Mersana Therapeutics (MRSN) 10-K 28 Mar 18 2017 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2017	Mar. 20, 2018	Jun. 30, 2017
Document and Entity Information
Entity Registrant Name	Mersana Therapeutics, Inc.
Entity Central Index Key	1,442,836
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Public Float			$ 19,147,953
Entity Common Stock, Shares Outstanding		22,845,916
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	FY

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 26,591	$ 100,297
Short-term marketable securities	88,143
Accounts receivable	784	1,051
Prepaid expenses and other current assets	2,025	825
Total current assets	117,543	102,173
Property and equipment, net	2,319	2,483
Long-term marketable securities	10,482
Other assets	371	431
Total assets	130,715	105,087
Current liabilities:
Accounts payable	3,070	2,068
Accrued expenses	6,944	3,428
Deferred rent	232	159
Deferred revenue	21,635	22,731
Total current liabilities	31,881	28,386
Deferred rent, net of current portion	67	299
Deferred revenue, net of current portion	28,773	37,571
Commitments (Note 13)
Stockholders’ equity (deficit)
Preferred stock, $0.0001 par value; 25,000,000 and 0 shares authorized; 0 shares issued and outstanding at December 31, 2017 and December 31, 2016, respectively
Common stock, $0.0001 par value; 175,000,000 and 95,000,000 shares authorized; 22,765,017 and 1,294,352 shares issued and outstanding at December 31, 2017 and December 31, 2016, respectively	3	1
Additional paid-in capital	168,018	3,551
Accumulated other comprehensive loss	(149)
Accumulated deficit	(97,878)	(59,171)
Total stockholders’ equity (deficit)	69,994	(55,619)
Total liabilities, convertible preferred stock, and stockholders’ equity (deficit)	$ 130,715	105,087
Series A-1 convertible preferred stock
Current liabilities:
Convertible redeemable preferred shares, carrying Amount		26,336
Series B-1 convertible preferred stock
Current liabilities:
Convertible redeemable preferred shares, carrying Amount		35,232
Series C-1 convertible preferred stock
Current liabilities:
Convertible redeemable preferred shares, carrying Amount		$ 32,882

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2017	Dec. 31, 2016
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	25,000,000	0
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	175,000,000	95,000,000
Common stock, shares issued	22,765,017	1,294,352
Common stock, shares outstanding	22,765,017	1,294,352
Series A-1 convertible preferred stock
Convertible preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Convertible preferred stock, shares authorized	0	25,085,153
Convertible preferred stock, shares issued	0	25,085,153
Convertible preferred stock, shares outstanding	0	25,085,153
Series B-1 convertible preferred stock
Convertible preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Convertible preferred stock, shares authorized	0	32,936,919
Convertible preferred stock, shares issued	0	32,936,919
Convertible preferred stock, shares outstanding	0	32,936,919
Series C-1 convertible preferred stock
Convertible preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Convertible preferred stock, shares authorized	0	14,674,062
Convertible preferred stock, shares issued	0	14,674,062
Convertible preferred stock, shares outstanding	0	14,674,062

Consolidated Statements of Oper

Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Condensed Consolidated Statements of Operations and Comprehensive Loss
Collaboration revenue	$ 17,545	$ 25,171	$ 10,359
Operating expenses:
Research and development	46,700	32,008	21,353
General and administrative	10,462	6,984	5,347
Total operating expenses	57,162	38,992	26,700
Other income:
Other income (expense)			(89)
Interest income	910	121	2
Total other income	910	121	(87)
Net loss	(38,707)	(13,700)	(16,428)
Other comprehensive loss:
Unrealized loss on marketable securities	(149)
Comprehensive loss	(38,856)	(13,700)	(16,428)
Net loss attributable to ordinary shareholders - basic	(38,707)	(13,700)	(16,428)
Net loss attributable to ordinary shareholders - diluted	$ (38,707)	$ (13,700)	$ (16,428)
Net loss per share attributable to common stockholders — basic and diluted	$ (3.22)	$ (10.82)	$ (13.43)
Weighted-average number of common shares used in net loss per share attributable to common stockholders — basic and diluted	12,022,733	1,266,758	1,223,457

Consolidated Statements of Conv

Consolidated Statements of Convertible Preferred Stock - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Series A-1 convertible preferred stock
Increase (Decrease) in Temporary Equity
Balance (in shares)	25,085,153	25,085,153	25,085,153
Balance	$ 26,336	$ 26,336	$ 26,336
Balance (in shares)	0	25,085,153	25,085,153
Balance		$ 26,336	$ 26,336
Conversion of preferred stock into common stock (in shares)	(25,085,153)
Conversion of preferred stock into common stock	$ (26,336)
Series B-1 convertible preferred stock
Increase (Decrease) in Temporary Equity
Balance (in shares)	32,936,919	9,410,551
Balance	$ 35,232	$ 9,960
Issuance of convertible preferred stock (in shares)		23,526,368	9,410,551
Issuance of convertible preferred stock, net of issuance costs		$ 25,272	$ 9,960
Balance (in shares)	0	32,936,919	9,410,551
Balance		$ 35,232	$ 9,960
Conversion of preferred stock into common stock (in shares)	(32,936,919)
Conversion of preferred stock into common stock	$ (35,232)
Series C-1 convertible preferred stock
Increase (Decrease) in Temporary Equity
Balance (in shares)	14,674,062
Balance	$ 32,882
Issuance of convertible preferred stock (in shares)		14,674,062
Issuance of convertible preferred stock, net of issuance costs		$ 32,882
Balance (in shares)	0	14,674,062
Balance		$ 32,882
Conversion of preferred stock into common stock (in shares)	(14,674,062)
Conversion of preferred stock into common stock	$ (32,882)

Consolidated Statements of Con6

Consolidated Statements of Convertible Preferred Stock (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Over allotment option
Issuance costs	$ 55
Series B-1 convertible preferred stock
Issuance costs		$ 50	$ 168
Series C-1 convertible preferred stock
Issuance costs		$ 218

Consolidated Statements of Stoc

Consolidated Statements of Stockholders’ (Deficit) Equity - USD ($) $ in Thousands	Common StockIPO	Common StockOver allotment option	Common Stock	Additional paid-in capitalIPO	Additional paid-in capitalOver allotment option	Additional paid-in capital	Accumulated Other Comprehensive Income (Loss)	Accumulated deficit	IPO	Over allotment option	Total
Balance (in shares) at Dec. 31, 2014			1,223,457
Balance at Dec. 31, 2014			$ 1			$ 2,429		$ (29,043)			$ (26,613)
Increase (Decrease) in Stockholders' Equity
Stock-based compensation expense						349					349
Net loss								(16,428)			(16,428)
Balance (in shares) at Dec. 31, 2015			1,223,457
Balance at Dec. 31, 2015			$ 1			2,778		(45,471)			(42,692)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)			70,895
Exercise of stock options						105					105
Stock-based compensation expense						668					668
Net loss								(13,700)			(13,700)
Balance (in shares) at Dec. 31, 2016			1,294,352
Balance at Dec. 31, 2016			$ 1			3,551		(59,171)			(55,619)
Increase (Decrease) in Stockholders' Equity
Issuance of stock (in shares)	5,000,000	51,977
Issuance of stock				$ 67,420	$ 725				$ 67,420	$ 725
Conversion of preferred shares into common stock (in shares)			16,154,671
Conversion of preferred shares into common stock			$ 2			94,448					$ 94,450
Exercise of stock options (in shares)											244,946
Exercise of stock options and warrants (in shares)			264,017
Exercise of stock options and warrants						452					$ 452
Stock-based compensation expense						1,422					1,422
Other comprehensive loss							$ (149)				(149)
Net loss								(38,707)			(38,707)
Balance (in shares) at Dec. 31, 2017			22,765,017
Balance at Dec. 31, 2017			$ 3			$ 168,018	$ (149)	$ (97,878)			$ 69,994

Consolidated Statements of Sto8

Consolidated Statements of Stockholders’ (Deficit) Equity (Parenthetical) - USD ($) $ in Thousands	Aug. 02, 2017	Jul. 03, 2017	Dec. 31, 2017
IPO
Issuance costs		$ 7,580	$ 7,580
Over allotment option
Issuance costs	$ 55

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities
Net loss	$ (38,707)	$ (13,700)	$ (16,428)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation	928	655	297
Net amortization of premiums and discounts on investments	(293)
Stock-based compensation	1,422	668	349
Change in deferred rent	(159)	102
Changes in operating assets and liabilities:
Accounts receivable	267	(411)	1,197
Prepaid expenses and other current assets	(1,200)	(245)	(240)
Other assets	60	(60)
Accounts payable	1,335	(325)	926
Accrued expenses	3,562	1,726	544
Deferred revenue	(9,894)	43,178	3,719
Net cash provided by (used in) operating activities	(42,679)	31,588	(9,636)
Cash flows from investing activities
Purchase of marketable securities	(145,701)
Maturities of marketable securities	47,220
Purchase of property and equipment	(1,143)	(1,084)	(619)
Change in restricted cash			(164)
Net cash used in investing activities	(99,624)	(1,084)	(783)
Cash flows from financing activities
Proceeds from exercise of stock options and warrants	452	105
Net cash provided by financing activities	68,597	58,259	9,960
Increase (decrease) in cash and cash equivalents	(73,706)	88,763	(459)
Cash and cash equivalents, beginning of period	100,297	11,534	11,993
Cash and cash equivalents, end of period	26,591	100,297	11,534
Supplemental disclosures of non-cash activities:
Conversion of preferred stock to common stock upon closing of initial public offering	94,450
Purchases of property and equipment included in accounts payable and accrued expenses	35	414
Purchases of property and equipment reimbursed by landlord		356
Series B-1 convertible preferred stock
Cash flows from financing activities
Net proceeds from sale of convertible preferred stock		25,272	$ 9,960
Series C-1 convertible preferred stock
Cash flows from financing activities
Net proceeds from sale of convertible preferred stock		$ 32,882
IPO
Cash flows from financing activities
Net proceeds from issuance of stock	67,420
Over allotment option
Cash flows from financing activities
Net proceeds from issuance of stock	$ 725

Nature of business and basis of

Nature of business and basis of presentation	12 Months Ended
	Dec. 31, 2017
Nature of business and basis of presentation
Nature of business and basis of presentation	1. Nature of Business and Basis of Presentation Mersana Therapeutics, Inc. (the Company) is a clinical stage company located in Cambridge, Massachusetts. The Company is advancing a proprietary pipeline of targeted oncology therapeutics leveraging its Dolaflexin® antibody drug conjugate (ADC) platform. Mersana's first product candidate, XMT-1522, an ADC designed to address a much broader population of patients with HER2-expressing tumors than served by currently approved HER2 therapies, is currently in a Phase 1 dose escalation study. The Company’s second product candidate, XMT-1536, an ADC targeting NaPi2b, an antigen broadly expressed in certain types of cancer, is also in a Phase 1 dose escalation study. In addition, we have established a strategic partnership with Takeda Pharmaceutical Company Limited, or Takeda, under which they obtained rights to XMT‑1522 outside of the United States and Canada. We have also established strategic research and development partnerships with Takeda and Merck KGaA for the development and commercialization of additional ADC product candidates against a limited number of targets selected by our partners based on our Dolaflexin platform. The Company is subject to risks common to companies in the biotechnology industry, including but not limited to, risks of failure of preclinical studies and clinical trials, the need to obtain marketing approval for any drug product candidate that it may identify and develop, the need to successfully commercialize and gain market acceptance of its product candidates, dependence on key personnel, protection of proprietary technology, compliance with government regulations, development of technological innovations by competitors, reliance on third party manufacturers and ability to transition from pilot-scale production to large-scale manufacturing of products. On July 3, 2017, the Company completed an initial public offering (IPO), in which the Company issued and sold 5,000,000 shares of its common stock at a public offering price of $ 15.00 per share, for aggregate gross proceeds of $75,000. The Company received $67,420 in net proceeds after deducting $7,580 of underwriting discounts and commissions and offering costs. On August 2, 2017, the Company issued and sold 51,977 shares of common stock at $15.00 per share for gross proceeds of $780 upon the partial exercise of the underwriters’ overallotment option. The Company received net proceeds of $725 after deducting $55 in underwriting discounts and commissions. Upon the closing of the IPO, all of the outstanding shares of convertible preferred stock automatically converted into 16,154,671 shares of common stock. In connection with the IPO, the Company amended and restated its certificate of incorporation to change the authorized capital stock to 175,000,000 shares designated as common stock and 25,000,000 shares designated as preferred stock, all with a par value of $0.0001 per share. In connection with preparing for its IPO, the Company effected a 1-for-4.5 reverse stock split of the Company’s common stock. The reverse stock split became effective on June 15, 2017. The par value and authorized shares of common stock and convertible preferred stock were not adjusted as a result of the reverse stock split. All share and per share amounts in the financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital. The financial statements have also been retroactively adjusted to reflect adjustments to the conversion ratio for each series of convertible preferred stock effected in connection with the reverse stock split. The Company has incurred net losses since inception. The Company’s net loss was $38,707, $13,700 and $16,428 for the years ended December 31, 2017, 2016 and 2015. The Company expects to continue to incur operating losses for at least the next several years. As of December 31, 2017, the Company had an accumulated deficit of $97,878. The future success of the Company is dependent on its ability to identify and develop its product candidates, and ultimately upon its ability to attain profitable operations. The Company has devoted substantially all of its financial resources and efforts to research and development and general and administrative expense to support such research and development. The Company’s net losses may fluctuate significantly from quarter to quarter and year to year. Net losses and negative cash flows have had, and will continue to have, an adverse effect on the Company’s stockholders’ equity and working capital. The Company believes that its existing cash, cash equivalents and marketable securities as of December 31, 2017, will enable it to fund its operating plan through at least mid-2019, which the Company expects will allow it to achieve initial clinical data readouts for its two lead development programs. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and the rules and regulations of the Securities and Exchange Commission (SEC). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB). All dollar amounts, except per share data in the text and tables herein, are stated in thousands unless otherwise indicated.

Summary of significant accounti

Summary of significant accounting policies	12 Months Ended
	Dec. 31, 2017
Summary of significant accounting policies
Summary of significant accounting policies	2. Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements include those of the Company and its subsidiary, Mersana Securities Corp., which was established in December 2016. All intercompany balances and transactions have been eliminated. Use of Estimates The preparation of the Company's consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity, revenue, expenses and related disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company's management evaluates its estimates, which include, but are not limited to, management's judgments with respect to the separate units of accounting and best estimate of selling price of those units of accounting within its revenue arrangements, accrued expenses, valuation of stock-based awards and income taxes. Actual results could differ from those estimates. The Company utilized significant estimates and assumptions in determining the fair value of its common stock prior to the Company’s IPO. The Company has utilized various valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately‑Held Company Equity Securities Issued as Compensation , the Practice Aid, to estimate the fair value of its common stock. Each valuation methodology includes estimates and assumptions that require the Company’s judgment. These estimates and assumptions include a number of objective and subjective factors, including external market conditions, the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to the Company’s common stock at the time of, and the likelihood of, achieving a liquidity event, such as an initial public offering or sale. Significant changes to the key assumptions used in the valuations could result in different fair values of common stock at each valuation date. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision-maker in deciding how to allocate resources and assess performance. The Company and the Company's chief operating decision-maker, the Company's chief executive officer, view the Company's operations and manage its business as a single operating segment, which is the business of discovering and developing ADCs. Research and Development The Company expenses all costs incurred in performing research and development activities. Research and development expenses include salaries and benefits, materials and supplies, preclinical expenses, manufacturing expenses, stock-based compensation expense, depreciation of equipment, contract services and other outside expenses. Costs of certain development activities, such as manufacturing, are recognized based on an evaluation of the progress to completion of specific tasks. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development costs. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized. The capitalized amounts are expensed as the related goods are delivered or the services are performed. Costs associated with collaboration agreements are included in research and development expense. Revenue Recognition The Company recognizes revenue from collaboration arrangements in accordance with FASB ASC Topic 605, Revenue Recognition (ASC 605). Accordingly, revenue is recognized when all of the following criteria are met: · Persuasive evidence of an arrangement exists; · Delivery has occurred or services have been rendered; · The seller's price to the buyer is fixed or determinable; and · Collectibility is reasonably assured. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue in the consolidated balance sheets. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current liabilities. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion. Multiple element arrangements The Company analyzes its strategic partnerships that include multiple element arrangements based on the guidance in FASB ASC Topic 605-25, Revenue Recognition—Multiple Element Arrangements , or ASC 605-25. Pursuant to the guidance in ASC 605-25, the Company evaluates multiple element arrangements to determine i) the deliverables included in the arrangement and (ii) whether the individual deliverables represent separate units of accounting or whether they must be accounted for as a combined unit of accounting. This evaluation requires subjective determinations and requires management to make judgments about the individual deliverables and whether such deliverables are separable from the other aspects of the contractual relationship. Deliverables are considered separate units of accounting provided that: (i) the delivered item(s) has value to the customer on a standalone basis and (ii) if the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in the Company's control. In assessing whether an item has standalone value, the Company considers factors such as the research, manufacturing and commercialization capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. In addition, the Company considers whether the collaboration partner can use the deliverable(s) for their intended purpose without the receipt of the remaining element(s), whether the value of the deliverable is dependent on the undelivered item(s) and whether there are other vendors that can provide the undelivered element(s). Options are considered substantive if, at the inception of the arrangement, the Company is at risk as to whether the collaboration partner will choose to exercise the option. Factors that the Company considers in evaluating whether an option is substantive include the cost to exercise the option, the overall objective of the arrangement, the benefit the collaborator might obtain from the arrangement without exercising the option and the likelihood the option will be exercised. When an option is considered substantive, the Company does not consider the option or item underlying the option to be a deliverable at the inception of the arrangement and the associated option fees are not included in the allocable consideration, assuming the option is not priced at a significant and incremental discount. Conversely, when an option is not considered substantive, the Company would consider the option including other deliverables contingent upon the exercise of the option, to be a deliverable at the inception of the arrangement and a corresponding amount would be included in the allocable arrangement consideration. Notwithstanding whether the option is considered substantive or non-substantive, if the price of the option includes a significant incremental discount, the discount would be included as a deliverable at the inception of the arrangement. Allocation of arrangement consideration Arrangement consideration that is fixed or determinable is allocated among the separate units of accounting using the relative selling price method. Then, the applicable revenue recognition criteria in ASC 605-25 are applied to each of the separate units of accounting in determining the appropriate period and pattern of recognition. The Company determines the selling price of a unit of accounting following the hierarchy of evidence prescribed by ASC 605-25. Accordingly, the Company determines the estimated selling price for units of accounting within each arrangement using vendor-specific objective evidence (VSOE) of selling price, if available, third-party evidence (TPE) of selling price if VSOE is not available, or best estimate of selling price (BESP) if neither VSOE nor TPE is available. The Company typically uses BESP to estimate the selling price, since it generally does not have VSOE or TPE of selling price for its units of accounting. Determining the BESP for a unit of accounting requires significant judgment. In developing the BESP for a unit of accounting, the Company considers applicable market conditions and relevant entity-specific factors, including factors that were contemplated in negotiating the agreement with the customer and estimated costs. The Company validates the BESP for units of accounting by evaluating whether changes in the key assumptions used to determine the BESP will have a significant effect on the allocation of arrangement consideration between multiple units of accounting. Pattern of recognition The Company recognizes arrangement consideration allocated to each unit of accounting when all of the revenue recognition criteria in ASC 605 are satisfied for that particular unit of accounting. Deliverables under collaboration agreements generally consist of licenses and research and development services. License revenue is recognized when the license is delivered when it is determined to have standalone value from the undelivered elements of the arrangement. If the license does not have standalone value, the amounts allocated to the license will be combined with the related undelivered items as a single unit of accounting. The revenue recognition of a combined unit of accounting typically follows the pattern of revenue of the last delivered item in the combined accounting unit. The Company recognizes the amounts associated with research and development services and other service related deliverables over the associated period of performance. If there is no discernable pattern of performance or objectively measurable performance measures do not exist, then the Company recognizes revenue under the arrangement on a straight-line basis over the period the Company is expected to complete its performance obligations. Conversely, if the pattern of performance in which the service is provided to the customer can be determined and objectively measurable performance exists, then the Company recognizes revenue under the arrangement using the proportional performance method. The Company recognizes revenue associated with license options upon exercise of the option, if the underlying license has standalone value from the other deliverables to be provided subsequent to delivery of the license. If the license does not have standalone value, the amounts allocated to the license option will be combined with the related undelivered items as a single unit of accounting. Revenue recognized is limited to the lesser of the cumulative amount of payments received or the cumulative revenue earned determined using the straight-line method or proportional performance, as applicable, as of the period end date. Recognition of milestones and royalties At the inception of each arrangement that includes milestone payments, the Company evaluates whether each milestone is substantive and at-risk. This evaluation includes an assessment of whether (a) the consideration is commensurate with either (1) the entity's performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting at least in part from the entity's performance to achieve the milestone, (b) the consideration relates solely to past performance, and (c) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. The Company evaluates factors such as the scientific, regulatory, commercial, and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required to achieve the respective milestone, and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement in making this assessment. On the milestone achievement date, assuming all other revenue recognition criteria are met and the milestone is deemed substantive and at-risk, the Company recognizes the payment as collaboration revenue. For milestones that are not deemed substantive and at-risk, where payment is reasonably assured, the Company recognizes the milestone payment over the remaining service period. The Company will recognize royalty revenue, if any, in the period of sale of the related product(s), based on the underlying contract terms, provided that the reported sales are reliably measurable and the Company has no remaining performance obligations, assuming all other revenue recognition criteria are met. Collaborative arrangements The Company records the elements of its collaboration agreements that represent joint operating activities in accordance with ASC Topic 808, Collaborative Arrangements (ASC 808). Accordingly, the elements of the collaboration agreements that represent activities in which both parties are active participants and to which both parties are exposed to the significant risks and rewards that are dependent on the commercial success of the activities, are recorded as collaborative arrangements. The Company considers the guidance in ASC Topic 605-45, Revenue Recognition—Principal Agent Considerations (ASC 605-45) in determining the appropriate treatment for the transactions between the Company and its collaborative partner and the transactions between the Company and third parties. Generally, the classification of transactions under the collaborative arrangements is determined based on the nature and contractual terms of the arrangement along with the nature of the operations of the participants. To the extent revenue is generated from a collaboration, the Company will recognize its share of the net sales on a gross basis if it is deemed to be the principal in the transactions with customers, or on a net basis if it is instead deemed to be the agent in the transactions with customers, consistent with the guidance in ASC 605-45. Fair Value Measurements Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability between market participants at measurement dates. ASC Topic 820 Fair Value Measurement (ASC 820), establishes a three-level valuation hierarchy for instruments measured at fair value. The hierarchy is based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: Level 1—Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity, or a remaining maturity at the time of purchase, of three months or less to be cash equivalents. The Company invests excess cash primarily in money market funds, commercial paper and government agency securities, which are highly liquid and have strong credit ratings. These investments are subject to minimal credit and market risks. Cash and cash equivalents are stated at cost, which approximates market value. Marketable Securities Short-term marketable securities consist of investments with maturities greater than three months and less than one year from the balance sheet date. Long-term marketable securities consist of investments with maturities greater than one year that are not expected to be used to fund current operations. The Company classifies all of its marketable securities as available-for-sale. Accordingly, these investments are recorded at fair value. Amortization and accretion of discounts and premiums are recorded as interest income within other income. Unrealized gains and losses on available-for-sale securities are included in other comprehensive loss as a component of stockholders’ equity (deficit) until realized. Restricted Cash Restricted cash of $371 is recorded in other non-current assets as of December 31, 2017 and 2016 and includes amounts held as security deposits for a standby letter of credit related to a facility lease and a corporate credit card program. Accounting for Stock-based Compensation The Company accounts for its stock-based compensation in accordance with ASC Topic 718 Compensation— Stock Compensation (ASC 718). ASC 718 requires all stock-based payments to employees and directors to be recognized as expense in the statements of operations based on their grant date fair values. Expense related to stock awards to non-employees is required to be recognized in the statement of operations based on the awards' vesting date fair values. The Company estimates the fair value of options granted using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires inputs based on certain subjective assumptions, including (a) the expected stock price volatility, (b) the calculation of expected term of the award, (c) the risk-free interest rate and (d) expected dividends. Due to the lack of a public market for the Company's common stock prior to completion of the IPO and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The historical volatility is calculated based on a period of time commensurate with the expected term assumption. The computation of expected volatility is based on the historical volatility of a representative group of companies with similar characteristics to the Company, including stage of product development and life science industry focus. The Company uses the simplified method as prescribed by the SEC Staff Accounting Bulletin No. 107, Share-Based Payment , to calculate the expected term for options granted to employees as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. For options granted to non-employees, the Company utilizes the contractual term of the arrangement as the basis for the expected term assumption. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to do so. There were significant judgments and estimates inherent in the determination of the fair value of our common stock prior to the closing of the IPO. These estimates and assumptions include a number of objective and subjective factors, including external market conditions, the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to its common stock at the time of, and the likelihood of, achieving a liquidity event, such as an IPO or sale. Through December 31, 2016, the Company was required to estimate forfeitures at the time of grant, and revise those estimates in subsequent periods if actual forfeitures differ from its estimates. The Company used historical data to estimate post-vesting forfeitures and recorded stock-based compensation expense only for those awards that were expected to vest. To the extent that actual forfeitures differ from estimates, the difference was recorded as a cumulative adjustment in the period the estimates were revised. Stock-based compensation expense recognized in the financial statements is based on awards that were ultimately expected to vest. The fair value of stock-based payments was recognized as expense, net of estimated forfeitures, over the requisite service period which is generally the vesting period. In the first quarter of 2017, the Company made an accounting policy election to recognize forfeitures as they occur upon adoption of guidance per ASU No. 2016-09. The adoption of this ASU did not have a material impact on the Company's financial statements. Net Loss per Share Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares and potentially dilutive securities outstanding for the period determined using the treasury stock and if-converted methods. For purposes of the diluted net loss per share calculation, convertible preferred stock, warrants to purchase common stock and options to purchase common stock are considered to be potentially dilutive securities, but are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive and therefore, basic and diluted net loss per share were the same for all periods presented. The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to include them would be anti-dilutive (in common stock equivalent shares): Year ended December 31, 2017 2016 2015 Series A-1 convertible preferred stock — 5,574,467 5,574,467 Series B-1 convertible preferred stock — 7,319,307 2,091,229 Series C-1 convertible preferred stock — 3,260,897 — Warrants 110,365 129,491 129,491 Stock options 3,205,485 2,901,985 2,146,436 3,315,850 19,186,147 9,941,623 Property and Equipment Property and equipment is stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life of each asset as follows: Computer equipment, office equipment and software 3 years Laboratory equipment 5 years Leasehold improvements Shorter of useful life or life of lease Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are eliminated from the balance sheet and related gains or losses are reflected in the statement of operations. There were no material retirements or sales of assets during the years ended December 31, 2017, 2016 and 2015. The Company reviews its property and equipment for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. If an impairment review is performed to evaluate an asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the asset to its carrying value. If the carrying amount of the asset exceeds its estimated undiscounted future net cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. The Company did not recognize impairment charges during the years ended December 31, 2017, 2016 and 2015. Repairs and maintenance costs are expensed as incurred. Deferred Initial Public Offering Costs The Company capitalized deferred initial public offering (IPO) costs, which primarily consisted of direct, incremental legal and accounting fees, within other non-current assets. As of December 31, 2016, $60 of deferred issuance costs were incurred and capitalized. The deferred IPO costs were offset against IPO proceeds upon the consummation of the offering. Patent Costs The Company expenses patent application and related legal costs as incurred and classifies such costs as general and administrative expenses in the accompanying consolidated statements of operations. Income Taxes The Company accounts for income taxes using the liability method . The difference between the financial statement and tax basis of the assets and liabilities is determined annually. Deferred income tax assets and liabilities are computed using the tax laws and rates that are expected to apply for periods in which such differences reverse. Valuation allowances are established, if necessary, to reduce the deferred tax asset to the amount that will more likely than not be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Comprehensive Income (Loss) Comprehensive income (loss) is comprised of net loss and other comprehensive loss. For the year ended December 31, 2017, other comprehensive loss consisted of unrealized loss on marketable securities. For the years ended December 31, 2016 and 2015 comprehensive loss equaled net loss. Concentration of Credit Risk and Off-balance Sheet Risk The Company has no financial instruments with off-balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash equivalents and marketable securities. 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. The Company is not exposed to any significant concentrations of credit risk from these financial instruments. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued a new standard, ASU No. 2014-09, Revenue from Contracts with Customers (ASU No. 2014-09), as amended, which will supersede nearly all existing revenue recognition guidance. Under ASU No. 2014-09, an entity is required to recognize revenue upon transfer of promised goods or services to customers in an amount that reflects the expected consideration received in exchange for those goods or services. ASU No. 2014-09 defines a five-step process in order to achieve this core principle, which may require the use of judgment and estimates, and also requires expanded qualitative and quantitative disclosures relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, including significant judgments and estimates used. The FASB issued supplemental adoption guidance and clarification to ASU 2014-09 in March 2016, April 2016, May 2016, and December 2016 within ASU 2016-08 Revenue from Contracts with Customers: Principal vs. Agent Considerations , ASU 2016-10 Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, ASU 2016-12 Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients, and ASU 2016-20 Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, respectively. The new standard permits adoption either by using (i) a full retrospective approach for all periods presented in the period of adoption or (ii) a modified retrospective approach with the cumulative effect of initially applying the new standard recognized at the date of initial application and providing certain additional disclosures. The new standard is effective for annual reporting periods beginning after December 15, 2017. The Company adopted the new standard effective January 1, 2018 using the modified retrospective approach. The Company is analyzing the potential impact the new standard may have on its historical revenue recognition under its agreements with Takeda and Merck KGaA. Since inception, the Company has recognized approximately $42,500 and $12,800 in revenue under its agreements with Takeda and Merck KGaA, respectively. This analysis includes, but is not limited to, reviewing variable compensation including the inclusion of milestone payments in the transaction price, evaluating whether a significant financing component is present, and assessing the allocation of the transaction price to one or more of the performance obligations in the agreements. The Company has substantially completed this analysis. However, the Company is still finalizing its assessment of the potential impact of adoption as of January 1, 2018. The Company will complete its assessment in the first quarter of 2018. The adoption of the new standard may have a significant impact on the allocation of transaction price as compared to historical accounting, however final conclusions will be reached during the quarter ended March 31, 2018. Additionally, the Company expects that the adoption of the new standard will have a significant change on the financial statement disclosures In January 2016, the FASB issued ASU No. 2016-01 Financial Instruments (ASU No. 2016-01) related to the recording of financial assets and financial liabilities. Under the amended guidance, equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) are to be measured at fair value with changes in fair value recognized in net income (loss). However, an entity has the option to measure equity investments without readily determinable fair values either (i) at fair value or (ii) at cost, adjusted for changes in observable prices minus impairment. Changes in measurement under either alternative will be recognized in net income (loss). The amended guidance became effective January 1, 2018. Based on the Company’s current investment holdings, the adoption of this new standard is not expected to have a material impact on its consolidated financial position or results of operations; however, it will result in the reclassification of where the Company recognizes changes in fair value related to certain investments prospectively. In February 2016, the FASB issued ASU No. 2016-02, Leases (ASU No. 2016-02), which will replace the existing guidance in ASC 840, Leases. The updated standard aims to increase transparency and comparability among organizations by requiring lessees to recognize lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing arrangements. This standard is effective for the Company in the fiscal year beginning after December 15, 2018, but early adoption is permissible. The Company is currently evaluating the potential impact that ASU No. 2016-02 may have on its financial position and results of operations. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (ASU No. 2016-09), which amends ASC Topic 718, Compensation—Stock Compensation. The new standard identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the consolidated statements of cash flows. The amendments are effective for annual reporting periods (including interim reporting periods within those years) beginning after December 15, 2016. The Company adopted this ASU effective January 1, 2017. The adoption of this ASU did not have a material impact on the Company's financial statements. Upon adoption of ASU No. 2016-09, the Company accounts for forfeitures as they occur. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments . The new standard clarifies certain aspects of the statement of cash flows, including the classification of contingent consideration payments made after a business combination and several other clarifications not currently applicable to the Compan

Collaboration agreements

Collaboration agreements	12 Months Ended
	Dec. 31, 2017
Collaboration agreements
Collaboration agreements	3. Collaboration Agreements Takeda strategic research and development partnership In March 2014, the Company entered into a Research Collaboration and Commercial License Agreement with Takeda through its wholly owned subsidiary, Millennium Pharmaceuticals, Inc. (the 2014 Agreement). The 2014 Agreement was amended in January 2015 (the 2015 Amended Agreement) and amended and restated in January 2016 (the 2016 Restated Agreement). The agreements provide Takeda with the right to develop ADCs directed to a total of seven exclusive targets over a specified period of time. Takeda will be responsible for the product development and marketing of any products resulting from this collaboration. The 2014 Agreement was structured to allow Takeda the right to evaluate two targets upon payment of a per target technology access fee with the right to receive a development and commercialization license upon the exercise of an option with an additional payment to the Company. The 2014 Agreement also provided a limited replacement right for a target. The 2015 Amended Agreement granted Takeda the right to develop two additional targets and also gave Takeda an additional limited replacement right. The 2016 Restated Agreement provided Takeda with the right to develop three additional targets. Under the terms of the 2014 Agreement, the Company was eligible to receive a nonrefundable technology access fee of $500 per target, payable upon designation of the target, and an option exercise fee of $1,300 per target to receive a development and commercialization license. The Company received an upfront payment of $1,150 representing the $500 technology access fee for the first designated target and a $650 nonrefundable payment creditable against the $1,300 option exercise payment for the development and commercialization license for the first designated target. In 2014, the Company also received the remaining $650 option exercise fee for the first designated target and the $500 technology access fee for the second designated target. In connection with the 2015 Amended Agreement, the Company received a nonrefundable payment of $9,000 for the right to develop two additional targets. Takeda is required to pay $500 in order to utilize the second limited replacement right. Under the terms of the 2016 Restated Agreement, the Company received a nonrefundable payment of $13,500 for the right to develop three additional targets, bringing the total to seven. For all targets under the 2015 Amended Agreement and the 2016 Restated Agreement, the Company grants a research, development and commercialization license upon the designation of a target, including targets initially covered by the 2015 Amended Agreement. Through December 31, 2017 Takeda has designated four targets and received development and commercialization licenses for the first, third and fourth designated targets. In order to receive a development and commercialization license for the second designated target, Takeda must exercise its option and make a payment of $1,300. Takeda still has three targets and the limited replacement rights for two targets available. Takeda advanced one target to portfolio entry and commenced IND-enabling studies. Takeda has discontinued efforts on a previously designated target. Under the terms of the agreements, the Company and Takeda develop research plans to evaluate Takeda's antibodies as ADCs incorporating the Company's technology. The Company receives reimbursement for its efforts under the research plans. The goal of the research plans is to provide Takeda with sufficient information to formally nominate a development candidate and begin Investigational New Drug Application, or IND, enabling studies or cease development on the designated target. If products are successfully developed and commercialized, the Company is entitled to receive aggregate milestones of up to $1,063,300 for all seven designated targets consisting of $107,800 in development milestones, $325,000 in regulatory milestones, and $630,500 in commercial milestones. The total milestones payable on each of the first and second designated targets are $136,000 and the total milestones payable on each of the third, fourth, fifth, sixth and seventh designated target are $158,300. There are four individual development milestones per target, which are payable upon either the initiation of a GLP toxicology study or the filing of an IND application (depending upon the designated target), and the initiation of Phase 1 through Phase 3 clinical trials. There are six or eight individual regulatory milestones per target, depending on the target. These are payable upon regulatory submissions, regulatory approvals and pricing approvals, as applicable, for the U.S., European Union and Japanese markets and regulatory approvals for both a second and third indication. There are six individual commercial milestones, which are payable upon the first commercial sale in each of the U.S., European Union and Japanese markets and upon the attainment of three separate defined thresholds for annual net sales. The next potential milestone payment the Company will be eligible to receive is either a development milestone of $500 related to a GLP toxicology study or a development milestone of $750 related to the filing of an IND, depending upon the designated target. The Company is also entitled to receive royalties on product sales, if any, during the applicable royalty term. Royalties payable on the first and second designated targets are in the mid single digits and royalties payable on the third, fourth, fifth, sixth and seventh designated target are in the mid to high single digits. In connection with the 2016 Restated Agreement, the Company may elect to exercise an option to co-develop and co-commercialize one product incorporating either Takeda's third, fourth, fifth, sixth or seventh target in the United States for a payment of $15,000. If the Company elects to exercise the option to co-develop and co-commercialize a product, the Company will share in 50% of the profits related to United States. The Company will be responsible for 50% of costs incurred specifically for the United States and 30% of global development costs. Any costs incurred specifically for a foreign country will be borne 100% by Takeda. If the Company elects to co-develop and co-commercialize a product, certain regulatory milestones and royalties related to the United States for that target would not be paid by Takeda. Unless earlier terminated, the 2016 Restated Agreement will expire upon the expiration of the last royalty term for a product under the agreement, after which time, Takeda will have a perpetual, royalty-free license. Except with respect to the target antigen of a product for which the Company exercised its option to co-develop and co-commercialize in the United States, Takeda may terminate the 2016 Restated Agreement in its entirety or with respect to any target for convenience upon 45 days' prior written notice. Each party may terminate the 2016 Restated Agreement in its entirety upon bankruptcy or similar proceedings of the other party or upon an uncured material breach of the agreement by the other party. However, if such breach only relates to one target, the agreement may only be terminated with respect to such target. Takeda XMT-1522 strategic partnership In January 2016, the Company entered into a Development Collaboration and Commercial license Agreement with Takeda through its wholly owned subsidiary, Millennium Pharmaceuticals, Inc. for the development and commercialization of XMT-1522 (the XMT-1522 Agreement). Under the XMT-1522 Agreement, Takeda was granted the exclusive right to commercialize XMT-1522 outside of the United States and Canada. Under the XMT-1522 Agreement, the Company is responsible for conducting certain Phase 1 development activities for XMT-1522, including the ongoing Phase 1 clinical study, at its own expense. Takeda has the option to conduct Phase 1 development activities at its own expense within its territory. The parties will collaborate on the further development of XMT-1522 in accordance with a global development plan (Post-Phase 1 Development). The parties will share equally all clinical stage manufacturing costs and any Post-Phase 1 Development costs incurred in the performance of activities for the purpose of obtaining regulatory approval in either the United States or Canada and in certain major markets in the rest of the world. Each party will be responsible for all Post-Phase 1 Development costs incurred in the performance of activities solely for the purpose of obtaining regulatory approval in such party's territory. Each party may conduct independent development of XMT-1522, subject to certain restrictions. The Company received an upfront payment of $26,500 upon execution of the XMT-1522 Agreement. In addition, the Company was entitled to a milestone payment of $20,000 upon achievement of the IND Clearance Date. The Company achieved the IND Clearance Date in October 2016. Accordingly, the right to credit a portion of the upfront payment lapsed and the Company received the $20,000 milestone payment in October 2016. In addition to the milestone payment upon achievement of the IND Clearance Date, the Company is entitled to receive future development, regulatory and commercial milestones of up to $288,000 consisting of $87,000 of development milestones, $128,000 of regulatory milestones and $73,000 of commercial milestones, as well as royalties in the low to mid teens on net sales of XMT-1522 in Takeda's territory during the applicable royalty term. There are development milestones payable upon the achievement of nine separate events: the initiation of Phase 2 clinical trials and Phase 3 clinical trials for four separate specified patient populations and the initiation of a Phase 3 clinical trial for one additional unspecified patient population. There are 14 regulatory milestones, which are payable upon regulatory submissions, regulatory approvals and pricing approvals, as applicable, for the U.S., European Union and Japanese markets for up to four separate patient populations and multiple label indications. In addition, a regulatory milestone is payable upon the receipt of regulatory and pricing approval in two specified markets other than the United States, the European Union or Japan. There are three individual commercial milestones, which are payable upon the attainment of certain thresholds for annual net sales. The next potential milestone the Company will be eligible to receive is a development milestone of $12,000 related to the initiation of a Phase 2 clinical trial. Under the XMT-1522 Agreement, Takeda committed to make equity investments in the Company of up to $20,000 in the aggregate in either a qualified private financing or in connection with the Company's IPO at the same price paid by the investors in the qualified private financing or the price per share in the IPO. Takeda invested approximately $10,000 in the Company's Series C-1 financing in June 2016 and invested the remaining $10,000 in the Company's IPO. The XMT-1522 Agreement expires upon the expiration of the royalty term for XMT-1522, after which time, Takeda will have a perpetual, royalty-free license. However, Takeda may terminate the XMT-1522 Agreement in its entirety for convenience upon 30 days' prior written notice at any time up to the initiation of the first Phase 2 clinical study of XMT-1522 or upon 90 days' prior written notice following the initiation of the first Phase 2 clinical study of XMT-1522. Each party may terminate the XMT-1522 Agreement in its entirety upon bankruptcy or similar proceedings of the other party and in its entirety or on a country-by-country basis upon an uncured material breach of the agreement by the other party. Following termination, XMT-1522 will revert to the Company for further development and commercialization. Accounting for agreements In accordance with ASC 605-25, the Company identified the deliverables under the 2014 Agreement. The deliverables were determined to be (i) research license for the first designated target, (ii) exclusive development and commercialization license for the first designated target, (iii) research and development services under the research plan associated with the first designated target, (iv) replacement right for a designated target, (v) rights to future technological improvements, and (vi) providing joint research committee services. The Company determined that the option to obtain an exclusive development and commercialization license for the first designated target was not a substantive option for accounting purposes, primarily because Takeda had made an upfront nonrefundable payment of 50% of the option exercise fee. As a result, the exclusive development and commercialization license was considered a deliverable at the inception of the arrangement. In addition, the total option exercise fee of $1,300 related to the first designated target was included in the allocable consideration. Similarly, the Company concluded the option to replace a designated target was not a substantive option as there were no additional payments required in connection with the first replacement option. Conversely, the Company concluded that Takeda's ability to designate a second designated target was a substantive option as the designation of an additional target was at Takeda's option and was not required to pursue the development of the first designated target. The Company has determined that the research license for the first designated target and the research and development services under the research plan associated with the first designated target should be combined into one unit of accounting (the research license and related service) as the research license does not have standalone value from the research services as the research services are required for Takeda to obtain the benefit of the research license. The Company has concluded the research license and related services have standalone value from the other units of accounting. The exclusive commercial license, replacement right for a designated target, rights to future technological improvements and joint research committee services are not required for Takeda to realize the value of the initial research license and related services. Under the terms of the 2014 Agreement, the total arrangement consideration of $4,500 (which comprises the $500 upfront technology access payment, expected fees of $2,700 for the research services and $1,300 for the option exercise fee for the first designated target) was allocated to the units of accounting based on management's BESP. The Company determined the BESP for the research license and related research services based on the estimated selling price of a research license and an estimate of the overall effort to perform the research services and an estimated market rate for research services. In developing the BESP for the exclusive development and commercialization license, the replacement rights for a designated target and the future technological improvements, the Company considered other comparable transactions, the selling price for a research license and the probability that the future technology will be developed and utilized. The BESP for the joint research committee services was developed using an estimate of the time and costs incurred to participate in the committees. The Company applied the relative selling price allocation using these BESP, which resulted in the consideration being allocated as follows: $2,790 to the research license and related service for the first designated target, $1,125 related to the commercial license on the first designated target, $450 to the replacement right for a designated target, $45 to rights to future technological improvements and $90 to joint research committee services. In addition, Takeda paid $500 in 2014 for the technology access fee and research license associated with the second designated target. In connection with the 2015 Amended Agreement, the Company reassessed the units of accounting from the 2014 Agreement and identified incremental deliverables, resulting in the following units of accounting at the time of the 2015 Amended Agreement (i) exclusive license to the first designated target and related research services, (ii) research license to the second designated target and related research services, (iii) research license to the third designated target and related services, (iv) research license to the fourth designated target and related services, (v) replacement right to the first or second designated target, (vi) discount on the option for an exclusive development and commercialization license for the second designated target, (vii) option for exclusive development and commercialization license for the third designated target, (viii) option for an exclusive development and commercialization license for the fourth designated target, (ix) rights to future technological improvements and (x) joint research committee services. The Company concluded that the option for the exclusive development and commercialization license for the second designated target includes a significant incremental discount as the option exercise fee was at a discount to the then-current estimated selling price of an exclusive development and commercialization license for a designated target. The Company concluded the options to obtain exclusive development and commercialization licenses for the third and fourth designated targets were not substantive options as there were no additional payments required to exercise those options. Consistent with the assessment of the units of accounting under the 2014 Agreement, the research licenses (and the exclusive commercial license as it relates to the first designated target) have been combined with the related research services under the related research plan as the license does not have standalone value from the related research services. Upon execution of the 2015 Amended Agreement the total arrangement consideration of $16,697 (which comprises the $9,000 upfront payment, expected fees of $5,776 for the research services and $1,921 of remaining deferred revenue related to the initial 2014 Agreement) was allocated to the units of accounting based on management's BESP, which were developed using consistent methodologies to the 2014 Agreement, as follows: $4,308 to the exclusive development and commercialization license to the first designated target and related research services, $1,611 to each of the research licenses and related research services for the second, third and fourth designated targets, $388 to the replacement right on the first or second designated target, $524 to the discount on the exclusive license to the second designated target, $3,105 to each of the exclusive development and commercialization licenses on the third and fourth designated targets, $262 to rights to future technological improvements and $174 to joint research committee services. The Company has concluded that the 2016 Restated Agreement and the XMT-1522 Agreement should be accounted for as one arrangement due in part because the agreements are with the same party and were negotiated and executed contemporaneously. The Company reassessed the accounting units from the 2015 Amended Agreement and identified the additional deliverables and units of accounting. As such, the Company identified the units of accounting: (i) exclusive development and commercialization license to the first designated target and related research services, (ii) research license to the second designated target and related research services, (iii) discount on the exclusive development and commercialization license to the second designated target, (iv) exclusive development and commercialization license to the third designated target and related research services, (v) exclusive development and commercialization license to the fourth designated target and related research services, (vi) exclusive development and commercialization license to the fifth designated target and related research services, (vii) exclusive development and commercialization license to the sixth designated target and related research services, (viii) exclusive development and commercialization license to the seventh designated target and related research services, (ix) first replacement right for a designated target, (x) discount on the second replacement right to a designated target, (xi) rights to future technological improvements, (xii) joint research committee services, (xiii) XMT-1522 license and related services, and (xiv) joint research committee services for XMT-1522. Consistent with the assessment under the prior Takeda agreements, the Company has concluded that the license does not have standalone value from the research services and has accounted for each exclusive license and the related research services as a combined unit of accounting. In addition, in assessing the additional accounting units under the XMT-1522 Agreement, the Company concluded that the license to the Company's intellectual property and the related obligations to perform services, including Phase 1 development and transfer certain materials and know how related to the Company's manufacturing processes should be a combined unit of accounting. The license to the Company's intellectual property does not have standalone value from the services that the Company is obligated to perform. Takeda would not have the ability to realize the value of the license without the Company performing the related services. The Company has concluded that the Post-Phase 1 Development activities under the XMT-1522 Agreement represent joint operating activities in which both parties are active participants and of which both parties are exposed to significant risks and rewards that are dependent on the commercial success of the activities. Accordingly, the Company is accounting for the Post-Phase 1 Development activities in accordance with ASC No. 808, Collaborative Arrangements (ASC 808) and they are not considered revenue elements under ASC 605-25. For the years ended December 31, 2017 and 2016, the Company was billed approximately $3,408 and $340, respectively, from Takeda representing the Company's share of Post-Phase 1 Development costs incurred by Takeda. These amounts have been reflected as research and development costs in the consolidated statement of operations for the years ended December 31, 2017 and 2016. The Company did not perform any Post-Phase 1 Development activities or incur any associated costs during the years ended December 31, 2017 and 2016. The total allocable arrangement consideration for the 2016 Restated Agreement and the XMT-1522 Agreement was $50,089 comprised of the following: (i) nonrefundable upfront payment—$13,500, (ii) expected fees for the remaining research services—$9,515, (iii) remaining deferred revenue from the 2015 Amended Agreement—$7,498, (iv) non-creditable portion of the XMT-1522 upfront fee—$13,250, and (v) expected reimbursement for related services—$6,326. In the third quarter 2017, based on an assessment of the total costs to complete research services, the Company revised its estimate for (i) the expected fees for the remaining research services under the 2016 Restated Agreement to $4,160 and (ii) the expected reimbursement for the related services under the XMT-1522 Agreement to $7,740. The revised total allocable arrangement consideration for the 2016 Restated Agreement and the XMT-1522 Agreement is $46,148. Additionally, the Company has received approximately $800 in additional license consideration and research plan extension fees through December 2017, which has been included in total allocable arrangement consideration. The Company excluded from the initial allocable consideration $13,250 of the upfront fee under the XMT-1522 Agreement as it was contingent on the Company achieving IND Clearance before January 30, 2017. Upon achievement of the IND Clearance, which occurred in October 2016, the contingent consideration was included in the allocable consideration and the Company recognized the cumulative revenue that would have been recognized if the contingent consideration was included in allocable consideration at the inception of the agreements. The allocable arrangement consideration was allocated to the units of accounting based on the relative estimated selling prices of each unit of accounting. The Company utilized BESP for each accounting unit which was developed on a basis similar to the prior Takeda agreements. The BESP for units of accounting which include a license and research services, was developed using the estimated selling price of the license and an estimate of the overall effort to perform the research service and an estimated market rate for research services. The BESP for the discounts on exclusive license, replacement rights (or discounts thereon) and rights to future technological improvements were developed based on the estimated selling prices of a license, as well as considering the probability that additional technology would be made available or the probability the counterpart would utilize the technology or exercise the option. The BESP for the joint research committee services was developed using an estimate of the time and costs incurred to participate in the committees. The total allocable consideration, as revised in the third quarter 2017 and including contingent fees received after achieving IND Clearance in October 2016, was allocated to each unit of accounting as follows (i) exclusive development and commercialization license to the first designated target and related research services—$4,502, (ii) research license to the second designated target and related research services—$1,362, (iii) discount on the exclusive development and commercialization license to the second designated target—$553, (iv) exclusive development and commercialization license to the third designated target and related research services—$4,546, (v) exclusive development and commercialization license to the fourth designated target and related research services—$4,975, (vi) exclusive development and commercialization license to the fifth designated target and related research services—$4,975, (vii) exclusive development and commercialization license to the sixth designated target and related research services—$4,975, (viii) exclusive development and commercialization license to the seventh designated target and related research services—$4,975, (ix) first replacement right for a designated target—$3,685, (x) discount on the second replacement right to a designated target—$3,276, (xi) rights to future technological improvements—$1,843, (xii) joint research committee services—$157, (xiii) XMT-1522 license and related services—$39,901, and (xiv) XMT-1522 joint research committee services—$472. The Company will recognize revenue related to the combined units of accounting which include research licenses or an exclusive development and commercialization license (if the license option is exercised during the research term) and the related research services, over the estimated period of the research and development services using a proportional performance model. Revenue related to discounts on options will be recognized when the option is exercised, unless there are additional research services that the Company is required to perform related to the designated target or at the time the option right lapses. Revenue related to the replacement rights will be recognized over the research term of the replacement target once the replacement right is exercised or at the time the right lapses unused. Revenue related to future technological improvements and joint research committee services will be recognized ratably over the performance period, which is expected to be ten years and six years, respectively. The Company will reassess the estimated remaining term at each subsequent reporting period. The Company has evaluated all of the development, regulatory and commercial milestones that may be received in connection with the Takeda agreements. In evaluating if a milestone is substantive, the Company assesses whether: (i) the consideration is commensurate with either the Company's performance to achieve the milestone or the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the Company's performance to achieve the milestone, (ii) the consideration relates solely to past performance, and (iii) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. With the exception of the $20,000 milestone payment due upon achievement of IND Clearance under the XMT-1522 Agreement, all development and regulatory milestones are considered substantive on the basis of the contingent nature of the milestone, specifically reviewing factors such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the milestone as well as the level of effort and investment required. Accordingly, such amounts will be recognized as revenue in full in the period in which the associated milestone is achieved, assuming all other revenue recognition criteria have been met. The $20,000 milestone payment was not considered a substantive milestone as the payment was not considered commensurate with the Company's performance to achieve IND Clearance nor was the payment solely for past performance. The $20,000 milestone payment was in substance part of the overall consideration for the license and development services the Company is required to perform under the XMT-1522 Agreement. Upon achievement of the IND Clearance, which occurred in October 2016, the contingent consideration was included in the allocable consideration and the Company recognized the cumulative revenue that would have been recognized if the contingent consideration as included in allocable consideration at the inception of the agreement. All commercial milestones will be accounted for in the same manner as royalties and recorded as revenue upon achievement of the milestone, assuming all other revenue recognition criteria are met. The Company will recognize royalty revenue in the period of sale of the related product(s), based on the underlying contract terms, provided that the reported sales are reliably measurable and the Company has no remaining performance obligations, assuming all other revenue recognition criteria are met. For the years ended December 31, 2017, 2016 and 2015, the Company recorded total revenue of $13,784, $21,401 and $5,477, respectively, related to its efforts under the 2016 Restated Agreement and the XMT-1522 Agreement. Included in accounts receivable as of December 31, 2017 and December 31, 2016 was $454 and $542, respectively, related to the Takeda agreements. During the quarter ended September 30, 2017, the Company revised its estimates of the total costs to complete the research services under the Takeda agreements, which changed the total consideration to be received under the agreements and the amount of revenue recognized during the year ended December 31, 2017. Approximately $4,028 of the Company’s revenue from the Takeda agreements for the year ended December 31, 2017 is a result of the Company’s change in estimates. The change in estimates decreased net loss by $4,028 for the year ended December 31, 2017, or $0.33 per common share. As of December 31, 2017 and 2016, the Company had $43,579 and $52,066, respectively, of deferred revenue related to the Takeda agreements that will be recognized over the remaining performance period. Merck KGaA In June 2014, the Company entered into a Collaboration and Commercial License Agreement with Merck KGaA. Upon the execution of the agreement, Merck KGaA paid the Company a nonrefundable technology access fee of $12,000 for the right to develop ADCs directed to six exclusive targets over a specified period of time. No additional fees are due when a target is designated and the commercial license to the target is granted. Merck KGaA will be responsible for the product development and marketing of any products resulting from this collaboration. Under the terms of the agreement, the Company and Merck KGaA develop research plans to evaluate Merck KGaA's antibodies as ADCs incorporating the Company's technology. The Company receives reimbursement for its efforts under the research plans. The goal of the research plans is to provide Merck KGaA with s

Fair value measurements

Fair value measurements	12 Months Ended
	Dec. 31, 2017
Fair value measurements
Fair value measurements	4. Fair Value Measurements The following table presents information about the Company’s assets and liabilities regularly measured and carried at a fair value and indicates the level within fair value hierarchy of the valuation techniques utilized to determine such value as of December 31, 2017 and 2016: Significant Quoted Prices Other Significant in Active Observable Unobservable Fair Markets Inputs Inputs Value (Level 1) (Level 2) (Level 3) December 31, 2017 Cash and cash equivalents $ 26,591 $ 26,591 $ — $ — Marketable securities: U.S. Treasuries 62,640 62,640 — — Commercial paper 24,931 — 24,931 — Corporate bonds 11,054 — 11,054 — $ 125,216 $ 89,231 $ 35,985 $ — Significant Quoted Prices Other Significant in Active Observable Unobservable Fair Markets Inputs Inputs Value (Level 1) (Level 2) (Level 3) December 31, 2016 Cash and cash equivalents $ 100,297 $ 100,297 $ — $ — $ 100,297 $ 100,297 $ — $ — There were no changes in valuation techniques or transfers between fair value measurement levels during the years ended December 31 2017, 2016 and 2015. As of December 31, 2017 and 2016, cash and cash equivalents were comprised of cash and money market funds.

Marketable securities

Marketable securities	12 Months Ended
	Dec. 31, 2017
Marketable securities
Marketable securities	5. Marketable Securities The following table summarizes marketable securities held at December 31, 2017. There were no marketable securities as of December 31, 2016. Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value December 31, 2017 U.S. Treasuries $ 62,777 $ — $ (137) $ 62,640 Commercial paper 24,931 — — 24,931 Corporate bonds 11,066 — (12) 11,054 $ 98,774 $ — $ (149) $ 98,625 As of December 31, 2017, the Company held 22 securities that were in an unrealized loss position. The aggregate fair value of securities held by the Company in an unrealized loss position for less than 12 months at December 31, 2017 was $73,695 and there were no securities held by the Company in an unrealized loss position for more than 12 months. As of December 31, 2017, the Company did not intend to sell, and would not be more likely than not required to sell, the securities in an unrealized loss position before recovery of their amortized cost basis. Furthermore, the Company has determined that there was no material change in the credit risk of these securities. As a result, the Company determined it did not hold any securities with any other-than-temporary impairment as of December 31, 2017. There were no realized gains or losses on available-for-sale securities during the years ended December 31, 2017, 2016 and 2015.

Property and Equipment

Property and Equipment	12 Months Ended
	Dec. 31, 2017
Property and Equipment
Property and Equipment	6. Property and Equipment Property and equipment consists of the following as of December 31, 2017 and 2016: December 31, December 31, 2017 2016 Laboratory equipment $ 5,237 $ 4,672 Computer equipment, office equipment and software 718 579 Leasehold improvements 1,504 1,444 Total property and equipment at cost 7,459 6,695 Less: Accumulated depreciation (5,140) (4,212) $ 2,319 $ 2,483 Depreciation expense for the years ended December 31, 2017, 2016 and 2015 was $928, $655 and $297, respectively.

Accrued expenses

Accrued expenses	12 Months Ended
	Dec. 31, 2017
Accrued expenses
Accrued expenses	7. Accrued Expenses Accrued expenses consist of the following as of December 31, 2017 and 2016: December 31, December 31, 2017 2016 Accrued payroll and related expenses $ 3,041 $ 2,276 Accrued preclinical, manufacturing and clinical expenses 3,183 602 Accrued professional fees 492 402 Accrued other 228 148 $ 6,944 $ 3,428

Convertible preferred stock

Convertible preferred stock	12 Months Ended
	Dec. 31, 2017
Convertible preferred stock
Convertible preferred stock	8. Convertible Preferred Stock Prior to January 1, 2016, the Company issued 25,085,153 shares of Series A-1 convertible preferred stock (Series A-1 Preferred Stock) at a purchase price of $1.0763 per share resulting in net proceeds of $26,336. In February 2015 and June 2016, the Company issued 9,410,551 and 23,526,368 shares of Series B-1 convertible preferred stock (Series B-1 Preferred Stock) at a purchase price of $1.0763 per share resulting in net proceeds of $35,232. In June 2016 the Company issued 14,674,062 shares of Series C-1 convertible preferred stock (Series C-1 Preferred Stock) at a purchase price of $2.25568 resulting in net proceeds of $32,882. In connection with the closing of the Company’s IPO in July 2017, all outstanding convertible preferred stock was converted into 16,154,671 shares of common stock. As of December 31, 2017, the Company has 25,000,000 shares of authorized preferred stock. No shares of preferred stock have been issued.

Stockholders_ equity (deficit)

Stockholders’ equity (deficit)	12 Months Ended
	Dec. 31, 2017
Stockholders' equity (deficit)
Stockholders' deficit	9. Stockholders’ Equity (Deficit) Common Stock The holders of the common stock are entitled to one vote for each share held. Common stockholders are not entitled to receive dividends, unless declared by the Board of Directors (the Board). As of December 31, 2017 there were 3,315,850 shares of common stock reserved for the exercise of outstanding stock options and warrants. As of December 31, 2016 there were 19,186,147 shares of common stock reserved for the conversion of outstanding Series A‑1, Series B‑1 and Series C‑1 Preferred Stock and for the exercise of outstanding stock options and warrants. December 31, December 31, 2017 2016 Series A-1 Preferred Stock — 5,574,467 Series B-1 Preferred Stock — 7,319,307 Series C-1 Preferred Stock — 3,260,897 Warrants 110,365 129,491 Stock options 3,205,485 2,901,985 3,315,850 19,186,147 Warrants In connection with a 2013 Series A‑1 Preferred Stock issuance, the Company granted to certain investors warrants to purchase 129,491 shares of common stock. The warrants have a $0.05 per share exercise price and a contractual life of 10 years. The fair value of these warrants was recorded as a component of equity at the time of issuance. During the year ended December 31, 2017, the Company issued 19,071 shares of common stock upon the exercise of a warrant.

Stock options

Stock options	12 Months Ended
	Dec. 31, 2017
Stock options
Stock options	10. Stock Options Stock Option Plan As of June 30, 2017, there were 3,141,625 options outstanding under the Company’s 2007 Stock Incentive Plan. The 2007 Plan expired in June 2017 and there will be no future grants under this plan. In June 2017 the Company’s shareholders approved the 2017 Stock Incentive Plan (the 2017 Plan or the Plan). Under the 2017 Plan, up to 2,255,000 shares of common stock may be granted to the Company's employees, officers, directors, consultants and advisors in the form of options, restricted stock awards or other stock-based awards. The number of shares of common stock issuable under the Plan will be cumulatively increased annually by 4% of the outstanding shares or such lesser amount specified by the Board. The terms of the awards are determined by the Board, subject to the provisions of the Plan. Any cancellations under the 2007 Plan would increase the number of shares that could be granted under the 2017 Plan. As of December 31, 2017 there were 2,149,280 shares available for future issuance under the Plan. In January 2018, the number of shares of common stock that might be issued under the Plan was increased by 910,600 shares. With respect to incentive stock options, the exercise price per share will equal the fair market value of the common stock on the date of grant, as determined by the Board, and the vesting period is generally four years. Nonqualified stock options will be granted at an exercise price established by the Board at its sole discretion (which has not been less than fair market value on the date of grant) and the vesting periods may vary. Options granted under the Plan expire no later than 10 years from the date of grant. The Board may accelerate vesting or extend the expiration of granted options in the case of a merger, consolidation, dissolution, or liquidation of the Company. A summary of the activity under the Plan is as follows: Weighted- Remaining Number Average Contractual Life Aggregate of Shares Exercise Price (in years) Intrinsic Value Options outstanding at January 1, 2017 2,901,985 $ 2.23 8.4 $ 8,906 Granted 574,124 8.93 Exercised (244,946) 1.84 Cancelled (25,678) 5.04 Options outstanding at December 31, 2017 3,205,485 $ 3.44 7.8 $ 41,709 Options exercisable at December 31, 2017 1,595,337 $ 2.11 7.1 $ 22,845 The weighted-average grant date fair value of options granted during the years ended December 31, 2017, 2016 and 2015, was $5.53, $2.34 and $0.86 per share, respectively. Cash received from the exercise of stock options was $452, $105 and $0 for the years ended December 31, 2017, 2016 and 2015, respectively. Stock-Based Compensation The Company uses the provisions of ASC 718, Stock Compensation , to account for all stock-based awards to employees and nonemployees. The measurement date for employee awards is generally the date of grant. Stock-based compensation expense is recognized over the requisite service period, which is generally the vesting period, using the straight-line method. For the years ended December 31, 2017, 2016 and 2015, the Company recorded stock-based compensation expense of $1,366, $664 and $349, respectively, related to employee grants. The Company has an aggregate of $4,526 of unrecognized stock compensation cost as of December 31, 2017 remaining to be amortized over the weighted-average period of 2.9 years. The fair value of each option award is estimated on the date of grant using the Black–Scholes option pricing model with the following weighted average assumptions: December 31, 2017 2016 2015 Risk-free interest rate 2.2 % 1.5 % 2.0 % Expected dividend yield — % — % — % Expected term (years) 6.21 6.25 6.25 Expected stock price volatility 67 % 69 % 61 % Expected volatility for the Company’s common stock was determined based on the historical volatility of comparable publicly traded companies. The risk-free interest rate is based on the yield of U.S. Treasury securities consistent with the expected term of the option. No dividend yield was assumed as the Company has not historically and does not expect to pay dividends on its common stock. The expected term of the options granted is based on the use of the simplified method, in which the expected term is presumed to be the mid-point between the vesting date and the end of the contractual term. The fair value of the common stock has been determined by the Board at each date of grant based on the variety of factors, including the Company’s financial position and historical financial performance, the status of developments within the Company’s research and development activities, the composition and ability of the current research and management team, an evaluation of the Company’s competition, the current climate in the marketplace, the illiquid nature of the common stock, the effect of the rights and preferences of the preferred shareholders, and the prospects of the liquidity event, among others. Prior to its IPO, the Company’s common stock valuations were prepared using the hybrid method. The hybrid method is a hybrid between the probability‑weighted expected return method (PWERM) and the option‑pricing method (OPM). The hybrid method estimates the probability‑weighted average value across multiple scenarios using the OPM to allocated equity value within at least one of those scenarios. The Company granted stock option awards to non-employees. Total expense recorded during the years ended December 31, 2017, 2016 and 2015 related to these awards was $56, $4 and $0, respectively. Employee Stock Purchase Plan In connection with the IPO, the Board adopted and the Company's stockholders approved the 2017 employee stock purchase plan (the 2017 ESPP), which became effective upon the closing of the Company's IPO in July 2017. The Company has reserved 225,000 shares of common stock for issuance under the 2017 ESPP. The Company has not issued any shares under the 2017 ESPP.

Income Taxes

Income Taxes	12 Months Ended
	Dec. 31, 2017
Income Taxes
Income Taxes	11. Income Taxes For the years ended December 31, 2017, 2016 and 2015, the Company recorded no income tax benefit for the net operating losses incurred in each year, due to its uncertainty of realizing a benefit from those items. A reconciliation of income taxes computed using the U.S. federal statutory rate to that reflected in operations as of December 31, 2017, 2016 and 2015 are as follows: 2017 2016 2015 Income tax computed at federal statutory tax rate 34.0 % 34.0 % 34.0 % State taxes, net of federal benefit 5.1 % 5.1 % 5.4 % Permanent differences (0.8) % (1.3) % (0.6) % Research and development expenditures (2.3) % — % — % General business credits 8.2 % 12.9 % 7.3 % Impact of tax reform (27.3) % — % — % Section 382 adjustment for net operating losses and credits — % — % (120.1) % Other — % (0.1) % (0.2) % Change in valuation allowance (16.9) % (50.6) % 74.2 % — % — % — % On December 22, 2017, legislation commonly known as the Tax Cuts and Jobs Act (the Tax Act) was signed into law. The Tax Act, among other changes, reduces the U.S. federal corporate tax rate from 35% to 21%, requires taxpayers to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. As of December 31, 2017, the Company did not have any foreign subsidiaries and the international aspects of the Tax Act are not applicable. The Company is still in the process of analyzing the impact to the Company of the Tax Act. On December 22, 2017, the SEC staff issued SAB 118 to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. The Company has recognized the provisional tax impacts related to the revaluation of the deferred tax assets and liabilities and included these amounts in its consolidated financial statements for the year ended December 31, 2017. The ultimate impact may differ from these provisional amounts due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the Tax Act, which could result in changes to the provisional tax impacts during 2018. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred tax assets as of December 31, 2017 and 2016 are as follows: 2017 2016 Deferred tax assets: Net operating losses $ 9,324 $ 9,263 Tax credit carryforwards 7,516 4,055 Deferred revenue 13,718 11,061 Licensed technology 1,266 856 Depreciation 268 286 Accrued expenses 53 215 Deferred expenses 313 180 Unrealized loss 41 — Other state credits 103 75 Total deferred tax assets 32,602 25,991 Valuation allowance (32,602) (25,991) Net deferred tax assets $ — $ — The Company has incurred net operating losses (“NOL”) since inception. At December 31, 2017, the Company had Federal and State net operating loss carryforwards of approximately $34,200 and $33,900, respectively, which expire at various dates through 2037. At December 31, 2017, the Company had Federal and State research and development tax credit carryforwards of approximately $5,600 and $2,600, respectively, which expire at various dates through 2037. As required by ASC 740, management of the Company has evaluated the evidence bearing upon the reliability of its deferred tax assets. Based on the weight of available evidence, both positive and negative, management has determined that it is more likely than not that the Company will not realize the benefits of these assets. Accordingly, the Company recorded a valuation allowance of $32,602 and $25,991 at December 31, 2017 and December 31, 2016, respectively. The valuation allowance increased by $6,611 and $6,930 during the years ended December 31, 2017 and 2016, respectively, primarily as a result of net operating losses generated during the periods. Utilization of the NOLs and research and development tax credit carryforwards may be subject to a substantial annual limitation under Section 382 due to ownership change limitations that have occurred previously or that could occur in the future in accordance with Section 382, as well as similar state provisions. These ownership changes may limit the amount of NOLs and research and development tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. If a change in control as defined by Section 382 has occurred at any time since the Company’s formation, utilization of its NOLs or research and development tax credit carryforwards would be subject to an annual limitation under Section 382, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, which could then be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the NOLs or research and development tax carryforwards before their utilization. The Company has determined that ownership changes have occurred through December 31, 2015 and that certain NOLs and research and development tax credit carryforwards will be subject to limitation. The amounts presented do not include NOLs or research and development tax credit carryforwards that will expire unused due to ownership changes. The Company applies the accounting guidance in ASC 740 related to accounting for uncertainty in income taxes. The Company’s reserves related to taxes are based on a determination of whether, and how much of, a tax benefit taken by the Company in its tax filings or positions is more likely than not to be realized following resolution of any potential contingencies present related to the tax benefit. As of December 31, 2017 and 2016, the Company had no unrecognized tax benefits. The Company has not conducted a study of its research and development credit carryforwards. This study may result in an adjustment to research and development credit carryforwards; however, until a study is completed and any adjustment is known, no amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against the Company’s research and development credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the balance sheets or statements of operations if an adjustment were required. Interest and penalties related to uncertain tax positions would be classified as income tax expense in the accompanying statements of operations. As of December 31, 2017 and 2016, the Company had no accrued interest or penalties related to uncertain tax positions. The Company files income tax returns in the United States federal tax jurisdiction and one state jurisdiction. The Company did not have any foreign operations during the years ended December 31, 2017, 2016 and 2015. The statute of limitations for assessment by the Internal Revenue Service and state tax authorities is closed for tax years prior to 2014, although carryforward attributes that were generated prior to tax year 2014 may still be adjusted upon examination to the extent utilized in a future period. There are currently no federal or state audits in progress.

Employee Benefit Plan

Employee Benefit Plan	12 Months Ended
	Dec. 31, 2017
Employee Benefit Plan
Employee Benefit Plan	12. Employee Benefit Plan The Company has a defined contribution plan established under Section 401(k) of the Internal Revenue Code (401(k) Plan), which covers substantially all employees. Employees who have attained the age of 21 are eligible to participate in the 401(k) Plan with no service requirement. Employees may contribute up to 75% of eligible pay on a pre–tax basis up to the federal annual limits. The Company matches the employees’ contributions at 50% on the first 6% up to $6. For the years ended December 31, 2017, 2016 and 2015, the Company recorded expense of $273, $136 and $100, respectively, related to its contribution to its 401(k) Plan.

Commitments

Commitments	12 Months Ended
	Dec. 31, 2017
Commitments
Commitments	13. Commitments Operating Leases The Company leases office space in Cambridge, MA under an operating lease, which was effective through March 2019. The lease also provided the Company with a tenant improvement allowance of up to $356. The Company fully utilized the allowance and recorded the assets acquired with the allowance as leasehold improvements. The Company recorded the tenant improvement allowance incurred as a deferred lease incentive and has amortized the deferred lease incentive through a reduction of rent expense ratably over the lease term. In connection with the office lease, the Company has a letter of credit agreement for the benefit of its landlord in the amount of $321 as of each December 31, 2017 and 2016, respectively, collaterized by a money market account. The Company classified this amount as restricted cash in the accompanying consolidated balance sheets. In January 2018, the Company amended the lease agreement and extended the lease term through March 2021. In addition, the Company leases certain equipment under operating leases that expire through February 2022. Future minimum lease payments under operating leases, as amended, were as follows: 2018 $ 2,089 2019 2,271 2020 2,394 2021 687 2022 9 $ 7,450 Rent expense was approximately $1,834, $1,572 and $947 for the years ended December 31, 2017, 2016 and 2015, respectively. The Company is recording rent expense on a straight-line basis over the term of the lease and has recorded deferred rent in the consolidated balance sheets accordingly. License Agreements Through December 31, 2017 the Company has licensed intellectual property from two biotechnology companies. The consideration included upfront payments and a commitment to pay annual license fees, milestone payments, and, upon product commercialization, royalties on revenue generated from the sale of products covered by the licenses. The Company recorded a $1,000 upfront payment as research and development expense for the year ended December 31, 2015. During the year ended December 31, 2017, the Company recorded expense related to milestone payments of $2,750 related to these agreements.

Related party transactions

Related party transactions	12 Months Ended
	Dec. 31, 2017
Related party transactions
Related party transactions	14. Related Party Transactions Included in Series C‑1 financing and the Company’s IPO were investments of $10,000 and $10,000, respectively, by Takeda, one of the Company’s collaborators.

Subsequent Events

Subsequent Events	12 Months Ended
	Dec. 31, 2017
Subsequent events
Subsequent events	15. Subsequent Events The Company considered the events or transactions occurring after the balance sheet date, but prior to the issuance of the consolidated financial statements, for potential recognition or disclosure in its consolidated financial statements. All significant subsequent events have been properly disclosed in the consolidated financial statements.

Selected quarterly financial da

Selected quarterly financial data (Unaudited)	12 Months Ended
	Dec. 31, 2017
Selected quarterly financial data (unaudited)
Selected quarterly financial data (unaudited)	16. Selected Quarterly Financial Data (unaudited) The following table contains selected quarterly financial information for 2017 and 2016. The Company believes that the following information reflects all normal recurring adjustments necessary for a fair statement of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. Three months ended March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 Collaboration revenue $ 4,290 $ 3,727 $ 6,267 $ 3,261 Operating expenses: Research and development 10,106 10,627 11,412 14,555 General and administrative 2,296 2,204 2,905 3,057 Total operating expenses 12,402 12,831 14,317 17,612 Other income: Other income (expense) — — — — Interest income 51 158 318 383 Total other income 51 158 318 383 Net loss $ (8,061) $ (8,946) $ (7,732) $ (13,968) Net loss per share attributable to common stockholders — basic and diluted $ (6.02) $ (6.33) $ (0.35) $ (0.61) Weighted-average number of common shares used in net loss per share attributable to common stockholders — basic and diluted 1,338,475 1,412,308 22,242,129 22,750,425 Three months ended March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 Collaboration revenue $ 3,697 $ 6,215 $ 3,262 $ 11,997 Operating expenses: Research and development 7,436 8,171 7,555 8,846 General and administrative 1,621 1,826 1,598 1,939 Total operating expenses 9,057 9,997 9,153 10,785 Other income: Other income (expense) — — — — Interest income 4 16 54 47 Total other income 4 16 54 47 Net income (loss) $ (5,356) $ (3,766) $ (5,837) $ 1,259 Net income attributable to participating securities — — — (1,166) Net income (loss) attributable to common stockholders $ (5,356) $ (3,766) $ (5,837) $ 93 Net income (loss) per share attributable to common stockholders — basic $ (4.31) $ (3.00) $ (4.56) $ 0.07 Net income (loss) per share attributable to common stockholders — diluted $ (4.31) $ (3.00) $ (4.56) $ 0.07 Weighted-average number of common shares used in net income (loss) per share attributable to common stockholders — basic 1,242,993 1,254,104 1,279,383 1,290,224 Weighted-average number of common shares used in net income (loss) per share attributable to common stockholders — diluted 1,242,993 1,254,104 1,279,383 2,647,181

Summary of significant accoun26

Summary of significant accounting policies (Policies)	12 Months Ended
	Dec. 31, 2017
Summary of significant accounting policies
Principles of consolidation	Principles of Consolidation The accompanying consolidated financial statements include those of the Company and its subsidiary, Mersana Securities Corp., which was established in December 2016. All intercompany balances and transactions have been eliminated.
Use of estimates	Use of Estimates The preparation of the Company's consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity, revenue, expenses and related disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company's management evaluates its estimates, which include, but are not limited to, management's judgments with respect to the separate units of accounting and best estimate of selling price of those units of accounting within its revenue arrangements, accrued expenses, valuation of stock-based awards and income taxes. Actual results could differ from those estimates. The Company utilized significant estimates and assumptions in determining the fair value of its common stock prior to the Company’s IPO. The Company has utilized various valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately‑Held Company Equity Securities Issued as Compensation , the Practice Aid, to estimate the fair value of its common stock. Each valuation methodology includes estimates and assumptions that require the Company’s judgment. These estimates and assumptions include a number of objective and subjective factors, including external market conditions, the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to the Company’s common stock at the time of, and the likelihood of, achieving a liquidity event, such as an initial public offering or sale. Significant changes to the key assumptions used in the valuations could result in different fair values of common stock at each valuation date.
Segment information	Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision-maker in deciding how to allocate resources and assess performance. The Company and the Company's chief operating decision-maker, the Company's chief executive officer, view the Company's operations and manage its business as a single operating segment, which is the business of discovering and developing ADCs.
Research and development	Research and Development The Company expenses all costs incurred in performing research and development activities. Research and development expenses include salaries and benefits, materials and supplies, preclinical expenses, manufacturing expenses, stock-based compensation expense, depreciation of equipment, contract services and other outside expenses. Costs of certain development activities, such as manufacturing, are recognized based on an evaluation of the progress to completion of specific tasks. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development costs. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized. The capitalized amounts are expensed as the related goods are delivered or the services are performed. Costs associated with collaboration agreements are included in research and development expense.
Revenue recognition	Revenue Recognition The Company recognizes revenue from collaboration arrangements in accordance with FASB ASC Topic 605, Revenue Recognition (ASC 605). Accordingly, revenue is recognized when all of the following criteria are met: · Persuasive evidence of an arrangement exists; · Delivery has occurred or services have been rendered; · The seller's price to the buyer is fixed or determinable; and · Collectibility is reasonably assured. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue in the consolidated balance sheets. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current liabilities. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion. Multiple element arrangements The Company analyzes its strategic partnerships that include multiple element arrangements based on the guidance in FASB ASC Topic 605-25, Revenue Recognition—Multiple Element Arrangements , or ASC 605-25. Pursuant to the guidance in ASC 605-25, the Company evaluates multiple element arrangements to determine i) the deliverables included in the arrangement and (ii) whether the individual deliverables represent separate units of accounting or whether they must be accounted for as a combined unit of accounting. This evaluation requires subjective determinations and requires management to make judgments about the individual deliverables and whether such deliverables are separable from the other aspects of the contractual relationship. Deliverables are considered separate units of accounting provided that: (i) the delivered item(s) has value to the customer on a standalone basis and (ii) if the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in the Company's control. In assessing whether an item has standalone value, the Company considers factors such as the research, manufacturing and commercialization capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. In addition, the Company considers whether the collaboration partner can use the deliverable(s) for their intended purpose without the receipt of the remaining element(s), whether the value of the deliverable is dependent on the undelivered item(s) and whether there are other vendors that can provide the undelivered element(s). Options are considered substantive if, at the inception of the arrangement, the Company is at risk as to whether the collaboration partner will choose to exercise the option. Factors that the Company considers in evaluating whether an option is substantive include the cost to exercise the option, the overall objective of the arrangement, the benefit the collaborator might obtain from the arrangement without exercising the option and the likelihood the option will be exercised. When an option is considered substantive, the Company does not consider the option or item underlying the option to be a deliverable at the inception of the arrangement and the associated option fees are not included in the allocable consideration, assuming the option is not priced at a significant and incremental discount. Conversely, when an option is not considered substantive, the Company would consider the option including other deliverables contingent upon the exercise of the option, to be a deliverable at the inception of the arrangement and a corresponding amount would be included in the allocable arrangement consideration. Notwithstanding whether the option is considered substantive or non-substantive, if the price of the option includes a significant incremental discount, the discount would be included as a deliverable at the inception of the arrangement. Allocation of arrangement consideration Arrangement consideration that is fixed or determinable is allocated among the separate units of accounting using the relative selling price method. Then, the applicable revenue recognition criteria in ASC 605-25 are applied to each of the separate units of accounting in determining the appropriate period and pattern of recognition. The Company determines the selling price of a unit of accounting following the hierarchy of evidence prescribed by ASC 605-25. Accordingly, the Company determines the estimated selling price for units of accounting within each arrangement using vendor-specific objective evidence (VSOE) of selling price, if available, third-party evidence (TPE) of selling price if VSOE is not available, or best estimate of selling price (BESP) if neither VSOE nor TPE is available. The Company typically uses BESP to estimate the selling price, since it generally does not have VSOE or TPE of selling price for its units of accounting. Determining the BESP for a unit of accounting requires significant judgment. In developing the BESP for a unit of accounting, the Company considers applicable market conditions and relevant entity-specific factors, including factors that were contemplated in negotiating the agreement with the customer and estimated costs. The Company validates the BESP for units of accounting by evaluating whether changes in the key assumptions used to determine the BESP will have a significant effect on the allocation of arrangement consideration between multiple units of accounting. Pattern of recognition The Company recognizes arrangement consideration allocated to each unit of accounting when all of the revenue recognition criteria in ASC 605 are satisfied for that particular unit of accounting. Deliverables under collaboration agreements generally consist of licenses and research and development services. License revenue is recognized when the license is delivered when it is determined to have standalone value from the undelivered elements of the arrangement. If the license does not have standalone value, the amounts allocated to the license will be combined with the related undelivered items as a single unit of accounting. The revenue recognition of a combined unit of accounting typically follows the pattern of revenue of the last delivered item in the combined accounting unit. The Company recognizes the amounts associated with research and development services and other service related deliverables over the associated period of performance. If there is no discernable pattern of performance or objectively measurable performance measures do not exist, then the Company recognizes revenue under the arrangement on a straight-line basis over the period the Company is expected to complete its performance obligations. Conversely, if the pattern of performance in which the service is provided to the customer can be determined and objectively measurable performance exists, then the Company recognizes revenue under the arrangement using the proportional performance method. The Company recognizes revenue associated with license options upon exercise of the option, if the underlying license has standalone value from the other deliverables to be provided subsequent to delivery of the license. If the license does not have standalone value, the amounts allocated to the license option will be combined with the related undelivered items as a single unit of accounting. Revenue recognized is limited to the lesser of the cumulative amount of payments received or the cumulative revenue earned determined using the straight-line method or proportional performance, as applicable, as of the period end date. Recognition of milestones and royalties At the inception of each arrangement that includes milestone payments, the Company evaluates whether each milestone is substantive and at-risk. This evaluation includes an assessment of whether (a) the consideration is commensurate with either (1) the entity's performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting at least in part from the entity's performance to achieve the milestone, (b) the consideration relates solely to past performance, and (c) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. The Company evaluates factors such as the scientific, regulatory, commercial, and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required to achieve the respective milestone, and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement in making this assessment. On the milestone achievement date, assuming all other revenue recognition criteria are met and the milestone is deemed substantive and at-risk, the Company recognizes the payment as collaboration revenue. For milestones that are not deemed substantive and at-risk, where payment is reasonably assured, the Company recognizes the milestone payment over the remaining service period. The Company will recognize royalty revenue, if any, in the period of sale of the related product(s), based on the underlying contract terms, provided that the reported sales are reliably measurable and the Company has no remaining performance obligations, assuming all other revenue recognition criteria are met. Collaborative arrangements The Company records the elements of its collaboration agreements that represent joint operating activities in accordance with ASC Topic 808, Collaborative Arrangements (ASC 808). Accordingly, the elements of the collaboration agreements that represent activities in which both parties are active participants and to which both parties are exposed to the significant risks and rewards that are dependent on the commercial success of the activities, are recorded as collaborative arrangements. The Company considers the guidance in ASC Topic 605-45, Revenue Recognition—Principal Agent Considerations (ASC 605-45) in determining the appropriate treatment for the transactions between the Company and its collaborative partner and the transactions between the Company and third parties. Generally, the classification of transactions under the collaborative arrangements is determined based on the nature and contractual terms of the arrangement along with the nature of the operations of the participants. To the extent revenue is generated from a collaboration, the Company will recognize its share of the net sales on a gross basis if it is deemed to be the principal in the transactions with customers, or on a net basis if it is instead deemed to be the agent in the transactions with customers, consistent with the guidance in ASC 605-45.
Fair value measurements	Fair Value Measurements Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability between market participants at measurement dates. ASC Topic 820 Fair Value Measurement (ASC 820), establishes a three-level valuation hierarchy for instruments measured at fair value. The hierarchy is based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: Level 1—Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3—Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
Cash and cash equivalents	Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity, or a remaining maturity at the time of purchase, of three months or less to be cash equivalents. The Company invests excess cash primarily in money market funds, commercial paper and government agency securities, which are highly liquid and have strong credit ratings. These investments are subject to minimal credit and market risks. Cash and cash equivalents are stated at cost, which approximates market value.
Marketable securities	Marketable Securities Short-term marketable securities consist of investments with maturities greater than three months and less than one year from the balance sheet date. Long-term marketable securities consist of investments with maturities greater than one year that are not expected to be used to fund current operations. The Company classifies all of its marketable securities as available-for-sale. Accordingly, these investments are recorded at fair value. Amortization and accretion of discounts and premiums are recorded as interest income within other income. Unrealized gains and losses on available-for-sale securities are included in other comprehensive loss as a component of stockholders’ equity (deficit) until realized.
Restricted cash	Restricted Cash Restricted cash of $371 is recorded in other non-current assets as of December 31, 2017 and 2016 and includes amounts held as security deposits for a standby letter of credit related to a facility lease and a corporate credit card program.
Accounting for stock-based compensation	Accounting for Stock-based Compensation The Company accounts for its stock-based compensation in accordance with ASC Topic 718 Compensation— Stock Compensation (ASC 718). ASC 718 requires all stock-based payments to employees and directors to be recognized as expense in the statements of operations based on their grant date fair values. Expense related to stock awards to non-employees is required to be recognized in the statement of operations based on the awards' vesting date fair values. The Company estimates the fair value of options granted using the Black-Scholes option pricing model. The Black-Scholes option pricing model requires inputs based on certain subjective assumptions, including (a) the expected stock price volatility, (b) the calculation of expected term of the award, (c) the risk-free interest rate and (d) expected dividends. Due to the lack of a public market for the Company's common stock prior to completion of the IPO and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The historical volatility is calculated based on a period of time commensurate with the expected term assumption. The computation of expected volatility is based on the historical volatility of a representative group of companies with similar characteristics to the Company, including stage of product development and life science industry focus. The Company uses the simplified method as prescribed by the SEC Staff Accounting Bulletin No. 107, Share-Based Payment , to calculate the expected term for options granted to employees as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. For options granted to non-employees, the Company utilizes the contractual term of the arrangement as the basis for the expected term assumption. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to do so. There were significant judgments and estimates inherent in the determination of the fair value of our common stock prior to the closing of the IPO. These estimates and assumptions include a number of objective and subjective factors, including external market conditions, the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to its common stock at the time of, and the likelihood of, achieving a liquidity event, such as an IPO or sale. Through December 31, 2016, the Company was required to estimate forfeitures at the time of grant, and revise those estimates in subsequent periods if actual forfeitures differ from its estimates. The Company used historical data to estimate post-vesting forfeitures and recorded stock-based compensation expense only for those awards that were expected to vest. To the extent that actual forfeitures differ from estimates, the difference was recorded as a cumulative adjustment in the period the estimates were revised. Stock-based compensation expense recognized in the financial statements is based on awards that were ultimately expected to vest. The fair value of stock-based payments was recognized as expense, net of estimated forfeitures, over the requisite service period which is generally the vesting period. In the first quarter of 2017, the Company made an accounting policy election to recognize forfeitures as they occur upon adoption of guidance per ASU No. 2016-09. The adoption of this ASU did not have a material impact on the Company's financial statements.
Net loss per share	Net Loss per Share Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares and potentially dilutive securities outstanding for the period determined using the treasury stock and if-converted methods. For purposes of the diluted net loss per share calculation, convertible preferred stock, warrants to purchase common stock and options to purchase common stock are considered to be potentially dilutive securities, but are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive and therefore, basic and diluted net loss per share were the same for all periods presented. The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to include them would be anti-dilutive (in common stock equivalent shares): Year ended December 31, 2017 2016 2015 Series A-1 convertible preferred stock — 5,574,467 5,574,467 Series B-1 convertible preferred stock — 7,319,307 2,091,229 Series C-1 convertible preferred stock — 3,260,897 — Warrants 110,365 129,491 129,491 Stock options 3,205,485 2,901,985 2,146,436 3,315,850 19,186,147 9,941,623
Property and Equipment	Property and Equipment Property and equipment is stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life of each asset as follows: Computer equipment, office equipment and software 3 years Laboratory equipment 5 years Leasehold improvements Shorter of useful life or life of lease Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are eliminated from the balance sheet and related gains or losses are reflected in the statement of operations. There were no material retirements or sales of assets during the years ended December 31, 2017, 2016 and 2015. The Company reviews its property and equipment for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. If an impairment review is performed to evaluate an asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the asset to its carrying value. If the carrying amount of the asset exceeds its estimated undiscounted future net cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. The Company did not recognize impairment charges during the years ended December 31, 2017, 2016 and 2015. Repairs and maintenance costs are expensed as incurred.
Deferred initial public offering costs	Deferred Initial Public Offering Costs The Company capitalized deferred initial public offering (IPO) costs, which primarily consisted of direct, incremental legal and accounting fees, within other non-current assets. As of December 31, 2016, $60 of deferred issuance costs were incurred and capitalized. The deferred IPO costs were offset against IPO proceeds upon the consummation of the offering.
Patent Costs	Patent Costs The Company expenses patent application and related legal costs as incurred and classifies such costs as general and administrative expenses in the accompanying consolidated statements of operations.
Income Taxes	Income Taxes The Company accounts for income taxes using the liability method . The difference between the financial statement and tax basis of the assets and liabilities is determined annually. Deferred income tax assets and liabilities are computed using the tax laws and rates that are expected to apply for periods in which such differences reverse. Valuation allowances are established, if necessary, to reduce the deferred tax asset to the amount that will more likely than not be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.
Comprehensive Income (Loss)	Comprehensive Income (Loss) Comprehensive income (loss) is comprised of net loss and other comprehensive loss. For the year ended December 31, 2017, other comprehensive loss consisted of unrealized loss on marketable securities. For the years ended December 31, 2016 and 2015 comprehensive loss equaled net loss.
Concentration of credit risk and off-balance sheet risk	Concentration of Credit Risk and Off-balance Sheet Risk The Company has no financial instruments with off-balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash equivalents and marketable securities. 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. The Company is not exposed to any significant concentrations of credit risk from these financial instruments.
Recently issued accounting pronouncements	Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued a new standard, ASU No. 2014-09, Revenue from Contracts with Customers (ASU No. 2014-09), as amended, which will supersede nearly all existing revenue recognition guidance. Under ASU No. 2014-09, an entity is required to recognize revenue upon transfer of promised goods or services to customers in an amount that reflects the expected consideration received in exchange for those goods or services. ASU No. 2014-09 defines a five-step process in order to achieve this core principle, which may require the use of judgment and estimates, and also requires expanded qualitative and quantitative disclosures relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, including significant judgments and estimates used. The FASB issued supplemental adoption guidance and clarification to ASU 2014-09 in March 2016, April 2016, May 2016, and December 2016 within ASU 2016-08 Revenue from Contracts with Customers: Principal vs. Agent Considerations , ASU 2016-10 Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing, ASU 2016-12 Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients, and ASU 2016-20 Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, respectively. The new standard permits adoption either by using (i) a full retrospective approach for all periods presented in the period of adoption or (ii) a modified retrospective approach with the cumulative effect of initially applying the new standard recognized at the date of initial application and providing certain additional disclosures. The new standard is effective for annual reporting periods beginning after December 15, 2017. The Company adopted the new standard effective January 1, 2018 using the modified retrospective approach. The Company is analyzing the potential impact the new standard may have on its historical revenue recognition under its agreements with Takeda and Merck KGaA. Since inception, the Company has recognized approximately $42,500 and $12,800 in revenue under its agreements with Takeda and Merck KGaA, respectively. This analysis includes, but is not limited to, reviewing variable compensation including the inclusion of milestone payments in the transaction price, evaluating whether a significant financing component is present, and assessing the allocation of the transaction price to one or more of the performance obligations in the agreements. The Company has substantially completed this analysis. However, the Company is still finalizing its assessment of the potential impact of adoption as of January 1, 2018. The Company will complete its assessment in the first quarter of 2018. The adoption of the new standard may have a significant impact on the allocation of transaction price as compared to historical accounting, however final conclusions will be reached during the quarter ended March 31, 2018. Additionally, the Company expects that the adoption of the new standard will have a significant change on the financial statement disclosures In January 2016, the FASB issued ASU No. 2016-01 Financial Instruments (ASU No. 2016-01) related to the recording of financial assets and financial liabilities. Under the amended guidance, equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) are to be measured at fair value with changes in fair value recognized in net income (loss). However, an entity has the option to measure equity investments without readily determinable fair values either (i) at fair value or (ii) at cost, adjusted for changes in observable prices minus impairment. Changes in measurement under either alternative will be recognized in net income (loss). The amended guidance became effective January 1, 2018. Based on the Company’s current investment holdings, the adoption of this new standard is not expected to have a material impact on its consolidated financial position or results of operations; however, it will result in the reclassification of where the Company recognizes changes in fair value related to certain investments prospectively. In February 2016, the FASB issued ASU No. 2016-02, Leases (ASU No. 2016-02), which will replace the existing guidance in ASC 840, Leases. The updated standard aims to increase transparency and comparability among organizations by requiring lessees to recognize lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing arrangements. This standard is effective for the Company in the fiscal year beginning after December 15, 2018, but early adoption is permissible. The Company is currently evaluating the potential impact that ASU No. 2016-02 may have on its financial position and results of operations. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (ASU No. 2016-09), which amends ASC Topic 718, Compensation—Stock Compensation. The new standard identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the consolidated statements of cash flows. The amendments are effective for annual reporting periods (including interim reporting periods within those years) beginning after December 15, 2016. The Company adopted this ASU effective January 1, 2017. The adoption of this ASU did not have a material impact on the Company's financial statements. Upon adoption of ASU No. 2016-09, the Company accounts for forfeitures as they occur. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments . The new standard clarifies certain aspects of the statement of cash flows, including the classification of contingent consideration payments made after a business combination and several other clarifications not currently applicable to the Company. The new standard also clarifies that an entity should determine each separately identifiable source or use within cash receipts and cash payments on the basis of the nature of the underlying cash flows. In situations in which cash receipts and payments have aspects of more than one class of cash flows and cannot be separated by source or use, the appropriate classification should depend on the activity that is likely to be the predominant source or use of cash flows for the item. The new standard will be effective for the Company on January 1, 2018. The adoption of this standard is not expected to have a material impact on the Company’s consolidated statement of cash flows upon adoption. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows: Restricted Cash (ASU No. 2016-18). The amendments in this update require that amounts generally described as restricted cash and restricted cash equivalents be included within cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU No. 2016-18 will be effective January 1, 2018, with early adoption permitted. The Company expects the adoption to impact its consolidated statement of cash flows as, upon adoption, it will include the Company’s restricted cash balance in the cash and cash equivalents reconciliation of operating, investing and financing activities. In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting . This guidance is intended to provide clarity and reduce diversity in practice as to when changes to the terms or conditions of share-based payments are accounted for as modifications. Under this new guidance, entities will apply modification accounting if the fair value, vesting conditions or classification of the award changes. This guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods, and early adoption is permitted. The guidance per ASU 2017-09 is to be adopted prospectively to an award modified on or after the adoption date. The Company does not anticipate a material impact to the consolidated financial statements as a result of the adoption of this guidance .

Summary of significant accoun27

Summary of significant accounting policies (Tables)	12 Months Ended
	Dec. 31, 2017
Summary of significant accounting policies
Schedule of outstanding potentially dilutive securities excluded from calculation of diluted net loss per share	Year ended December 31, 2017 2016 2015 Series A-1 convertible preferred stock — 5,574,467 5,574,467 Series B-1 convertible preferred stock — 7,319,307 2,091,229 Series C-1 convertible preferred stock — 3,260,897 — Warrants 110,365 129,491 129,491 Stock options 3,205,485 2,901,985 2,146,436 3,315,850 19,186,147 9,941,623
Schedule of estimated useful life of property and equipment	Computer equipment, office equipment and software 3 years Laboratory equipment 5 years Leasehold improvements Shorter of useful life or life of lease

Fair value measurements (Tables

Fair value measurements (Tables)	12 Months Ended
	Dec. 31, 2017
Fair value measurements
Schedule of assets and liabilities measured and carried at fair value	Significant Quoted Prices Other Significant in Active Observable Unobservable Fair Markets Inputs Inputs Value (Level 1) (Level 2) (Level 3) December 31, 2017 Cash and cash equivalents $ 26,591 $ 26,591 $ — $ — Marketable securities: U.S. Treasuries 62,640 62,640 — — Commercial paper 24,931 — 24,931 — Corporate bonds 11,054 — 11,054 — $ 125,216 $ 89,231 $ 35,985 $ — Significant Quoted Prices Other Significant in Active Observable Unobservable Fair Markets Inputs Inputs Value (Level 1) (Level 2) (Level 3) December 31, 2016 Cash and cash equivalents $ 100,297 $ 100,297 $ — $ — $ 100,297 $ 100,297 $ — $ —

Marketable securities (Tables)

Marketable securities (Tables)	12 Months Ended
	Dec. 31, 2017
Marketable securities
Schedule of reconciliation of marketable securities from cost basis to fair value	Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value December 31, 2017 U.S. Treasuries $ 62,777 $ — $ (137) $ 62,640 Commercial paper 24,931 — — 24,931 Corporate bonds 11,066 — (12) 11,054 $ 98,774 $ — $ (149) $ 98,625

Property and Equipment (Tables)

Property and Equipment (Tables)	12 Months Ended
	Dec. 31, 2017
Property and Equipment
Schedule of property and equipment	December 31, December 31, 2017 2016 Laboratory equipment $ 5,237 $ 4,672 Computer equipment, office equipment and software 718 579 Leasehold improvements 1,504 1,444 Total property and equipment at cost 7,459 6,695 Less: Accumulated depreciation (5,140) (4,212) $ 2,319 $ 2,483

Accrued expenses (Tables)

Accrued expenses (Tables)	12 Months Ended
	Dec. 31, 2017
Accrued expenses
Schedule of accrued expenses	December 31, December 31, 2017 2016 Accrued payroll and related expenses $ 3,041 $ 2,276 Accrued preclinical, manufacturing and clinical expenses 3,183 602 Accrued professional fees 492 402 Accrued other 228 148 $ 6,944 $ 3,428

Stockholders_ equity (deficit)

Stockholders’ equity (deficit) (Tables)	12 Months Ended
	Dec. 31, 2017
Stockholders' equity (deficit)
Schedule for number of common stock reserved for conversion of outstanding Preferred Stock and for the exercise of outstanding stock options and warrants	December 31, December 31, 2017 2016 Series A-1 Preferred Stock — 5,574,467 Series B-1 Preferred Stock — 7,319,307 Series C-1 Preferred Stock — 3,260,897 Warrants 110,365 129,491 Stock options 3,205,485 2,901,985 3,315,850 19,186,147

Stock options (Tables)

Stock options (Tables)	12 Months Ended
	Dec. 31, 2017
Stock options
Schedule of stock option activity under Plan	Weighted- Remaining Number Average Contractual Life Aggregate of Shares Exercise Price (in years) Intrinsic Value Options outstanding at January 1, 2017 2,901,985 $ 2.23 8.4 $ 8,906 Granted 574,124 8.93 Exercised (244,946) 1.84 Cancelled (25,678) 5.04 Options outstanding at December 31, 2017 3,205,485 $ 3.44 7.8 $ 41,709 Options exercisable at December 31, 2017 1,595,337 $ 2.11 7.1 $ 22,845
Schedule of weighted average assumptions for estimating fair value of option awards	December 31, 2017 2016 2015 Risk-free interest rate 2.2 % 1.5 % 2.0 % Expected dividend yield — % — % — % Expected term (years) 6.21 6.25 6.25 Expected stock price volatility 67 % 69 % 61 %

Income Taxes (Tables)

Income Taxes (Tables)	12 Months Ended
	Dec. 31, 2017
Income Taxes
Schedule of reconciliation of income tax rates	2017 2016 2015 Income tax computed at federal statutory tax rate 34.0 % 34.0 % 34.0 % State taxes, net of federal benefit 5.1 % 5.1 % 5.4 % Permanent differences (0.8) % (1.3) % (0.6) % Research and development expenditures (2.3) % — % — % General business credits 8.2 % 12.9 % 7.3 % Impact of tax reform (27.3) % — % — % Section 382 adjustment for net operating losses and credits — % — % (120.1) % Other — % (0.1) % (0.2) % Change in valuation allowance (16.9) % (50.6) % 74.2 % — % — % — %
Schedule of significant components of net deferred tax assets	2017 2016 Deferred tax assets: Net operating losses $ 9,324 $ 9,263 Tax credit carryforwards 7,516 4,055 Deferred revenue 13,718 11,061 Licensed technology 1,266 856 Depreciation 268 286 Accrued expenses 53 215 Deferred expenses 313 180 Unrealized loss 41 — Other state credits 103 75 Total deferred tax assets 32,602 25,991 Valuation allowance (32,602) (25,991) Net deferred tax assets $ — $ —

Commitments (Tables)

Commitments (Tables)	12 Months Ended
	Dec. 31, 2017
Commitments
Schedule of future minimum lease payments under operating leases	2018 $ 2,089 2019 2,271 2020 2,394 2021 687 2022 9 $ 7,450

Selected quarterly financial 36

Selected quarterly financial data (Unaudited) (Tables)	12 Months Ended
	Dec. 31, 2017
Selected quarterly financial data (unaudited)
Selected quarterly financial data (unaudited)	Three months ended March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 Collaboration revenue $ 4,290 $ 3,727 $ 6,267 $ 3,261 Operating expenses: Research and development 10,106 10,627 11,412 14,555 General and administrative 2,296 2,204 2,905 3,057 Total operating expenses 12,402 12,831 14,317 17,612 Other income: Other income (expense) — — — — Interest income 51 158 318 383 Total other income 51 158 318 383 Net loss $ (8,061) $ (8,946) $ (7,732) $ (13,968) Net loss per share attributable to common stockholders — basic and diluted $ (6.02) $ (6.33) $ (0.35) $ (0.61) Weighted-average number of common shares used in net loss per share attributable to common stockholders — basic and diluted 1,338,475 1,412,308 22,242,129 22,750,425 Three months ended March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 Collaboration revenue $ 3,697 $ 6,215 $ 3,262 $ 11,997 Operating expenses: Research and development 7,436 8,171 7,555 8,846 General and administrative 1,621 1,826 1,598 1,939 Total operating expenses 9,057 9,997 9,153 10,785 Other income: Other income (expense) — — — — Interest income 4 16 54 47 Total other income 4 16 54 47 Net income (loss) $ (5,356) $ (3,766) $ (5,837) $ 1,259 Net income attributable to participating securities — — — (1,166) Net income (loss) attributable to common stockholders $ (5,356) $ (3,766) $ (5,837) $ 93 Net income (loss) per share attributable to common stockholders — basic $ (4.31) $ (3.00) $ (4.56) $ 0.07 Net income (loss) per share attributable to common stockholders — diluted $ (4.31) $ (3.00) $ (4.56) $ 0.07 Weighted-average number of common shares used in net income (loss) per share attributable to common stockholders — basic 1,242,993 1,254,104 1,279,383 1,290,224 Weighted-average number of common shares used in net income (loss) per share attributable to common stockholders — diluted 1,242,993 1,254,104 1,279,383 2,647,181

Nature of business and basis 37

Nature of business and basis of presentation - IPO (Details) $ / shares in Units, $ in Thousands	Aug. 02, 2017USD ($)$ / sharesshares	Jul. 03, 2017USD ($)$ / sharesshares	Jun. 15, 2017	Jul. 31, 2017shares	Dec. 31, 2017USD ($)$ / sharesshares	Dec. 31, 2016$ / sharesshares
Initial public offering
Convertible preferred stock converted into commons stock | shares		16,154,671		16,154,671
Preferred shares, shares outstanding | shares					0	0
Common stock, shares authorized | shares		175,000,000			175,000,000	95,000,000
Common stock, par value (in dollars per share) | $ / shares					$ 0.0001	$ 0.0001
Preferred stock, share authorized | shares		25,000,000			25,000,000	0
Preferred shares, par value (in dollars per share) | $ / shares		$ 0.0001			$ 0.0001	$ 0.0001
Reverse stock split			0.2222
IPO
Initial public offering
Issuance of stock (in shares) | shares		5,000,000
Share price (in dollars per share) | $ / shares		$ 15
Gross proceeds | $		$ 75,000
Net proceeds from issuance of stock | $		67,420			$ 67,420
Underwriting discounts and commissions and other offering costs | $		$ 7,580			7,580
Over allotment option
Initial public offering
Issuance of stock (in shares) | shares	51,977
Share price (in dollars per share) | $ / shares	$ 15
Gross proceeds | $	$ 780
Net proceeds from issuance of stock | $	725				$ 725
Underwriting discounts and commissions and other offering costs | $	$ 55

Nature of business and basis 38

Nature of business and basis of presentation - Liquidity (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Nature of business and basis of presentation
Net loss	$ (13,968)	$ (7,732)	$ (8,946)	$ (8,061)	$ 1,259	$ (5,837)	$ (3,766)	$ (5,356)	$ (38,707)	$ (13,700)	$ (16,428)
Accumulated deficit	$ (97,878)				$ (59,171)				$ (97,878)	$ (59,171)

Summary of significant accoun39

Summary of significant accounting policies - Restricted cash (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Restricted Cash
Restricted cash	$ 371	$ 371
Restricted cash, Balance Sheet Location	us-gaap:OtherAssetsNoncurrent	us-gaap:OtherAssetsNoncurrent

Summary of significant accoun40

Summary of significant accounting policies - Antidilutive securities (Details) - shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Anti-dilutive securities
Anti-dilutive securities	3,315,850	19,186,147	9,941,623
Series A-1 convertible preferred stock
Anti-dilutive securities
Anti-dilutive securities		5,574,467	5,574,467
Series B-1 convertible preferred stock
Anti-dilutive securities
Anti-dilutive securities		7,319,307	2,091,229
Series C-1 convertible preferred stock
Anti-dilutive securities
Anti-dilutive securities		3,260,897
Warrants
Anti-dilutive securities
Anti-dilutive securities	110,365	129,491	129,491
Stock options.
Anti-dilutive securities
Anti-dilutive securities	3,205,485	2,901,985	2,146,436

Summary of Significant Accoun41

Summary of Significant Accounting Policies - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2017
Computer equipment, office equipment and software
Property, equipment and software, net
Estimated useful life	3 years
Laboratory equipment
Property, equipment and software, net
Estimated useful life	5 years

Summary of significant accoun42

Summary of significant accounting policies - Other (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Deferred initial public offering costs
Deferred IPO costs		$ 60
Concentration of Credit Risk and Off-balance Sheet Risk
Financial instruments with off-balance sheet risk	$ 0

Summary of significant accoun43

Summary of significant accounting policies - Accounting Pronouncements (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended			45 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2017
Collaboration agreements
Collaboration revenue	$ 3,261	$ 6,267	$ 3,727	$ 4,290	$ 11,997	$ 3,262	$ 6,215	$ 3,697	$ 17,545	$ 25,171	$ 10,359
Takeda Agreements
Collaboration agreements
Collaboration revenue									13,784	21,401	5,477	$ 42,500
Merck KGaA
Collaboration agreements
Collaboration revenue									$ 3,636	$ 3,644	$ 4,557	$ 12,800

Collaboration agreements - Take

Collaboration agreements - Takeda partnership (Details) $ in Thousands	1 Months Ended			12 Months Ended
	Jan. 31, 2016USD ($)productitem	Jan. 31, 2015USD ($)item	Mar. 31, 2014USD ($)item	Dec. 31, 2014USD ($)	Dec. 31, 2017USD ($)item
2014, 2015 and 2016 Takeda Agreements
Collaboration agreements
Number of targets | item	7
Number of targets designated | item					4
Amount of option exercise fee for second designated target					$ 1,300
Number of targets Tokeda has remaining | item					3
Number of targets Tokeda has the limited right to replace | item					2
Number of targets advanced to portfolio entry | item					1
Aggregate milestones					$ 1,063,300
Development milestones					107,800
Regulatory milestones					325,000
Commercial milestones					630,500
Milestone on each of the first and second designated targets					136,000
Milestone on each of the remaining designated targets					$ 158,300
Number of individual development milestones per target | item					4
Number of individual commercial milestones per target | item					6
Number of thresholds for annual net sales | item					3
Next potential development milestone payment eligible to receive					$ 500
Amount of next potential milestone receivable related to filing IND					$ 750
2014, 2015 and 2016 Takeda Agreements | Minimum
Collaboration agreements
Number of individual regulatory milestones per target | item					6
2014, 2015 and 2016 Takeda Agreements | Maximum
Collaboration agreements
Number of individual regulatory milestones per target | item					8
2014 Tokeda Agreement
Collaboration agreements
Number of targets | item			2
Amount of technology access fee per target			$ 500
Amount of option exercise fee for first designated target			1,300
Upfront payment received			1,150
Technology access fee for first designated target received			500
Option exercise fee for first designated target received			650	$ 650
Amount of option exercise fee for first designated target			$ 1,300
Technology access fee for second designated target received				$ 500
2015 Amended Tokeda Agreement
Collaboration agreements
Number of targets | item		2
Upfront payment received		$ 9,000
Amount to be received for second limited replacement right		$ 500
2016 Restated Tokeda Agreement
Collaboration agreements
Number of targets | item	3
Upfront payment received	$ 13,500
Number of products entity may elect to co-develop and co-commercialize | product	1
Payment for option to co-develop and co-commercialize product	$ 15,000
Share of profit related to United States (as a percent)	50.00%
Costs incurred in United States (as a percent)	50.00%
Global development costs (as a percent)	30.00%
Costs incurred specifically for a foreign country borne by Takeda (as a percent)	100.00%
Prior written notice for termination period	45 days

Collaboration agreements - XMT-

Collaboration agreements - XMT-1522 Agreement (Details) $ in Thousands	1 Months Ended			12 Months Ended
	Oct. 31, 2016USD ($)	Jun. 30, 2016USD ($)	Jan. 31, 2016USD ($)item	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)
Series C-1 convertible preferred stock
Collaboration agreements
Amount invested in Company		$ 32,882			$ 32,882
XMT-1522 Agreement
Collaboration agreements
Upfront payment received			$ 26,500
Milestone payment upon achievement of IND Clearance Date			20,000
Milestone payment received upon achievement of the IND Clearance Date	$ 20,000
Aggregate milestones, excluding milestone payment upon achievement of IND Clearance Date			288,000
Development milestones			87,000
Regulatory milestones			128,000
Commercial milestones			$ 73,000
Number of separate events to be achieved | item			9
Number of additional unspecified patient populations | item			1
Number of separate patient populations, regulatory milestone | item			4
Number of individual commercial milestones per target | item			3
Next potential development milestone payment eligible to receive				$ 12,000
Prior written notice for termination, before initiation of clinical study			30 days
Prior written notice for termination, after initiation of clinical study			90 days
XMT-1522 Agreement | United States, European Union and Japan
Collaboration agreements
Number of regulatory milestones | item			14
XMT-1522 Agreement | Locations other than United States, European Union and Japan
Collaboration agreements
Number of specified markets in which regulatory milestone is payable | item			2
XMT-1522 Agreement | Maximum
Collaboration agreements
Equity investments committed to be made in Company			$ 20,000
XMT-1522 Agreement | Maximum | United States, European Union and Japan
Collaboration agreements
Number of separate specified patient populations | item			4
Takeda
Collaboration agreements
Proceeds from IPO				$ 10,000
Takeda | Series C-1 convertible preferred stock
Collaboration agreements
Amount invested in Company		$ 10,000

Collaboration agreements - 2014

Collaboration agreements - 2014 Agreement - Accounting (Details) - 2014 Tokeda Agreement $ in Thousands	1 Months Ended	12 Months Ended
	Mar. 31, 2014USD ($)item	Dec. 31, 2014USD ($)
Accounting analysis
Option exercise fee paid by Takeda (as a percent)	50.00%
Amount of option exercise fee for first designated target	$ 1,300
Additional payments required in connection with the first replacement option	0
Total arrangement consideration	4,500
Technology access fee for first designated target received	500
Expected fees for research services	$ 2,700
Technology access fee for second designated target received		$ 500
Research license and related service, First designated target
Accounting analysis
Number of units of accounting | item	1
Selling price allocation	$ 2,790
Commercial license, First designated target
Accounting analysis
Selling price allocation	1,125
Replacement right, Designated target
Accounting analysis
Selling price allocation	450
Future technological improvements
Accounting analysis
Selling price allocation	45
Joint research committee services, Takeda
Accounting analysis
Selling price allocation	$ 90

Collaboration agreements - 2015

Collaboration agreements - 2015 Agreement - Accounting (Details) - 2015 Amended Tokeda Agreement $ in Thousands	1 Months Ended
	Jan. 31, 2015USD ($)
Accounting analysis
Amount of additional payment to be received in connection with options to obtain licenses for third and fourth designated targets	$ 0
Total arrangement consideration	16,697
Upfront payment received	9,000
Expected fees for research services	5,776
Remaining deferred revenue	1,921
Exclusive development and commercialization license and related research services, First designated target
Accounting analysis
Selling price allocation	4,308
Research license and related services, Second designated target
Accounting analysis
Selling price allocation	1,611
Research license and related services, Third designated target
Accounting analysis
Selling price allocation	1,611
Research license and related services, Fourth designated target
Accounting analysis
Selling price allocation	1,611
Replacement right, First or second designated target
Accounting analysis
Selling price allocation	388
Discount on exclusive license, Second designated target
Accounting analysis
Selling price allocation	524
Exclusive development and commercialization license and related research services, Third designated target
Accounting analysis
Selling price allocation	3,105
Exclusive development and commercialization license and related research services, Fourth designated target
Accounting analysis
Selling price allocation	3,105
Future technological improvements
Accounting analysis
Selling price allocation	262
Joint research committee services, Takeda
Accounting analysis
Selling price allocation	$ 174

Collaboration agreements - 2016

Collaboration agreements - 2016 Takeda and XMT-1522 Agreements - Accounting (Details) - USD ($) $ in Thousands

1 Months Ended

3 Months Ended

12 Months Ended

Jan. 31, 2016

Dec. 31, 2017

Sep. 30, 2017

Jun. 30, 2017

Mar. 31, 2017

Dec. 31, 2016

Sep. 30, 2016

Jun. 30, 2016

Mar. 31, 2016

Dec. 31, 2017

Dec. 31, 2016

Dec. 31, 2015

Accounting analysis

Research and development

$ 14,555

$ 11,412

$ 10,627

$ 10,106

$ 8,846

$ 7,555

$ 8,171

$ 7,436

$ 46,700

$ 32,008

$ 21,353

2016 Restated Tokeda Agreement and XMT-1522 Agreement

Accounting analysis

Total arrangement consideration

$ 50,089

46,148

Upfront payment received

13,500

Expected fees for research services

9,515

4,160

Remaining deferred revenue

7,498

Non-creditable portion of XMT-1522 upfront fee

13,250

Expected reimbursement for related services

6,326

7,740

License consideration and research plan extension fee received

800

2016 Restated Tokeda Agreement and XMT-1522 Agreement | Exclusive development and commercialization license and related research services, First designated target

Accounting analysis

Selling price allocation

4,502

2016 Restated Tokeda Agreement and XMT-1522 Agreement | Research license and related services, Second designated target

Accounting analysis

Selling price allocation

1,362

2016 Restated Tokeda Agreement and XMT-1522 Agreement | Discount on exclusive license, Second designated target

Accounting analysis

Selling price allocation

553

2016 Restated Tokeda Agreement and XMT-1522 Agreement | Exclusive development and commercialization license and related research services, Third designated target

Accounting analysis

Selling price allocation

4,546

2016 Restated Tokeda Agreement and XMT-1522 Agreement | Exclusive development and commercialization license and related research services, Fourth designated target

Accounting analysis

Selling price allocation

4,975

2016 Restated Tokeda Agreement and XMT-1522 Agreement | Exclusive development and commercialization license and related research services, Fifth designated target

Accounting analysis

Selling price allocation

4,975

2016 Restated Tokeda Agreement and XMT-1522 Agreement | Exclusive development and commercialization license and related research services, Sixth designated target

Accounting analysis

Selling price allocation

4,975

2016 Restated Tokeda Agreement and XMT-1522 Agreement | Exclusive development and commercialization license and related research services, Seventh designated target

Accounting analysis

Selling price allocation

4,975

2016 Restated Tokeda Agreement and XMT-1522 Agreement | First replacement right, Designated target

Accounting analysis

Selling price allocation

3,685

2016 Restated Tokeda Agreement and XMT-1522 Agreement | Discount on second replacement right, Designated target

Accounting analysis

Selling price allocation

3,276

2016 Restated Tokeda Agreement and XMT-1522 Agreement | Future technological improvements

Accounting analysis

Selling price allocation

1,843

2016 Restated Tokeda Agreement and XMT-1522 Agreement | Joint research committee services, Takeda

Accounting analysis

Selling price allocation

157

2016 Restated Tokeda Agreement and XMT-1522 Agreement | License and related services, XMT-1522

Accounting analysis

Selling price allocation

39,901

2016 Restated Tokeda Agreement and XMT-1522 Agreement | Joint research committee services, XMT-1522

Accounting analysis

Selling price allocation

$ 472

XMT-1522 Agreement

Accounting analysis

Research and development

$ 3,408

$ 340

Upfront payment received

$ 26,500

Collaboration agreements - Ta49

Collaboration agreements - Takeda agreements - Accounting (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended								12 Months Ended			45 Months Ended
	Oct. 31, 2016	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2017	Jan. 31, 2016
Accounting analysis
Collaboration revenue		$ 3,261	$ 6,267	$ 3,727	$ 4,290	$ 11,997	$ 3,262	$ 6,215	$ 3,697	$ 17,545	$ 25,171	$ 10,359
Accounts receivable		784				1,051				784	1,051		$ 784
Deferred revenue, current		21,635				22,731				21,635	22,731		21,635
Net income (loss)		$ (13,968)	$ (7,732)	$ (8,946)	$ (8,061)	1,259	$ (5,837)	$ (3,766)	$ (5,356)	$ (38,707)	$ (13,700)	$ (16,428)
Net income (loss) per share attributable to common stockholders — basic and diluted		$ (0.61)	$ (0.35)	$ (6.33)	$ (6.02)					$ (3.22)	$ (10.82)	$ (13.43)
Takeda Agreements
Accounting analysis
Collaboration revenue										$ 13,784	$ 21,401	$ 5,477	42,500
Accounts receivable		$ 454				542				454	542		454
Deferred revenue		$ 43,579				$ 52,066				43,579	$ 52,066		$ 43,579
Takeda Agreements | Change in estimate, Research service costs
Accounting analysis
Collaboration revenue										4,028
Net income (loss)										$ 4,028
Net income (loss) per share attributable to common stockholders — basic and diluted										$ 0.33
XMT-1522 Agreement
Accounting analysis
Milestone payment upon achievement of IND Clearance Date														$ 20,000
Milestone payment received upon achievement of the IND Clearance Date	$ 20,000
Future technological improvements | Takeda Agreements
Accounting analysis
Estimated performance period in which revenue will be recognized										10 years
Joint research committee services | Takeda Agreements
Accounting analysis
Estimated performance period in which revenue will be recognized										6 years

Collaboration agreements - Merc

Collaboration agreements - Merck KGaA Agreement (Details) $ in Thousands	1 Months Ended	3 Months Ended								12 Months Ended			45 Months Ended
	Jun. 30, 2014USD ($)item	Dec. 31, 2017USD ($)item	Sep. 30, 2017USD ($)	Jun. 30, 2017USD ($)	Mar. 31, 2017USD ($)	Dec. 31, 2016USD ($)	Sep. 30, 2016USD ($)	Jun. 30, 2016USD ($)	Mar. 31, 2016USD ($)	Dec. 31, 2017USD ($)item	Dec. 31, 2016USD ($)	Dec. 31, 2015USD ($)	Dec. 31, 2017USD ($)item
Collaboration agreements
Collaboration revenue		$ 3,261	$ 6,267	$ 3,727	$ 4,290	$ 11,997	$ 3,262	$ 6,215	$ 3,697	$ 17,545	$ 25,171	$ 10,359
Accounts receivable		784				1,051				784	1,051		$ 784
Deferred revenue, current		21,635				22,731				21,635	22,731		21,635
Merck KGaA
Collaboration agreements
Upfront payment received	$ 12,000
Number of targets | item	6
Amount of additional fees receivable when target is designated and commercial license to target is granted	$ 0
Aggregate milestones	780,000
Development milestones	84,000
Regulatory milestones	264,000
Sales milestones	$ 432,000
Number of individual development milestones per target | item	6
Number of individual regulatory milestones per target | item	5
Number of individual commercial milestones per target | item	3
Milestone revenue received and recognized										1,000	1,000	1,000
Next potential development milestone payment eligible to receive		$ 500								$ 500			$ 500
Number of targets designated | item		6								6			6
Prior written notice for termination period	60 days
Total arrangement consideration	$ 23,025		19,875
Expected fees for research services	11,025		7,875
Collaboration revenue										$ 3,636	3,644	$ 4,557	$ 12,800
Accounts receivable		$ 330				509				330	509		330
Deferred revenue		$ 6,634				$ 8,236				$ 6,634	$ 8,236		$ 6,634
First and second targets combined | Merck KGaA
Collaboration agreements
Selling price allocation			6,428
License and corresponding research and development services | Merck KGaA
Collaboration agreements
Selling price allocation	3,723		3,214
Future technological improvements | Merck KGaA
Collaboration agreements
Selling price allocation	$ 437		376
Estimated period in which revenue will be recognize	10 years
Joint research committee services | Merck KGaA
Collaboration agreements
Selling price allocation	$ 248		$ 214
Estimated period in which revenue will be recognize	6 years

Collaboration Agreements - Othe

Collaboration Agreements - Other Revenue (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Collaboration agreements
Collaboration revenue	$ 3,261	$ 6,267	$ 3,727	$ 4,290	$ 11,997	$ 3,262	$ 6,215	$ 3,697	$ 17,545	$ 25,171	$ 10,359
Feasibility Study Agreement
Collaboration agreements
Collaboration revenue											$ 325
Asana BioSciences
Collaboration agreements
Total arrangement consideration					$ 250					250
Collaboration revenue									$ 125	$ 125

Fair value measurements (Detail

Fair value measurements (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Fair value measurements
Marketable securities	$ 98,625
Transfers between fair value measurement level 1 to level 2	0	$ 0	$ 0
Transfers between fair value measurement level 2 to level 1	0	0	$ 0
Recurring basis
Fair value measurements
Cash and cash equivalents	26,591	100,297
U.S. Treasuries | Recurring basis
Fair value measurements
Marketable securities	62,640
Commercial paper | Recurring basis
Fair value measurements
Marketable securities	24,931
Cash and cash equivalents | Recurring basis
Fair value measurements
Total assets	125,216	100,297
Corporate bonds | Recurring basis
Fair value measurements
Marketable securities	11,054
Quoted Prices in Active Markets (Level 1) | Recurring basis
Fair value measurements
Cash and cash equivalents	26,591	100,297
Quoted Prices in Active Markets (Level 1) | U.S. Treasuries | Recurring basis
Fair value measurements
Marketable securities	62,640
Quoted Prices in Active Markets (Level 1) | Cash and cash equivalents | Recurring basis
Fair value measurements
Total assets	89,231	$ 100,297
Significant Other Observable Inputs (Level 2) | Commercial paper | Recurring basis
Fair value measurements
Marketable securities	24,931
Significant Other Observable Inputs (Level 2) | Cash and cash equivalents | Recurring basis
Fair value measurements
Total assets	35,985
Significant Other Observable Inputs (Level 2) | Corporate bonds | Recurring basis
Fair value measurements
Marketable securities	$ 11,054

Marketable securities (Details)

Marketable securities (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017USD ($)itemsecurity	Dec. 31, 2016USD ($)	Dec. 31, 2015USD ($)
Marketable securities
Amortized Cost	$ 98,774
Gross Unrealized Losses	(149)
Marketable securities	$ 98,625
Number of securities in an unrealized loss position for less than 12 months | security	22
Aggregate fair value of securities in an unrealized loss position for less than 12 months	$ 73,695
Number of securities in an unrealized loss position for more than 12 months | security	0
Number of securities with other-than-temporary impairment | item	0
Realized gains (losses) on available-for-sale securities	$ 0	$ 0	$ 0
U.S. Treasuries
Marketable securities
Amortized Cost	62,777
Gross Unrealized Losses	(137)
Marketable securities	62,640
Commercial paper
Marketable securities
Amortized Cost	24,931
Marketable securities	24,931
Corporate bonds
Marketable securities
Amortized Cost	11,066
Gross Unrealized Losses	(12)
Marketable securities	$ 11,054

Property and Equipment (Details

Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Property, equipment and software, net
Total property and equipment at cost	$ 7,459	$ 6,695
Less: Accumulated depreciation	(5,140)	(4,212)
Property and equipment	2,319	2,483
Depreciation expense	928	655	$ 297
Laboratory equipment
Property, equipment and software, net
Total property and equipment at cost	5,237	4,672
Computer equipment, office equipment and software
Property, equipment and software, net
Total property and equipment at cost	718	579
Leasehold improvements
Property, equipment and software, net
Total property and equipment at cost	$ 1,504	$ 1,444

Accrued expenses (Details)

Accrued expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Accrued expenses
Accrued payroll and related expenses	$ 3,041	$ 2,276
Accrued preclinical, manufacturing and clinical expenses	3,183	602
Accrued professional fees	492	402
Accrued other	228	148
Total	$ 6,944	$ 3,428

Convertible preferred stock (De

Convertible preferred stock (Details) - USD ($) $ / shares in Units, $ in Thousands	Jul. 03, 2017	Jul. 31, 2017	Jun. 30, 2016	Feb. 28, 2015	Dec. 31, 2016	Dec. 31, 2015	Jun. 30, 2016	Dec. 31, 2015	Dec. 31, 2017
Convertible preferred stock.
Convertible preferred stock converted into commons stock	16,154,671	16,154,671
Preferred stock, shares authorized	25,000,000				0				25,000,000
Preferred stock, shares issued					0				0
Series A-1 convertible preferred stock
Convertible preferred stock.
Issuance of convertible preferred stock (in shares)								25,085,153
Issue price (in dollars per share)						$ 1.0763		$ 1.0763
Net proceeds from sale of convertible preferred stock								$ 26,336
Series B-1 convertible preferred stock
Convertible preferred stock.
Issuance of convertible preferred stock (in shares)			23,526,368	9,410,551	23,526,368	9,410,551
Issue price (in dollars per share)			$ 1.0763	$ 1.0763			$ 1.0763
Net proceeds from sale of convertible preferred stock					$ 25,272	$ 9,960	$ 35,232
Series C-1 convertible preferred stock
Convertible preferred stock.
Issuance of convertible preferred stock (in shares)			14,674,062		14,674,062
Issue price (in dollars per share)			$ 2.25568				$ 2.25568
Net proceeds from sale of convertible preferred stock			$ 32,882		$ 32,882

Stockholders'equity (deficit) (

Stockholders'equity (deficit) (Details)	12 Months Ended
	Dec. 31, 2017Vote$ / sharesshares	Dec. 31, 2016shares
Common stock
Number of votes for each shares held | Vote	1
Number of shares reserved for future issuance	3,315,850	19,186,147
Warrants
Number of shares of common stock into which warrants granted may be converted	129,491
Warrant exercise price per share (in dollars per share) | $ / shares	$ 0.05
Contractual life of warrants	10 years
Common stock issued upon exercise of warrant (in shares)	19,071
Stock options.
Common stock
Number of shares reserved for future issuance	3,205,485	2,901,985
Warrants
Common stock
Number of shares reserved for future issuance	110,365	129,491
Series A-1 convertible preferred stock
Common stock
Number of shares reserved for future issuance		5,574,467
Series B-1 convertible preferred stock
Common stock
Number of shares reserved for future issuance		7,319,307
Series C-1 convertible preferred stock
Common stock
Number of shares reserved for future issuance		3,260,897
Convertible preferred stock, warrants and options
Common stock
Number of shares reserved for future issuance		19,186,147
Warrants and options
Common stock
Number of shares reserved for future issuance	3,315,850

Stock options - Plans (Details)

Stock options - Plans (Details) - shares	1 Months Ended		12 Months Ended
	Jan. 31, 2018	Jun. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Stock options
Number of shares outstanding			3,205,485	2,901,985
2007 Plan
Stock options
Number of shares outstanding		3,141,625
Number of shares authorized		2,255,000
Cumulative increase in number of shares issuable (as a percent)		4.00%
Number of shares available for future issuance			2,149,280
Additional shares authorized	910,600
Vesting period (in years)			4 years
2007 Plan | Maximum
Stock options
Expiration period			10 years

Stock options - Activity under

Stock options - Activity under stock option plan (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Number of Shares
Outstanding at beginning of period (in shares)	2,901,985
Granted (in shares)	574,124
Exercised (in shares)	(244,946)
Cancelled (in shares)	(25,678)
Outstanding at end of period (in shares)	3,205,485	2,901,985
Options exercisable, at end of period (in shares)	1,595,337
Weighted- Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 2.23
Granted (in dollars per share)	8.93
Exercised (in dollars per share)	1.84
Cancelled (in dollars per share)	5.04
Outstanding at end of period (in dollars per share)	3.44	$ 2.23
Options exercisable, at end of period (in dollars per share)	$ 2.11
Additional Disclosures
Remaining Contractual Life, Options outstanding	7 years 9 months 18 days	8 years 4 months 24 days
Remaining Contractual Life, Options exercisable	7 years 1 month 6 days
Aggregate Intrinsic Value, Options outstanding (in dollars)	$ 41,709	$ 8,906
Aggregate Intrinsic Value, Options exercisable (in dollars)	$ 22,845
Weighted-average grant date fair value of options granted (in dollars per share)	$ 5.53	$ 2.34	$ 0.86
Cash received from the exercise of stock options (in dollars)	$ 452	$ 105

Stock options - Stock based com

Stock options - Stock based compensation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Stock options
Share-based compensation charge	$ 1,366	$ 664	$ 349
Unrecognized stock compensation cost	$ 4,526
Weighted-average amortization period of unrecognized stock compensation cost	2 years 10 months 24 days

Stock options - Fair value of e

Stock options - Fair value of each option award (Details)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Weighted average fair value assumptions
Risk-free interest rate (as a percent)	2.20%	1.50%	2.00%
Expected term	6 years 2 months 16 days	6 years 3 months	6 years 3 months
Expected stock price volatility (as a percent)	67.00%	69.00%	61.00%

Stock options - Non-employees (

Stock options - Non-employees (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Stock options
Total expense for stock options granted to non-employees	$ 56	$ 4	$ 0

Stock options - Employee Stock

Stock options - Employee Stock Purchase Plan (Details) - shares	Dec. 31, 2017	Dec. 31, 2016
Employee Stock Purchase Plan
Number of shares reserved for future issuance	3,315,850	19,186,147
Employee Stock Purchase Plan
Employee Stock Purchase Plan
Number of shares reserved for future issuance	225,000

Income Taxes - Reconciliation (

Income Taxes - Reconciliation (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reconciliation of income taxes
Income tax benefit		$ 0	$ 0	$ 0
Income tax computed at federal statutory tax rate		34.00%	34.00%	34.00%
State taxes, net of federal benefit		5.10%	5.10%	5.40%
Permanent differences		(0.80%)	(1.30%)	(0.60%)
Research and development expenditures		(2.30%)
General business credits		8.20%	12.90%	7.30%
Impact of tax reform		$ (27.3)
Section 382 adjustment for net operating losses and credits				(120.10%)
Other			(0.10%)	(0.20%)
Change in valuation allowance		(16.90%)	(50.60%)	74.20%
Maximum
Reconciliation of income taxes
Income tax computed at federal statutory tax rate		35.00%
Forecast
Reconciliation of income taxes
Income tax computed at federal statutory tax rate	21.00%

Income Taxes - Components of de

Income Taxes - Components of deferred tax assets (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Deferred tax assets:
Net operating losses	$ 9,324	$ 9,263
Tax credit carryforwards	7,516	4,055
Deferred revenue	13,718	11,061
Licensed technology	1,266	856
Depreciation	268	286
Accrued expenses	53	215
Deferred expenses	313	180
Unrealized loss	41
Other state credits	103	75
Total deferred tax assets	32,602	25,991
Valuation allowance	$ (32,602)	$ (25,991)

Income Taxes - Net operating lo

Income Taxes - Net operating loss carryforwards (Details) $ in Thousands	Dec. 31, 2017USD ($)
Federal
Operating loss carry-forwards
Net operating loss carry forwards	$ 34,200
State
Operating loss carry-forwards
Net operating loss carry forwards	$ 33,900

Income Taxes - Tax credit carry

Income Taxes - Tax credit carryforward (Details) - Research and Development $ in Thousands	Dec. 31, 2017USD ($)
Federal
Tax credit carryforwards
Tax credit carryforwards	$ 5,600
State
Tax credit carryforwards
Tax credit carryforwards	$ 2,600

Income Taxes - Valuation allowa

Income Taxes - Valuation allowance (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017USD ($)item	Dec. 31, 2016USD ($)
Valuation allowance
Valuation allowance	$ 32,602	$ 25,991
Increase (decrease) in valuation allowance	6,611	6,930
Unrecognized tax benefits	0	0
Accrued interest or penalties related to uncertain tax position	$ 0	$ 0
Number of state jurisdictions in which entity files income tax returns | item	1
Number of federal or state audits in progress | item	0

Employee Benefit Plan (Details)

Employee Benefit Plan (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Employee Benefit Plan
Eligible age to participate	21 years
Maximum contribution by employee (as a percent)	75.00%
Percentage employer matches of the employee's percentage contribution matched	50.00%
Employer matching contribution (as a percent)	6.00%
Maximum annual amount employer contributes per employee	$ 6
Employee benefit expenses	$ 273	$ 136	$ 100

Commitments - Operating leases

Commitments - Operating leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Operating leases
Letter of credit for security deposit	$ 321	$ 321
Future minimum lease payments under operating leases
2,018	2,089
2,019	2,271
2,020	2,394
2,021	687
2,022	9
Total	7,450
Rent expense	1,834	$ 1,572	$ 947
Maximum
Operating leases
Tenant improvement allowance	$ 356

Commitments - License agreement

Commitments - License agreements (Details) - License agreements $ in Thousands	12 Months Ended
	Dec. 31, 2017USD ($)item	Dec. 31, 2015USD ($)
License Agreements
Number of biotechnology companies where Company has licensed intellectual property | item	2
Payment for research and development expenses | $	$ 2,750	$ 1,000

Related party transactions (Det

Related party transactions (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2017	Dec. 31, 2016
Takeda
Related party transactions
Proceeds from IPO		$ 10,000
Series C-1 convertible preferred stock
Related party transactions
Amount invested in Company	$ 32,882		$ 32,882
Series C-1 convertible preferred stock | Takeda
Related party transactions
Amount invested in Company	$ 10,000

Selected quarterly financial 73

Selected quarterly financial data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Quarterly Financial Data
Collaboration revenue	$ 3,261	$ 6,267	$ 3,727	$ 4,290	$ 11,997	$ 3,262	$ 6,215	$ 3,697	$ 17,545	$ 25,171	$ 10,359
Operating expenses:
Research and development	14,555	11,412	10,627	10,106	8,846	7,555	8,171	7,436	46,700	32,008	21,353
General and administrative	3,057	2,905	2,204	2,296	1,939	1,598	1,826	1,621	10,462	6,984	5,347
Total operating expenses	17,612	14,317	12,831	12,402	10,785	9,153	9,997	9,057	57,162	38,992	26,700
Other income:
Other income (expense)											(89)
Interest income	383	318	158	51	47	54	16	4	910	121	2
Total other income	383	318	158	51	47	54	16	4	910	121	(87)
Net loss	$ (13,968)	$ (7,732)	$ (8,946)	$ (8,061)	1,259	(5,837)	(3,766)	(5,356)	(38,707)	(13,700)	(16,428)
Net income attributable to participating securities					(1,166)
Net income (loss) attributable to common stockholders - basic					$ 93	$ (5,837)	$ (3,766)	$ (5,356)	$ (38,707)	$ (13,700)	$ (16,428)
Net loss per share attributable to common stockholders — basic and diluted	$ (0.61)	$ (0.35)	$ (6.33)	$ (6.02)					$ (3.22)	$ (10.82)	$ (13.43)
Net income (loss) per share attributable to common stockholders — basic					$ 0.07	$ (4.56)	$ (3)	$ (4.31)
Net income (loss) per share attributable to common stockholders — diluted					$ 0.07	$ (4.56)	$ (3)	$ (4.31)
Weighted-average number of common shares used in net loss per share attributable to common stockholders — basic and diluted	22,750,425	22,242,129	1,412,308	1,338,475					12,022,733	1,266,758	1,223,457
Weighted-average number of common shares used in net income (loss) per share attributable to common stockholders — basic					1,290,224	1,279,383	1,254,104	1,242,993
Weighted-average number of common shares used in net income (loss) per share attributable to common stockholders — diluted					2,647,181	1,279,383	1,254,104	1,242,993