Mersana Therapeutics (MRSN) 10-Q 8 May 20 2020 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	May 05, 2020
Document and Entity Information
Document Type	10-Q
Document Period End Date	Mar. 31, 2020
Entity Registrant Name	Mersana Therapeutics, Inc.
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		58,949,470
Entity Central Index Key	0001442836
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 60,450	$ 62,351
Short-term marketable securities	17,976	37,439
Prepaid expenses and other current assets	1,866	1,536
Total current assets	80,292	101,326
Property and equipment, net	1,979	2,164
Operating lease right-of-use assets	12,134	2,598
Other assets	1,453	1,453
Total assets	95,858	107,541
Current liabilities:
Accounts payable	4,603	7,296
Accrued expenses	5,678	8,986
Deferred revenue	4,804	4,815
Operating lease liabilities	1,150	2,219
Short-term debt	1,167	667
Other liabilities	88	87
Total current liabilities	17,490	24,070
Operating lease liabilities	11,295	677
Long-term debt, net	3,732	4,201
Other liabilities	250	275
Total liabilities	32,767	29,223
Commitments (Note 12)
Stockholders' equity
Preferred stock, $0.0001 par value; 25,000,000 shares authorized; 0 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively
Common stock, $0.0001 par value; 175,000,000 shares authorized; 48,006,049 and 45,388,023 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively	5	5
Additional paid-in capital	272,390	270,662
Accumulated other comprehensive income (loss)	(4)	25
Accumulated deficit	(209,300)	(192,374)
Total stockholders’ equity	63,091	78,318
Total liabilities and stockholders’ equity	$ 95,858	$ 107,541

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
Condensed Consolidated Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	25,000,000	25,000,000
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	175,000,000
Common stock, shares issued	48,006,049	45,388,023
Common stock, shares outstanding	48,006,049	45,388,023

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
Collaboration revenue	$ 11	$ 41,035
Operating expenses:
Research and development	12,219	15,143
General and administrative	4,936	4,443
Total operating expenses	17,155	19,586
Other income (expense):
Interest income	306	452
Interest expense	(88)
Total other income (expense), net	218	452
Net income (loss)	(16,926)	21,901
Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities	(29)	8
Comprehensive income (loss)	(16,955)	21,909
Net loss attributable to common stockholders - basic	(16,926)	21,901
Net loss attributable to common stockholders - diluted	$ (16,926)	$ 21,901
Net income (loss) per share attributable to common stockholders — basic (in dollars per share)	$ (0.35)	$ 0.72
Net income (loss) per share attributable to common stockholders — diluted (in dollars per share)	$ (0.35)	$ 0.70
Weighted-average number of shares of common stock used in net income (loss) per share attributable to common stockholders — basic	47,988,630	30,299,650
Weighted-average number of shares of common stock used in net income (loss) per share attributable to common stockholders — diluted	47,988,630	31,461,696
Type of Revenue	mrsn:CollaborationMember	mrsn:CollaborationMember

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Total
Balance at beginning of period at Dec. 31, 2018	$ 3	$ 172,966	$ (8)	$ (164,166)	$ 8,795
Balance at beginning of period (in shares) at Dec. 31, 2018	23,234,472
Increase (Decrease) in Stockholders' Equity
Exercise of stock options		42			42
Exercise of stock options (in shares)	12,192
Issuance of common stock under public offering, net of issuance costs of $5,587	$ 2	92,160			92,162
Issuance of common stock under public offering, net of issuance costs of $5,587 (in shares)	24,437,500
Stock-based compensation expense		1,164			1,164
Other comprehensive income (loss)			8		8
Net income (loss)				21,901	21,901
Balance at end of period at Mar. 31, 2019	$ 5	266,332		(142,265)	124,072
Balance at end of period (in shares) at Mar. 31, 2019	47,684,164
Increase (Decrease) in Stockholders' Equity
Exercise of stock options		58			58
Exercise of stock options (in shares)	32,693
Purchase of common stock under ESPP		283			283
Purchase of common stock under ESPP (in shares)	82,281
Stock-based compensation expense		1,161			1,161
Other comprehensive income (loss)			11		11
Net income (loss)				(17,071)	(17,071)
Balance at end of period at Jun. 30, 2019	$ 5	267,834	11	(159,336)	108,514
Balance at end of period (in shares) at Jun. 30, 2019	47,799,138
Increase (Decrease) in Stockholders' Equity
Exercise of stock options and warrants		21			21
Exercise of stock options and warrants (in shares)	83,759
Stock-based compensation expense		1,285			1,285
Other comprehensive income (loss)			17		17
Net income (loss)				(16,792)	(16,792)
Balance at end of period at Sep. 30, 2019	$ 5	269,140	28	(176,128)	93,045
Balance at end of period (in shares) at Sep. 30, 2019	47,882,897
Increase (Decrease) in Stockholders' Equity
Retirement of common stock in exchange for common stock warrant		(8,986)			(8,986)
Retirement of common stock in exchange for common stock warrant (in shares)	(2,575,000)
Issuance of common stock warrant in exchange for retirement of common stock		8,986			8,986
Purchase of common stock under ESPP		206			206
Purchase of common stock under ESPP (in shares)	57,792
Exercise of stock options and warrants		54			54
Exercise of stock options and warrants (in shares)	22,334
Stock-based compensation expense		1,262			1,262
Other comprehensive income (loss)			(3)		(3)
Net income (loss)				(16,246)	(16,246)
Balance at end of period at Dec. 31, 2019	$ 5	270,662	25	(192,374)	$ 78,318
Balance at end of period (in shares) at Dec. 31, 2019	45,388,023
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)					43,055
Exercise of common stock warrant in exchange for common stock (in shares)	2,574,971
Exercise of stock options and warrants		119			$ 119
Exercise of stock options and warrants (in shares)	43,055
Stock-based compensation expense		1,609			1,609
Other comprehensive income (loss)			(29)		(29)
Net income (loss)				(16,926)	(16,926)
Balance at end of period at Mar. 31, 2020	$ 5	$ 272,390	$ (4)	$ (209,300)	$ 63,091
Balance at end of period (in shares) at Mar. 31, 2020	48,006,049

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Stockholders’ Equity (Parenthetical) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Condensed Consolidated Statements of Stockholders’ Equity
Issuance costs	$ 5,587

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities
Net income (loss)	$ (16,926)	$ 21,901
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation	248	337
Net amortization of premiums and discounts on investments	(66)	4
Stock-based compensation	1,609	1,164
Other non-cash items	37	26
Changes in operating assets and liabilities:
Accounts receivable		(9)
Prepaid expenses and other current assets	(330)	389
Accounts payable	(2,693)	(3,444)
Accrued expenses	(3,128)	(4,463)
Operating lease assets	444
Operating lease liabilities	(430)
Deferred revenue	(11)	(40,592)
Net cash used in operating activities	(21,246)	(24,687)
Cash flows from investing activities
Maturities of marketable securities	19,500	10,500
Purchase of property and equipment	(65)	(372)
Net cash provided by investing activities	19,435	10,128
Cash flows from financing activities
Net proceeds from offering of common stock		92,162
Proceeds from exercise of stock options	119	42
Payments from issuance of debt	(180)
Payments under capital lease obligations	(29)
Net cash provided by (used in) financing activities	(90)	92,204
Increase (decrease) in cash, cash equivalents and restricted cash	(1,901)	77,645
Cash, cash equivalents and restricted cash, beginning of period	62,672	60,005
Cash, cash equivalents and restricted cash, end of period	60,771	137,650
Supplemental disclosures of non-cash activities:
Purchases of property and equipment in accounts payable and accrued expenses		26
Cash paid for interest	56
Right-of-use assets obtained in exchange for operating lease liabilities	$ 9,980	4,369
Right-of-use assets obtained in exchange for financing lease liabilities		$ 429

Nature of business and basis of

Nature of business and basis of presentation	3 Months Ended
	Mar. 31, 2020
Nature of business and basis of presentation
Nature of business and basis of presentation	1. Nature of business and basis of Mersana Therapeutics, Inc. is a clinical stage biopharmaceutical company focused on developing antibody drug conjugates (ADCs) that offer a clinically meaningful benefit for cancer patients with significant unmet need. The Company has leveraged 20 years of industry learning in the ADC field to develop proprietary and differentiated technology platforms that enable it to design ADCs to have improved efficacy, safety and tolerability relative to existing ADC therapies. The Company’s innovative platforms which include Dolaflexin and Dolasynthen, each delivering its DolaLock payload, as well as Immunosynthen, delivering a novel stimulator of interferon genes (STING) agonist, provide an efficient product engine that has enabled a robust discovery pipeline for the Company and its partners. The Company’s product candidates include XMT‑1536 and XMT-1592. XMT-1536, an ADC utilizing the Company’s Dolaflexin platform and targeting NaPi2b, an antigen broadly expressed in ovarian cancer and non-small cell lung cancer (NSCLC) adenocarcinoma is currently in the expansion portion of a Phase 1 study in patients with ovarian cancer and NSCLC adenocarcinoma. XMT-1592 uses one of the Company’s new platforms, Dolasynthen, and also targets NaPi2b. The Company filed an Investigational New Drug (IND) application in the first quarter of 2020, which was approved by the U.S. Food and Drug Administration (FDA). The Company remains on track to initiate the Phase 1 dose escalation study of XMT-1592 in the second quarter of 2020. The Company has incurred cumulative net losses since inception. For the three months ended March 31, 2020, the net loss was $16,926, compared to net income of $21,901 in the three months ended March 31, 2019. The difference year over year is primarily attributable to $39,965 in revenue that was recognized in the first quarter of 2019 as a result of the discontinuation of the partnership with Takeda in the first quarter of 2019. The Company expects to continue to incur operating losses for at least the next several years. As of March 31, 2020, the Company had an accumulated deficit of $ 209,300 . The future success of the Company is dependent on, among other factors, 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. Net losses and negative operating cash flows have had, and will continue to have, an adverse effect on the Company’s stockholders' equity and working capital. On April 7, 2020, the Company sold 8,938,599 and 1,962,000 shares of common stock at $5.59 per share and $7.74 per share, respectively, to raise gross proceeds of $65,153 through its at-the-market equity offering program (ATM). The Company believes that its currently available funds will be sufficient to fund the Company’s operations through at least the next twelve months from the issuance of this Quarterly Report on Form 10-Q. Management’s belief with respect to its ability to fund operations is based on estimates that are subject to risks and uncertainties. If actual results are different from management’s estimates, the Company may need to seek additional funding. The Company is subject to risks common to companies in the biotechnology industry, including but not limited to, the need for additional capital, risks of failure of preclinical and clinical studies, the need to obtain marketing approval and reimbursement 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 the ability to transition from pilot-scale production to large-scale manufacturing of products. The Company’s unaudited condensed 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. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2019 and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 28, 2020. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments that are necessary to present fairly the Company’s financial position as of March 31, 2020, the results of its operations for the three months ended March 31, 2020 and 2019, a statement of stockholders’ equity for the three months ended March 31, 2020 and 2019 and cash flows for the three months ended March 31, 2020 and 2019. Such adjustments are of a normal and recurring nature. The results for the three months ended March 31, 2020 are not necessarily indicative of the results for the year ending December 31, 2020, or for any future period.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2020
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include those of the Company and its wholly-owned subsidiary, Mersana Securities Corp. All intercompany balances and transactions have been eliminated. Use of Estimates The preparation of the Company’s unaudited condensed 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 identification of performance obligations and standalone selling prices of those performance obligations within its revenue arrangements, accrued expenses, valuation of stock-based awards and income taxes. Actual results could differ from those estimates. 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, or decision making group, in deciding how to allocate resources and assess performance. The Company views its operations and manages its business as a single operating segment, which is the business of discovering and developing ADCs. Summary of Accounting Policies The significant accounting policies used in preparation of these condensed consolidated financial statements for the three months ended March 31, 2020 are consistent with those discussed in Note 2 to the consolidated financial statements in the Company’s 2019 Annual Report on Form 10-K. 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. Three months ended Three months ended March 31, 2020 March 31, 2019 Beginning End Beginning End of period of period of period of period Cash and cash equivalents $ 62,351 $ 60,450 $ 59,634 $ 137,279 Restricted cash included in other assets, noncurrent 321 321 371 371 Total cash, cash equivalents and restricted cash per statement of cash flows $ 62,672 $ 60,771 $ 60,005 $ 137,650 Marketable Securities Short-term marketable securities consist of investments in debt securities with maturities greater than three months and less than one year from the balance sheet date. 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 accumulated comprehensive income (loss) as a component of stockholders’ equity until realized. Realized gains and losses and declines in value judged to be other than temporary are included as a component of other income (expense), net, based on the specific identification method. When determining whether a decline in value is other than temporary, the Company considers various factors, including whether the Company has the intent to sell the security, and whether it is more likely than not that the Company will be required to sell the security prior to recovery of its amortized cost basis. Fair value is determined based on quoted market prices. Other Assets The Company recorded other assets of $1,453 as of March 31, 2020 and December 31, 2019, comprised of restricted cash of $321 held as security deposits for a standby letter of credit related to a facility lease and $1,132 held by a service provider. 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 shares of common stock outstanding during the period, without further 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 shares of common stock 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, stock options, unvested restricted stock units (RSUs) and 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. Therefore, basic and diluted net loss per share were the same for the three months ended March 31, 2020. The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share for the period ended March 31, 2020, because to include them would be anti-dilutive (in common stock equivalent shares): Three months ended March 31, 2020 Stock options 6,049,288 Restricted stock units 760,193 Warrants 39,474 6,848,955 For the three months ended March 31, 2019, the Company reported net income. Diluted earnings per share was computed using the "treasury method" by dividing the net income by the weighted-average number of shares of common stock and potentially dilutive securities outstanding during the period. The weighted-average number of shares of common stock were adjusted for the potential dilutive effect of the exercise of stock options and warrants to purchase common stock. Refer to Note 7 “Earnings per share”. Recently Issued Accounting Pronouncements In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808):Clarifying the Interaction between Topic 808 and Topic 606 . The main provisions of ASU 2018-18 include: (i) clarifying that certain transactions between collaborative arrangement participants should be accounted for as revenue when the collaborative arrangement participant is a customer in the context of a unit of account and (ii) precluding the presentation of transactions with collaborative arrangement participants that are not directly related to sales to third parties together with revenue. This guidance is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual reporting periods, and early adoption is permitted. The guidance per ASU 2018-18 is to be adopted retrospectively to the date of initial application of Topic 606. The Company adopted the new standard effective January 1, 2020. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. Currently, U.S. GAAP delays recognition of the full amount of credit losses until the loss is probable of occurring. Under this ASU, the income statement will reflect an entity’s current estimate of all expected credit losses. The measurement of expected credit losses will be based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses rather than as a direct write-down of the security. This ASU is effective for annual periods beginning after December 15, 2019, including interim periods within those annual reporting periods, and early adoption is permitted. The Company adopted the new standard effective January 1, 2020 using the modified retrospective method. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures.

Collaboration agreements

Collaboration agreements	3 Months Ended
	Mar. 31, 2020
Collaboration agreements
Collaboration agreements	3. Collaboration agreements Merck KGaA In June 2014, the Company entered into a Collaboration and Commercial License Agreement with Merck KGaA (the Merck KGaA Agreement). 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. All six targets were designated prior to 2018. The Company is eligible to receive milestones under the Merck KGaA Agreement. The next potential milestone payment is a development milestone of $500 on Merck KGaA’s designation of a preclinical development candidate for any target. Revenue for the milestone is fully constrained until it is certain the milestone would be achieved. Under the terms of the Merck KGaA 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 sufficient information to formally nominate a development candidate and begin IND-enabling studies or cease development on the designated target. In May 2018, the Company entered into a Supply Agreement with Merck KGaA (the Merck KGaA Supply Agreement). Under the terms of the Merck KGaA Supply Agreement, the Company will provide Merck KGaA preclinical non-GMP ADC Drug Substance and clinical GMP Drug Substance for use in clinical trials associated with one of the antibodies designated under the Merck KGaA Agreement. The Company receives fees for its efforts under the Merck KGaA Supply Agreement and reimbursement equal to the supply cost. The Company may also enter into future supply agreements to provide clinical supply material should Merck KGaA pursue clinical development of any other candidates nominated under the Merck KGaA Agreement. Accounting Analysis The Company identified the following performance obligations under the Merck KGaA agreement: (i) exclusive license and research services for six designated targets, (ii) rights to future technological improvements and (iii) participation of project team leaders and providing joint research committee services. The Company is recognizing revenue related to the exclusive license and research and development services over the estimated period of the research and development services using a proportional performance model. The Company measures proportional performance based on the costs incurred relative to the total costs expected to be incurred. To the extent that the Company receives fees for the research services as they are performed, these amounts are recorded as deferred revenue. Revenue related to future technological improvements and joint research committee services will be recognized ratably over the respective performance period (which in the case of the joint research committee services approximates the time and cost incurred each period), which are 10 and five years, respectively. The Company is continuing to reassess the estimated remaining term at each subsequent reporting period. For the three months ended March 31, 2020 and 2019, the Company recorded collaboration revenue of $11 and $18, respectively, related to its efforts under the Merck KGaA Agreement. During the three months ended March 31, 2020 and 2019, the Company recognized $0 and $1,037, respectively, in collaboration revenue and corresponding research and development expense related to the Merck KGaA Supply Agreement. As of March 31, 2020 and December 31, 2019, the Company had $4,804 and $4,815, respectively, in deferred revenue related to the Merck KGaA Agreement and Merck KGaA Supply Agreement that will be recognized over the remaining performance period. Takeda XMT-1522 Strategic Partnership In January 2016, the Company entered into a Development Collaboration and Commercial License Agreement with Takeda’s 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 was responsible for conducting certain Phase 1 development activities for XMT-1522, including the ongoing Phase 1 clinical trial, at its own expense. The parties agreed to collaborate on the further development of XMT-1522 in accordance with a global development plan (Post-Phase 1 Development). On January 2, 2019, the Company received notice from Takeda stating that Takeda was exercising its right to terminate the XMT-1522 Agreement upon 30 days’ prior written notice. The XMT-1522 Agreement terminated in accordance with its provisions, and the Company and Takeda wound down activities related to the XMT-1522 Agreement as of March 31, 2019. Under the XMT-1522 Agreement, the Company and Takeda shared equally all Post-Phase 1 Development costs through the date of termination and for a period of 30 days after the effective termination date. For the applicable period within the three months ended March 31, 2019, the Company was billed $200 by Takeda, representing the Company’s share of Post-Phase 1 Development costs incurred by Takeda. This amount has been reflected as research and development costs in the consolidated statement of operations. Takeda strategic research and development partnership In March 2014, the Company entered into a Research Collaboration and Commercial License Agreement with Takeda through Takeda’s wholly owned subsidiary, Millennium Pharmaceuticals, Inc. (the 2014 Agreement). The 2014 Agreement was amended in January 2015 and amended and restated in January 2016 (the 2016 Restated Agreement). The agreements provided Takeda with the right to develop ADCs directed to a total of seven exclusive targets, designated by Takeda, over a specified period of time. On January 2, 2019, the Company received notice from Takeda stating that Takeda was exercising its right to terminate the 2016 Restated Agreement upon 45 days’ prior written notice. The 2016 Restated Agreement terminated in accordance with its provisions, and the Company and Takeda wound down activities related to the 2016 Restated Agreement as of March 31, 2019. During the applicable period within the three months ended March 31, 2019, the Company billed Takeda $195 related to ASC 808 costs. Accounting Analysis The Company’s collaboration agreements with Takeda were terminated following receipt of written notices during the first quarter of 2019. As there are no further performance obligations, the Company recognized the remaining deferred revenue of $39,965 related to the termination of the Takeda agreements in the first quarter of 2019. Included in accounts payable as of March 31, 2020 and December 31, 2019 was $2,335 related to the Takeda agreements. Summary of Contract Assets and Liabilities The following table presents changes in the balances of our contract assets and liabilities during the three months ended March 31, 2020 and 2019: Balance at Beginning Balance at of Period Additions Deductions End of Period Three months ended March 31, 2020 Contract assets $ — $ — $ — $ — Contract liabilities: Deferred revenue $ 4,815 $ — $ 11 $ 4,804 Balance at Beginning Balance at of Period Additions Deductions End of Period Three months ended March 31, 2019 Contract assets $ — $ — $ — $ — Contract liabilities: Deferred revenue $ 46,196 $ — $ 40,592 $ 5,604 During the three months ended March 31, 2020 and 2019, the Company recognized the following revenues as a result of changes in the contract asset and the contract liability balances in the respective periods: Three months ended March 31, 2020 2019 Revenue recognized in the period from: Amounts included in the contract liability at the beginning of the period $ 11 $ 40,592 Performance obligations satisfied in previous periods $ — $ — Other Revenue The Company has provided limited services for a collaboration partner, Asana BioSciences. For the three months ended March 31, 2020 the Company did not recognize any revenue related to these services and for the three months ended March 31, 2019, the Company recognized $15 of revenue related to these services. The Company did not recognize any revenue related to milestones in the three months ended March 31, 2020 and 2019. The next potential milestone the Company is eligible to receive is $2,500 upon dosing the fifth patient in a Phase 1 clinical study by Asana BioSciences. As of March 31, 2020, the Company considers this next milestone to be fully constrained as there is considerable judgment involved in determining whether it is probable that a significant revenue reversal would occur. As part of its evaluation of the constraint, the Company considered numerous factors, including the fact that achievement of the milestone is outside the control of the Company and there is a high level of uncertainty in achieving this milestone, as this would require initiation of clinical trials by the collaboration partner. The Company reevaluates the probability of achievement of a milestone subject to constraint at each reporting period and as uncertain events are resolved or other changes in circumstances occur.

Fair value measurements

Fair value measurements	3 Months Ended
	Mar. 31, 2020
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 March 31, 2020 and December 31, 2019: Significant Quoted Prices Other Significant in Active Observable Unobservable Fair Markets Inputs Inputs Value (Level 1) (Level 2) (Level 3) March 31, 2020 Marketable securities: Commercial paper $ 5,983 $ — $ 5,983 $ — Corporate bonds 11,993 — 11,993 — $ 17,976 $ — $ 17,976 $ — Significant Quoted Prices Other Significant in Active Observable Unobservable Fair Markets Inputs Inputs Value (Level 1) (Level 2) (Level 3) December 31, 2019 Marketable securities: Commercial paper $ 11,940 $ — $ 11,940 $ — Corporate bonds 12,010 — 12,010 — U.S. Treasuries 13,489 13,489 — — $ 37,439 $ 13,489 $ 23,950 $ — There were no changes in valuation techniques or transfers between fair value measurement levels during the three months ended March 31, 2020 and 2019. The carrying amounts reflected in the consolidated balance sheets for prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to their short-term nature. As of March 31, 2020, the carrying value of the Company’s outstanding borrowing under the Credit Facility approximated fair value (a Level 2 fair value measurement), reflecting interest rates currently available to the Company. The Credit Facility is discussed in more detail in Note 8, “Debt”.

Marketable securities

Marketable securities	3 Months Ended
	Mar. 31, 2020
Marketable securities
Marketable securities	5. Marketable securities The following table summarizes marketable securities held at March 31, 2020 and December 31, 2019: Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value March 31, 2020 Commercial paper $ 5,983 $ — $ — $ 5,983 Corporate bonds 11,997 — (4) 11,993 $ 17,980 $ — $ (4) $ 17,976 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value December 31, 2019 Commercial paper $ 11,940 $ — $ — $ 11,940 Corporate bonds 11,990 20 — 12,010 U.S. Treasuries 13,484 5 — 13,489 $ 37,414 $ 25 $ — $ 37,439 As of March 31, 2020, the Company held three securities that were in an unrealized loss position. The aggregate fair value of securities held by the Company in an unrealized loss position at March 31, 2020 was $8,993. These securities were in a gain position as of December 31, 2019. The Company determined that there was no material change in the credit risk of these securities. The Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell these securities before recovery of their amortized cost bases, which may be at maturity. The Company has reviewed securities in an unrealized loss position at the individual security level and evaluated current expected credit loss by considering factors such as the nature of the investments, historical experience, market data, issuer-specific factors, and current economic conditions. During the three months ended March 31, 2020, the Company recognized no year-to-date credit loss related to short term marketable securities, and had no allowance for credit loss recorded as of March 31, 2020.

Accrued Expenses

Accrued Expenses	3 Months Ended
	Mar. 31, 2020
Accrued expenses
Accrued expenses	6. Accrued expenses Accrued expenses consisted of the following as of March 31, 2020 and December 31, 2019: March 31, December 31, 2020 2019 Accrued payroll and related expenses $ 1,549 $ 4,037 Accrued preclinical, manufacturing and clinical expenses 3,367 4,230 Accrued professional fees 716 675 Accrued other 46 44 $ 5,678 $ 8,986

Earnings per share

Earnings per share	3 Months Ended
	Mar. 31, 2020
Earnings per share
Earnings per share	7. Earnings per share The following table presents the calculation of basic and diluted net income per share: Three months ended March 31, 2020 2019 Numerator: Net income (loss) $ (16,926) $ 21,901 Denominator: Weighted-average number of shares - basic 47,988,630 30,299,650 Dilutive securities - share-based awards — 1,052,730 Dilutive securities - common stock warrants — 109,316 Weighted-average number of shares - diluted 47,988,630 31,461,696 Net income (loss) per share - basic $ (0.35) $ 0.72 Net income (loss) per share - diluted $ (0.35) $ 0.70 Anti-dilutive stock-based awards excluded from the calculation of diluted EPS for the three months ended March 31, 2019 were 2,686,700. For the three months ended March 31, 2020, potentially dilutive securities were excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive, therefore basic and diluted net loss per share were the same for the three months ended March 31, 2020.

Debt

Debt	3 Months Ended
	Mar. 31, 2020
Debt
Debt	8. Debt On May 8, 2019, the Company entered into a loan and security agreement (the Credit Facility) with Silicon Valley Bank (SVB) pursuant to which the Company can borrow, at its option, up to $20,000, in up to four principal advances of at least $5,000 each (each, a Term Loan or collectively, the Term Loans) through August 31, 2020. The Company drew $5,000 on the Term Loan upon execution of the Credit Facility. In the event the Company has not borrowed a total of $20,000 upon the earlier of August 21, 2020, acceleration of the Company’s payment obligations or Company’s prepayment of the then extended Term Loans, the Company is required to pay an additional fee equal to 3.0% of any unborrowed portion of the committed funding (the Unused Term Loan Commitment Fee). As of March 31, 2020, the Company was in compliance with all covenants under the Credit Facility. As such, as of March 31, 2020, the classification of the loan balance as stated on the balance sheet was based on the timing of defined future payment obligations. As of March 31, 2020, the Company had drawn a Term Loan of $5,000. As of March 31, 2020, debt consisted of the following: March 31, 2020 Total debt $ 5,000 Less: Current portion of long-term-debt (1,167) Total debt, net of current portion 3,833 Debt financing costs, net of accretion (163) Accretion related to final payment 62 Long-term debt, net $ 3,732 As of March 31, 2020, the estimated future principal payments due are as follows: 2020 (excluding the three months ended March 31, 2020) $ 667 2021 2,000 2022 2,000 2023 333 Total debt $ 5,000 During the three months ended March 31, 2020, the Company recognized $51 of interest expense related to the Credit Facility.

Stockholders' equity

Stockholders' equity	3 Months Ended
	Mar. 31, 2020
Stockholders' equity
Stockholders’ equity	9. Stockholders’ equity Preferred stock As of March 31, 2020, the Company had 25,000,000 shares of authorized preferred stock. No shares of preferred stock have been issued. 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). At March 31, 2020 and December 31, 2019, there were 6,848,955 and 7,782,582, respectively, shares of common stock reserved for the exercise of outstanding stock options, restricted stock units and warrants. March 31, December 31, 2020 2019 Stock options 6,049,288 4,720,772 Restricted stock units 760,193 447,336 Warrants 39,474 39,474 Exchange warrants — 2,575,000 6,848,955 7,782,582 At-the-market equity offering program On July 2, 2018, the Company established an at-the-market equity offering program (ATM) pursuant to which it is able to offer and sell up to $75,000 of its common stock from time to time at prevailing market prices. As of March 31, 2020, the Company had not sold any shares under the ATM. 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. As of March 31, 2020 , there were warrants to purchase 39,474 shares of common stock. Exchange Warrants On November 26, 2019, the Company entered into an exchange agreement with entities affiliated with Biotechnology Value Fund, L.P. (the “Exchanging Stockholders”), pursuant to which the Exchanging Stockholders exchanged an aggregate of 2,575,000 shares of common stock for warrants (the “Exchange Warrants”) to purchase an aggregate of 2,575,000 shares of common stock (subject to adjustment in the event of any stock dividends and splits, reverse stock split, merger or consolidation, change of control, reorganization or similar transaction, as described in the Exchange Warrants), with an exercise price of $0.0001 per share. On March 2, 2020, the Exchanging Stockholders exercised the Exchange Warrants in full on a net cashless exercise basis, resulting in the issuance of 2,574,971 shares of common stock.

Stock options

Stock options	3 Months Ended
	Mar. 31, 2020
Stock options
Stock options	10. Stock options Stock option plans In June 2017 the Company’s shareholders approved the 2017 Stock Incentive Plan (the 2017 Plan). Under the 2017 Plan, up to 2,255,000 shares of common stock were initially available to be granted to the Company's employees, officers, directors, consultants and advisors in the form of options, restricted stock units (RSUs) or other stock-based awards. The number of shares of common stock issuable under the 2017 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 2017 Plan. Any cancellations under the 2007 Plan, which expired in June 2017, would increase the number of shares that could be granted under the 2017 Plan. In January 2020, the number of shares of common stock issuable under the 2017 Plan was increased by 1,815,520 shares. As of March 31, 2020, there were 1,642,679 shares available for future issuance under the 2017 Plan. 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, 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 2017 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. Stock option activity A summary of the options activity under the Plans is as follows: Weighted- Number Average of Shares Exercise Price Outstanding at January 1, 2020 4,720,772 $ 5.24 Granted 1,412,653 6.10 Exercised (43,055) 2.77 Cancelled (41,082) 8.50 Outstanding at March 31, 2020 6,049,288 $ 5.44 Exercisable at March 31, 2020 2,846,100 $ 4.68 The weighted-average grant date fair value of options granted during the three months ended March 31, 2020 and 2019, was $ 3.79 and $ 2.39 per share, respectively. Cash received from the exercise of stock options was $119 and $ 42 for the three months ended March 31, 2020 and 2019, respectively. Restricted stock units In July 2019, the Company issued RSUs with service conditions to employees. The awards cliff-vest two years after the grant date. In January 2020, the Company issued 324,932 RSUs with a service condition to employees for which the vesting term is annually over four years. Vesting of these awards is contingent on the fulfillment of the service conditions during the vesting term. A summary of the RSU activity under the 2017 Plan is as follows: Number of Shares Unvested at January 1, 2020 447,336 Granted 324,932 Vested — Forfeited (12,075) Unvested at March 31, 2020 760,193 Stock-based compensation expense 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. The following table presents stock-based compensation expense by award type included within the Company’s condensed consolidated statement of operations and comprehensive loss: Three months ended March 31, 2020 2019 Stock options $ 1,233 $ 1,094 Restricted stock units 310 — Employee stock purchase plan 66 70 Stock-based compensation expense included in Total operating expenses $ 1,609 $ 1,164 The following table presents stock-based compensation expense as reflected in the Company’s condensed consolidated statements of operations and comprehensive loss: Three months ended March 31, 2020 2019 Research and development $ 797 $ 516 General and administrative 812 648 Stock-based compensation expense included in Total operating expenses $ 1,609 $ 1,164 As of March 31, 2020, there was $11,341 and $3,022 of unrecognized stock compensation expense related to unvested stock options and unvested RSUs, respectively, that is expected to be recognized over a weighted-average period of 2.5 and 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: Three months ended March 31, 2020 2019 Risk-free interest rate 1.6 % 2.6 % Expected dividend yield — % — % Expected term (years) 6.04 6.00 Expected stock price volatility 69 % 74 % Employee Stock Purchase Plan During the year ended December 31, 2017, the Board adopted and the Company’s stockholders approved the 2017 employee stock purchase plan (the 2017 ESPP). The Company initially reserved 225,000 shares of common stock for issuance under the 2017 ESPP. In January 2020, the number of shares of common stock for issuance under the 2017 ESPP was increased by 450,000 shares. The Company did not issue any shares under the 2017 ESPP during the three months ended March 31, 2020 and 2019. As of March 31, 2020, there were 725,085 shares available for issuance under the 2017 ESPP.

Leases

Leases	3 Months Ended
	Mar. 31, 2020
Leases
Leases	11. Leases The Company has an operating lease for its office space in Cambridge, MA and operating and finance leases for certain equipment. In March 2020, the Company entered into the Seventh Amendment to the office space lease to extend the term of the lease through March 2026 and to provide the Company with a tenant improvement allowance of $172. The current rate per square foot that is in place through March 2021 (the original expiration date of the lease) did not change. After March 2021, there are predetermined fixed escalations of the rate as outlined in the amendment. The Company has an option to extend the lease term for an additional five years. The Company’s exercise of this option was not considered reasonably certain as of March 31, 2020. The extension is accounted for as a lease modification. The Company assessed the lease classification of the amended office space lease at the modification date and determined that the amended office space lease should be accounted for as an operating lease. The right-of-use asset and corresponding operating lease liability have been remeasured based on the present value of remaining lease payments over the remaining extended lease term, using the incremental borrowing rate applicable as of the lease modification date. The Company determined the appropriate incremental borrowing rate by using a synthetic credit rating which was estimated based on an analysis of outstanding debt of companies with similar credit and financial profiles. Since the operating lease is a net lease, as the non-lease components (i.e., common area maintenance) are paid separately from rent based on actual costs incurred, such non-lease components were not included in the right-of-use asset and liability and are reflected as an expense in the period incurred. As a result of the modification, the Company recorded an increase of $9,980 to its right-of-use (ROU) asset and lease liabilities. Following the change, the Company’s future minimum lease payments under non-cancellable leases as of March 31, 2020 were as follows: Operating leases Finance leases 2020 (excluding the three months ended March 31, 2020) $ 1,809 $ 87 2021 2,772 116 2022 2,843 84 2023 2,928 74 2024 and thereafter 6,904 18 Total lease payments 17,256 379 Present value adjustment (4,811) (41) Present value of lease liabilities $ 12,445 $ 338

Commitments

Commitments	3 Months Ended
	Mar. 31, 2020
Commitments
Commitments	12 . Commitments License agreements Through March 31, 2020, the Company had 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 did not record any milestone payments during the three months ended March 31, 2020 and 2019.

Subsequent events

Subsequent events	3 Months Ended
	Mar. 31, 2020
Subsequent events
Subsequent events	13. Subsequent Events On July 2, 2018, the Company established an at-the-market equity offering program (ATM) pursuant to which it is able to offer and sell up to $75,000 of its common stock from time to time at prevailing market prices. As of March 31, 2020, the Company had not sold any shares under the ATM. On April 7, 2020, the Company sold 8,938,599 and 1,962,000 shares of common stock at $5.59 per share and $7.74 per share, respectively, to raise gross proceeds of $65,153 through this ATM facility.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2020
Summary of Significant Accounting Policies
Principles of Consolidation	Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include those of the Company and its wholly-owned subsidiary, Mersana Securities Corp. All intercompany balances and transactions have been eliminated.
Use of Estimates	Use of Estimates The preparation of the Company’s unaudited condensed 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 identification of performance obligations and standalone selling prices of those performance obligations within its revenue arrangements, accrued expenses, valuation of stock-based awards and income taxes. Actual results could differ from those estimates.
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, or decision making group, in deciding how to allocate resources and assess performance. The Company views its operations and manages its business as a single operating segment, which is the business of discovering and developing ADCs.
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. Three months ended Three months ended March 31, 2020 March 31, 2019 Beginning End Beginning End of period of period of period of period Cash and cash equivalents $ 62,351 $ 60,450 $ 59,634 $ 137,279 Restricted cash included in other assets, noncurrent 321 321 371 371 Total cash, cash equivalents and restricted cash per statement of cash flows $ 62,672 $ 60,771 $ 60,005 $ 137,650
Marketable Securities	Marketable Securities Short-term marketable securities consist of investments in debt securities with maturities greater than three months and less than one year from the balance sheet date. 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 accumulated comprehensive income (loss) as a component of stockholders’ equity until realized. Realized gains and losses and declines in value judged to be other than temporary are included as a component of other income (expense), net, based on the specific identification method. When determining whether a decline in value is other than temporary, the Company considers various factors, including whether the Company has the intent to sell the security, and whether it is more likely than not that the Company will be required to sell the security prior to recovery of its amortized cost basis. Fair value is determined based on quoted market prices.
Other Assets	Other Assets The Company recorded other assets of $1,453 as of March 31, 2020 and December 31, 2019, comprised of restricted cash of $321 held as security deposits for a standby letter of credit related to a facility lease and $1,132 held by a service provider.
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 shares of common stock outstanding during the period, without further 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 shares of common stock 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, stock options, unvested restricted stock units (RSUs) and 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. Therefore, basic and diluted net loss per share were the same for the three months ended March 31, 2020. The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share for the period ended March 31, 2020, because to include them would be anti-dilutive (in common stock equivalent shares): Three months ended March 31, 2020 Stock options 6,049,288 Restricted stock units 760,193 Warrants 39,474 6,848,955 For the three months ended March 31, 2019, the Company reported net income. Diluted earnings per share was computed using the "treasury method" by dividing the net income by the weighted-average number of shares of common stock and potentially dilutive securities outstanding during the period. The weighted-average number of shares of common stock were adjusted for the potential dilutive effect of the exercise of stock options and warrants to purchase common stock. Refer to Note 7 “Earnings per share”.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808):Clarifying the Interaction between Topic 808 and Topic 606 . The main provisions of ASU 2018-18 include: (i) clarifying that certain transactions between collaborative arrangement participants should be accounted for as revenue when the collaborative arrangement participant is a customer in the context of a unit of account and (ii) precluding the presentation of transactions with collaborative arrangement participants that are not directly related to sales to third parties together with revenue. This guidance is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual reporting periods, and early adoption is permitted. The guidance per ASU 2018-18 is to be adopted retrospectively to the date of initial application of Topic 606. The Company adopted the new standard effective January 1, 2020. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. Currently, U.S. GAAP delays recognition of the full amount of credit losses until the loss is probable of occurring. Under this ASU, the income statement will reflect an entity’s current estimate of all expected credit losses. The measurement of expected credit losses will be based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses rather than as a direct write-down of the security. This ASU is effective for annual periods beginning after December 15, 2019, including interim periods within those annual reporting periods, and early adoption is permitted. The Company adopted the new standard effective January 1, 2020 using the modified retrospective method. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2020
Summary of Significant Accounting Policies
Schedule of cash, cash equivalents and restricted cash	Three months ended Three months ended March 31, 2020 March 31, 2019 Beginning End Beginning End of period of period of period of period Cash and cash equivalents $ 62,351 $ 60,450 $ 59,634 $ 137,279 Restricted cash included in other assets, noncurrent 321 321 371 371 Total cash, cash equivalents and restricted cash per statement of cash flows $ 62,672 $ 60,771 $ 60,005 $ 137,650
Schedule of outstanding potentially dilutive securities excluded from calculation of diluted net loss per share	The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share for the period ended March 31, 2020, because to include them would be anti-dilutive (in common stock equivalent shares): Three months ended March 31, 2020 Stock options 6,049,288 Restricted stock units 760,193 Warrants 39,474 6,848,955

Collaboration Agreements (Table

Collaboration Agreements (Tables)	3 Months Ended
	Mar. 31, 2020
Collaboration agreements
Schedule of changes in the balances of our contract assets and liabilities and recognized revenue	The following table presents changes in the balances of our contract assets and liabilities during the three months ended March 31, 2020 and 2019: Balance at Beginning Balance at of Period Additions Deductions End of Period Three months ended March 31, 2020 Contract assets $ — $ — $ — $ — Contract liabilities: Deferred revenue $ 4,815 $ — $ 11 $ 4,804 Balance at Beginning Balance at of Period Additions Deductions End of Period Three months ended March 31, 2019 Contract assets $ — $ — $ — $ — Contract liabilities: Deferred revenue $ 46,196 $ — $ 40,592 $ 5,604 During the three months ended March 31, 2020 and 2019, the Company recognized the following revenues as a result of changes in the contract asset and the contract liability balances in the respective periods: Three months ended March 31, 2020 2019 Revenue recognized in the period from: Amounts included in the contract liability at the beginning of the period $ 11 $ 40,592 Performance obligations satisfied in previous periods $ — $ —

Fair value measurements (Tables

Fair value measurements (Tables)	3 Months Ended
	Mar. 31, 2020
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) March 31, 2020 Marketable securities: Commercial paper $ 5,983 $ — $ 5,983 $ — Corporate bonds 11,993 — 11,993 — $ 17,976 $ — $ 17,976 $ — Significant Quoted Prices Other Significant in Active Observable Unobservable Fair Markets Inputs Inputs Value (Level 1) (Level 2) (Level 3) December 31, 2019 Marketable securities: Commercial paper $ 11,940 $ — $ 11,940 $ — Corporate bonds 12,010 — 12,010 — U.S. Treasuries 13,489 13,489 — — $ 37,439 $ 13,489 $ 23,950 $ —

Marketable securities (Tables)

Marketable securities (Tables)	3 Months Ended
	Mar. 31, 2020
Marketable securities
Schedule of reconciliation of marketable securities from cost basis to fair value	Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value March 31, 2020 Commercial paper $ 5,983 $ — $ — $ 5,983 Corporate bonds 11,997 — (4) 11,993 $ 17,980 $ — $ (4) $ 17,976 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value December 31, 2019 Commercial paper $ 11,940 $ — $ — $ 11,940 Corporate bonds 11,990 20 — 12,010 U.S. Treasuries 13,484 5 — 13,489 $ 37,414 $ 25 $ — $ 37,439

Accrued expenses (Tables)

Accrued expenses (Tables)	3 Months Ended
	Mar. 31, 2020
Accrued expenses
Schedule of accrued expenses	March 31, December 31, 2020 2019 Accrued payroll and related expenses $ 1,549 $ 4,037 Accrued preclinical, manufacturing and clinical expenses 3,367 4,230 Accrued professional fees 716 675 Accrued other 46 44 $ 5,678 $ 8,986

Earnings per share (Tables)

Earnings per share (Tables)	3 Months Ended
	Mar. 31, 2020
Earnings per share
Schedule of calculation of basic and diluted net income per share	Three months ended March 31, 2020 2019 Numerator: Net income (loss) $ (16,926) $ 21,901 Denominator: Weighted-average number of shares - basic 47,988,630 30,299,650 Dilutive securities - share-based awards — 1,052,730 Dilutive securities - common stock warrants — 109,316 Weighted-average number of shares - diluted 47,988,630 31,461,696 Net income (loss) per share - basic $ (0.35) $ 0.72 Net income (loss) per share - diluted $ (0.35) $ 0.70

Debt (Tables)

Debt (Tables)	3 Months Ended
	Mar. 31, 2020
Debt
Schedule of debt	March 31, 2020 Total debt $ 5,000 Less: Current portion of long-term-debt (1,167) Total debt, net of current portion 3,833 Debt financing costs, net of accretion (163) Accretion related to final payment 62 Long-term debt, net $ 3,732
Schedule of estimated future payments	2020 (excluding the three months ended March 31, 2020) $ 667 2021 2,000 2022 2,000 2023 333 Total debt $ 5,000

Stockholders' equity (Tables)

Stockholders' equity (Tables)	3 Months Ended
	Mar. 31, 2020
Stockholders' equity
Schedule for number of common stock reserved for exercise of outstanding stock options and warrants	March 31, December 31, 2020 2019 Stock options 6,049,288 4,720,772 Restricted stock units 760,193 447,336 Warrants 39,474 39,474 Exchange warrants — 2,575,000 6,848,955 7,782,582

Stock options (Tables)

Stock options (Tables)	3 Months Ended
	Mar. 31, 2020
Stock options
Schedule of stock option activity	Weighted- Number Average of Shares Exercise Price Outstanding at January 1, 2020 4,720,772 $ 5.24 Granted 1,412,653 6.10 Exercised (43,055) 2.77 Cancelled (41,082) 8.50 Outstanding at March 31, 2020 6,049,288 $ 5.44 Exercisable at March 31, 2020 2,846,100 $ 4.68
Schedule of restricted stock unit activity	Number of Shares Unvested at January 1, 2020 447,336 Granted 324,932 Vested — Forfeited (12,075) Unvested at March 31, 2020 760,193
Schedule of stock-based compensation expense by award type	Three months ended March 31, 2020 2019 Stock options $ 1,233 $ 1,094 Restricted stock units 310 — Employee stock purchase plan 66 70 Stock-based compensation expense included in Total operating expenses $ 1,609 $ 1,164
Schedule of stock-based compensation expense as reflected in the Company’s condensed consolidated statements of operations and comprehensive loss	Three months ended March 31, 2020 2019 Research and development $ 797 $ 516 General and administrative 812 648 Stock-based compensation expense included in Total operating expenses $ 1,609 $ 1,164
Schedule of weighted average assumptions for estimating fair value of option awards	Three months ended March 31, 2020 2019 Risk-free interest rate 1.6 % 2.6 % Expected dividend yield — % — % Expected term (years) 6.04 6.00 Expected stock price volatility 69 % 74 %

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2020
Leases
Schedule of future minimum lease payments under non-cancellable leases	Operating leases Finance leases 2020 (excluding the three months ended March 31, 2020) $ 1,809 $ 87 2021 2,772 116 2022 2,843 84 2023 2,928 74 2024 and thereafter 6,904 18 Total lease payments 17,256 379 Present value adjustment (4,811) (41) Present value of lease liabilities $ 12,445 $ 338

Nature of business and basis _2

Nature of business and basis of presentation - Termination of collaborative arrangement (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019
Collaboration agreements
Net (loss) income	$ (16,926)	$ (16,246)	$ (16,792)	$ (17,071)	$ 21,901
Deferred revenue recognized	11				40,592
Accumulated deficit	$ (209,300)	$ (192,374)
2016 Restated Tokeda Agreement and XMT-1522 Agreement
Collaboration agreements
Deferred revenue recognized					$ 39,965

Nature of business and basis _3

Nature of business and basis of presentation - Liquidity (Details) - USD ($) $ / shares in Units, $ in Thousands	Apr. 07, 2020	Mar. 31, 2020	Mar. 31, 2019
Net proceeds from offering of common stock			$ 92,162
Substantial doubt about going concern, within twelve months		false
ATM
Issuance of common stock in offering (in shares)		0
Subsequent event | ATM
Net proceeds from offering of common stock	$ 65,153
Subsequent event | ATM, $5.59 per share
Issuance of common stock in offering (in shares)	8,938,599
Share price (in dollars per share)	$ 5.59
Subsequent event | ATM, $7.74 per share
Issuance of common stock in offering (in shares)	1,962,000
Share price (in dollars per share)	$ 7.74

Summary of significant accoun_4

Summary of significant accounting policies - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Cash, cash equivalents and restricted cash
Cash and cash equivalents	$ 60,450	$ 62,351	$ 137,279	$ 59,634
Restricted cash included in other assets, noncurrent	321	321	371	371
Total cash, cash equivalents and restricted cash per statement of cash flows	$ 60,771	$ 62,672	$ 137,650	$ 60,005
Restricted cash, Balance Sheet Location	us-gaap:OtherAssetsNoncurrent	us-gaap:OtherAssetsNoncurrent	us-gaap:OtherAssetsNoncurrent

Summary of significant accoun_5

Summary of significant accounting policies - Other Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Other Assets
Other assets	$ 1,453	$ 1,453
Security deposit	321	321
Retainage deposit	1,132	1,132
Restricted cash included in other assets, noncurrent	$ 321	$ 321	$ 371	$ 371
Restricted cash, Balance Sheet Location	us-gaap:OtherAssetsNoncurrent	us-gaap:OtherAssetsNoncurrent	us-gaap:OtherAssetsNoncurrent

Summary of significant accoun_6

Summary of significant accounting policies - Antidilutive securities (Details) - shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Anti-dilutive securities
Anti-dilutive securities	6,848,955	2,686,700
Stock options.
Anti-dilutive securities
Anti-dilutive securities	6,049,288
Restricted stock units
Anti-dilutive securities
Anti-dilutive securities	760,193
Warrants
Anti-dilutive securities
Anti-dilutive securities	39,474

Summary of significant accoun_7

Summary of significant accounting policies - Recently Issued Accounting Pronouncement (Details)	Jan. 01, 2020
ASU 2018-18
New Accounting pronouncements
Change in Accounting Principle, Accounting Standards Update, Adopted	true
ASU 2016-13
New Accounting pronouncements
Change in Accounting Principle, Accounting Standards Update, Adopted	true

Collaboration agreements - Merc

Collaboration agreements - Merck KGaA (Detail) - Merck KGaA $ in Thousands	1 Months Ended
	Jun. 30, 2014USD ($)item	Mar. 31, 2020USD ($)item	Dec. 31, 2017item
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
Number of targets designated | item		6	6
Next potential development milestone payment eligible to receive		$ 500

Collaboration agreements - Me_2

Collaboration agreements - Merck KGaA - Accounting Analysis (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)item	Mar. 31, 2019USD ($)	Dec. 31, 2019USD ($)	Dec. 31, 2018USD ($)	Dec. 31, 2017item
Collaboration agreements
Collaboration revenue	$ 11	$ 41,035
Research and development	12,219	15,143
Deferred revenue	4,804	5,604	$ 4,815	$ 46,196
Merck KGaA Agreement and Merck KGaA Supply Agreement
Collaboration agreements
Deferred revenue	$ 4,804		$ 4,815
Merck KGaA
Collaboration agreements
Number of targets designated | item	6				6
Collaboration revenue	$ 11	18
Merck KGaA | Rights to future technological improvements | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-01-01
Collaboration agreements
Expected recognition period	10 years
Merck KGaA | Joint research committee services | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-01-01
Collaboration agreements
Expected recognition period	5 years
Merck KGaA Supply Agreement
Collaboration agreements
Collaboration revenue	$ 0	1,037
Research and development	$ 0	$ 1,037

Collaboration agreements - XMT-

Collaboration agreements - XMT-1522 Strategic Partnership (Details) - USD ($) $ in Thousands	Jan. 02, 2019	Mar. 31, 2020	Mar. 31, 2019
Collaboration agreements
Research and development		$ 12,219	$ 15,143
XMT-1522 Agreement
Collaboration agreements
Period of time until agreement terminated	30 days
Period of shared development costs following effective termination date	30 days
Research and development			$ 200

Collaboration agreements - Take

Collaboration agreements - Takeda strategic R & D partnership (Details) - 2016 Restated Tokeda Agreement $ in Thousands	Jan. 02, 2019	Mar. 31, 2019USD ($)	Jan. 31, 2016item
Collaboration agreements
Number of targets | item			7
Period of time until agreement terminated	45 days
Amount of costs billed | $		$ 195

Collaboration agreements - 2016

Collaboration agreements - 2016 Takeda and XMT-1522 Agreements - Accounting Analysis (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Collaboration agreements
Deferred revenue recognized	$ 11	$ 40,592
Collaboration revenue	11	41,035
Accounts payable	4,603		$ 7,296
2016 Restated Tokeda Agreement and XMT-1522 Agreement
Collaboration agreements
Deferred revenue recognized		$ 39,965
Accounts payable	$ 2,335		$ 2,335

Collaboration Agreements - Cont

Collaboration Agreements - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Contract liabilities
Deferred revenue, Balance at Beginning of Period	$ 4,815	$ 46,196
Deferred revenue, Deductions	11	40,592
Deferred revenue, Balance at End of Period	4,804	5,604
Revenue recognized in the period from:
Amounts included in the contract liability at the beginning of the period	$ 11	$ 40,592

Collaboration Agreements - Othe

Collaboration Agreements - Other Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Collaboration agreements
Collaboration revenue	$ 11	$ 41,035
Type of Revenue	mrsn:CollaborationMember	mrsn:CollaborationMember
Asana BioSciences
Collaboration agreements
Next potential milestone payment eligible to receive	$ 2,500
Asana BioSciences | Limited services
Collaboration agreements
Collaboration revenue	0	$ 15
Asana BioSciences | Milestone
Collaboration agreements
Collaboration revenue	$ 0	$ 0

Fair value measurements (Detail

Fair value measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019
Fair value measurements
Marketable securities	$ 17,976	$ 37,439
Transfers between fair value measurement level 1 to level 2	0		$ 0
Transfers between fair value measurement level 2 to level 1	0		$ 0
Recurring basis
Fair value measurements
Total assets regularly measured and carried at fair value	17,976	37,439
Recurring basis | Commercial paper
Fair value measurements
Marketable securities	5,983	11,940
Recurring basis | Corporate bonds
Fair value measurements
Marketable securities	11,993	12,010
Recurring basis | U.S. Treasuries
Fair value measurements
Marketable securities		13,489
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair value measurements
Total assets regularly measured and carried at fair value		13,489
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasuries
Fair value measurements
Marketable securities		13,489
Recurring basis | Significant Other Observable Inputs (Level 2)
Fair value measurements
Total assets regularly measured and carried at fair value	17,976	23,950
Recurring basis | Significant Other Observable Inputs (Level 2) | Commercial paper
Fair value measurements
Marketable securities	5,983	11,940
Recurring basis | Significant Other Observable Inputs (Level 2) | Corporate bonds
Fair value measurements
Marketable securities	$ 11,993	$ 12,010

Marketable securities (Details)

Marketable securities (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)security	Dec. 31, 2019USD ($)
Marketable securities
Amortized Cost	$ 17,980	$ 37,414
Gross Unrealized Gains		25
Gross Unrealized Losses	(4)
Marketable securities	$ 17,976	37,439
Number of securities in an unrealized loss position | security	3
Aggregate fair value of securities in an unrealized loss position	$ 8,993
Change in credit loss	0
Allowance for credit loss	0
Commercial paper
Marketable securities
Amortized Cost	5,983	11,940
Marketable securities	5,983	11,940
Corporate bonds
Marketable securities
Amortized Cost	11,997	11,990
Gross Unrealized Gains		20
Gross Unrealized Losses	(4)
Marketable securities	$ 11,993	12,010
U.S. Treasuries
Marketable securities
Amortized Cost		13,484
Gross Unrealized Gains		5
Marketable securities		$ 13,489

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Accrued expenses
Accrued payroll and related expenses	$ 1,549	$ 4,037
Accrued preclinical, manufacturing and clinical expenses	3,367	4,230
Accrued professional fees	716	675
Accrued other	46	44
Total	$ 5,678	$ 8,986

Earnings per share (Details)

Earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Numerator
Net income (loss) - basic (in dollars)	$ (16,926)	$ 21,901
Net income (loss) - diluted (in dollars)	$ (16,926)	$ 21,901
Denominator
Weighted-average number of shares - basic	47,988,630	30,299,650
Dilutive securities - share-based awards (in shares)		1,052,730
Dilutive securities - common stock warrants (in shares)		109,316
Weighted average number of shares - diluted (in shares)	47,988,630	31,461,696
Net income (loss) per share - basic (in dollars per share)	$ (0.35)	$ 0.72
Net income (loss) per share - diluted (in dollars per share)	$ (0.35)	$ 0.70

Earnings per share - Antidiluti

Earnings per share - Antidilutive securities (Details) - shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Earnings per share
Anti-dilutive securities	6,848,955	2,686,700

Debt - Agreement (Details)

Debt - Agreement (Details) $ in Thousands	May 08, 2019USD ($)installment	Mar. 31, 2020USD ($)
Debt
Debt amount		$ 5,000
Credit Facility
Debt
Maximum borrowing capacity	$ 20,000
Number of principal advances | installment	4
Drawn amount	$ 5,000
Commitment fee (as a percent)	3.00%
Debt amount		$ 5,000
Credit Facility | Minimum
Debt
Term loan tranche amount	$ 5,000

Debt - Components (Details)

Debt - Components (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Debt
Total debt	$ 5,000
Less: Current portion of long-term-debt	(1,167)	$ (667)
Total debt, net of current portion	3,833
Debt financing costs, net of accretion	(163)
Accretion related to final payment	62
Long-term debt, net	3,732	$ 4,201
Credit Facility
Debt
Total debt	$ 5,000

Debt - Future payments (Details

Debt - Future payments (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)
Estimated future principal payments
2020 (excluding the three months ended March 31, 2020)	$ 667
2021	2,000
2022	2,000
2023	333
Total debt	5,000
Credit Facility
Estimated future principal payments
Total debt	5,000
Interest expense	$ 51

Stockholders' Equity - Preferre

Stockholders' Equity - Preferred stock (Details) - shares	Mar. 31, 2020	Dec. 31, 2019
Stockholders' equity
Preferred stock, shares authorized	25,000,000	25,000,000
Preferred stock, shares issued	0	0

Stockholders' Equity - Common s

Stockholders' Equity - Common stock (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020Voteshares	Mar. 31, 2019USD ($)	Dec. 31, 2019shares
Common stock
Net proceeds from offering of common stock | $		$ 92,162
Number of shares reserved for future issuance	6,848,955		7,782,582
Stock options.
Common stock
Number of shares reserved for future issuance	6,049,288		4,720,772
Restricted stock units
Common stock
Number of shares reserved for future issuance	760,193		447,336
Warrants
Common stock
Number of shares reserved for future issuance	39,474		39,474
Exchange warrants
Common stock
Number of shares reserved for future issuance			2,575,000
Common Stock
Common stock
Number of votes for each shares held | Vote	1
Warrants and share-based payment awards
Common stock
Number of shares reserved for future issuance	6,848,955		7,782,582

Stockholders' Equity - At-the-m

Stockholders' Equity - At-the-market equity offering program (Details) - USD ($) $ / shares in Units, $ in Thousands	Apr. 07, 2020	Mar. 31, 2020	Mar. 31, 2019	Jul. 02, 2018
Offering program
Net proceeds from offering of common stock			$ 92,162
ATM
Offering program
Amount of shares authorized to be offered and sold				$ 75,000
Issuance of common stock in offering (in shares)		0
ATM | Subsequent event
Offering program
Net proceeds from offering of common stock	$ 65,153
ATM, $5.59 per share | Subsequent event
Offering program
Issuance of common stock in offering (in shares)	8,938,599
Share price (in dollars per share)	$ 5.59
ATM, $7.74 per share | Subsequent event
Offering program
Issuance of common stock in offering (in shares)	1,962,000
Share price (in dollars per share)	$ 7.74

Stockholders' Equity - Warrants

Stockholders' Equity - Warrants (Details) - Warrants - $ / shares	12 Months Ended
	Dec. 31, 2013	Mar. 31, 2020
Warrants
Number of shares into which warrant issued during period may be converted	129,491
Warrant exercise price per share (in dollars per share)	$ 0.05
Contractual life of warrants	10 years
Number of shares of common stock into which warrants may be converted		39,474

Stockholders' Equity - Exchange

Stockholders' Equity - Exchange Warrants (Details) - Exchange warrants - $ / shares	Mar. 02, 2020	Nov. 26, 2019
Warrants
Number of common shares exchanged for warrants		2,575,000
Number of shares of common stock into which warrants may be converted		2,575,000
Warrant exercise price per share (in dollars per share)		$ 0.0001
Shares issued upon exercise of warrants	2,574,971

Stock options - Plans (Details)

Stock options - Plans (Details) - shares	1 Months Ended		3 Months Ended
	Jan. 31, 2020	Jun. 30, 2017	Mar. 31, 2020	Dec. 31, 2019
Share-based awards
Number of shares outstanding			6,049,288	4,720,772
2017 Plan
Share-based awards
Number of shares authorized		2,255,000
Cumulative annual increase in number of shares issuable (as a percent)		4.00%
Number of shares available for future issuance			1,642,679
Additional shares authorized	1,815,520
Vesting period (in years)			4 years
2017 Plan | Maximum
Share-based awards
Expiration period			10 years

Stock options - Activity under

Stock options - Activity under stock option plan (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Number of Shares
Outstanding at beginning of period (in shares)	4,720,772
Granted (in shares)	1,412,653
Exercised (in shares)	(43,055)
Cancelled (in shares)	(41,082)
Outstanding at end of period (in shares)	6,049,288
Options exercisable, at end of period (in shares)	2,846,100
Weighted- Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 5.24
Granted (in dollars per share)	6.10
Exercised (in dollars per share)	2.77
Cancelled (in dollars per share)	8.50
Outstanding at end of period (in dollars per share)	5.44
Options exercisable, at end of period (in dollars per share)	4.68
Additional Disclosures
Weighted-average grant date fair value of options granted (in dollars per share)	$ 3.79	$ 2.39
Cash received from the exercise of stock options (in dollars)	$ 119	$ 42

Stock options - Restricted stoc

Stock options - Restricted stock units (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended
	Jan. 31, 2020	Jul. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Restricted stock units
Share-based compensation expense			$ 1,609	$ 1,164
Restricted stock units
Restricted stock units
Vesting period (in years)	4 years	2 years
Number of Shares, Unvested, Beginning of period (in shares)	324,932		324,932
Number of Shares, Granted (in shares)	324,932
Number of Shares, Vested (in shares)			(12,075)
Number of Shares, Forfeited (in shares)			760,193
Share-based compensation expense			$ 310

Stock options - Stock based com

Stock options - Stock based compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Stock options
Stock-based compensation expense included in total operating expenses	$ 1,609	$ 1,164
Unrecognized stock compensation cost, Options	11,341
Stock options.
Stock options
Stock-based compensation expense included in total operating expenses	$ 1,233	1,094
Weighted-average amortization period of unrecognized stock compensation cost	2 years 6 months
Restricted stock units
Stock options
Stock-based compensation expense included in total operating expenses	$ 310
Unrecognized stock compensation cost. Other than options	$ 3,022
Weighted-average amortization period of unrecognized stock compensation cost	2 years 10 months 24 days
Employee stock purchase plan
Stock options
Stock-based compensation expense included in total operating expenses	$ 66	70
Research and development
Stock options
Stock-based compensation expense included in total operating expenses	797	516
General and administrative
Stock options
Stock-based compensation expense included in total operating expenses	$ 812	$ 648

Stock options - Fair value assu

Stock options - Fair value assumptions (Details)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Weighted average fair value assumptions
Risk-free interest rate (as a percent)	1.60%	2.60%
Expected term (years)	6 years 15 days	6 years
Expected stock price volatility (as a percent)	69.00%	74.00%

Stock options - Employee Stock

Stock options - Employee Stock Purchase Plan (Details) - shares	1 Months Ended
	Jan. 31, 2020	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2017
Employee Stock Purchase Plan
Number of shares reserved for future issuance		6,848,955	7,782,582
Employee Stock Purchase Plan
Employee Stock Purchase Plan
Number of shares reserved for future issuance				225,000
Additional shares authorized	450,000
Number of shares available for future issuance		725,085

Leases - Description (Details)

Leases - Description (Details) - USD ($) $ in Thousands	1 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Leases
Letter of credit for security deposit	$ 321	$ 321
Increase in ROU assets due to lease modification	9,980
Increase in operating lease liabilities due to lease modification	9,980
Office space, Cambridge, MA, Leased
Leases
Tenant improvement allowance	$ 172
Renewal term	5 years

Leases - Future minimum lease p

Leases - Future minimum lease payments (Details) $ in Thousands	Mar. 31, 2020USD ($)
Operating leases
2020 (excluding the three months ended March 31, 2020)	$ 1,809
2021	2,772
2022	2,843
2023	2,928
2024 and thereafter	6,904
Total lease payments	17,256
Present value adjustment	(4,811)
Present value of operating lease liabilities	12,445
Finance leases
2020 (excluding the three months ended March 31, 2020)	87
2021	116
2022	84
2023	74
2024 and thereafter	18
Total lease payments	379
Present value adjustment	(41)
Present value of finance lease liabilities	$ 338

Commitments - License agreement

Commitments - License agreements (Details) - License agreements $ in Thousands	3 Months Ended
	Mar. 31, 2020USD ($)item	Mar. 31, 2019USD ($)
Commitments
Number of biotechnology companies where Company has licensed intellectual property | item	2
Milestone payments | $	$ 0	$ 0

Subsequent events (Details)

Subsequent events (Details) - USD ($) $ / shares in Units, $ in Thousands	Apr. 07, 2020	Mar. 31, 2020	Mar. 31, 2019	Jul. 02, 2018
Subsequent events
Net proceeds from offering of common stock			$ 92,162
ATM
Subsequent events
Amount of shares authorized to be offered and sold				$ 75,000
Issuance of common stock in offering (in shares)		0
Subsequent event | ATM
Subsequent events
Net proceeds from offering of common stock	$ 65,153
Subsequent event | ATM, $5.59 per share
Subsequent events
Issuance of common stock in offering (in shares)	8,938,599
Share price (in dollars per share)	$ 5.59
Subsequent event | ATM, $7.74 per share
Subsequent events
Issuance of common stock in offering (in shares)	1,962,000
Share price (in dollars per share)	$ 7.74