995 2021 5,141 2022 5,294 2023 5,455 Total $ 22,115 Indemnification In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and may provide for indemnification of the counterparty. The Company’s exposure under these agreements is unknown because it involves claims that may be made against it in the future, but have not yet been made. In accordance with the Company’s amended and restated certificate of incorporation and its amended and restated bylaws, the Company has indemnification obligations to its officers and directors, subject to some limits, with respect to their service in such capacities. The Company has also entered into indemnification agreements with its directors and certain of its officers. To date, the Company has not been subject to any claims, and it maintains director and officer insurance that may enable it to recover a portion of any amounts paid for future potential claims. The Company’s exposure under these agreements is unknown because it involves claims that may be made against it in the future, but have not yet been made. The Company believes that the fair value of these indemnification obligations is minimal and, accordingly, it has not recognized any liabilities relating to these obligations for any period presented. |
Convertible Preferred Stock
Convertible Preferred Stock | 9 Months Ended |
Sep. 30, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Convertible Preferred Stock | 8. Convertible Preferred Stock Upon the closing of the Company’s IPO, each then outstanding share of convertible preferred stock was converted into a share of common stock at a ratio of 1:1. With respect to the Company’s convertible preferred stock outstanding prior to the IPO, the Company has elected to follow the SEC staff’s guidance (included in ASC 480-10-S99, SEC Materials) when evaluating the classification of its shares within the condensed consolidated balance sheets. A liquidation, winding up, change in control, or sale of substantially all assets of the Company could constitute a redemption event. Although the majority of the Company’s preferred stock was not mandatorily or currently redeemable, a liquidation or winding up of the Company could have constituted an event outside its control. Therefore, all shares of convertible preferred stock have been presented outside the permanent equity for all periods presented due to being contingently redeemable. Convertible preferred stock at December 31, 2018 , consisted of the following (in thousands): Issuance Aggregate Aggregate Shares Price per Liquidation Carrying Authorized Outstanding Share Value Value Series A 13,295 13,275 $ 2.00 26,550 $ 26,462 Series B 11,078 11,078 5.00 55,389 55,148 Series C 8,328 8,328 6.00 49,970 49,887 Series D 6,600 5,753 10.00 57,530 57,461 Series E 8,833 8,833 12.00 88,335 105,916 48,134 47,267 $ 277,774 $ 294,874 In March 2015, the Company amended and restated its certificate of incorporation in conjunction with the Series E convertible preferred stock offering. Prior to the conversion of the convertible preferred stock upon closing of the IPO, the significant rights and obligations of the Company’s convertible preferred stock were as follows: Voting Rights: Each holder of convertible preferred stock was entitled to the number of votes equal to the number of shares of common stock into which such shares of convertible preferred stock were convertible. In the event the preferred stockholders controlled a majority of the board of directors through direct representation on the board of directors or through other rights, the stockholders could approve redemption of the preferred stock. Dividends: Each holder of convertible preferred stock was entitled to receive non-cumulative dividends at the rate of 8% per annum for each share of convertible preferred stock outstanding, when, as and if declared by the board of directors. These dividends were payable in preference to common stock dividends. The Company did not declare or pay any dividends. Liquidation: In the event of any liquidation, dissolution or winding-up of the Company, each holder of convertible preferred stock was entitled to receive payment out of the assets of the Company legally available for distribution for each share of convertible preferred stock held by the holder of an amount per share of preferred stock equal to the original issue price plus all declared and unpaid dividends on the convertible preferred stock, with the exception that the holder of the Series E convertible preferred stock was only eligible to receive an amount equal to $10.00 per share plus all declared and unpaid dividends on the convertible preferred stock. In the event that the available funds and assets were insufficient for full payment to the holders of convertible preferred stock on a per-share basis as outlined above, the entire assets and funds of the Company legally available for distribution would have been distributed ratably among the holders of convertible preferred stock in proportion to the full amount to which they would otherwise have been respectively entitled. Upon completion of the distribution of assets as set forth above, all of the remaining assets, if any, would have been distributed ratably among the holders of common stock. As of September 30, 2019, the Company does not have any convertible preferred stock issued or outstanding. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | 9. Stockholders’ Equity (Deficit) Common Stock As of September 30, 2019 and December 31, 2018 , the Company had 66,155,613 and 6,937,890 shares of common stock outstanding, respectively, which included shares subject to repurchase of 108,177 and 205,108, respectively, as a result of early exercise of stock options not yet vested. December 31, 2018 , the Company reserved shares of common stock for issuance as follows: September 30, 2019 December 31, 2018 Conversion of convertible preferred stock — 47,267,466 Common stock options outstanding 11,328,508 9,806,689 Common stock options available for grant 5,515,036 2,125,875 Warrant to purchase convertible preferred stock — 19,637 401(k) Matching Plan 28,274 36,751 ESPP shares available for purchase 1,000,000 — Total 17,871,818 59,256,418 Stock Option Plan In 2018, the Company adopted the 2018 Equity Incentive Plan (the “2018 Plan”) for eligible employees, officers, directors, advisors and consultants, which provides for the grant of incentive and non-statutory stock options, restricted stock awards and stock appreciation rights. The terms of the stock option agreements, including vesting requirements, are determined by the board of directors, subject to the provisions of the 2018 Plan. Options granted by the Company generally vest within four years and are exercisable from the grant date until ten years after the date of grant. Vesting of certain employee options may be accelerated in the event of a change in control of the Company. As of September 30, 2019, 17,874,624 shares of common stock had been authorized for issuance under the 2018 Plan. The Company’s 2008 Equity Incentive Plan (the “2008 Plan”) expired at the beginning of 2018. Stock options are governed by stock option agreements between the Company and recipients of stock options. Prior to the closing of the Company’s IPO, the board of directors exercised reasonable judgment and considered a number of objective and subjective factors to determine the best estimate of the fair value of our common stock, including the Company’s stage of development; progress of its research and development efforts; the rights, preferences and privileges of its convertible preferred stock relative to those of its common stock; equity market conditions affecting comparable companies; and the lack of marketability of our common stock . Subsequent to the IPO, the exercise price of each option shall not be less than 100% of the fair market value of the common stock subject to the option on the date the option is granted. A 10% or greater stockholder shall not be granted an incentive stock option unless the exercise price of such option is at least 110% of the fair value of the common stock on the date of grant and the option is not exercisable after the expiration of five years from the grant date. Options become exercisable and expire as determined by the Compensation Committee, provided that the term of incentive stock options may not exceed ten years from the date of grant for options granted to those other than 10% stockholders. Stock Option Activity A summary of the outstanding stock options is as follows: Outstanding Options Options Available for Grant Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Aggregate Intrinsic Value (in Thousands) Balances at December 31, 2018 2,125,875 9,806,689 $ 5.86 6.62 $ 105,226 Additional shares reserved 5,193,322 Options granted (2,007,751 ) 2,007,751 12.62 Options exercised — (282,342 ) 4.18 Options cancelled 203,590 (203,590 ) 8.99 Balances at September 30, 2019 5,515,036 11,328,508 $ 7.04 6.35 $ 77,527 Vested and expected to vest at September 30, 2019 11,214,990 7.00 6.33 $ 77,196 Outstanding and exercisable at September 30, 2019 11,328,508 $ 7.04 6.35 $ 77,527 The aggregate intrinsic values of options outstanding, exercisable, vested and expected to vest were calculated as the difference between the exercise price of the options and the estimated fair value of the Company’s common stock, as determined by the board of directors. The weighted-average grant date fair value of stock options granted during the nine months ended September 30, 2019 and 2018 was $7.93 and $5.63 per share, respectively. The intrinsic value of stock options exercised was $3.0 million and $1.5 million for the nine months ended September 30, 2019 and 2018, respectively. Because of the Company’s net operating losses, the Company did not realize any tax benefits from stock-based payment arrangements for the three and nine months ended September 30, 2019 and 2018. Early Exercise of Stock Options The 2018 Plan allows for the granting of options that may be exercised before the options have vested. Shares issued as a result of early exercise that have not vested are subject to repurchase by the Company upon termination of the purchaser’s employment or services, at the price paid by the purchaser, and are not deemed to be issued for accounting purposes until those related shares vest. The amounts received in exchange for these shares have been recorded as a liability on the consolidated balance sheets and will be reclassified into common stock and additional paid-in-capital as the shares vest. The Company’s right to repurchase these shares generally lapses in equal installments over four years beginning from the original vesting commencement date. As of September 30, 2019, there were 108,177 shares of common stock outstanding subject to the Company’s right of repurchase at prices ranging from $7.64 to $8.14 per share. At December 31, 2018 , there were 205,108 shares of common stock outstanding subject to the Company’s right of repurchase at prices ranging from $4.00 to $8.14 per share. As of September 30, 2019 and December 31, 2018 , the Company recorded $0.8 million and $1.6 million, respectively, as early exercise stock option liabilities associated with shares issued with repurchase rights. Employee Stock-Based Compensation Expense Employee and director stock-based compensation expense for the three and nine months ended September 30, 2019 and 2018 was calculated based on awards ultimately expected to vest and has been reduced for estimated forfeitures. The following table summarizes stock-based compensation expense related to stock-based payment awards to employees and directors for the three and nine months ended September 30, 2019 and 2018, which was allocated as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Research and development $ 1,652 $ 1,318 $ 5,114 $ 3,951 General and administrative 1,405 1,632 4,030 3,427 Total stock-based compensation expense $ 3,057 $ 2,950 $ 9,144 $ 7,378 Valuation Assumptions The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options at the grant date. The Black-Scholes option-pricing model requires the Company to make certain estimates and assumptions, including assumptions related to the expected price volatility of the Company’s stock, the period during which the options will be outstanding, the rate of return on risk-free investments and the expected dividend yield for the Company’s stock. The fair value of stock option awards granted to employees was estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted-average valuation assumptions: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Risk-free interest rate 1.56 % 2.86 % 2.42 % 2.69 % Expected term of options (in years) 6.25 6.25 6.25 6.25 Expected stock price volatility 65.03 % 62.83 % 64.86 % 67.80 % Forfeiture rate 5.12 % 1.85 % 2.49 % 4.10 % Expected dividends — — — — The weighted-average valuation assumptions were determined as follows: Expected Stock Price Volatility: The expected volatility is based on the historical volatility of the stock of similar entities within the Company’s industry over periods commensurate with the Company’s expected term assumption. Expected Term of Options: The expected term of options represents the period of time options are expected to be outstanding. The expected term of the options granted is derived using the “simplified” method (that is, estimating the expected term as the midpoint between the vesting date and the end of the contractual term for each option). Risk-Free Interest Rate: The Company bases the risk-free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected option term. Expected Annual Dividends: The Company has not historically paid, and does not expect for the foreseeable future to pay, a dividend. Forfeiture Rate: The forfeiture rate represents the percentage of unvested stock options the Company expects will not vest, and, therefore, should not be expensed. The Company estimates forfeiture rates based on historical stock option grants and cancellations. As of September 30, 2019, there was approximately $23.9 million in total unrecognized compensation expense, net of estimated forfeitures, related to unvested options granted to employees and directors under the 2008 and 2018 Plans. The expense is expected to be recognized over a weighted-average period of 2.70 years Stock Options Granted to Non-employees The Company grants stock options to non-employees in exchange for services performed for the Company. The Company did not grant options to non-employees for the three months ended September 30, 2019 and granted 22,500 options to non-employees for the nine months ended September 30, 2019. The Company did not grant any options during the three and nine months ended September 30, 2018. Stock-based compensation expense related to stock-based payment awards to non-employees for the three and nine months ended September 30, 2019 was $32,000 and $102,000, respectively. Stock-based compensation expense related to stock-based payment awards to non-employees for the three and nine months ended September 30, 2018 was $23,000 and $71,000, respectively. As of September 30, 2019 and December 31, 2018 , non-employee stock options to purchase 25,939 and 16,042 shares, respectively, remained unvested. The fair value of stock option awards granted to non-employees was estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted-average valuation assumptions: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Risk-free interest rate — — 2.22 % — Expected term of options (in years) — — 5.53 — Expected stock price volatility — — 65.47 % — Expected dividends — — — — 2019 Employee Stock Purchase Plan In March 2019, the Company adopted the 2019 ESPP. The Company reserved 1,000,000 shares of common stock pursuant to purchase rights granted to the Company’s employees. The 2019 ESPP provides that the number of shares reserved and available for issuance will automatically increase on January 1 of each calendar year, beginning January 1, 2020, by the lesser of (1) 1.0% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, (2) 1,000,000 shares or (3) a number determined by our board of directors that is less than (1) and (2). Under the 2019 ESPP, eligible employees are granted options to purchase shares of our common stock through payroll deductions that cannot exceed 15% of each employee’s salary. The 2019 ESPP provides for a 24-month offering period, which includes four six-month purchase periods. At the end of each purchase period, eligible employees are permitted to purchase shares of common stock at the lower of 85% of fair market value at the beginning of the offering period or fair market value at the end of the purchase period. The 2019 ESPP is considered a compensatory plan and the Company recorded stock-based compensation expense of $0.3 million and $0.6 million for the three and nine months ended September 30, 2019. As of September 30, 2019, no shares of common stock were issued under the 2019 ESPP. The fair value of the rights granted to employees under the 2019 ESPP was estimated at the date of offer using a Black-Scholes option-pricing model with the following weighted-average valuation assumptions: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Risk-free interest rate 1.90 % — 1.90 % — Expected term of options (in years) 1.24 — 1.24 — Expected stock price volatility 59.79 % — 59.79 % — Expected dividends — — — — |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes The Company has a history of losses, and expects to record a loss in 2019. Additionally, the net deferred tax assets have been fully offset by a valuation allowance against our net operating loss carryforwards. Therefore, the Company has not recorded a provision for income taxes. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and Regulation S-X for interim consolidated financial information. These unaudited condensed consolidated financial statements include the consolidated accounts of the Company and its wholly-owned foreign subsidiary in Australia. All intercompany balances and transactions have been eliminated upon consolidation. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make judgments, assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. Specific accounts that require management estimates include, but are not limited to, stock-based compensation, research and development periods under multiple element agreements, the valuation of convertible preferred stock warrants, the fair value of convertible preferred and common stock, contract manufacturing accruals, clinical trial accruals and revenue in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers ( “ ASC 606 ” ). Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from those estimates. |
Need for Additional Capital | Need for Additional Capital Since inception, the Company has incurred net losses and negative cash flow from operations. ompany incurred net losses of $10.9 million and $26.9 million, respectively, compared to net losses of $7.5 million and $14.7 million for the three and nine months ended September 30, 2018, respectively. As of September 30, 2019, the Company had an accumulated deficit of $180.2 million and does not expect to experience positive cash flows from operations in the near future. The Company had $356.6 million of cash, cash equivalents and marketable securities as of September 30, 2019, and therefore the Company expects that its cash and cash equivalents and marketable securities will be sufficient to fund its operations for a period of at least one year from the date these unaudited condensed consolidated financial statements are filed with the SEC. To fully implement the Company’s business plan and fund its operations, the Company may raise capital through the issuance of equity securities or debt financings, collaborations, strategic alliances and licensing arrangements, government or other third-party funding or a combination of these. |
Deferred Initial Public Offering Costs | Deferred Initial Public Offering Costs Costs incurred in connection with the IPO primarily consisted of direct incremental legal, printing and accounting fees. IPO costs were capitalized as incurred and offset against proceeds upon completion of the IPO. As of September 30, 2019 and , deferred IPO costs included on the accompanying condensed consolidated balance sheets were zero and $2.3 million, respectively. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, the related party receivables from collaboration and other current assets and liabilities approximate their respective fair values because of the short-term nature of those instruments. Fair value accounting is applied to the convertible preferred stock warrant liabilities that are recorded at their estimated fair value in the condensed consolidated financial statements. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents are stated at fair value. Cash equivalents are related to securities having an original maturity of three months or less at the time of purchase. The Company limits its credit risk associated with cash and cash equivalents by placing its investments with a bank it believes is highly creditworthy and with highly rated money market funds. As of September 30, 2019 and , cash and cash equivalents consisted of bank deposits and investments in money market funds. |
Marketable Securities | Marketable Securities The appropriate classification of the Company’s marketable securities is determined at the time of purchase and such designations are re-evaluated at each balance sheet date. All of the Company’s securities are considered as available-for-sale and carried at estimated fair values and reported in cash equivalents, short-term marketable securities or long-term marketable securities. Unrealized gains and losses on available-for-sale securities are excluded from net loss and reported in accumulated other comprehensive loss as a separate component of stockholders’ equity (deficit). Other income (expense), net, includes interest, amortization of purchase premiums and accretion of purchase discounts, realized gains and losses on sales of securities and other-than-temporary declines in the fair value of securities, if any. The cost of securities sold is based on the specific identification method. The Company’s investments are regularly reviewed for other-than-temporary declines in fair value. This review includes the consideration of the cause of the impairment, including the creditworthiness of the security issuers, the number of securities in an unrealized loss position, the severity and duration of the unrealized losses, whether the Company has the intent to sell the securities and whether it is more likely than not that the Company will be required to sell the securities before the recovery of their amortized cost basis. When the Company determines that the decline in fair value of an investment is below its carrying value and this decline is other-than-temporary, the Company reduces the carrying value of the security it holds and records a loss for the amount of such decline. |
Restricted Cash | Restricted Cash The Company’s restricted cash represents collateral in connection with the lease on the Company’s headquarters entered into in 2015 and is classified as a non-current asset on the condensed consolidated balance sheets as the collateral will not be returned to the Company in less than 12 months (Note 7). |
Concentration of Credit and Other Risks | Concentration of Credit and Other Risks Cash and cash equivalents and marketable securities from the Company’s available-for-sale and marketable security portfolio potentially subject the Company to concentrations of credit risk. The Company is invested in money market funds and marketable securities through custodial relationships with major U.S. and Australian banks. Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. Related party receivables from collaborations (Notes 5 and 6) are typically unsecured. Accordingly, the Company may be exposed to credit risk generally associated with its current collaboration agreement with Merck ( “Collaboration Agreement”) and any future collaboration agreements with other collaboration partners. To date, the Company has not experienced any losses related to these receivables. Merck accounted for 100% of the Company’s revenue for the three and nine months ended September 30, 2019 and 2018. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment is recorded at cost and consists of computer equipment, laboratory equipment and office furniture and leasehold improvements. Maintenance and repairs, and training on the use of equipment, are charged to expense as incurred. Costs that improve assets or extend their economic lives are capitalized. Depreciation is recognized using the straight-line method based on an estimated useful life of the asset, which is as follows: Computer equipment 3 years Laboratory equipment and office furniture 3 years Leasehold improvement Shorter of life of asset or lease term |
Leases | Leases The Company’s lease agreement for its laboratory and office facilities are classified as operating leases. Rent expense is recognized on a straight-line basis over the term of the lease. Incentives granted under the Company’s facilities leases, including allowances to fund leasehold improvements and rent holidays, are capitalized and are recognized as reductions to rental expense on a straight-line basis over the term of the lease. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. As of September 30, 2019 and , no revision to the remaining useful lives or write-down of long-lived assets was required. |
Income Taxes | Income Taxes Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and the operating loss and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Deferred tax assets and liabilities are measured at the balance sheet date using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period such tax rate changes are enacted. |
Convertible Preferred Stock Warrant | Convertible Preferred Stock Warrant Freestanding warrants to purchase the Company’s convertible preferred stock were classified as a liability on the condensed consolidated balance sheet were contingently redeemable, which could have obligated the Company to transfer assets at some point in the future to settle the warrants. The convertible preferred stock warrants are recorded as a liability and subject to remeasurement at each balance sheet date, with changes in estimated fair value recorded in the Company’s consolidated statements of operations as a component of total other income (expense), net. On February 3, 2019, all convertible preferred stock warrants were automatically exercised on a net basis into 16,380 shares of Series A convertible preferred stock at a fair value of $0.2 million As of , there were no convertible preferred stock warrants outstanding. |
Revenue Recognition | Revenue Recognition On January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), and subsequent amendments, using the modified retrospective transition method applied to those contracts that were not completed as of January 1, 2019. ASC 606 supersedes all prior revenue recognition guidance. Results for operating periods beginning after January 1, 2019 are presented under ASC 606, while prior period amounts have not been adjusted and continue to be reported in accordance with previous accounting rules under Accounting Standards Codification Topic 605, Revenue Recognition (“ASC 605”). The core principle in ASC 606 requires an entity to recognize revenue upon the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company applies the following five-step revenue recognition model outlined in ASC 606 to adhere to this core principle: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the Company satisfies a performance obligation. All of the Company’s revenue to date has been generated from its collaboration agreements. The terms of these agreements generally require the Company to provide (i) license options for its compounds, (ii) research and development services and (iii) non-mandatory services in connection with participation in research or steering committees. Payments received under these arrangements may include non-refundable upfront license fees, partial or complete reimbursement of research and development costs, contingent consideration payments based on the achievement of defined collaboration objectives and royalties on sales of commercialized products. In some agreements, the collaboration partner is solely responsible for meeting defined objectives that trigger contingent or royalty payments. Often the partner only pursues such objectives subsequent to exercising an optional license on compounds identified as a result of the research and development services performed under the collaboration agreement. The Company assesses whether the promises in its arrangements, including any options provided to the customer, are considered distinct performance obligations that should be accounted for separately. Judgment is required to determine whether the license to a compound is distinct from research and development services or participation in steering committees, as well as whether options create material rights in the contract. The transaction price in each arrangement is generally comprised of a non-refundable upfront fee and variable consideration related to the performance of research and development services. The Company typically submits a budget for the research and development services to the customer in advance of performing the services. The transaction price is allocated to the identified performance obligations based on the standalone selling price (“SSP”) of each distinct performance obligation. Judgment is required to determine SSP. In instances where SSP is not directly observable, such as when a license or service is not sold separately, SSP is determined using information that may include market conditions and other observable inputs. The Company utilizes judgment to assess the nature of its performance obligations to determine whether they are satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress toward completion. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company’s collaboration agreements may include contingent payments related to specified development and regulatory milestones or contingent payments for royalties based on sales of a commercialized product. Milestones can be achieved for such activities in connection with progress in clinical trials, regulatory filings in various geographical markets and marketing approvals from regulatory authorities. Sales-based royalties are generally related to the volume of annual sales of a commercialized product. At the inception of each agreement that includes such payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price by using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s or its customer’s control, such as those related to regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation based on a relative SSP basis. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of each such milestone and any related constraint and, if necessary, adjusts its estimate of the overall transaction price. Pursuant to the guidance in ASC 606, sales-based royalties are not included in the transaction price. Instead, royalties are recognized at the later of when the performance obligation is satisfied or partially satisfied, or when the sale that gives rise to the royalty occurs. Prior to the adoption of ASC 606, the Company’s revenue from collaboration agreements was recognized when the Company determined that persuasive evidence of an arrangement exists, services had been rendered, the price was fixed or determinable and collectability was reasonably assured. The Company would record amounts received prior to satisfying the above revenue recognition criteria as deferred revenue until all applicable revenue recognition criteria were met. Revenue allocated to research activities was generally recognized in the period the services were performed, and revenue allocated to licenses was generally recognized on a straight-line basis over the contractual term. Allocations to non-contingent elements were based on the relative selling price of each element using vendor-specific objective evidence or third-party evidence, where available. In the absence of either of these measures, the Company used the best estimate of selling price for that deliverable. The most significant change to the Company’s policies upon the adoption of ASC 606 is the estimation of an arrangement’s total transaction price, which would include any variable consideration and the recognition of that transaction price based on a cost-based input method that requires significant estimates to determine, at each reporting period, the percentage of completion based on the estimated total effort required to complete the project and the total transaction price. Given the differences in revenue recognition policies, the revenue recognized in prior years is not strictly comparable to revenue recorded in the quarter ending September 30, 2019 or in future periods (see Recently Adopted Accounting Pronouncements). |
Research and Development | Research and Development Research and development costs are expensed as incurred. Research and development expenses primarily include salaries and benefits for medical, clinical, quality, preclinical, manufacturing and research personnel, costs related to research activities, preclinical studies, clinical trials, drug manufacturing expenses and allocated overhead and facility occupancy costs. The Company accounts for non-refundable advance payments for goods or services that will be used in future research and development activities as expenses when the goods have been received or when the service has been performed rather than when the payment is made. Clinical trial costs are a component of research and development expenses. The Company expenses costs for its clinical trial activities performed by third parties, including clinical research organizations (“CROs”) and other service providers, as they are incurred, based upon estimates of the work completed over the life of the individual study in accordance with associated agreements. The Company uses information it receives from internal personnel and outside service providers to estimate the clinical trial costs incurred. |
Stock-Based Compensation | Stock-Based Compensation The Company’s stock-based compensation programs include stock options and shares that will be issued under the Company’s 2019 Employee Stock Purchase Plan ("ESPP"). Stock-based compensation to employees is valued on the grant date of each award using the Black-Scholes option-pricing model, and its estimated fair value is recognized over the period during which the employee is required to provide service in exchange for the award, which is generally the vesting period of each award. Subsequent to the adoption of ASU 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, stock-based compensation expense for non-employee stock-based awards is also measured based on the fair value on grant date with its estimated fair value recorded over the period for which the non-employee is required to provide service in exchange for the award. As non-cash stock-based compensation expense is based on awards ultimately expected to vest, it is reduced by an estimate for future forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from estimates. |
Foreign Currency Transactions | Foreign Currency Transactions The functional currency of NGM Biopharmaceuticals Australia Pty Ltd., a wholly-owned subsidiary, is the U.S. Dollar. Accordingly, all monetary assets and liabilities of the subsidiary are remeasured into U.S. Dollars at the current period-end exchange rates and non-monetary assets are remeasured using historical exchange rates. Income and expense elements are remeasured to U.S. Dollars using the average exchange rates in effect during the period. Remeasurement gains and losses are recorded as other income (expense), net on the condensed consolidated statements of operations. The Company is subject to foreign currency risk with respect to its clinical and manufacturing contracts denominated in currencies other than the U.S. Dollar, primarily British Pounds, Swiss Francs, Australian Dollars and the Euro. Payments on contracts denominated in foreign currencies are made at the spot rate on the day of payment. Changes in the exchange rate between billing dates and payment dates are recorded within other income (expense), net on the condensed consolidated statements of operations. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is comprised of net loss and certain changes in equity that are excluded from net loss. For the three and nine months ended September 30, 2019 and 2018, the difference between comprehensive loss and net loss consisted , respectively. |
Net Loss per Common Share | Net Loss per Common Share Basic net loss per common share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period, less shares subject to repurchase, and excludes any dilutive effects of stock-based awards and warrants. Diluted net loss per common share is computed giving effect to all potentially dilutive common shares, including common stock issuable upon exercise of stock options, and unvested restricted common stock and stock units. As the Company had net losses for the three and nine months ended September 30, 2019 and 2018, all potential common shares were determined to be anti-dilutive. The following table sets forth the computation of net loss per common share (in thousands, except share and per share): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Numerator: Net loss $ (10,917 ) $ (7,517 ) $ (26,854 ) $ (14,658 ) Denominator: Weighted-average number of common shares used in calculating net income per share—basic and diluted 65,948,207 6,525,660 44,828,596 6,285,905 Net loss per share—basic and diluted $ (0.17 ) $ (1.15 ) $ (0.60 ) $ (2.33 ) Potential gross dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows: September 30, 2019 2018 Convertible preferred stock — 47,267,466 Options to purchase common stock 11,328,508 9,915,997 Warrants to purchase convertible preferred stock — 19,637 Shares committed under ESPP 429,369 — Total 11,757,877 57,203,100 |
Segment and Geographical Information | Segment and Geographical Information The Company operates in one segment. Substantially all of the Company’s long-lived assets, primarily comprised of property and equipment, are based in the United States. For the three and nine months ended September 30, 2019 and 2018, the Company’s revenues were entirely within the United States |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on our condensed consolidated financial statements upon adoption. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), we meet the definition of an emerging growth company, and have elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. Recently Adopted Accounting Pronouncements In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Non-Employee Share-Based Payment Accounting as part of the FASB simplification initiative. The new standard expands the scope of Topic 718, allowing the Company to apply the requirements of Topic 718 to certain non-employee awards issued in exchange for the acquisition of goods and services from non-employees. ASU 2018-07 is intended to supersede Subtopic 505-50, Equity-Based Payments to Non-Employees and is effective for the Company for fiscal years beginning after December 15, 2019. Effective January 1, 2019, the Company early adopted this ASU using the modified retrospective transition method in which all previously issued equity-classified share-based payment awards to non-employees were remeasured at fair value as of the adoption date. Newly issued equity-classified share-based payments awards to non-employees are measured at fair value as of grant date. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 replaced existing revenue recognition guidance and permits the use of either the full retrospective or modified retrospective transition method. Additionally, in March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the implementation guidance on principal versus agent considerations in ASU 2014-09. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarifies certain aspects of identifying performance obligations and licensing implementation guidance. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, which relates to disclosures of remaining performance obligations, as well as other amendments to guidance on collectability, non-cash consideration and the presentation of sales and other similar taxes collected from customers. For the Company, these standards (collectively, ASC 606) have the same effective date and transition date of January 1, 2019. The Company adopted ASC 606 on January 1, 2019, using the modified retrospective transition method and, therefore, evaluated its contract with Merck under ASC 606. The Company recorded adjustments upon the adoption of ASC 606 as a result of the Company concluding that licenses and research and development services promised in the agreement are a single combined performance obligation. This determination impacts the timing of recognition of both the non-refundable upfront fee and the payments related to the services. Under previous guidance, the upfront fee was recognized ratably over the contract term, and fees related to the services were recognized in the period the services were performed. Under ASC 606, revenue for the single performance obligation is recognized over time using a cost-based input method to measure progress toward completion of the single combined performance obligation. The adoption of ASC 606 impacted the Company’s contract liabilities and accumulated deficit balance as of January 1, 2019 as follows (in thousands): December 31, 2018 Adjustments due to the Adoption of ASC 606 January 1, 2019 Deferred revenue, current $ 19,025 $ 5,171 $ 24,196 Deferred revenue, noncurrent 3,942 985 4,927 Accumulated deficit (147,193 ) (6,156 ) (153,349 ) The impact of the adoption of ASC 606 on the condensed condensed consolidated statement of operations and cash flows for the nine months ended September 30, 2019 was as follows (in thousands): September 30, 2019 Amount Under ASC 605 Adjustments As Reported Under ASC 606 Deferred revenue, current $ 11,212 $ 3,412 $ 14,624 Accumulated deficit (176,791 ) (3,412 ) (180,203 ) Three Months Ended September 30, 2019 Amount Under ASC 605 Adjustments As Reported Under ASC 606 Related party revenue $ 20,826 $ 742 $ 21,568 Loss from operations (13,739 ) 742 (12,997 ) Net loss (11,659 ) 742 (10,917 ) Net loss per common share, basic and diluted (0.18 ) (0.17 ) Nine Months Ended September 30, 2019 Amount Under ASC 605 Adjustments As Reported Under ASC 606 Related party revenue $ 69,717 $ 2,744 $ 72,461 Loss from operations (34,790 ) $ 2,744 (32,046 ) Net loss (29,598 ) $ 2,744 (26,854 ) Net loss per common share, basic and diluted (0.66 ) (0.60 ) Nine Months Ended September 30, 2019 Amount Under ASC 605 Adjustments As Reported Under ASC 606 Cash flows from operating activities: Net loss $ (29,598 ) $ 2,744 $ (26,854 ) Changes in operating assets and liabilities: Deferred revenue (11,755 ) (2,744 ) (14,499 ) Recent Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which increases lease transparency and comparability among organizations. Under the new standard, lessees will be required to recognize all assets and liabilities arising from leases on the balance sheet, with the exception of leases with a term of 12 months or less, which permits a lessee to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities. In March 2018, the FASB approved an alternative transition method to the modified retrospective approach, which eliminates the requirement to restate prior period financial statements and allows the cumulative effect of the retrospective allocation to be recorded as an adjustment to the opening balance of retained earnings at the date of adoption. The Company is currently assessing the timing of adoption and the impact that the adoption of ASU 2016-02 will have on its condensed consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement as part of the FASB’s disclosure framework project. This ASU modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement by removing the requirement to disclose amounts of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and the valuation process for Level 3 fair value measurements. This ASU also modifies existing disclosure requirements by clarifying that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date, and it adds required disclosures for the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This ASU will be effective for the Company for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently assessing the impact of this ASU on its condensed consolidated financial statements. In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (ASC 808): Clarifying the Interaction between ASC 808 and ASC 606, which clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under ASC 606 when then collaborative arrangement participant is a customer in the context of a unit of account. In those situations, all the guidance in ASC 606 should be applied, including recognition, measurement, presentation and disclosure requirements. This ASU adds unit-of-account guidance in ASC 808 to align with the guidance in ASC 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of ASC 606, and requires that in a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, presenting the transaction together with revenue recognized under ASC 606 is precluded if the collaborative arrangement participant is not a customer. This ASU will be effective for the Company for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The Company is currently assessing the impact of this ASU on its condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. The new guidance amended guidance on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. For available-for-sale debt securities, credit losses will be presented as an allowance rather than as a write-down. This standard is effective for the Company’s fiscal year beginning after December 31, 2020. Early adoption is permitted for all entities. The Company is currently assessing the timing of adoption and the impact that the adoption of ASU 2016-13 will have on its condensed consolidated financial statements and related disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Estimated Useful Life of Asset | Depreciation is recognized using the straight-line method based on an estimated useful life of the asset, which is as follows: Computer equipment 3 years Laboratory equipment and office furniture 3 years Leasehold improvement Shorter of life of asset or lease term |
Computation of Net Loss Per Common Share | The following table sets forth the computation of net loss per common share (in thousands, except share and per share): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Numerator: Net loss $ (10,917 ) $ (7,517 ) $ (26,854 ) $ (14,658 ) Denominator: Weighted-average number of common shares used in calculating net income per share—basic and diluted 65,948,207 6,525,660 44,828,596 6,285,905 Net loss per share—basic and diluted $ (0.17 ) $ (1.15 ) $ (0.60 ) $ (2.33 ) |
Potential Gross Dilutive Securities Not Included in Diluted Per Share Calculations | Potential gross dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows: September 30, 2019 2018 Convertible preferred stock — 47,267,466 Options to purchase common stock 11,328,508 9,915,997 Warrants to purchase convertible preferred stock — 19,637 Shares committed under ESPP 429,369 — Total 11,757,877 57,203,100 |
ASC 606 | |
Summary of Impact of Adopting ASC 606 on Select Financial Statement Line Items | The adoption of ASC 606 impacted the Company’s contract liabilities and accumulated deficit balance as of January 1, 2019 as follows (in thousands): December 31, 2018 Adjustments due to the Adoption of ASC 606 January 1, 2019 Deferred revenue, current $ 19,025 $ 5,171 $ 24,196 Deferred revenue, noncurrent 3,942 985 4,927 Accumulated deficit (147,193 ) (6,156 ) (153,349 ) The impact of the adoption of ASC 606 on the condensed condensed consolidated statement of operations and cash flows for the nine months ended September 30, 2019 was as follows (in thousands): September 30, 2019 Amount Under ASC 605 Adjustments As Reported Under ASC 606 Deferred revenue, current $ 11,212 $ 3,412 $ 14,624 Accumulated deficit (176,791 ) (3,412 ) (180,203 ) Three Months Ended September 30, 2019 Amount Under ASC 605 Adjustments As Reported Under ASC 606 Related party revenue $ 20,826 $ 742 $ 21,568 Loss from operations (13,739 ) 742 (12,997 ) Net loss (11,659 ) 742 (10,917 ) Net loss per common share, basic and diluted (0.18 ) (0.17 ) Nine Months Ended September 30, 2019 Amount Under ASC 605 Adjustments As Reported Under ASC 606 Related party revenue $ 69,717 $ 2,744 $ 72,461 Loss from operations (34,790 ) $ 2,744 (32,046 ) Net loss (29,598 ) $ 2,744 (26,854 ) Net loss per common share, basic and diluted (0.66 ) (0.60 ) Nine Months Ended September 30, 2019 Amount Under ASC 605 Adjustments As Reported Under ASC 606 Cash flows from operating activities: Net loss $ (29,598 ) $ 2,744 $ (26,854 ) Changes in operating assets and liabilities: Deferred revenue (11,755 ) (2,744 ) (14,499 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of Cash and Cash Equivalents and Marketable Securities Classified as Available-for-sale Securities | Cash and cash equivalents and marketable securities, all of which are classified as available-for-sale securities consisted of the following (in thousands): Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value As of September 30, 2019 Money market funds $ 298,057 $ — $ — $ 298,057 Corporate and agency bonds 39,750 79 — 39,829 Commercial paper 5,746 — — 5,746 U.S. government agencies securities 7,962 20 — 7,982 Total $ 351,515 $ 99 — $ 351,614 Classified as: Cash and cash equivalents $ 298,057 Short-term marketable securities (amortized cost of $53,458) 53,557 Total cash equivalents and marketable securities $ 351,614 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value As of December 31, 2018 Money market funds $ 34,983 $ — $ — $ 34,983 Corporate and agency bonds 68,323 — (241 ) 68,082 Commercial paper 17,904 — — 17,904 U.S. government agencies securities 63,751 — (26 ) 63,725 Total $ 184,961 $ — $ (267 ) $ 184,694 Classified as: Cash and cash equivalents $ 34,984 Short-term marketable securities (amortized cost of $149,978) 149,710 Total cash equivalents and marketable securities $ 184,694 |
Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table sets forth the estimated fair value of the Company’s financial assets and liabilities that were measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018 (in thousands): Fair Value Measurements As of September 30, 2019 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 298,057 $ — $ — $ 298,057 Corporate and agency bonds — 39,829 — 39,829 Commercial paper — 5,746 — 5,746 U.S. government agencies securities — 7,982 — 7,982 $ 298,057 $ 53,557 $ — $ 351,614 Fair Value Measurements As of December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 34,983 $ — $ — $ 34,983 Corporate and agency bonds — 68,082 — 68,082 Commercial paper — 17,904 — 17,904 U.S. government agencies securities — 63,725 — 63,725 $ 34,983 $ 149,711 $ — $ 184,694 Liabilities: Convertible preferred stock warrant liability $ — $ — $ 198 $ 198 $ — $ — $ 198 $ 198 |
Summary of Changes in Fair Value of Convertible Preferred Stock Warrant Liability | The following table provides a summary of changes in the fair value of the Company’s convertible preferred stock warrant liability (in thousands): Fair Value Using Level 3 Inputs Amounts Balance at December 31, 2017 $ 121 Change in fair value of warrant liability included in other income (expense), net 77 Balance at September 30, 2018 $ 198 Balance at December 31, 2018 $ 198 Net exercise of preferred stock warrant to Series A preferred stock (198 ) Balance at September 30, 2019 $ — |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Statement Of Financial Position [Abstract] | |
Property and Equipment | Property and equipment consist of the following (in thousands): September 30, December 31, 2019 2018 Computer equipment $ 1,131 $ 1,123 Laboratory equipment and office furniture 21,471 18,977 Leasehold improvements 25,836 25,314 Construction in process 36 679 Total property and equipment, gross 48,474 46,093 Less: accumulated depreciation and amortization (27,989 ) (22,200 ) Total property and equipment, net $ 20,485 $ 23,893 |
Accrued Liabilities | Accrued liabilities consist of the following (in thousands): September 30, December 31, 2019 2018 Accrued expenses $ 1,640 $ 2,595 Clinical trials and research and development costs 8,887 4,844 Personnel-related costs 5,072 4,148 Manufacturing costs 3,006 2,416 Total accrued liabilities $ 18,605 $ 14,003 |
Research Collaboration and Li_2
Research Collaboration and License Agreements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Collaboration And License Agreement Disclosure [Abstract] | |
Schedule of Milestone Payments by Indications | A breakout of the milestone payments in connection with the potential achievement of certain clinical development events is as follows (in thousands): First Indication Second Indication Third Indication Upon administration of an applicable product to the first patient in the first Phase 3 clinical trial for such product for the given indication $ 35,000 $ 25,250 $ 17,500 A breakout of the milestone payments in connection with the potential achievement of certain regulatory events for each of the three indications, for each of the three geographic areas, is as follows (in thousands): First Indication Second Indication Third Indication Total United States $ 75,000 $ 56,250 $ 37,500 $ 168,750 European Union 60,000 45,000 30,000 135,000 Japan 30,000 22,500 15,000 67,500 $ 165,000 $ 123,750 $ 82,500 $ 371,250 |
Schedule Of Recognized Revenue From Collaboration And License Agreements | The Company recognized revenue from its collaboration and license agreements as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Related party revenue $ 21,568 $ 20,815 $ 72,461 $ 61,546 |
Schedule of Changes in Contract Liabilities Under ASC 606 | Contract Assets and Liabilities Changes in contract liabilities under ASC 606 were as follows (in thousands): Amounts Balance at December 31, 2018 $ 22,967 Adoption of ASC 606 6,156 Balance at January 1, 2019 29,123 Revenue recognized included in the contract liability balance at the beginning of the period (16,844 ) Increases as a result of research and development expenses to be earned under the Collaboration Agreement 2,345 Balance at September 30, 2019 $ 14,624 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Future Minimum Commitments under Unassigned Lease Obligations | Future minimum payments under the unassigned lease obligations described above are as follows as of September 30, 2019 (in thousands): Year Ending December 31, 2019 $ 1,230 2020 4,995 2021 5,141 2022 5,294 2023 5,455 Total $ 22,115 |
Convertible Preferred Stock (Ta
Convertible Preferred Stock (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of Convertible Preferred Stock | Convertible preferred stock at December 31, 2018 , consisted of the following (in thousands): Issuance Aggregate Aggregate Shares Price per Liquidation Carrying Authorized Outstanding Share Value Value Series A 13,295 13,275 $ 2.00 26,550 $ 26,462 Series B 11,078 11,078 5.00 55,389 55,148 Series C 8,328 8,328 6.00 49,970 49,887 Series D 6,600 5,753 10.00 57,530 57,461 Series E 8,833 8,833 12.00 88,335 105,916 48,134 47,267 $ 277,774 $ 294,874 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Schedule of Shares of Common Stock Reserved for Issuance | As of September 30, 2019 and December 31, 2018 , the Company reserved shares of common stock for issuance as follows: September 30, 2019 December 31, 2018 Conversion of convertible preferred stock — 47,267,466 Common stock options outstanding 11,328,508 9,806,689 Common stock options available for grant 5,515,036 2,125,875 Warrant to purchase convertible preferred stock — 19,637 401(k) Matching Plan 28,274 36,751 ESPP shares available for purchase 1,000,000 — Total 17,871,818 59,256,418 |
Summary of Outstanding Stock Options | A summary of the outstanding stock options is as follows: Outstanding Options Options Available for Grant Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Aggregate Intrinsic Value (in Thousands) Balances at December 31, 2018 2,125,875 9,806,689 $ 5.86 6.62 $ 105,226 Additional shares reserved 5,193,322 Options granted (2,007,751 ) 2,007,751 12.62 Options exercised — (282,342 ) 4.18 Options cancelled 203,590 (203,590 ) 8.99 Balances at September 30, 2019 5,515,036 11,328,508 $ 7.04 6.35 $ 77,527 Vested and expected to vest at September 30, 2019 11,214,990 7.00 6.33 $ 77,196 Outstanding and exercisable at September 30, 2019 11,328,508 $ 7.04 6.35 $ 77,527 |
Summary of Stock Based Compensation Expense | The following table summarizes stock-based compensation expense related to stock-based payment awards to employees and directors for the three and nine months ended September 30, 2019 and 2018, which was allocated as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Research and development $ 1,652 $ 1,318 $ 5,114 $ 3,951 General and administrative 1,405 1,632 4,030 3,427 Total stock-based compensation expense $ 3,057 $ 2,950 $ 9,144 $ 7,378 |
Summary of Fair Value of Stock Option to Employees was Estimated at Date of Grant Using Black-Scholes Option-pricing Model | The fair value of stock option awards granted to employees was estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted-average valuation assumptions: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Risk-free interest rate 1.56 % 2.86 % 2.42 % 2.69 % Expected term of options (in years) 6.25 6.25 6.25 6.25 Expected stock price volatility 65.03 % 62.83 % 64.86 % 67.80 % Forfeiture rate 5.12 % 1.85 % 2.49 % 4.10 % Expected dividends — — — — |
2019 Employee Stock Purchase Plan | |
Summary of Fair Value of Stock Option to Employees was Estimated at Date of Grant Using Black-Scholes Option-pricing Model | The fair value of the rights granted to employees under the 2019 ESPP was estimated at the date of offer using a Black-Scholes option-pricing model with the following weighted-average valuation assumptions: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Risk-free interest rate 1.90 % — 1.90 % — Expected term of options (in years) 1.24 — 1.24 — Expected stock price volatility 59.79 % — 59.79 % — Expected dividends — — — — |
Non-employees | |
Summary of Fair Value of Stock Option Granted to Non-Employees was Estimated at Date of Grant Using Black-Scholes Option-pricing Model | The fair value of stock option awards granted to non-employees was estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted-average valuation assumptions: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Risk-free interest rate — — 2.22 % — Expected term of options (in years) — — 5.53 — Expected stock price volatility — — 65.47 % — Expected dividends — — — — |
Organization and Description _2
Organization and Description of Business - Additional Information (Detail) $ / shares in Units, $ in Thousands | Apr. 03, 2019USD ($)$ / sharesshares | Mar. 22, 2019 | Jun. 30, 2019USD ($)shares | Sep. 30, 2019USD ($)Segment | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Subsidiary Sale Of Stock [Line Items] | ||||||
Place of incorporation | Delaware | |||||
Date of incorporation | Dec. 20, 2007 | |||||
Number of operating business segment | Segment | 1 | |||||
Common stock reverse stock split ratio | 2 | |||||
Underwriting discounts commissions and offering expenses | $ 779 | |||||
Reclassification to common stock and additional paid-in capital | $ 295,072 | |||||
Proceeds from issuance of stock | $ 65,947 | |||||
Merck Sharp & Dohme Corp | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Percentage of outstanding shares of common stock owned by related party | 19.90% | |||||
IPO | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Common stock issued upon conversion of convertible preferred stock | shares | 47,283,839 | |||||
Convertible preferred stock to common stock conversion ratio | 100.00% | |||||
Common Stock | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Number of shares issued in transaction | shares | 7,521,394 | 7,521,000 | ||||
Common stock issued upon conversion of convertible preferred stock | shares | 47,283,000 | |||||
Reclassification to common stock and additional paid-in capital | $ 295,100 | $ 47 | ||||
Proceeds from issuance of stock | $ 65,900 | |||||
Common Stock | IPO | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Number of shares issued in transaction | shares | 6,666,667 | |||||
Share price | $ / shares | $ 16 | |||||
Proceeds from issuance of common stock, net of underwriters discount and commissions | $ 107,800 | |||||
Underwriting discounts commissions and offering expenses | $ 4,100 | $ 2,300 | ||||
Common Stock | Over-Allotment Option | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Number of shares issued in transaction | shares | 854,727 | |||||
Share price | $ / shares | $ 16 | |||||
Common Stock | Private Placement | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Number of shares issued in transaction | shares | 4,121,683 | |||||
Share price | $ / shares | $ 16 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | Feb. 03, 2019USD ($)shares | Sep. 30, 2019USD ($)shares | Mar. 31, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)Segmentshares | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Summary Of Significant Accounting Policies [Line Items] | |||||||
Net losses | $ 10,900 | $ 7,500 | $ 26,854 | $ 14,658 | |||
Accumulated deficit | 180,203 | 180,203 | $ 147,193 | ||||
Cash, cash equivalents and marketable securities | 356,600 | 356,600 | |||||
Deferred IPO costs | 0 | 0 | $ 2,292 | ||||
Net unrealized gain on marketable securities | $ 0 | $ 200 | $ 400 | $ 100 | |||
Number of operating business segment | Segment | 1 | ||||||
Convertible Preferred Stock Warrant Liability | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Warrants outstanding | shares | 0 | 0 | |||||
Convertible Preferred Stock | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Convertible preferred stock warrants exercised on net basis into shares of series A convertible preferred stock | shares | 16,380 | ||||||
Convertible preferred stock fair value | $ 200 | $ 198 | |||||
Revenue | Customer Concentration Risk | Merck | |||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||
Percentage of revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Estimated Useful Life of Asset (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Computer Equipment | |
Property Plant And Equipment [Line Items] | |
Estimated useful life of asset | 3 years |
Laboratory Equipment and Office Furniture | |
Property Plant And Equipment [Line Items] | |
Estimated useful life of asset | 3 years |
Leasehold Improvement | |
Property Plant And Equipment [Line Items] | |
Leasehold improvement | Shorter of life of asset or lease term |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Computation of Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||||||
Net Loss | $ (10,917) | $ (7,669) | $ (8,268) | $ (7,517) | $ (3,200) | $ (3,941) | $ (26,854) | $ (14,658) |
Denominator: | ||||||||
Weighted-average number of common shares used in calculating net income per share—basic and diluted | 65,948,207 | 6,525,660 | 44,828,596 | 6,285,905 | ||||
Net loss per share—basic and diluted | $ (0.17) | $ (1.15) | $ (0.60) | $ (2.33) |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Potential Gross Dilutive Securities Not Included in Diluted Per Share Calculations (Details) - shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities not included in calculations of diluted per share | 11,757,877 | 57,203,100 |
Convertible Preferred Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities not included in calculations of diluted per share | 47,267,466 | |
Options to Purchase Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities not included in calculations of diluted per share | 11,328,508 | 9,915,997 |
Warrants to Purchase Convertible Preferred Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities not included in calculations of diluted per share | 19,637 | |
Shares Committed Under ESPP | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities not included in calculations of diluted per share | 429,369 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Summary of Impact of Adopting ASC 606 on Select Financial Statement Line Items (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | |
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Deferred revenue, current | $ 14,624 | $ 14,624 | $ 19,025 | |||||||
Deferred revenue, non-current | 3,942 | |||||||||
Accumulated deficit | (180,203) | (180,203) | $ (147,193) | |||||||
Loss from operations | (12,997) | $ (8,469) | (32,046) | $ (17,370) | ||||||
Net Loss | $ (10,917) | $ (7,669) | $ (8,268) | $ (7,517) | $ (3,200) | $ (3,941) | $ (26,854) | $ (14,658) | ||
Net loss per common share, basic and diluted | $ (0.17) | $ (1.15) | $ (0.60) | $ (2.33) | ||||||
Cash flows from operating activities | ||||||||||
Net loss | $ (10,900) | $ (7,500) | $ (26,854) | $ (14,658) | ||||||
Changes in operating assets and liabilities | ||||||||||
Deferred revenue | (14,499) | $ (13,799) | ||||||||
ASC 606 | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Deferred revenue, current | 14,624 | 14,624 | $ 24,196 | |||||||
Deferred revenue, non-current | 4,927 | |||||||||
Accumulated deficit | (180,203) | (180,203) | (153,349) | |||||||
Related party revenue | 21,568 | 72,461 | ||||||||
Loss from operations | (12,997) | (32,046) | ||||||||
Net Loss | $ (10,917) | $ (26,854) | ||||||||
Net loss per common share, basic and diluted | $ (0.17) | $ (0.60) | ||||||||
Adjustments | ||||||||||
Cash flows from operating activities | ||||||||||
Net loss | $ 2,744 | |||||||||
Changes in operating assets and liabilities | ||||||||||
Deferred revenue | (2,744) | |||||||||
Adjustments | ASC 606 | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Deferred revenue, current | $ 3,412 | 3,412 | 5,171 | |||||||
Deferred revenue, non-current | 985 | |||||||||
Accumulated deficit | (3,412) | (3,412) | $ (6,156) | |||||||
Related party revenue | 742 | 2,744 | ||||||||
Loss from operations | 742 | 2,744 | ||||||||
Net Loss | 742 | 2,744 | ||||||||
Amount Under ASC 605 | ||||||||||
Cash flows from operating activities | ||||||||||
Net loss | (29,598) | |||||||||
Changes in operating assets and liabilities | ||||||||||
Deferred revenue | (11,755) | |||||||||
Amount Under ASC 605 | ASC 606 | ||||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||||
Deferred revenue, current | 11,212 | 11,212 | ||||||||
Accumulated deficit | (176,791) | (176,791) | ||||||||
Related party revenue | 20,826 | 69,717 | ||||||||
Loss from operations | (13,739) | (34,790) | ||||||||
Net Loss | $ (11,659) | $ (29,598) | ||||||||
Net loss per common share, basic and diluted | $ (0.18) | $ (0.66) |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Cash and Cash Equivalents and Marketable Securities Classified as Available-for-sale Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 351,515 | $ 184,961 |
Gross Unrealized Gain | 99 | |
Gross Unrealized Loss | (267) | |
Fair Value | 351,614 | 184,694 |
Money Market Funds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 298,057 | 34,983 |
Fair Value | 298,057 | 34,983 |
Corporate and Agency Bonds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 39,750 | 68,323 |
Gross Unrealized Gain | 79 | |
Gross Unrealized Loss | (241) | |
Fair Value | 39,829 | 68,082 |
Commercial Paper | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 5,746 | 17,904 |
Fair Value | 5,746 | 17,904 |
U.S. Government Agencies Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 7,962 | 63,751 |
Gross Unrealized Gain | 20 | |
Gross Unrealized Loss | (26) | |
Fair Value | 7,982 | 63,725 |
Cash and Cash Equivalents | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Fair Value | 298,057 | 34,984 |
Short-term Marketable Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 53,458 | 149,978 |
Fair Value | $ 53,557 | $ 149,710 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Cash and Cash Equivalents and Marketable Securities Classified as Available-for-sale Securities (Parenthetical) (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 351,515 | $ 184,961 |
Short-term Marketable Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 53,458 | $ 149,978 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Cash on deposit with banks | $ 5,000,000 | $ 21,900,000 |
Fair value, assets, level 1 to level 2 transfers, amount | 0 | 0 |
Fair value, assets, level 2 to level 1 transfers, amount | 0 | 0 |
Fair value, liabilities, level 1 to level 2 transfers, amount | 0 | 0 |
Fair value, liabilities, level 2 to level 1 transfers, amount | $ 0 | $ 0 |
Convertible Preferred Stock Warrant Liability | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Warrants outstanding | 0 | |
Loan and Security Agreement | Convertible Preferred Stock Warrant Liability | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Warrants outstanding | 0 |
Fair Value Measurements - Sum_3
Fair Value Measurements - Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value Measurements, Recurring - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets: | ||
Assets fair value | $ 351,614 | $ 184,694 |
Liabilities: | ||
Liabilities fair value | 198 | |
Convertible Preferred Stock Warrant Liability | ||
Liabilities: | ||
Liabilities fair value | 198 | |
Level 1 | ||
Assets: | ||
Assets fair value | 298,057 | 34,983 |
Fair Value, Inputs, Level 2 | ||
Assets: | ||
Assets fair value | 53,557 | 149,711 |
Level 3 | ||
Liabilities: | ||
Liabilities fair value | 198 | |
Level 3 | Convertible Preferred Stock Warrant Liability | ||
Liabilities: | ||
Liabilities fair value | 198 | |
Money Market Funds | ||
Assets: | ||
Assets fair value | 298,057 | 34,983 |
Money Market Funds | Level 1 | ||
Assets: | ||
Assets fair value | 298,057 | 34,983 |
Corporate and Agency Bonds | ||
Assets: | ||
Assets fair value | 39,829 | 68,082 |
Corporate and Agency Bonds | Fair Value, Inputs, Level 2 | ||
Assets: | ||
Assets fair value | 39,829 | 68,082 |
Commercial Paper | ||
Assets: | ||
Assets fair value | 5,746 | 17,904 |
Commercial Paper | Fair Value, Inputs, Level 2 | ||
Assets: | ||
Assets fair value | 5,746 | 17,904 |
U.S. Government Agencies Securities | ||
Assets: | ||
Assets fair value | 7,982 | 63,725 |
U.S. Government Agencies Securities | Fair Value, Inputs, Level 2 | ||
Assets: | ||
Assets fair value | $ 7,982 | $ 63,725 |
Fair Value Measurements - Sum_4
Fair Value Measurements - Summary of Changes in Fair Value of Convertible Preferred Stock Warrant Liability (Details) - Fair Value Measurements, Recurring - Level 3 - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | $ 198 | $ 121 |
Change in fair value of warrant liability included in other income (expense), net | 77 | |
Net exercise of preferred stock warrant to Series A preferred stock | (198) | |
Ending balance | $ 198 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 48,474 | $ 46,093 |
Less: accumulated depreciation and amortization | (27,989) | (22,200) |
Total property and equipment, net | 20,485 | 23,893 |
Computer Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 1,131 | 1,123 |
Laboratory Equipment and Office Furniture | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 21,471 | 18,977 |
Leasehold Improvement | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 25,836 | 25,314 |
Construction In Process | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 36 | $ 679 |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement Of Financial Position [Abstract] | ||||
Depreciation expense | $ 1,900 | $ 1,900 | $ 5,838 | $ 5,332 |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Accrued expenses | $ 1,640 | $ 2,595 |
Clinical trials and research and development costs | 8,887 | 4,844 |
Personnel-related costs | 5,072 | 4,148 |
Manufacturing costs | 3,006 | 2,416 |
Total accrued liabilities | $ 18,605 | $ 14,003 |
Research Collaboration and Li_3
Research Collaboration and License Agreements - Additional Information (Details) | Apr. 03, 2019 | Nov. 30, 2018USD ($) | Feb. 28, 2015USD ($)$ / sharesshares | Sep. 30, 2019USD ($)Option$ / shares | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)Option$ / sharesshares | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)Option$ / shares | Dec. 31, 2018USD ($)$ / shares | Nov. 29, 2018USD ($) | Apr. 30, 2015USD ($) |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||
Preferred stock, price per share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Deferred revenue | $ 14,624,000 | $ 14,624,000 | $ 14,624,000 | $ 29,123,000 | |||||||
Deferred revenue recognized | 16,844,000 | ||||||||||
Collaboration and license revenue | 21,568,000 | $ 20,815,000 | 72,461,000 | $ 61,546,000 | |||||||
Contract assets | $ 0 | $ 0 | $ 0 | $ 0 | |||||||
Series E Convertible Preferred Stock | |||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||
Preferred stock, price per share | $ / shares | $ 12 | ||||||||||
Merck Sharp & Dohme Corp | |||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||
Percentage of outstanding shares of common stock owned by related party | 19.90% | ||||||||||
Collaboration Agreement | Merck Sharp & Dohme Corp | |||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||
Upfront payment received | $ 94,000,000 | ||||||||||
Fair values of assets and services exchanged allocated to equity component | $ 106,000,000 | ||||||||||
Fair values of assets and services exchanged allocated to revenue component | $ 94,000,000 | ||||||||||
Term of agreement | 5 years | ||||||||||
License fee | $ 20,000,000 | ||||||||||
Development and regulatory milestone payments received | $ 449,000,000 | ||||||||||
Research and Development Collaboration Agreement Additional Term Description | In connection with this extension, Merck agreed to continue to fund the Company’s research and development efforts during the two-year extension period at the same levels as during the initial term and, in lieu of a $20.0 million extension fee that would have otherwise been payable to the Company, Merck will make additional payments totaling up to $20.0 million in support of the Company’s research and development program activities across 2021 and the first quarter of 2022. | ||||||||||
Amount of fund received for research activities | $ 20,000,000 | ||||||||||
Amount of additional fund received for research activities | $ 20,000,000 | ||||||||||
Performance of R&D services period | 5 years | ||||||||||
Number of options | Option | 2 | 2 | 2 | ||||||||
Research and development services additional option extend term | 2 years | ||||||||||
Upfront Fee | $ 94,000,000 | ||||||||||
Collaborative arrangement funding, amount | $ 75,000,000 | 75,000,000 | $ 75,000,000 | ||||||||
Collaborative agreement milestone or other forms of consideration | 0 | ||||||||||
Received amount from options | $ 20,000,000 | ||||||||||
Deferred revenue | 14,600,000 | 14,600,000 | 14,600,000 | $ 23,000,000 | |||||||
Deferred revenue recognized | 6,200,000 | ||||||||||
Due from related party | $ 3,700,000 | ||||||||||
Collaboration and license revenue | 21,600,000 | 20,800,000 | 72,500,000 | 61,500,000 | $ 337,000,000 | ||||||
One-time payment | 20,000,000 | ||||||||||
Milestone payments | 449,000,000 | ||||||||||
Milestone payments relates to potential achievement of specific clinical development events | 77,700,000 | ||||||||||
Milestone payments relates to potential achievement of certain regulatory events | 371,300,000 | ||||||||||
Upfront license fee | $ 5,400,000 | 16,800,000 | |||||||||
Amortization of upfront license fee | $ 4,700,000 | $ 14,100,000 | |||||||||
Collaboration Agreement | Merck Sharp & Dohme Corp | Maximum | |||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||
Research collaboration and license agreements extension fee | 75,000,000 | ||||||||||
Commercial milestone payments received | 125,000,000 | ||||||||||
Eligible to receive commercial milestone payments | 125,000,000 | ||||||||||
Collaboration Agreement | Merck Sharp & Dohme Corp | Series E Convertible Preferred Stock | |||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||
Number of shares issued in transaction | shares | 8,833,333 | ||||||||||
Preferred stock, price per share | $ / shares | $ 12 | ||||||||||
Proceeds from issuance of preferred stock | $ 106,000,000 | ||||||||||
Small Molecule Compounds | Merck Sharp & Dohme Corp | |||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||
Research collaboration and license agreements extension fee | $ 20,000,000 | ||||||||||
Initial research term | 5 years | ||||||||||
Additional term | 3 years | ||||||||||
Side Letter Agreement | Merck Sharp & Dohme Corp | |||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||
Initial research term | 5 years | ||||||||||
Public offering price of common stock | $ / shares | $ 16 | $ 16 | $ 16 | ||||||||
Percentage of outstanding shares of common stock owned by related party | 19.90% | ||||||||||
Reduction in percentage of securities owned by related party | 5.00% | ||||||||||
Side Letter Agreement | Merck Sharp & Dohme Corp | Private Placement | |||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||
Common stock purchased by related party | shares | 4,121,683 |
Research Collaboration and Li_4
Research Collaboration and License Agreements - Schedule of Milestone Payments by Indications (Details) - Collaboration Agreement $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | $ 371,250 |
United States | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 168,750 |
European Union | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 135,000 |
Japan | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 67,500 |
First Indication | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 165,000 |
First Indication | United States | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 75,000 |
First Indication | European Union | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 60,000 |
First Indication | Japan | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 30,000 |
Second Indication | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 123,750 |
Second Indication | United States | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 56,250 |
Second Indication | European Union | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 45,000 |
Second Indication | Japan | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 22,500 |
Third Indication | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 82,500 |
Third Indication | United States | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 37,500 |
Third Indication | European Union | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 30,000 |
Third Indication | Japan | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 15,000 |
First Indication | Clinical Trial to First Patient in First Phase 3 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Upon administration of an applicable product to the first patient in the first Phase 3 clinical trial for such product for the given indication | 35,000 |
Second Indication | Clinical Trial to First Patient in First Phase 3 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Upon administration of an applicable product to the first patient in the first Phase 3 clinical trial for such product for the given indication | 25,250 |
Third Indication | Clinical Trial to First Patient in First Phase 3 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Upon administration of an applicable product to the first patient in the first Phase 3 clinical trial for such product for the given indication | $ 17,500 |
Research Collaboration and Li_5
Research Collaboration and License Agreements - Schedule Of Recognized Revenue From Collaboration And License Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Collaboration Agreement | Merck Sharp & Dohme Corp | ||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||
Related party revenue | $ 21,568 | $ 20,815 | $ 72,461 | $ 61,546 |
Research Collaboration and Li_6
Research Collaboration and License Agreements - Schedule of Changes in Contract Liabilities Under ASC 606 (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Jan. 01, 2019 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Beginning Balance | $ 29,123 | |
Revenue recognized included in the contract liability balance at the beginning of the period | (16,844) | |
Increases as a result of research and development expenses to be earned under the Collaboration Agreement | 2,345 | |
Ending Balance | 14,624 | |
Amount Under ASC 605 | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Beginning Balance | $ 22,967 | |
ASC 606 | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Adoption of ASC 606 | $ 6,156 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||||
Deferred revenue | $ 14,624 | $ 14,624 | $ 29,123 | ||
Merck Sharp & Dohme Corp | Collaboration Agreement | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related parties | 21,568 | $ 20,815 | 72,461 | $ 61,546 | |
Deferred revenue | $ 14,600 | $ 14,600 | $ 23,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Dec. 31, 2015USD ($)ft² | Sep. 30, 2009USD ($)ft² | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Commitments And Contingencies Disclosure [Line Items] | |||||||
Total Leasehold improvements | $ 20,485 | $ 20,485 | $ 23,893 | ||||
Corporate Office Space and Laboratory Facility | |||||||
Commitments And Contingencies Disclosure [Line Items] | |||||||
Area of leased property | ft² | 122,000 | 50,000 | |||||
Operating lease agreement, amended period | 2014-06 | ||||||
Operating lease agreement, expiration period | 2023-12 | 2020-11 | |||||
Tenant improvement allowances | $ 15,200 | $ 800 | |||||
Operating lease option additional extend term | 3 years | ||||||
Rent expense | 500 | $ 500 | 1,600 | $ 1,600 | |||
Corporate Office Space and Laboratory Facility | Merck Sharp & Dohme Corp | |||||||
Commitments And Contingencies Disclosure [Line Items] | |||||||
Remaining lease payment obligation | 2,400 | $ 4,200 | |||||
Corporate Office Space and Laboratory Facility | Letter of Credit | |||||||
Commitments And Contingencies Disclosure [Line Items] | |||||||
Letter of credit as a security deposit | 2,300 | ||||||
Reduction in letter of credit on each of third anniversary and fourth anniversary | 400 | ||||||
Corporate Office Space and Laboratory Facility | Letter of Credit | Cash and Cash Equivalents | |||||||
Commitments And Contingencies Disclosure [Line Items] | |||||||
Reduction in letter of credit | $ 400 | $ 400 | |||||
Corporate Office Space and Laboratory Facility | Leasehold Improvement | |||||||
Commitments And Contingencies Disclosure [Line Items] | |||||||
Total Leasehold improvements | $ 22,300 | ||||||
Operating lease term | 7 years |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Commitments under Unassigned Lease Obligations (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2019 | $ 1,230 |
2020 | 4,995 |
2021 | 5,141 |
2022 | 5,294 |
2023 | 5,455 |
Total | $ 22,115 |
Convertible Preferred Stock - A
Convertible Preferred Stock - Additional Information (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Temporary Equity [Line Items] | ||
Convertible preferred stock, conversion ratio | 1 | |
Convertible preferred stock, voting rights | Each holder of convertible preferred stock was entitled to the number of votes equal to the number of shares of common stock into which such shares of convertible preferred stock were convertible. | |
Convertible preferred stock, non-cumulative dividend rate per annum | 8.00% | |
Convertible preferred stock, shares issued | 0 | 47,267,466 |
Convertible preferred stock, shares outstanding | 0 | 47,267,466 |
Series E Convertible Preferred Stock | ||
Temporary Equity [Line Items] | ||
Convertible preferred stock, liquidation preference per share | $ 10 | |
Convertible preferred stock, liquidation terms | An amount equal to $10.00 per share plus all declared and unpaid dividends on the convertible preferred stock. | |
Convertible preferred stock, shares outstanding | 8,833,000 |
Convertible Preferred Stock - S
Convertible Preferred Stock - Schedule of Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Temporary Equity [Line Items] | ||
Convertible preferred stock, shares authorized | 96,268,206 | 96,268,206 |
Convertible preferred stock, shares outstanding | 0 | 47,267,466 |
Convertible preferred stock, par value | $ 0.001 | $ 0.001 |
Convertible preferred stock, aggregate liquidation preference | $ 0 | $ 277,774 |
Aggregate Carrying Value | $ 294,874 | |
Series A Convertible Preferred Stock | ||
Temporary Equity [Line Items] | ||
Convertible preferred stock, shares authorized | 13,295,000 | |
Convertible preferred stock, shares outstanding | 13,275,000 | |
Convertible preferred stock, par value | $ 2 | |
Convertible preferred stock, aggregate liquidation preference | $ 26,550 | |
Aggregate Carrying Value | $ 26,462 | |
Series B Convertible Preferred Stock | ||
Temporary Equity [Line Items] | ||
Convertible preferred stock, shares authorized | 11,078,000 | |
Convertible preferred stock, shares outstanding | 11,078,000 | |
Convertible preferred stock, par value | $ 5 | |
Convertible preferred stock, aggregate liquidation preference | $ 55,389 | |
Aggregate Carrying Value | $ 55,148 | |
Series C Convertible Preferred Stock | ||
Temporary Equity [Line Items] | ||
Convertible preferred stock, shares authorized | 8,328,000 | |
Convertible preferred stock, shares outstanding | 8,328,000 | |
Convertible preferred stock, par value | $ 6 | |
Convertible preferred stock, aggregate liquidation preference | $ 49,970 | |
Aggregate Carrying Value | $ 49,887 | |
Series D Convertible Preferred Stock | ||
Temporary Equity [Line Items] | ||
Convertible preferred stock, shares authorized | 6,600,000 | |
Convertible preferred stock, shares outstanding | 5,753,000 | |
Convertible preferred stock, par value | $ 10 | |
Convertible preferred stock, aggregate liquidation preference | $ 57,530 | |
Aggregate Carrying Value | $ 57,461 | |
Series E Convertible Preferred Stock | ||
Temporary Equity [Line Items] | ||
Convertible preferred stock, shares authorized | 8,833,000 | |
Convertible preferred stock, shares outstanding | 8,833,000 | |
Convertible preferred stock, par value | $ 12 | |
Convertible preferred stock, aggregate liquidation preference | $ 88,335 | |
Aggregate Carrying Value | $ 105,916 | |
Series A,B,C,D and E Convertible Preferred Stock | ||
Temporary Equity [Line Items] | ||
Convertible preferred stock, shares authorized | 48,134,000 | |
Convertible preferred stock, shares outstanding | 47,267,000 | |
Convertible preferred stock, aggregate liquidation preference | $ 277,774 | |
Aggregate Carrying Value | $ 294,874 |
Stockholders' Equity (Deficit_2
Stockholders' Equity (Deficit) - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2019Periodshares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($)shares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | |
Class Of Stock [Line Items] | ||||||
Common stock, shares outstanding | 66,155,613 | 66,155,613 | 6,937,890 | |||
Stock repurchase plan, authorized shares | 108,177 | 108,177 | 205,108 | |||
Weighted-average grant date fair value of stock options ,Granted | $ / shares | $ 7.93 | $ 5.63 | ||||
Intrinsic value of stock options exercised | $ | $ 3,000,000 | $ 1,500,000 | ||||
Tax benefits realized | $ | $ 0 | $ 0 | $ 0 | 0 | ||
Options granted | 2,007,751 | |||||
Number of shares of common stock reserved for issuance | 17,871,818 | 17,871,818 | 59,256,418 | |||
Common stock issued | 66,155,613 | 66,155,613 | 6,937,890 | |||
Employees and Directors | ||||||
Class Of Stock [Line Items] | ||||||
Unrecognized compensation expense, net of estimated forfeitures | $ | $ 23,900,000 | $ 23,900,000 | ||||
Unrecognized compensation expense expected to be recognized over a weighted-average period | 2 years 8 months 12 days | |||||
Stock-based compensation expense | $ | 3,057,000 | 2,950,000 | $ 9,144,000 | 7,378,000 | ||
Non-employees | ||||||
Class Of Stock [Line Items] | ||||||
Stock-based compensation expense | $ | $ 32,000 | $ 23,000 | $ 102,000 | $ 71,000 | ||
Options granted | 0 | 0 | 22,500 | 0 | ||
Stock options to purchase shares, remain unvested | 25,939 | 25,939 | 16,042 | |||
2018 Equity Incentive Plan | ||||||
Class Of Stock [Line Items] | ||||||
Common stock, shares outstanding | 108,177 | 108,177 | 205,108 | |||
Common stock authorized for issuance | 17,874,624 | 17,874,624 | ||||
Right to repurchase shares lapses over period | 4 years | |||||
Early exercise stock option liabilities | $ | $ 800,000 | $ 800,000 | $ 1,600,000 | |||
2018 Equity Incentive Plan | Minimum | ||||||
Class Of Stock [Line Items] | ||||||
Stock options, vesting period | 4 years | |||||
Share repurchase price per Share | $ / shares | $ 7.64 | $ 7.64 | $ 4 | |||
2018 Equity Incentive Plan | Minimum | IPO | ||||||
Class Of Stock [Line Items] | ||||||
Percentage of exercise price to fair market value common stock on grant date | 100.00% | |||||
2018 Equity Incentive Plan | Minimum | IPO | 10% or Greater Stockholder | ||||||
Class Of Stock [Line Items] | ||||||
Percentage of exercise price to fair market value common stock on grant date | 110.00% | |||||
Stock option expiration period | 5 years | |||||
2018 Equity Incentive Plan | Maximum | ||||||
Class Of Stock [Line Items] | ||||||
Stock options, vesting period | 10 years | |||||
Share repurchase price per Share | $ / shares | $ 8.14 | $ 8.14 | $ 8.14 | |||
2018 Equity Incentive Plan | Maximum | IPO | 10% or Greater Stockholder | ||||||
Class Of Stock [Line Items] | ||||||
Stock option expiration period | 10 years | |||||
2019 Employee Stock Purchase Plan | ||||||
Class Of Stock [Line Items] | ||||||
Stock-based compensation expense | $ | $ 300,000 | $ 600,000 | ||||
Number of shares of common stock reserved for issuance | 1,000,000 | |||||
Number of shares reserved and available for issuance, description | the number of shares reserved and available for issuance will automatically increase on January 1 of each calendar year, beginning January 1, 2020, by the lesser of (1) 1.0% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, (2) 1,000,000 shares or (3) a number determined by our board of directors that is less than (1) and (2) | |||||
Maximum percentage of payroll deductions of employee's compensation | 15.00% | |||||
Maximum duration for purchase under employee stock purchase plan | 24 months | |||||
Number of purchase periods | Period | 4 | |||||
Duration of each purchase period | 6 months | |||||
Percentage of purchase of common stock fair market value | 85.00% | |||||
Common stock issued | 0 | 0 |
Stockholders' Equity (Deficit_3
Stockholders' Equity (Deficit) - Schedule of Shares of Common Stock Reserved for Issuance (Details) - shares | Sep. 30, 2019 | Dec. 31, 2018 |
Class Of Stock [Line Items] | ||
Total | 17,871,818 | 59,256,418 |
Convertible Preferred Stock | ||
Class Of Stock [Line Items] | ||
Total | 47,267,466 | |
Common Stock Options Outstanding | ||
Class Of Stock [Line Items] | ||
Total | 11,328,508 | 9,806,689 |
Common Stock Options Available for Grant | ||
Class Of Stock [Line Items] | ||
Total | 5,515,036 | 2,125,875 |
401(k) Matching Plan | ||
Class Of Stock [Line Items] | ||
Total | 28,274 | 36,751 |
Warrants to Purchase Convertible Preferred Stock | ||
Class Of Stock [Line Items] | ||
Total | 19,637 | |
Shares Committed Under ESPP | ||
Class Of Stock [Line Items] | ||
Total | 1,000,000 |
Stockholders' Equity (Deficit_4
Stockholders' Equity (Deficit) - Summary of Outstanding Stock Options (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | |
Equity [Abstract] | ||
Outstanding Options, Options Available for Grant, Beginning balance | 2,125,875 | |
Outstanding Options, Options Available for Grant, Additional Shares | 5,193,322 | |
Outstanding Options, Options Available for Grant, Granted | (2,007,751) | |
Outstanding Options, Options Available for Grant, Cancelled | 203,590 | |
Outstanding Options, Options Available for Grant, Ending balance | 5,515,036 | 2,125,875 |
Outstanding Options, Number of Options, Beginning balance | 9,806,689 | |
Outstanding Options, Number of Options, Granted | 2,007,751 | |
Outstanding Options, Number of Options, Exercised | (282,342) | |
Outstanding Options, Number of Options, Cancelled | (203,590) | |
Outstanding Options, Number of Options, Ending balance | 11,328,508 | 9,806,689 |
Outstanding Options, Number of Options, Options vested and expected to vest | 11,214,990 | |
Outstanding Options, Number of Options, Options exercisable | 11,328,508 | |
Outstanding Options, Weighted-Average Exercise Price, Beginning balance | $ / shares | $ 5.86 | |
Outstanding Options, Weighted-Average Exercise Price, Granted | $ / shares | 12.62 | |
Outstanding Options, Weighted-Average Exercise Price, Exercised | $ / shares | 4.18 | |
Outstanding Options, Weighted-Average Exercise Price, Cancelled | $ / shares | 8.99 | |
Outstanding Options, Weighted-Average Exercise Price, Ending balance | $ / shares | 7.04 | $ 5.86 |
Outstanding Options, Weighted-Average Exercise Price, Options vested and expected to vest | $ / shares | 7 | |
Outstanding Options, Weighted-Average Exercise Price, Options exercisable | $ / shares | $ 7.04 | |
Weighted Average Remaining Contractual Life (in Years) | 6 years 4 months 6 days | 6 years 7 months 13 days |
Weighted Average Remaining Contractual Life (in Years), Vested and expected to vest | 6 years 3 months 29 days | |
Weighted Average Remaining Contractual Life (in Years),Outstanding and Exercisable | 6 years 4 months 6 days | |
Outstanding Options, Aggregate Intrinsic Value, Balance | $ | $ 77,527 | $ 105,226 |
Outstanding Options, Aggregate Intrinsic Value, Options vested and expected to vest-September 30, 2019 | $ | 77,196 | |
Options Outstanding, Aggregate Intrinsic Value, Options exercisable-September 30, 2019 | $ | $ 77,527 |
Stockholders' Equity (Deficit_5
Stockholders' Equity (Deficit) - Summary of Stock Based Compensation Expense (Details) - Employees and Directors - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 3,057 | $ 2,950 | $ 9,144 | $ 7,378 |
Research and Development | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 1,652 | 1,318 | 5,114 | 3,951 |
General and Administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 1,405 | $ 1,632 | $ 4,030 | $ 3,427 |
Stockholders' Equity (Deficit_6
Stockholders' Equity (Deficit) - Summary of Fair Value of Stock Option Granted to Employees was Estimated at Date of Grant Using Black-Scholes Option-pricing Model (Details) - Employees | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Risk-free interest rate | 1.56% | 2.86% | 2.42% | 2.69% |
Expected term of options (in years) | 6 years 3 months | 6 years 3 months | 6 years 3 months | 6 years 3 months |
Expected stock price volatility | 65.03% | 62.83% | 64.86% | 67.80% |
Forfeiture rate | 5.12% | 1.85% | 2.49% | 4.10% |
Stockholders' Equity (Deficit_7
Stockholders' Equity (Deficit) - Summary of Fair Value of Stock Option Granted to Non-Employees was Estimated at Date of Grant Using Black-Scholes Option-pricing Model (Details) - Non-employees | 9 Months Ended |
Sep. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Risk-free interest rate | 2.22% |
Expected term of options (in years) | 5 years 6 months 10 days |
Expected stock price volatility | 65.47% |
Stockholders' Equity (Deficit_8
Stockholders' Equity (Deficit) - Summary of Fair Value of the Rights Granted to Employees Under the 2019 ESPP was Estimated at the Date of Offer Using Black-Scholes Option-pricing Model (Details) - 2019 Employee Stock Purchase Plan | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Risk-free interest rate | 1.90% | 1.90% |
Expected term of options (in years) | 1 year 2 months 26 days | 1 year 2 months 26 days |
Expected stock price volatility | 59.79% | 59.79% |