Mersana Therapeutics (MRSN) 10-Q 9 Nov 20 2020 Q3 Quarterly report Financial data

Cover Page

Cover Page - shares	9 Months Ended
	Sep. 30, 2020	Nov. 04, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	001-38129
Entity Registrant Name	Mersana Therapeutics, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	04-3562403
Entity Address, Address Line One	840 Memorial Drive
Entity Address, City or Town	Cambridge
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02139
City Area Code	617
Local Phone Number	498-0020
Title of 12(b) Security	Common Stock, $0.0001 par value
Trading Symbol	MRSN
Security Exchange Name	NASDAQ
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		68,497,425
Entity Central Index Key	0001442836
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 270,936	$ 62,351
Short-term marketable securities	0	37,439
Prepaid expenses and other current assets	3,998	1,536
Total current assets	274,934	101,326
Property and equipment, net	1,698	2,164
Operating lease right-of-use assets	11,343	2,598
Other assets	2,153	1,453
Total assets	290,128	107,541
Current liabilities:
Accounts payable	4,528	7,296
Accrued expenses	11,173	8,986
Deferred revenue	3,998	4,815
Operating lease liabilities	1,280	2,219
Short-term debt	0	667
Other liabilities	91	87
Total current liabilities	21,070	24,070
Operating lease liabilities	10,606	677
Long-term debt, net	4,944	4,201
Other liabilities	200	275
Total liabilities	36,820	29,223
Commitments (Note 11)
Stockholders' equity:
Preferred stock, $0.0001 par value; 25,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively	0	0
Common stock,$0.0001 par value; 175,000,000 shares authorized; 68,470,081 and 45,388,023 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively	7	5
Additional paid-in capital	504,876	270,662
Accumulated other comprehensive income (loss)	0	25
Accumulated deficit	(251,575)	(192,374)
Total stockholders’ equity	253,308	78,318
Total liabilities and stockholders’ equity	$ 290,128	$ 107,541

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
Stockholders' equity:
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	25,000,000	25,000,000
Preferred stock, shares issued (in shares)	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	175,000,000	175,000,000
Common stock, shares issued (in shares)	68,470,081	45,388,023
Common stock, shares outstanding (in shares)	68,470,081	45,388,023

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Collaboration revenue	$ 11	$ 844	$ 817	$ 42,081
Operating expenses:
Research and development	16,546	13,701	44,179	42,610
General and administrative	5,881	4,436	15,988	13,072
Total operating expenses	22,427	18,137	60,167	55,682
Other income (expense):
Interest income	19	608	414	1,785
Interest expense	(92)	(107)	(267)	(146)
Total other income (expense), net	(73)	501	147	1,639
Net loss	(22,489)	(16,792)	(59,203)	(11,962)
Other comprehensive loss
Unrealized gain (loss) on marketable securities	(2)	17	(25)	36
Comprehensive loss	(22,491)	(16,775)	(59,228)	(11,926)
Net income (loss) attributable to common stockholders - diluted	(22,489)	(16,792)	(59,203)	(11,962)
Net income (loss) attributable to common stockholders - basic	$ (22,489)	$ (16,792)	$ (59,203)	$ (11,962)
Net loss per share attributable to common stockholders - basic and diluted (in dollars per share)	$ (0.33)	$ (0.35)	$ (1)	$ (0.28)
Weighted-average number of shares of common stock used in net income (loss) per share attributable to common stockholders - basic (in shares)	68,419,192	47,833,607	59,086,202	42,011,340
Weighted-average number of shares of common stock used in net income (loss) per share attributable to common stockholders - diluted (in shares)	68,419,192	47,833,607	59,086,202	42,011,340

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	ATM	Public Stock Offering	Common Stock	Common StockATM	Common StockPublic Stock Offering	Additional Paid-in Capital	Additional Paid-in CapitalATM	Additional Paid-in CapitalPublic Stock Offering	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Balance at beginning of period (in shares) at Dec. 31, 2018				23,234,472
Balance at beginning of period at Dec. 31, 2018	$ 8,795			$ 3			$ 172,966			$ (8)	$ (164,166)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)				12,192
Exercise of stock options	42						42
Issuance of common stock under public offering, net of issuance costs (in shares)				24,437,500
Issuance of common stock under public offering, net of issuance costs	92,162			$ 2			92,160
Stock-based compensation expense	1,164						1,164
Other comprehensive income (loss)	8									8
Net (loss) income	21,901										21,901
Balance at end of period (in shares) at Mar. 31, 2019				47,684,164
Balance at end of period at Mar. 31, 2019	124,072			$ 5			266,332				(142,265)
Balance at beginning of period (in shares) at Dec. 31, 2018				23,234,472
Balance at beginning of period at Dec. 31, 2018	8,795			$ 3			172,966			(8)	(164,166)
Increase (Decrease) in Stockholders' Equity
Net (loss) income	(11,962)
Balance at end of period (in shares) at Sep. 30, 2019				47,882,897
Balance at end of period at Sep. 30, 2019	93,045			$ 5			269,140			28	(176,128)
Balance at beginning of period (in shares) at Mar. 31, 2019				47,684,164
Balance at beginning of period at Mar. 31, 2019	124,072			$ 5			266,332				(142,265)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)				32,693
Exercise of stock options	58						58
Purchase of common stock under ESPP (in shares)				82,281
Purchase of common stock under ESPP	283						283
Stock-based compensation expense	1,161						1,161
Other comprehensive income (loss)	11									11
Net (loss) income	(17,071)										(17,071)
Balance at end of period (in shares) at Jun. 30, 2019				47,799,138
Balance at end of period at Jun. 30, 2019	108,514			$ 5			267,834			11	(159,336)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options and warrants (in shares)				83,759
Exercise of stock options and warrants	21						21
Stock-based compensation expense	1,285						1,285
Other comprehensive income (loss)	17									17
Net (loss) income	(16,792)										(16,792)
Balance at end of period (in shares) at Sep. 30, 2019				47,882,897
Balance at end of period at Sep. 30, 2019	93,045			$ 5			269,140			28	(176,128)
Increase (Decrease) in Stockholders' Equity
Retirement of common stock in exchange for common stock warrant (in shares)				(2,575,000)
Retirement of common stock in exchange for common stock warrant	(8,986)						(8,986)
Issuance of common stock warrant in exchange for retirement of common stock	8,986						8,986
Purchase of common stock under ESPP (in shares)				57,792
Purchase of common stock under ESPP	206						206
Exercise of stock options and warrants (in shares)				22,334
Exercise of stock options and warrants	54						54
Stock-based compensation expense	1,262						1,262
Other comprehensive income (loss)	(3)									(3)
Net (loss) income	(16,246)										(16,246)
Balance at end of period (in shares) at Dec. 31, 2019				45,388,023
Balance at end of period at Dec. 31, 2019	78,318			$ 5			270,662			25	(192,374)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)				43,055
Exercise of stock options	$ 119						119
Exercise of common stock warrant in exchange for common stock (in shares)	0			2,574,971
Stock-based compensation expense	$ 1,609						1,609
Other comprehensive income (loss)	(29)									(29)
Net (loss) income	(16,926)										(16,926)
Balance at end of period (in shares) at Mar. 31, 2020				48,006,049
Balance at end of period at Mar. 31, 2020	63,091			$ 5			272,390			(4)	(209,300)
Balance at beginning of period (in shares) at Dec. 31, 2019				45,388,023
Balance at beginning of period at Dec. 31, 2019	$ 78,318			$ 5			270,662			25	(192,374)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)	338,069
Net (loss) income	$ (59,203)
Balance at end of period (in shares) at Sep. 30, 2020				68,470,081
Balance at end of period at Sep. 30, 2020	253,308			$ 7			504,876			0	(251,575)
Balance at beginning of period (in shares) at Mar. 31, 2020				48,006,049
Balance at beginning of period at Mar. 31, 2020	63,091			$ 5			272,390			(4)	(209,300)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)				206,143
Exercise of stock options	1,296						1,296
Issuance of common stock under public offering, net of issuance costs (in shares)					10,900,599	9,200,000
Issuance of common stock under public offering, net of issuance costs		$ 62,977	$ 163,991		$ 1	$ 1		$ 62,976	$ 163,990
Purchase of common stock under ESPP (in shares)				68,419
Purchase of common stock under ESPP	333						333
Stock-based compensation expense	1,656						1,656
Other comprehensive income (loss)	6									6
Net (loss) income	(19,786)										(19,786)
Balance at end of period (in shares) at Jun. 30, 2020				68,381,210
Balance at end of period at Jun. 30, 2020	273,564			$ 7			502,641			2	(229,086)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)				88,871
Exercise of stock options	317						317
Stock-based compensation expense	1,918						1,918
Other comprehensive income (loss)	(2)									(2)
Net (loss) income	(22,489)										(22,489)
Balance at end of period (in shares) at Sep. 30, 2020				68,470,081
Balance at end of period at Sep. 30, 2020	$ 253,308			$ 7			$ 504,876			$ 0	$ (251,575)

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2020	Mar. 31, 2019
Stock issuance costs		$ 5,587
ATM
Stock issuance costs	$ 2,176
Public Stock Offering
Stock issuance costs	$ 10,809

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities
Net loss	$ (59,203)	$ (11,962)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	750	963
Net amortization of premiums and discounts on investments	(86)	(87)
Stock-based compensation	5,183	3,610
Other non-cash items	110	65
Changes in operating assets and liabilities:
Accounts receivable	0	161
Prepaid expenses and other current assets	(2,460)	1,318
Other assets	(700)	0
Accounts payable	(2,766)	(3,102)
Accrued expenses	2,367	(4,518)
Operating lease assets	1,235	1,290
Operating lease liabilities	(990)	(1,356)
Deferred revenue	(817)	(41,550)
Net cash used in operating activities	(57,377)	(55,168)
Cash flows from investing activities
Maturities of marketable securities	37,500	10,500
Purchase of marketable securities	0	(53,688)
Purchase of property and equipment	(285)	(605)
Net cash provided by (used in) investing activities	37,215	(43,793)
Cash flows from financing activities
Proceeds from exercise of stock options	1,732	121
Proceeds from purchases of common stock under ESPP	333	283
Proceeds from issuance of debt, net of issuance costs	(197)	4,965
Payments under capital lease obligations	(87)	(58)
Net cash provided by financing activities	228,747	97,473
Increase (decrease) in cash, cash equivalents and restricted cash	208,585	(1,488)
Cash, cash equivalents and restricted cash, beginning of period	62,672	60,005
Cash, cash equivalents and restricted cash, end of period	271,257	58,517
Supplemental disclosures of non-cash activities:
Debt financing costs in accrued expenses	0	180
Cash paid for interest	173	64
Right-of-use assets obtained in exchange for operating lease liabilities	9,980	4,778
Right-of-use assets obtained in exchange for financing lease liabilities	0	429
Public Stock Offering
Cash flows from financing activities
Net proceeds from public offering of common stock	163,990	92,162
ATM
Cash flows from financing activities
Net proceeds from public offering of common stock	$ 62,976	$ 0

Nature of business and basis of

Nature of business and basis of presentation	9 Months Ended
	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of business and basis of presentation	Nature of business and basis of presentation 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. The Company's early stage programs include a potentially first-in-class B7-H4-targeted DolaLock ADC as well as candidates leveraging the Immunosynthen platform. 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 and initiated 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 nine months ended September 30, 2020, the net loss was $59,203, compared to net loss of $11,962 in the nine months ended September 30, 2019. The difference year over year is primarily attributable to $39,965 in deferred revenue that was recognized in the first quarter of 2019 as a result of the discontinuation of the partnership with Takeda in that quarter. The Company expects to continue to incur operating losses for at least the next several years. As of September 30, 2020, the Company had an accumulated deficit of $251,575. 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. In April 2020, the Company sold 10,900,599 shares of common stock and received net proceeds of $62,976. In addition, in June 2020, the Company sold 9,200,000 shares of common stock and received net proceeds of $163,991. 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 U.S. GAAP 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 September 30, 2020, the results of its operations for the three and nine months ended September 30, 2020 and 2019, a statement of stockholders’ equity for the three and nine months ended September 30, 2020 and 2019 and cash flows for the nine months ended September 30, 2020 and 2019. Such adjustments are of a normal and recurring nature. The results for the three and nine months ended September 30, 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	9 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	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 and nine months ended September 30, 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, except as otherwise noted below in "Recently Issued Accounting Pronouncements." 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. Nine Months Ended Nine Months Ended Beginning End Beginning End Cash and cash equivalents $ 62,351 $ 270,936 $ 59,634 $ 58,196 Restricted cash included in other assets, noncurrent 321 321 371 321 Total cash, cash equivalents and restricted cash per statement of cash flows $ 62,672 $ 271,257 $ 60,005 $ 58,517 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. Prior to the adoption of ASU 2016-13, Financial Instruments - Credit Losses , 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 $2,153 and $1,453 as of September 30, 2020 and December 31, 2019, respectively, comprised of $1,832 and $1,132, respectively, held by a service provider, and restricted cash of $321 at the end of each period held as security deposits for a standby letter of credit related to a facility lease. 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), 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 for the three and nine months ended September 30, 2020 and 2019, because to include them would be anti-dilutive (in common stock equivalent shares): Three and Nine Months Ended Three and Nine Months Ended Stock options 6,215,368 4,718,597 Unvested restricted stock units 740,862 447,336 Warrants 39,474 39,474 6,995,704 5,205,407 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. Historically, U.S. GAAP delayed recognition of the full amount of credit losses until the loss was 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	9 Months Ended
	Sep. 30, 2020
Collaboration agreements
Collaboration agreements	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 a 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. As of December 31, 2019, the total transaction price for the Merck KGaA Agreement was $21,500, which represented the amount of consideration the Company was expected to receive for the transfer of goods and services to Merck KGaA. During the nine months ended September 30, 2020, the Company decreased the fees expected to be received for research and development activities by $175 to $6,325, resulting in a revised total transaction price for the Merck KGaA Agreement of $21,325. During the nine months ended September 30, 2020, the Company completed its performance obligations associated with one of the six designated targets. For the three months ended September 30, 2020 and 2019, and the nine months ended September 30, 2020 and 2019, the Company recorded collaboration revenue of $11, $800, $817, and $836, respectively, related to its efforts under the Merck KGaA Agreement. During the three and nine months ended September 30, 2019, the Company recognized $34 and $1,255, respectively, in collaboration revenue and corresponding research and development expense of $34 and $1,255, respectively, related to the Merck KGaA Supply Agreement. As of September 30, 2020 and December 31, 2019, the Company had $3,998 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 budgeted 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 September 30, 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 nine months ended September 30, 2020 and 2019: Balance at Additions Deductions Balance at Nine months ended September 30, 2020 Contract assets $ — $ — $ — $ — Contract liabilities: Deferred revenue $ 4,815 $ — $ 817 $ 3,998 Balance at Additions Deductions Balance at Nine months ended September 30, 2019 Contract assets $ — $ — $ — $ — Contract liabilities: Deferred revenue $ 46,196 $ — $ 41,550 $ 4,646 During the three and nine months ended September 30, 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 Nine Months Ended 2020 2019 2020 2019 Revenue recognized in the period from: Amounts included in the contract liability at the beginning of the period $ 11 $ 834 $ 817 $ 41,550 Performance obligations satisfied in previous periods $ — $ — $ — $ — Other Revenue The Company has provided limited services for a collaboration partner, Asana BioSciences. For the three and nine months ended September 30, 2019, the Company recognized $10 and $25, respectively, of revenue related to these services. The Company did not recognize any revenue related to these services for the three and nine months ended September 30, 2020. 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 September 30, 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 successful 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	9 Months Ended
	Sep. 30, 2020
Fair Value Disclosures [Abstract]
Fair value measurements	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, 2019. The Company had no marketable securities as of September 30, 2020 : Fair Quoted Prices Significant Significant 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 nine months ended September 30, 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 September 30, 2020, the carrying value of the Company’s outstanding borrowing under the Amended Credit Facility (as defined below) approximated fair value (a Level 2 fair value measurement), reflecting interest rates currently available to the Company. The Amended Credit Facility is discussed in more detail in Note 7, “Debt”.

Marketable securities

Marketable securities	9 Months Ended
	Sep. 30, 2020
Marketable Securities [Abstract]
Marketable securities	Marketable securities The following table summarizes marketable securities held at December 31, 2019. The Company had no marketable securities as of September 30, 2020 : Amortized Gross Gross Fair 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

Accrued Expenses	9 Months Ended
	Sep. 30, 2020
Accrued Liabilities, Current [Abstract]
Accrued expenses	Accrued expenses Accrued expenses consisted of the following as of September 30, 2020 and December 31, 2019: September 30, December 31, Accrued payroll and related expenses $ 3,647 $ 4,037 Accrued preclinical, manufacturing and clinical expenses 6,600 4,230 Accrued professional fees and insurance 861 675 Accrued other 65 44 $ 11,173 $ 8,986

Debt

Debt	9 Months Ended
	Sep. 30, 2020
Debt Disclosure [Abstract]
Debt	Debt On May 8, 2019, the Company entered into a loan and security agreement (the Original Agreement) with Silicon Valley Bank (SVB) pursuant to which the Company borrowed $5,000. The Original Agreement accrued interest at a floating per annum rate equal to the greater of (i) 4.0% and (ii) 1.50% below the Prime Rate. The Original Agreement had an interest-only period through August 31, 2020. On August 28, 2020 (the Effective Date), the Company entered into a second amendment (the Amendment) to its existing loan and security agreement (as amended prior to the Amendment, the Existing Credit Facility) with SVB. Pursuant to the Amendment, the Company can borrow term loans in an aggregate amount of $30,000 (the Amended Credit Facility), at its option, (i) up to $25,000 in up to five principal advances through April 30, 2022, and (ii) an additional $5,000 in one principal advance, if the Company reaches certain development milestone events, as described in the Amendment, through April 30, 2022. The Company drew $5,200 upon execution of the Amendment, the proceeds of which were used to repay the Company’s existing balance and satisfy its obligations to SVB, including the final payment obligation under the Existing Credit Facility. The Amended Credit Facility bears interest at a floating per annum rate equal to the greater of (i) 4.25% and (ii) 1.00% above the Prime Rate, as defined. The Company is obligated to make monthly interest-only payments on each outstanding term loan commencing on the first calendar day of the month following the funding date of such term loan, and continuing on the first calendar day of each month thereafter through May 31, 2022. The interest only period may be extended through January 31, 2023 upon the achievement of a regulatory milestone, as described in the Amendment. Following the interest-only period, the Company will be required to repay the outstanding principal balance under the term loans in equal monthly payments plus interest in arrears to SVB through November 1, 2024 (the Maturity Date). The Company is also required to make a final payment to SVB equal to 5.5% of the original principal amount of the term loans then extended to the Company. This final payment is accreted under the effective interest method over the life of each term loan. The term loans are secured by substantially all of the Company's assets, except for its intellectual property which is subject to a negative pledge, and certain other customary exclusions. At the Company’s option, it may prepay the outstanding principal balance of any term loans in whole but not in part, subject to a prepayment fee of: (a) 3.0% of the term loans then extended to the Company if the prepayment occurs on or prior to August 28, 2021, (b) 2.0% of the term loans then extended to the Company if the prepayment occurs after August 28, 2021 but on or prior to August 28, 2022, or (c) 1.0% of the term loans then extended to the Company if the prepayment occurs after August 28, 2022 but before November 1, 2024. The Amended Credit Facility includes customary affirmative and restrictive covenants applicable to the Company. Affirmative covenants include, among others, covenants requiring the Company to maintain its corporate existence and governmental approvals, deliver certain financial reports, maintain insurance coverage and satisfy certain requirements regarding deposit accounts. The Amendment removed the requirement for the Company to maintain a minimum liquidity ratio. The restrictive covenants include, among others, requirements relating to the Company’s ability to transfer collateral, incur additional indebtedness, engage in mergers or acquisitions, pay dividends or make other distributions, make investments, create liens, sell assets and agree to a change in control, in each case subject to certain customary exceptions. The Company’s payment obligations under the Amended Credit Facility are subject to acceleration upon the occurrence of specified events of default, which include, but are not limited to, the occurrence of a material adverse change in the Company’s business, operations, or financial or other condition. Amounts outstanding upon the occurrence of an event of default are payable upon SVB’s demand and shall accrue interest at an additional rate of 5.0% per annum of the past due amount outstanding. As of September 30, 2020, the Company was in compliance with all covenants under the Amended Credit Facility. As such, as of September 30, 2020, the classification of the loan balance as stated on the balance sheet was based on the timing of defined future payment obligations. The unamortized issuance costs under the Existing Credit Facility were $139 as of the date of the Amendment. The Company incurred debt issuance costs paid to the lender in connection with the Amended Credit Facility of $17. The Company recorded such costs, including the settlement of the final payment obligation under the Existing Credit Facility as a discount from the carrying value of the term loans which are amortized as interest expense using the effective-interest method over the term of the Amended Credit Facility. As of September 30, 2020, there was $5,200 in term loans outstanding under the Amended Credit Facility and the debt consisted of the following: September 30, Total debt $ 5,200 Debt financing costs, net of accretion (262) Accretion related to final payment 6 Long-term debt, net $ 4,944 As of September 30, 2020, the estimated future principal payments due are as follows: 2020 (excluding the nine months ended September 30, 2020) $ — 2021 — 2022 1,213 2023 2,080 2024 1,907 Total debt $ 5,200

Stockholders' equity

Stockholders' equity	9 Months Ended
	Sep. 30, 2020
Stockholders' Equity Note [Abstract]
Stockholders’ equity	Stockholders’ equity Preferred stock As of September 30, 2020, the Company had 25,000,000 shares of authorized preferred stock. No shares of preferred stock have been issued. At-the-market equity offering program In July 2018, the Company established an at-the-market (ATM) equity offering program (the 2018 ATM) pursuant to which it offered and sold up to $75,000 of its common stock from time to time at prevailing market prices. In April 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 aggregate gross proceeds of $65,153 through the 2018 ATM facility. Net proceeds to the Company after deducting fees, commissions and other expenses related to the offering were approximately $62,976. In May 2020, the Company terminated the 2018 ATM and established a new ATM equity offering program (the 2020 ATM) pursuant to which it is able to sell up to $100,000 of its common stock from time to time at prevailing market prices. As of September 30, 2020, the Company had not sold any shares under the 2020 ATM. Follow-on offering In June 2020, the Company sold 9,200,000 shares of common stock, in an underwritten public offering price to the public of $19.00 per share, resulting in gross proceeds of approximately $174,800. Net proceeds to the Company after deducting fees, commissions and other expenses related to the offering were approximately $163,991. 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 September 30, 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. 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 September 30, 2020 and December 31, 2019, there were 6,995,704 and 7,782,582, respectively, shares of common stock reserved for the exercise of outstanding stock options, restricted stock units and warrants, as follows: September 30, December 31, Stock options 6,215,368 4,720,772 Restricted stock units 740,862 447,336 Warrants 39,474 39,474 Exchange warrants — 2,575,000 6,995,704 7,782,582

Stock options

Stock options	9 Months Ended
	Sep. 30, 2020
Share-based Payment Arrangement [Abstract]
Stock options	Stock options Stock option plans In June 2017, the Company’s stockholders 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 September 30, 2020, there were 1,320,916 shares available for future issuance under the 2017 Plan. During the nine months ended September 30, 2020, the Company granted 2,165,306 RSUs and options to purchase shares of common stock to employees under the 2017 Plan. Inducement awards On September 2, 2020, the Company granted its senior vice president of regulatory affairs an option to purchase up to 120,000 shares of common stock as an inducement to employment in accordance with Nasdaq Listing Rule 5635(c)(4). No underwriters were involved in this issuance of securities. The securities were issued pursuant to Section 4(a)(2) under the Securities Act of 1933, as amended, relating to transactions by an issuer not involving any public offering. These options are subject to terms substantially the same as the 2017 Plan. With respect to the stock option grants as described above, 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 as described above 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: Number Weighted- Outstanding at January 1, 2020 4,720,772 $ 5.24 Granted 1,960,374 9.41 Exercised (338,069) 5.13 Cancelled (127,709) 7.70 Outstanding at September 30, 2020 6,215,368 $ 6.52 Exercisable at September 30, 2020 3,256,514 $ 4.87 The weighted-average grant date fair value of options granted during the nine months ended September 30, 2020 and 2019, was $6.17 and $2.47 per share, respectively. Cash received from the exercise of stock options was $1,732 and $121 for the nine months ended September 30, 2020 and 2019, respectively. Restricted stock units (RSUs) 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 (31,406) Unvested at September 30, 2020 740,862 Stock-based compensation expense The Company uses the provisions of ASC 718, Stock Compensation , to account for all stock-based awards to employees and non-employees. 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 Nine Months Ended 2020 2019 2020 2019 Stock options $ 1,520 $ 1,055 $ 4,025 $ 3,240 Restricted stock units 335 184 962 184 Employee stock purchase plan 63 46 196 186 Stock-based compensation expense included in Total operating expenses $ 1,918 $ 1,285 $ 5,183 $ 3,610 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 Nine Months Ended 2020 2019 2020 2019 Research and development $ 952 $ 587 $ 2,554 $ 1,636 General and administrative 966 698 2,629 1,974 Stock-based compensation expense included in Total operating expenses $ 1,918 $ 1,285 $ 5,183 $ 3,610 As of September 30, 2020, there was $15,007 and $2,269 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 years and 2.6 years, respectively. 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 Nine Months Ended 2020 2019 2020 2019 Risk-free interest rate 0.4 % 1.9 % 1.3 % 2.4 % Expected dividend yield — % — % — % — % Expected term (years) 6.10 6.11 6.04 5.99 Expected stock price volatility 81 % 75 % 72 % 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. For the nine months ended September 30, 2020 and 2019, the Company issued 68,419 and 82,281, respectively, shares under the 2017 ESPP. The Company did not issue any shares under the 2017 ESPP for the three months ended September 30, 2020 and 2019. As of September 30, 2020, there were 656,666 shares available for issuance under the 2017 ESPP.

Leases

Leases	9 Months Ended
	Sep. 30, 2020
Leases [Abstract]
Leases	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 September 30, 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 in March 2020, the Company recorded an increase of $9,980 to its right-of-use (ROU) asset and lease liabilities in the first quarter of 2020. Following the change, the Company's future minimum lease payments under non-cancellable leases as of September 30, 2020 were as follows: Operating leases Finance leases 2020 (excluding the nine months ended September 30, 2020) $ 604 $ 29 2021 2,772 116 2022 2,843 84 2023 2,928 74 2024 and thereafter 6,904 18 Total lease payments 16,051 321 Present value adjustment (4,165) (30) Present value of lease liabilities $ 11,886 $ 291
Leases	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 September 30, 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 in March 2020, the Company recorded an increase of $9,980 to its right-of-use (ROU) asset and lease liabilities in the first quarter of 2020. Following the change, the Company's future minimum lease payments under non-cancellable leases as of September 30, 2020 were as follows: Operating leases Finance leases 2020 (excluding the nine months ended September 30, 2020) $ 604 $ 29 2021 2,772 116 2022 2,843 84 2023 2,928 74 2024 and thereafter 6,904 18 Total lease payments 16,051 321 Present value adjustment (4,165) (30) Present value of lease liabilities $ 11,886 $ 291

Commitments

Commitments	9 Months Ended
	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments	CommitmentsLicense agreementsThrough September 30, 2020, the Company had licensed intellectual property from three 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 $750 milestone payment for the dosing of the first patient in the XMT-1592 trial during the nine months ended September 30, 2020. The Company recorded a milestone payment of $600 during the three and nine months ended September 30, 2019 upon the dosing of the first patient in the expansion cohort of the XMT-1536 clinical trial. The Company did not record any milestone payments during the three months ended September 30, 2020.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
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.
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. Prior to the adoption of ASU 2016-13, Financial Instruments - Credit Losses , 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 AssetsThe Company recorded other assets of $2,153 and $1,453 as of September 30, 2020 and December 31, 2019, respectively, comprised of $1,832 and $1,132, respectively, held by a service provider, and restricted cash of $321 at the end of each period held as security deposits for a standby letter of credit related to a facility lease.
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.
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. Historically, U.S. GAAP delayed recognition of the full amount of credit losses until the loss was 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)	9 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Schedule of Cash and Cash Equivalents	Nine Months Ended Nine Months Ended Beginning End Beginning End Cash and cash equivalents $ 62,351 $ 270,936 $ 59,634 $ 58,196 Restricted cash included in other assets, noncurrent 321 321 371 321 Total cash, cash equivalents and restricted cash per statement of cash flows $ 62,672 $ 271,257 $ 60,005 $ 58,517
Schedule of Restricted Cash and Cash Equivalents	Nine Months Ended Nine Months Ended Beginning End Beginning End Cash and cash equivalents $ 62,351 $ 270,936 $ 59,634 $ 58,196 Restricted cash included in other assets, noncurrent 321 321 371 321 Total cash, cash equivalents and restricted cash per statement of cash flows $ 62,672 $ 271,257 $ 60,005 $ 58,517
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 three and nine months ended September 30, 2020 and 2019, because to include them would be anti-dilutive (in common stock equivalent shares): Three and Nine Months Ended Three and Nine Months Ended Stock options 6,215,368 4,718,597 Unvested restricted stock units 740,862 447,336 Warrants 39,474 39,474 6,995,704 5,205,407

Collaboration Agreements (Table

Collaboration Agreements (Tables)	9 Months Ended
	Sep. 30, 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 nine months ended September 30, 2020 and 2019: Balance at Additions Deductions Balance at Nine months ended September 30, 2020 Contract assets $ — $ — $ — $ — Contract liabilities: Deferred revenue $ 4,815 $ — $ 817 $ 3,998 Balance at Additions Deductions Balance at Nine months ended September 30, 2019 Contract assets $ — $ — $ — $ — Contract liabilities: Deferred revenue $ 46,196 $ — $ 41,550 $ 4,646 During the three and nine months ended September 30, 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 Nine Months Ended 2020 2019 2020 2019 Revenue recognized in the period from: Amounts included in the contract liability at the beginning of the period $ 11 $ 834 $ 817 $ 41,550 Performance obligations satisfied in previous periods $ — $ — $ — $ —

Fair value measurements (Tables

Fair value measurements (Tables)	9 Months Ended
	Sep. 30, 2020
Fair Value Disclosures [Abstract]
Schedule of assets and liabilities measured and carried at fair value	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, 2019. The Company had no marketable securities as of September 30, 2020 : Fair Quoted Prices Significant Significant 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)	9 Months Ended
	Sep. 30, 2020
Marketable Securities [Abstract]
Schedule of reconciliation of marketable securities from cost basis to fair value	The following table summarizes marketable securities held at December 31, 2019. The Company had no marketable securities as of September 30, 2020 : Amortized Gross Gross Fair 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)	9 Months Ended
	Sep. 30, 2020
Accrued Liabilities, Current [Abstract]
Schedule of accrued expenses	Accrued expenses consisted of the following as of September 30, 2020 and December 31, 2019: September 30, December 31, Accrued payroll and related expenses $ 3,647 $ 4,037 Accrued preclinical, manufacturing and clinical expenses 6,600 4,230 Accrued professional fees and insurance 861 675 Accrued other 65 44 $ 11,173 $ 8,986

Debt (Tables)

Debt (Tables)	9 Months Ended
	Sep. 30, 2020
Debt Disclosure [Abstract]
Schedule of debt	As of September 30, 2020, there was $5,200 in term loans outstanding under the Amended Credit Facility and the debt consisted of the following: September 30, Total debt $ 5,200 Debt financing costs, net of accretion (262) Accretion related to final payment 6 Long-term debt, net $ 4,944
Schedule of estimated future payments	As of September 30, 2020, the estimated future principal payments due are as follows: 2020 (excluding the nine months ended September 30, 2020) $ — 2021 — 2022 1,213 2023 2,080 2024 1,907 Total debt $ 5,200

Stockholders' equity (Tables)

Stockholders' equity (Tables)	9 Months Ended
	Sep. 30, 2020
Stockholders' Equity Note [Abstract]
Schedule for number of common stock reserved for exercise of outstanding stock options and warrants	September 30, December 31, Stock options 6,215,368 4,720,772 Restricted stock units 740,862 447,336 Warrants 39,474 39,474 Exchange warrants — 2,575,000 6,995,704 7,782,582

Stock options (Tables)

Stock options (Tables)	9 Months Ended
	Sep. 30, 2020
Share-based Payment Arrangement [Abstract]
Schedule of stock option activity under Plan	A summary of the options activity under the Plans is as follows: Number Weighted- Outstanding at January 1, 2020 4,720,772 $ 5.24 Granted 1,960,374 9.41 Exercised (338,069) 5.13 Cancelled (127,709) 7.70 Outstanding at September 30, 2020 6,215,368 $ 6.52 Exercisable at September 30, 2020 3,256,514 $ 4.87
Schedule of restricted stock activity	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 (31,406) Unvested at September 30, 2020 740,862
Schedule of stock-based compensation expense by award type	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 Nine Months Ended 2020 2019 2020 2019 Stock options $ 1,520 $ 1,055 $ 4,025 $ 3,240 Restricted stock units 335 184 962 184 Employee stock purchase plan 63 46 196 186 Stock-based compensation expense included in Total operating expenses $ 1,918 $ 1,285 $ 5,183 $ 3,610
Schedule of stock-based compensation expense as reflected in the Company’s condensed consolidated statements of operations and comprehensive loss	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 Nine Months Ended 2020 2019 2020 2019 Research and development $ 952 $ 587 $ 2,554 $ 1,636 General and administrative 966 698 2,629 1,974 Stock-based compensation expense included in Total operating expenses $ 1,918 $ 1,285 $ 5,183 $ 3,610
Schedule of weighted average assumptions for estimating fair value of option awards	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 Nine Months Ended 2020 2019 2020 2019 Risk-free interest rate 0.4 % 1.9 % 1.3 % 2.4 % Expected dividend yield — % — % — % — % Expected term (years) 6.10 6.11 6.04 5.99 Expected stock price volatility 81 % 75 % 72 % 74 %

Leases (Tables)

Leases (Tables)	9 Months Ended
	Sep. 30, 2020
Leases [Abstract]
Schedule of future minimum payments under operating leases	Following the change, the Company's future minimum lease payments under non-cancellable leases as of September 30, 2020 were as follows: Operating leases Finance leases 2020 (excluding the nine months ended September 30, 2020) $ 604 $ 29 2021 2,772 116 2022 2,843 84 2023 2,928 74 2024 and thereafter 6,904 18 Total lease payments 16,051 321 Present value adjustment (4,165) (30) Present value of lease liabilities $ 11,886 $ 291
Schedule of future minimum payments under finance leases	Following the change, the Company's future minimum lease payments under non-cancellable leases as of September 30, 2020 were as follows: Operating leases Finance leases 2020 (excluding the nine months ended September 30, 2020) $ 604 $ 29 2021 2,772 116 2022 2,843 84 2023 2,928 74 2024 and thereafter 6,904 18 Total lease payments 16,051 321 Present value adjustment (4,165) (30) Present value of lease liabilities $ 11,886 $ 291

Nature of business and basis _2

Nature of business and basis of presentation - Termination of collaborative arrangement - (Details) - USD ($) $ in Thousands	3 Months Ended							9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Collaboration agreements
Net loss	$ 22,489	$ 19,786	$ 16,926	$ 16,246	$ 16,792	$ 17,071	$ (21,901)	$ 59,203	$ 11,962
Deferred revenue recognized	$ 11				$ 834			$ 817	$ 41,550
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 ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated deficit	$ (251,575)	$ (192,374)
Substantial doubt about going concern, within twelve months	false

Nature of business and basis _4

Nature of business and basis of presentation - Sale of Stock (Details) - USD ($) $ in Thousands	1 Months Ended
	Jun. 30, 2020	Apr. 30, 2020
ATM
Subsequent Event [Line Items]
Issuance of common stock under public offering, net of issuance costs (in shares)		10,900,599
Proceeds from stock issuance, net of issuance costs		$ 62,976
Public Stock Offering
Subsequent Event [Line Items]
Issuance of common stock under public offering, net of issuance costs (in shares)	9,200,000
Proceeds from stock issuance, net of issuance costs	$ 163,991

Summary of significant accoun_4

Summary of significant accounting policies - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019	Sep. 30, 2019	Dec. 31, 2018
Cash, cash equivalents and restricted cash
Cash and cash equivalents	$ 270,936	$ 62,351	$ 58,196	$ 59,634
Restricted cash included in other assets	321	321	321	371
Total cash, cash equivalents and restricted cash per statement of cash flows	$ 271,257	$ 62,672	$ 58,517	$ 60,005
Restricted cash, Balance Sheet Location	us-gaap:OtherAssetsNoncurrent	us-gaap:OtherAssetsNoncurrent

Summary of significant accoun_5

Summary of significant accounting policies - Other Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Other Assets
Other assets	$ 2,153	$ 1,453
Security deposit	321	321
Held by service provider	$ 1,832	$ 1,132

Summary of significant accoun_6

Summary of significant accounting policies - Antidilutive securities (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Anti-dilutive securities
Anti-dilutive securities (in shares)	6,995,704	5,205,407	6,995,704	5,205,407
Warrants
Anti-dilutive securities
Anti-dilutive securities (in shares)	39,474	39,474	39,474	39,474
Restricted stock units
Anti-dilutive securities
Anti-dilutive securities (in shares)	740,862	447,336	740,862	447,336
Stock options
Anti-dilutive securities
Anti-dilutive securities (in shares)	6,215,368	4,718,597	6,215,368	4,718,597

Summary of significant accoun_7

Summary of significant accounting policies - Recently Issued Accounting Pronouncement (Details)	Jan. 01, 2020
Accounting Standards Update 2016-13
New Accounting pronouncements
Change in Accounting Principle, Accounting Standards Update, Adopted	true
Accounting Standards Update 2018-08
New Accounting pronouncements
Change in Accounting Principle, Accounting Standards Update, Adopted	true

Collaboration agreements - Merc

Collaboration agreements - Merck KGaA (Details) - Merck KGaA $ in Thousands	1 Months Ended
	Jun. 30, 2014USD ($)target	Sep. 30, 2020USD ($)target	Dec. 31, 2017target
Collaboration agreements
Upfront payment received	$ 12,000
Number of targets | target	6
Amount of additional fees receivable when target is designated and commercial license to target is granted	$ 0
Number of targets designated | target		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		9 Months Ended
	Sep. 30, 2020USD ($)	Sep. 30, 2019USD ($)	Sep. 30, 2020USD ($)target	Sep. 30, 2019USD ($)	Dec. 31, 2019USD ($)	Dec. 31, 2018USD ($)
Collaboration agreements
Collaboration revenue	$ 11	$ 844	$ 817	$ 42,081
Research and development	16,546	13,701	44,179	42,610
Deferred revenue	$ 3,998	$ 4,646	3,998	4,646	$ 4,815	$ 46,196
Type of revenue [Extensible List]	mrsn:CollaborationMember	mrsn:CollaborationMember
Merck KGaA Agreement and Merck KGaA Supply Agreement
Collaboration agreements
Deferred revenue	$ 3,998		3,998		4,815
Merck KGaA
Collaboration agreements
Transaction price	21,325		21,325		$ 21,500
Decrease in fees expected to be received for research and development			175
Amount of research and development fees expected to be received	6,325		$ 6,325
Number of targets with satisfied performance obligations | target			1
Collaboration revenue	$ 11	$ 800	$ 817	836
Merck KGaA Supply Agreement
Collaboration agreements
Collaboration revenue		34		1,255
Research and development		$ 34		$ 1,255

Collaboration agreements - Me_3

Collaboration agreements - Merck KGaA - Performance Obligation Period (Details)	9 Months Ended
	Sep. 30, 2020
Collaboration agreements
Performance obligation, description of timing	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.

Collaboration agreements - XMT-

Collaboration agreements - XMT-1522 Strategic Partnership (Details) - USD ($) $ in Thousands	Jan. 02, 2019	Sep. 30, 2020	Sep. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Collaboration agreements
Research and development		$ 16,546	$ 13,701		$ 44,179	$ 42,610
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, 2016target
Collaboration agreements
Number of targets | target			7
Period of time until agreement terminated	45 days
Amount of costs billed | $		$ 195

Collaboration agreements - Ta_2

Collaboration agreements - Takeda - Accounting Analysis (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Collaboration agreements
Deferred revenue recognized	$ 11	$ 834		$ 817	$ 41,550
Accounts payable	4,528			4,528		$ 7,296
Collaboration revenue	11	$ 844		817	$ 42,081
2016 Restated Tokeda Agreement and XMT-1522 Agreement
Collaboration agreements
Deferred revenue recognized			$ 39,965
Accounts payable	$ 2,335			$ 2,335		$ 2,335

Collaboration Agreements - Cont

Collaboration Agreements - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Collaboration agreements
Contract assets	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0
Contract liabilities
Deferred revenue, Balance at Beginning of Period			4,815	46,196
Deferred revenue, Additions			0	0
Deferred revenue, Deductions			817	41,550
Deferred revenue, Balance at End of Period	3,998	4,646	3,998	4,646
Revenue recognized in the period from:
Amounts included in the contract liability at the beginning of the period	11	834	817	41,550
Performance obligations satisfied in previous periods	$ 0	$ 0	$ 0	$ 0

Collaboration Agreements - Othe

Collaboration Agreements - Other Revenue (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Collaboration agreements
Collaboration revenue	$ 11,000	$ 844,000	$ 817,000	$ 42,081,000
Asana BioSciences
Collaboration agreements
Next potential milestone payment eligible to receive	2,500,000		2,500,000
Asana BioSciences | Services
Collaboration agreements
Collaboration revenue	$ 0	$ 10,000	$ 0	$ 25,000

Fair value measurements (Detail

Fair value measurements (Details) $ in Thousands	Dec. 31, 2019USD ($)
Fair value measurements
Marketable securities	$ 37,439
Recurring basis
Fair value measurements
Total assets regularly measured and carried at fair value	37,439
Recurring basis | Commercial paper
Fair value measurements
Marketable securities	11,940
Recurring basis | Corporate bonds
Fair value measurements
Marketable securities	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) | Commercial paper
Fair value measurements
Marketable securities	0
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate bonds
Fair value measurements
Marketable securities	0
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	23,950
Recurring basis | Significant Other Observable Inputs (Level 2) | Commercial paper
Fair value measurements
Marketable securities	11,940
Recurring basis | Significant Other Observable Inputs (Level 2) | Corporate bonds
Fair value measurements
Marketable securities	12,010
Recurring basis | Significant Other Observable Inputs (Level 2) | U.S. Treasuries
Fair value measurements
Marketable securities	0
Recurring basis | Significant Unobservable Inputs (Level 3)
Fair value measurements
Total assets regularly measured and carried at fair value	0
Recurring basis | Significant Unobservable Inputs (Level 3) | Commercial paper
Fair value measurements
Marketable securities	0
Recurring basis | Significant Unobservable Inputs (Level 3) | Corporate bonds
Fair value measurements
Marketable securities	0
Recurring basis | Significant Unobservable Inputs (Level 3) | U.S. Treasuries
Fair value measurements
Marketable securities	$ 0

Marketable securities (Details)

Marketable securities (Details) $ in Thousands	Sep. 30, 2020security	Dec. 31, 2019USD ($)
Debt Securities, Available-for-sale [Line Items]
Number of securities in unrealized loss position | security	0
Marketable securities
Amortized Cost		$ 37,414
Gross Unrealized Gains		25
Gross Unrealized Losses		0
Fair Value		37,439
Commercial paper
Marketable securities
Amortized Cost		11,940
Gross Unrealized Gains		0
Gross Unrealized Losses		0
Fair Value		11,940
Corporate bonds
Marketable securities
Amortized Cost		11,990
Gross Unrealized Gains		20
Gross Unrealized Losses		0
Fair Value		12,010
U.S. Treasuries
Marketable securities
Amortized Cost		13,484
Gross Unrealized Gains		5
Gross Unrealized Losses		0
Fair Value		$ 13,489

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Accrued Liabilities, Current [Abstract]
Accrued payroll and related expenses	$ 3,647	$ 4,037
Accrued preclinical, manufacturing and clinical expenses	6,600	4,230
Accrued professional fees and insurance	861	675
Accrued other	65	44
Total	$ 11,173	$ 8,986

Debt - Agreement Narrative (Det

Debt - Agreement Narrative (Details) - USD ($)	Aug. 28, 2020	May 08, 2019	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Debt
Unamortized issuance costs			$ 262,000		$ 262,000
Outstanding debt			5,200,000		5,200,000
Interest expense			60,000	$ 51,000	173,000	$ 64,000
Existing Credit Facility | Line of Credit
Debt
Proceeds from line of credit		$ 5,000,000
Unamortized issuance costs	$ 139,000
Existing Credit Facility | Minimum | Line of Credit
Debt
Debt interest rate percentage		4.00%
Existing Credit Facility | Minimum | Prime Rate | Line of Credit
Debt
Basis spread on variable rate		1.50%
Amendment To Credit Facility | Line of Credit
Debt
Proceeds from line of credit	5,200,000
Maximum borrowing capacity	$ 30,000,000
Final payment as percentage of original principal amount	5.50%
Additional rate in event of default	5.00%
Unamortized issuance costs	$ 17,000
Outstanding debt			$ 5,200,000		$ 5,200,000
Amendment To Credit Facility | Line of Credit | Prior To August 28, 2021
Debt
Prepayment fee percent	3.00%
Amendment To Credit Facility | Line of Credit | Between August 28, 2021 And August 28, 2022
Debt
Prepayment fee percent	2.00%
Amendment To Credit Facility | Line of Credit | Between August 28, 2022 And November 1, 2024
Debt
Prepayment fee percent	1.00%
Amendment To Credit Facility | Minimum | Line of Credit
Debt
Debt interest rate percentage	4.25%
Amendment To Credit Facility | Minimum | Prime Rate | Line of Credit
Debt
Basis spread on variable rate	(1.00%)
Amended Credit Facility, Tranche One | Line of Credit
Debt
Maximum borrowing capacity	$ 25,000,000
Amended Credit Facility, Tranche Two | Line of Credit
Debt
Maximum borrowing capacity	25,000,000
Amended Credit Facility, Tranche Three | Line of Credit
Debt
Maximum borrowing capacity	25,000,000
Amended Credit Facility, Tranche Four | Line of Credit
Debt
Maximum borrowing capacity	25,000,000
Amended Credit Facility, Tranche Five | Line of Credit
Debt
Maximum borrowing capacity	25,000,000
Amended Credit Facility, Tranche Six | Line of Credit
Debt
Line of credit, increase limit	$ 5,000,000

Debt - Components (Details)

Debt - Components (Details) $ in Thousands	Sep. 30, 2020USD ($)
Debt Disclosure [Abstract]
Outstanding debt	$ 5,200
Debt financing costs, net of accretion	(262)
Accretion related to final payment	6
Long-term Debt	$ 4,944

Debt - Future payments (Details

Debt - Future payments (Details) $ in Thousands	Sep. 30, 2020USD ($)
Estimated future principal payments
2020 (excluding the nine months ended September 30, 2020)	$ 0
2021	0
2022	1,213
2023	2,080
2024	1,907
Total debt	$ 5,200

Stockholders' Equity - Preferre

Stockholders' Equity - Preferred stock (Details) - shares	Sep. 30, 2020	Dec. 31, 2019
Stockholders' Equity Note [Abstract]
Preferred stock, shares authorized (in shares)	25,000,000	25,000,000
Preferred stock, shares issued (in shares)	0

Stockholders' Equity - At-the-m

Stockholders' Equity - At-the-market equity and follow on offering programs (Details) - USD ($)	1 Months Ended
	Jun. 30, 2020	Apr. 30, 2020	Sep. 30, 2020	May 31, 2020	Jul. 31, 2018
At Market Equity Offering Program (2018 ATM)
Offering program
Amount of shares authorized to be offered and sold					$ 75,000,000
Number of shares sold (in shares)		10,900,599
Proceeds from issuance of common stock, gross		$ 65,153,000
Proceeds from stock issuance, net of issuance costs		$ 62,976,000
At Market Equity Offering Program, 5.59 per Share
Offering program
Number of shares sold (in shares)		8,938,599
Shares sold, price per share (in dollars per share)		$ 5.59
At Market Equity Offering Program, 7.74 per Share
Offering program
Number of shares sold (in shares)		1,962,000
Shares sold, price per share (in dollars per share)		$ 7.74
At Market Equity Offering Program (2020 ATM)
Offering program
Amount of shares authorized to be offered and sold				$ 100,000,000
Shares sold to date (in shares)			0
Public Stock Offering
Offering program
Number of shares sold (in shares)	9,200,000
Shares sold, price per share (in dollars per share)	$ 19
Proceeds from issuance of common stock, gross	$ 174,800,000
Proceeds from stock issuance, net of issuance costs	$ 163,991,000

Stockholders' Equity - Warrants

Stockholders' Equity - Warrants (Details) - $ / shares	12 Months Ended
	Dec. 31, 2013	Sep. 30, 2020
Warrants
Number of shares into which warrant issued during period may be converted (in shares)	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) - $ / shares	Mar. 02, 2020	Nov. 26, 2019	Sep. 30, 2020	Dec. 31, 2013
Class of Stock [Line Items]
Number of shares of common stock into which warrants may be converted			39,474
Warrant exercise price per share (in dollars per share)				$ 0.05
Common Stock
Class of Stock [Line Items]
Exercise of common stock warrant in exchange for common stock (in shares)	2,574,971
Warrant Two
Class of Stock [Line Items]
Aggregate common stock exchanged (in shares)		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

Stockholders' Equity - Common s

Stockholders' Equity - Common stock (Details)	9 Months Ended
	Sep. 30, 2020voteshares	Dec. 31, 2019shares
Common stock
Number of shares reserved for future issuance (in shares)	6,995,704	7,782,582
Common Stock
Common stock
Number of votes for each shares held | vote	1
Share-based payments | Stock options
Common stock
Number of shares reserved for future issuance (in shares)	6,215,368	4,720,772
Share-based payments | Restricted stock units
Common stock
Number of shares reserved for future issuance (in shares)	740,862	447,336
Warrants
Common stock
Number of shares reserved for future issuance (in shares)	39,474	39,474
Exchange warrants
Common stock
Number of shares reserved for future issuance (in shares)	0	2,575,000

Stock options - Plans narrative

Stock options - Plans narrative (Details) - 2017 Plan - shares	1 Months Ended		9 Months Ended
	Jan. 31, 2020	Jun. 30, 2017	Sep. 30, 2020
Stock options
Number of shares authorized (in shares)		2,255,000
Cumulative annual increase in number of shares issuable (as a percent)		4.00%
Additional shares authorized (in shares)	1,815,520
Number of shares available for future issuance (in shares)			1,320,916
Number of options granted in period (in shares)			2,165,306

Stock options - Inducement awar

Stock options - Inducement awards narrative (Details) - shares	Sep. 02, 2020	Sep. 30, 2020
Stock options
Granted (in shares)		1,960,374
Inducement Award Program
Stock options
Granted (in shares)	120,000
Inducement Award Program | Maximum
Stock options
Expiration period		10 years
Inducement Award Program | Stock options
Stock options
Vesting period (in years)		4 years

Stock options - Activity under

Stock options - Activity under stock option plan (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2020USD ($)$ / sharesshares	Sep. 30, 2019USD ($)$ / shares
Number of Shares
Outstanding at beginning of period (in shares) | shares	4,720,772
Granted (in shares) | shares	1,960,374
Exercised (in shares) | shares	(338,069)
Cancelled (in shares) | shares	(127,709)
Outstanding at end of period (in shares) | shares	6,215,368
Options exercisable, at end of period (in shares) | shares	3,256,514
Weighted- Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 5.24
Granted (in dollars per share)	9.41
Exercised (in dollars per share)	5.13
Cancelled (in dollars per share)	7.70
Outstanding at end of period (in dollars per share)	6.52
Options exercisable, at end of period (in dollars per share)	4.87
Additional Disclosures
Weighted-average grant date fair value of options granted (in dollars per share)	$ 6.17	$ 2.47
Cash received from the exercise of stock options (in dollars) | $	$ 1,732	$ 121

Stock options - Restricted stoc

Stock options - Restricted stock units (Details) - Restricted stock units - shares	1 Months Ended		9 Months Ended
	Jan. 31, 2020	Jul. 31, 2019	Sep. 30, 2020
Stock options
Vesting period (in years)	4 years	2 years
Restricted stock units
Unvested at beginning of period (in shares)	447,336		447,336
Granted (in shares)	324,932		324,932
Vested (in shares)			0
Forfeited (in shares)			(31,406)
Unvested at end of period (in shares)			740,862

Stock options - Stock based com

Stock options - Stock based compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Stock options
Stock-based compensation expense included in total operating expenses	$ 1,918	$ 1,285	$ 5,183	$ 3,610
Research and development
Stock options
Stock-based compensation expense included in total operating expenses	952	587	2,554	1,636
General and administrative
Stock options
Stock-based compensation expense included in total operating expenses	966	698	2,629	1,974
Stock options
Stock options
Stock-based compensation expense included in total operating expenses	1,520	1,055	4,025	3,240
Unrecognized stock compensation cost	15,007		$ 15,007
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	335	184	$ 962	184
Unrecognized stock compensation cost	2,269		$ 2,269
Weighted-average amortization period of unrecognized stock compensation cost			2 years 7 months 6 days
Employee stock purchase plan
Stock options
Stock-based compensation expense included in total operating expenses	$ 63	$ 46	$ 196	$ 186

Stock options - Fair value assu

Stock options - Fair value assumptions (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Risk-free interest rate (as a percent)	0.40%	1.90%	1.30%	2.40%
Expected dividend yield	0.00%	0.00%	0.00%	0.00%
Expected term (years)	6 years 1 month 6 days	6 years 1 month 9 days	6 years 14 days	5 years 11 months 26 days
Expected stock price volatility (as a percent)	81.00%	75.00%	72.00%	74.00%

Stock options - Employee stock

Stock options - Employee stock purchase plan narrative (Details) - shares	1 Months Ended	3 Months Ended		9 Months Ended
	Jan. 31, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019	Dec. 31, 2017
Employee Stock Purchase Plan
Number of shares reserved for future issuance (in shares)		6,995,704		6,995,704		7,782,582
Employee stock purchase plan
Employee Stock Purchase Plan
Number of shares reserved for future issuance (in shares)							225,000
Additional shares authorized (in shares)	450,000
Number of shares issued (in shares)		0	0	68,419	82,281
Number of shares available for future issuance (in shares)		656,666		656,666

Leases - Description (Details)

Leases - Description (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2020	Sep. 30, 2020
Leases
Tenant improvement allowance	$ 172
Increase in right-of-use asset		$ 9,980
Increase in operating lease liability		$ 9,980
Office space, Cambridge, MA
Leases
Renewal term			5 years

Leases - Future minimum lease p

Leases - Future minimum lease payments (Details) $ in Thousands	Sep. 30, 2020USD ($)
Operating leases
2020 (excluding the nine months ended September 30, 2020)	$ 604
2021	2,772
2022	2,843
2023	2,928
2024 and thereafter	6,904
Total lease payments	16,051
Present value adjustment	(4,165)
Present value of lease liabilities	11,886
Finance leases
2020 (excluding the three months ended June 30, 2020)	29
2021	116
2022	84
2023	74
2024 and thereafter	18
Total lease payments	321
Present value adjustment	(30)
Total finance lease liability	$ 291

Commitments - License agreement

Commitments - License agreements (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2020USD ($)	Sep. 30, 2019USD ($)	Sep. 30, 2020USD ($)company	Sep. 30, 2019USD ($)
Commitments
Milestone Payment | $	$ 0	$ 600,000	$ 750,000	$ 600,000
License agreements
Commitments
Number of biotechnology companies where Company has licensed intellectual property | company			3