Mersana Therapeutics (MRSN) 10-Q 10 May 21 2021 Q1 Quarterly report Financial data

Cover Page

Cover Page - shares	3 Months Ended
	Mar. 31, 2021	May 06, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
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	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		69,561,813
Entity Central Index Key	0001442836
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 228,430	$ 255,094
Prepaid expenses and other current assets	3,522	3,486
Total current assets	231,952	258,580
Property and equipment, net	1,918	1,730
Operating lease right-of-use assets	10,521	10,936
Other assets	3,520	2,153
Total assets	247,911	273,399
Current liabilities:
Accounts payable	11,743	8,340
Accrued expenses	17,496	16,146
Deferred revenue	3,976	3,987
Operating lease liabilities	1,570	1,437
Other liabilities	134	93
Total current liabilities	34,919	30,003
Operating lease liabilities	9,726	10,158
Long-term debt, net	5,010	4,977
Other liabilities	318	174
Total liabilities	49,973	45,312
Commitments (Note 10)
Stockholders' equity:
Preferred stock, $0.0001 par value; 25,000,000 shares authorized; 0 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively	0	0
Common stock,$0.0001 par value; 175,000,000 shares authorized; 69,051,438 and 68,841,288 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively	7	7
Additional paid-in capital	513,043	508,499
Accumulated other comprehensive income (loss)	0	0
Accumulated deficit	(315,112)	(280,419)
Total stockholders’ equity	197,938	228,087
Total liabilities and stockholders’ equity	$ 247,911	$ 273,399

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2021	Dec. 31, 2020
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	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)	69,051,438	68,841,288
Common stock, shares outstanding (in shares)	69,051,438	68,841,288

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Statement [Abstract]
Collaboration revenue	$ 11	$ 11
Type of revenue	mrsn:CollaborationMember	mrsn:CollaborationMember
Operating expenses:
Research and development	$ 27,415	$ 12,219
General and administrative	7,208	4,936
Total operating expenses	34,623	17,155
Other income (expense):
Interest income	12	306
Interest expense	(93)	(88)
Total other income (expense), net	(81)	218
Net loss	(34,693)	(16,926)
Other comprehensive loss
Unrealized gain (loss) on marketable securities	0	(29)
Comprehensive loss	(34,693)	(16,955)
Net loss attributable to common stockholders - basic	(34,693)	(16,926)
Net loss attributable to common stockholders - diluted	$ (34,693)	$ (16,926)
Net loss per share attributable to common stockholders - basic (in dollars per share)	$ (0.50)	$ (0.35)
Net loss per share attributable to common stockholders - diluted (in dollars per share)	$ (0.50)	$ (0.35)
Weighted-average number of shares of common stock used in net loss per share attributable to common stockholders - basic (in shares)	68,987,857	47,988,630
Weighted-average number of shares of common stock used in net loss per share attributable to common stockholders - diluted (in shares)	68,987,857	47,988,630

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, 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 common stock warrant in exchange for common stock (in shares)				2,574,971
Exercise of stock options (in shares)				43,055
Exercise of stock options	119						119
Stock-based compensation expense	1,609						1,609
Other comprehensive income (loss)	(29)									(29)
Net (loss) income	$ (16,926)										(16,926)
Purchase of common stock under ESPP (in shares)	0
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)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)				206,143
Exercise of stock options	1,296						1,296
Stock-based compensation expense	1,656						1,656
Other comprehensive income (loss)	6									6
Net (loss) income	(19,786)										(19,786)
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
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)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)				359,359
Exercise of stock options	1,406						1,406
Stock-based compensation expense	1,989						1,989
Net (loss) income	(28,844)										(28,844)
Purchase of common stock under ESPP (in shares)				11,848
Purchase of common stock under ESPP	228						228
Balance at end of period (in shares) at Dec. 31, 2020				68,841,288
Balance at end of period at Dec. 31, 2020	$ 228,087			$ 7			508,499			0	(280,419)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (in shares)	148,472			148,472
Exercise of stock options	$ 764						764
Vesting of restricted stock units, net of employee tax obligations				61,678
Vesting of restricted stock units, net of employee tax obligations	(259)						(259)
Stock-based compensation expense	4,039						4,039
Net (loss) income	$ (34,693)										(34,693)
Purchase of common stock under ESPP (in shares)	0
Balance at end of period (in shares) at Mar. 31, 2021				69,051,438
Balance at end of period at Mar. 31, 2021	$ 197,938			$ 7			$ 513,043			$ 0	$ (315,112)

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) $ in Thousands	3 Months Ended
	Jun. 30, 2020USD ($)
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	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash flows from operating activities
Net loss	$ (34,693)	$ (16,926)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	226	248
Net amortization of premiums and discounts on investments	0	(66)
Stock-based compensation	4,039	1,609
Other non-cash items	38	37
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(37)	(330)
Other assets	(1,366)	0
Accounts payable	3,415	(2,693)
Accrued expenses	1,251	(3,128)
Operating lease assets	415	444
Operating lease liabilities	(299)	(430)
Deferred revenue	(11)	(11)
Net cash used in operating activities	(27,022)	(21,246)
Cash flows from investing activities
Maturities of marketable securities	0	19,500
Purchase of property and equipment	(114)	(65)
Net cash provided by (used in) investing activities	(114)	19,435
Cash flows from financing activities
Proceeds from exercise of stock options	764	119
Payment of employee tax obligations related to vesting of restricted stock units	(259)	0
Proceeds from issuance of debt, net of issuance costs	0	(180)
Payments under capital lease obligations	(33)	(29)
Net cash provided by (used in) financing activities	472	(90)
Decrease in cash, cash equivalents and restricted cash	(26,664)	(1,901)
Cash, cash equivalents and restricted cash, beginning of period	255,415	62,672
Cash, cash equivalents and restricted cash, end of period	228,751	60,771
Supplemental disclosures of non-cash activities:
Purchases of property and equipment in accounts payable and accrued expenses	189	0
Cash paid for interest	60	56
Right-of-use assets obtained in exchange for operating lease liabilities	0	9,980
Right-of-use assets obtained in exchange for financing lease liabilities	$ 213	$ 0

Nature of business and basis of

Nature of business and basis of presentation	3 Months Ended
	Mar. 31, 2021
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 upifitamab rilsodotin (UpRi, XMT-1536) and XMT-1592. The Company's early stage programs include a potentially first-in-class B7-H4-targeted Dolasynthen ADC, XMT-1660, as well as candidates leveraging the Immunosynthen platform, the most advanced of which is XMT-2056. UpRi, 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 being studied in UPLIFT, a single-arm registration strategy, in patients with platinum-resistant ovarian cancer, as well as in the expansion portion of a Phase 1 proof-of-concept clinical study in patients with NSCLC adenocarcinoma. XMT-1592 uses the Company’s Dolasynthen platform and also targets NaPi2b. In the first half of 2020, the Company initiated the Phase 1 dose escalation study of XMT-1592. 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 has incurred cumulative net losses since inception. For the three months ended March 31, 2021, the net loss was $34,693, compared to net loss of $16,926 in the three months ended March 31, 2020. The Company expects to continue to incur operating losses for at least the next several years. As of March 31, 2021, the Company had an accumulated deficit of $315,112. 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. 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’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, 2020 and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 26, 2021. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments that are necessary to present fairly the Company’s financial position as of March 31, 2021, the results of its operations for the three months ended March 31, 2021 and 2020, a statement of stockholders’ equity for the three months ended March 31, 2021 and 2020 and cash flows for the three months ended March 31, 2021 and 2020. Such adjustments are of a normal and recurring nature. The results for the three months ended March 31, 2021 are not necessarily indicative of the results for the year ending December 31, 2021, or for any future period.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2021
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 preclinical, manufacturing and clinical expenses, valuation of stock-based awards and income taxes. Actual results could differ from those estimates. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision-maker, or decision making group, in deciding how to allocate resources and assess performance. The Company views its operations and manages its business as a single operating segment, which is the business of discovering and developing ADCs. Summary of Accounting Policies The significant accounting policies used in preparation of these condensed consolidated financial statements for the three months ended March 31, 2021 are consistent with those discussed in Note 2 to the consolidated financial statements in the Company’s 2020 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. Three Months Ended Three Months Ended Beginning End Beginning End Cash and cash equivalents $ 255,094 $ 228,430 $ 62,351 $ 60,450 Restricted cash included in other assets, noncurrent 321 321 321 321 Total cash, cash equivalents and restricted cash per statement of cash flows $ 255,415 $ 228,751 $ 62,672 $ 60,771 Other Assets The Company recorded other assets of $3,520 and $2,153 as of March 31, 2021 and December 31, 2020, respectively, comprised of $3,199 and $1,832, respectively, held by a service provider, and restricted cash of $321 at the end of each period held as a security deposit for a standby letter of credit related to a facility lease. Net Loss per Share Basic net loss per share of common stock 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 method. For purposes of the diluted net loss per share calculation, stock options, unvested restricted stock units (RSUs) and warrants to purchase common stock are considered to be potentially dilutive securities, but are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive and therefore, basic and diluted net loss per share were the same for all periods presented. The following table sets forth the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to include them would be anti-dilutive (in common stock equivalent shares): Three Months Ended Three Months Ended Stock options 7,478,289 6,049,288 Unvested restricted stock units 1,082,460 760,193 Warrants 39,474 39,474 8,600,223 6,848,955 Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , as part of its initiative to reduce complexity in the accounting standards. The amendments in ASU 2019-12 eliminate certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and simplifies other aspects of the accounting for income taxes. The amendments in ASU 2019-12 are effective for the fiscal years beginning after December 15, 2020 The adoption of ASU 2019-12 did not have a material effect on our results of operations and financial position.

Collaboration agreements

Collaboration agreements	3 Months Ended
	Mar. 31, 2021
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 Merck KGaA 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 next potential milestone payment that the Company is eligible to receive is a development milestone of $500 on Merck KGaA’s designation of a preclinical development candidate for a target. Revenue will be recognized when achievement of the milestone is considered probable. 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 performance obligations 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 approximate the time and cost incurred each period), which are 10 and 5 years, respectively. The Company is continuing to reassess the estimated remaining term at each subsequent reporting period. As of March 31, 2021, the Company had completed its research service obligations associated with four of the six designated targets. During each of the three months ended March 31, 2021 and 2020, the Company recorded collaboration revenue of $11 related to its efforts under the Merck KGaA Agreement. The Company did not recognize any collaboration revenue and corresponding research and development expense related to the Merck KGaA Supply Agreement during the three months ended March 31, 2021 and 2020. As of March 31, 2021 and December 31, 2020, the Company had $3,976 and $3,987, respectively, in deferred revenue related to the Merck KGaA Agreement and Merck KGaA Supply Agreement that will be recognized over the remaining performance period. Summary of Contract Assets and Liabilities The following table presents changes in the balances of our contract assets and liabilities during the three months ended March 31, 2021 and 2020: Balance at Additions Deductions Balance at Three months ended March 31, 2021 Contract assets $ — $ — $ — $ — Contract liabilities: Deferred revenue $ 3,987 $ — $ 11 $ 3,976 Balance at Additions Deductions Balance at Three months ended March 31, 2020 Contract assets $ — $ — $ — $ — Contract liabilities: Deferred revenue $ 4,815 $ — $ 11 $ 4,804 During the three months ended March 31, 2021 and 2020, 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 2021 2020 Revenue recognized in the period from: Amounts included in the contract liability at the beginning of the period $ 11 $ 11 Performance obligations satisfied in previous periods $ — $ — Other Revenue The Company has provided limited services for a collaboration partner, Asana BioSciences. For each of the three months ended March 31, 2021 and 2020, the Company did not recognize revenue related to these services. The next potential milestone the Company is eligible to receive is $2,500 upon dosing the fifth patient in a Phase 1 clinical study by Asana BioSciences. As of March 31, 2021, 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	3 Months Ended
	Mar. 31, 2021
Fair Value Disclosures [Abstract]
Fair value measurements	Fair value measurements 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 the quarters ended March 31, 2021 and December 31, 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 Credit Facility is discussed in more detail in Note 6, “Debt”.

Accrued expenses

Accrued expenses	3 Months Ended
	Mar. 31, 2021
Accrued Liabilities, Current [Abstract]
Accrued expenses	Accrued expenses Accrued expenses consisted of the following as of March 31, 2021 and December 31, 2020: March 31, December 31, Accrued preclinical, manufacturing and clinical expenses $ 13,399 $ 9,902 Accrued payroll and related expenses 2,972 5,412 Accrued professional fees and insurance 993 757 Accrued other 132 75 $ 17,496 $ 16,146

Debt

Debt	3 Months Ended
	Mar. 31, 2021
Debt Disclosure [Abstract]
Debt	Debt On May 8, 2019, the Company entered into a loan and security agreement, which has subsequently been amended on June 21, 2019, and August 28, 2020 (collectively, the Credit Facility) with Silicon Valley Bank ( SVB) pursuant to which the Company can borrow term loans in an aggregate amount of $30,000, at its option, comprising (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 Credit Facility, through April 30, 2022. As of March 31, 2021, the Company was in compliance with all covenants under the Amended Credit Facility. As such, as of March 31, 2021, the classification of the loan balance as stated on the balance sheet was based on the timing of defined future payment obligations. As of March 31, 2021, the Company had drawn a term loan of $5,200, and debt consisted of the following: March 31, Total debt $ 5,200 Less: Current portion of long-term-debt — Total debt, net of current portion 5,200 Debt financing costs, net of accretion (229) Accretion related to final payment 39 Long-term debt, net $ 5,010 As of March 31, 2021, the estimated future principal payments due are as follows: 2021 (excluding the three months ended March 31, 2021) $ — 2022 1,213 2023 2,080 2024 1,907 Total debt $ 5,200

Stockholders' equity

Stockholders' equity	3 Months Ended
	Mar. 31, 2021
Stockholders' Equity Note [Abstract]
Stockholders’ equity	Stockholders’ equity Preferred stock As of March 31, 2021, 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 could offer and sell 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 March 31, 2021, 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 at a price to the public of $19.00 per share. Net proceeds to the Company after deducting fees, commissions and other expenses related to the offering were $163,990. Warrants In connection with a 2013 Series A-1 Preferred Stock issuance, the Company granted to certain investors warrants to purchase 129,491 shares of common stock. The warrants have a $0.05 per share exercise price and a contractual life of 10 years. The fair value of these warrants was recorded as a component of equity at the time of issuance. As of March 31, 2021, there were warrants to purchase 39,474 shares of common stock. During the quarter ended March 31, 2021, there were no exercises of warrants in exchange for 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 March 31, 2021 and December 31, 2020, there were 8,600,223 and 6,869,189, respectively, shares of common stock reserved for the exercise of outstanding stock options and warrants. March 31, December 31, Stock options 7,478,289 6,112,948 Restricted stock units 1,082,460 716,767 Warrants 39,474 39,474 8,600,223 6,869,189

Stock options

Stock options	3 Months Ended
	Mar. 31, 2021
Share-based Payment Arrangement [Abstract]
Stock Options	Stock options Stock option plans As of June 30, 2017, there were 3,141,625 stock options outstanding under the Company’s 2007 Stock Incentive Plan (the 2007 Plan). The 2007 Plan expired in June 2017. Any cancellations under the 2007 Stock Incentive Plan will increase the options available under the 2017 Stock Incentive Plan as described below. In June 2017, the Company’s stockholders approved the 2017 Stock Incentive Plan (the 2017 Plan). Under the 2017 Plan initially, up to 2,255,000 shares of common stock may be granted to the Company's employees, officers, directors, consultants and advisors in the form of options, restricted stock 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 2021, the number of shares of common stock issuable under the 2017 Plan was increased by 2,753,651 shares. As of March 31, 2021, there were 2,188,263 shares available for future issuance under the 2017 Plan. During the three months ended March 31, 2021, the Company granted 2,051,293 RSUs and options to purchase shares of common stock to employees under the 2017 Plan. With respect to incentive stock options, the exercise price per share will equal the closing price of the common stock on the date of grant and the vesting period is generally four years. Nonqualified stock options will be granted at an exercise price established by the Board at its sole discretion (which has not been less than fair market value on the date of grant) and the vesting periods may vary. Options granted under the 2017 Plan expire no later than 10 years from the date of grant. The Board may accelerate vesting or extend the expiration of granted options in the case of a merger, consolidation, dissolution, or liquidation of the Company. Inducement awards The Company grants to its employees, upon approval by the Board, options to purchase shares of common stock as an inducement to employment in accordance with Nasdaq Listing Rule 5635(c)(4). The securities are 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. As of March 31, 2021 there were 420,000 options to purchase shares of common stock granted as inducement awards outstanding. Stock option activity A summary of stock option activity is as follows: Number Weighted- Outstanding at January 1, 2021 6,112,948 $ 7.84 Granted 1,650,507 20.78 Exercised (148,472) 5.15 Cancelled (136,694) 7.00 Outstanding at March 31, 2021 7,478,289 $ 10.77 Exercisable at March 31, 2021 3,243,294 $ 5.31 The weighted-average grant date fair value of options granted during the three months ended March 31, 2021 and 2020, was $14.51 and $3.79 per share, respectively. Cash received from the exercise of stock options was $764 and $119 for the three months ended March 31, 2021 and 2020, respectively. Restricted stock units (RSUs) The Company issues RSUs with a service condition to employees. The vesting term may be annually over four years for awards granted annually to employees for performance compensation, two A summary of the RSU activity under the 2017 Plan is as follows: Number of Shares Unvested at January 1, 2021 716,767 Granted 500,786 Vested (73,954) Forfeited (61,139) Unvested at March 31, 2021 1,082,460 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 2021 2020 Stock options $ 3,114 $ 1,233 Restricted stock units 806 310 Employee stock purchase plan 119 66 Stock-based compensation expense included in total operating expenses $ 4,039 $ 1,609 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 2021 2020 Research and development $ 2,301 $ 797 General and administrative 1,738 812 Stock-based compensation expense included in total operating expenses $ 4,039 $ 1,609 As of March 31, 2021, there was $39,697 and $12,100 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 3.1 years and 3.5 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 2021 2020 Risk-free interest rate 0.6 % 1.6 % Expected dividend yield — % — % Expected term (years) 6.06 6.04 Expected stock price volatility 83 % 69 % Expected volatility for the Company’s common stock is determined based on the historical volatility of comparable publicly traded companies. The risk-free interest rate is based on the yield of U.S. Treasury securities consistent with the expected term of the option. No dividend yield was assumed as the Company has not historically and does not expect to pay dividends on its common stock. The expected term of the options granted is based on the use of the simplified method, in which the expected term is presumed to be the mid-point between the vesting date and the end of the contractual term. The fair value of RSUs is determined based on the closing price of the Company’s common stock on the date of grant. Employee Stock Purchase Plan

Leases

Leases	3 Months Ended
	Mar. 31, 2021
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. The operating lease for its office space (the Office Lease) was amended in March 2020 and is effective through March 2026. The Company has an option to extend the lease term of the Office Lease for an additional five years. The Company’s exercise of this option to extend the lease term of the Office Lease was not considered reasonably certain as of March 31, 2021. The Company has remaining finance lease terms of one year to five years for certain equipment, some of which include options to purchase at fair value. The Company has subsequently amended the Office Lease, as further described in the Subsequent Event section. In connection with the Office Lease, the Company had a standby letter of credit agreement for the benefit of its landlord in the amount of $321 as of each March 31, 2021 and December 31, 2020, collateralized by a money market account. During the first quarter of 2021, the Company entered into a finance lease for certain equipment. The Company recorded an asset under finance lease of $213 as property and equipment. The components of lease expense were as follows: Operating leases Finance leases 2021 (excluding the three months ended March 31, 2021) $ 2,169 $ 123 2022 2,843 128 2023 2,928 121 2024 3,016 60 2025 and thereafter 3,889 56 Total lease payments 14,845 488 Present value adjustment (3,549) (36) Present value of lease liabilities $ 11,296 $ 452
Leases	Leases The Company has an operating lease for its office space in Cambridge, MA and operating and finance leases for certain equipment. The operating lease for its office space (the Office Lease) was amended in March 2020 and is effective through March 2026. The Company has an option to extend the lease term of the Office Lease for an additional five years. The Company’s exercise of this option to extend the lease term of the Office Lease was not considered reasonably certain as of March 31, 2021. The Company has remaining finance lease terms of one year to five years for certain equipment, some of which include options to purchase at fair value. The Company has subsequently amended the Office Lease, as further described in the Subsequent Event section. In connection with the Office Lease, the Company had a standby letter of credit agreement for the benefit of its landlord in the amount of $321 as of each March 31, 2021 and December 31, 2020, collateralized by a money market account. During the first quarter of 2021, the Company entered into a finance lease for certain equipment. The Company recorded an asset under finance lease of $213 as property and equipment. The components of lease expense were as follows: Operating leases Finance leases 2021 (excluding the three months ended March 31, 2021) $ 2,169 $ 123 2022 2,843 128 2023 2,928 121 2024 3,016 60 2025 and thereafter 3,889 56 Total lease payments 14,845 488 Present value adjustment (3,549) (36) Present value of lease liabilities $ 11,296 $ 452

Commitments

Commitments	3 Months Ended
	Mar. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Commitments	Commitments License agreements The Company did not record any research and development expense related to non-refundable upfront payments or milestone payments during the three months ended March 31, 2021 or 2020. See Note 9 for the Company’s future obligations related to leases as of March 31, 2021.

Subsequent events

Subsequent events	3 Months Ended
	Mar. 31, 2021
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsFor the purposes of the unaudited financial statements as of March 31, 2021 and the period then ended, the Company has evaluated subsequent events through May 10, 2021, the date the unaudited interim financial statements were issued. On April 5, 2021,the Company entered into an Eighth Amendment to the Office Lease for additional office space in its existing building for five years, beginning July 1, 2021, committing to lease payments of $4,983 over that period. In connection with the office lease, the Company increased the balance of the security deposit by increasing the standby letter of credit for the benefit of its landlord by $156.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2021
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 preclinical, manufacturing and clinical 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.
Other Assets	Other AssetsThe Company recorded other assets of $3,520 and $2,153 as of March 31, 2021 and December 31, 2020, respectively, comprised of $3,199 and $1,832, respectively, held by a service provider, and restricted cash of $321 at the end of each period held as a security deposit for a standby letter of credit related to a facility lease.
Net Loss per Share	Net Loss per Share Basic net loss per share of common stock 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 method.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , as part of its initiative to reduce complexity in the accounting standards. The amendments in ASU 2019-12 eliminate certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and simplifies other aspects of the accounting for income taxes. The amendments in ASU 2019-12 are effective for the fiscal years beginning after December 15, 2020 The adoption of ASU 2019-12 did not have a material effect on our results of operations and financial position.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2021
Accounting Policies [Abstract]
Schedule of cash and cash equivalents	Three Months Ended Three Months Ended Beginning End Beginning End Cash and cash equivalents $ 255,094 $ 228,430 $ 62,351 $ 60,450 Restricted cash included in other assets, noncurrent 321 321 321 321 Total cash, cash equivalents and restricted cash per statement of cash flows $ 255,415 $ 228,751 $ 62,672 $ 60,771
Schedule of restricted cash	Three Months Ended Three Months Ended Beginning End Beginning End Cash and cash equivalents $ 255,094 $ 228,430 $ 62,351 $ 60,450 Restricted cash included in other assets, noncurrent 321 321 321 321 Total cash, cash equivalents and restricted cash per statement of cash flows $ 255,415 $ 228,751 $ 62,672 $ 60,771
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 because to include them would be anti-dilutive (in common stock equivalent shares): Three Months Ended Three Months Ended Stock options 7,478,289 6,049,288 Unvested restricted stock units 1,082,460 760,193 Warrants 39,474 39,474 8,600,223 6,848,955

Collaboration Agreements (Table

Collaboration Agreements (Tables)	3 Months Ended
	Mar. 31, 2021
Collaboration agreements
Schedule of changes in the balances of our contract assets and liabilities and recognized revenue	The following table presents changes in the balances of our contract assets and liabilities during the three months ended March 31, 2021 and 2020: Balance at Additions Deductions Balance at Three months ended March 31, 2021 Contract assets $ — $ — $ — $ — Contract liabilities: Deferred revenue $ 3,987 $ — $ 11 $ 3,976 Balance at Additions Deductions Balance at Three months ended March 31, 2020 Contract assets $ — $ — $ — $ — Contract liabilities: Deferred revenue $ 4,815 $ — $ 11 $ 4,804 During the three months ended March 31, 2021 and 2020, 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 2021 2020 Revenue recognized in the period from: Amounts included in the contract liability at the beginning of the period $ 11 $ 11 Performance obligations satisfied in previous periods $ — $ —

Accrued expenses (Tables)

Accrued expenses (Tables)	3 Months Ended
	Mar. 31, 2021
Accrued Liabilities, Current [Abstract]
Schedule of accrued expenses	Accrued expenses consisted of the following as of March 31, 2021 and December 31, 2020: March 31, December 31, Accrued preclinical, manufacturing and clinical expenses $ 13,399 $ 9,902 Accrued payroll and related expenses 2,972 5,412 Accrued professional fees and insurance 993 757 Accrued other 132 75 $ 17,496 $ 16,146

Debt (Tables)

Debt (Tables)	3 Months Ended
	Mar. 31, 2021
Debt Disclosure [Abstract]
Schedule of debt	As of March 31, 2021, the Company had drawn a term loan of $5,200, and debt consisted of the following: March 31, Total debt $ 5,200 Less: Current portion of long-term-debt — Total debt, net of current portion 5,200 Debt financing costs, net of accretion (229) Accretion related to final payment 39 Long-term debt, net $ 5,010
Schedule of estimated future payments	As of March 31, 2021, the estimated future principal payments due are as follows: 2021 (excluding the three months ended March 31, 2021) $ — 2022 1,213 2023 2,080 2024 1,907 Total debt $ 5,200

Stockholders' equity (Tables)

Stockholders' equity (Tables)	3 Months Ended
	Mar. 31, 2021
Stockholders' Equity Note [Abstract]
Schedule for number of common stock reserved for exercise of outstanding stock options and warrants	March 31, December 31, Stock options 7,478,289 6,112,948 Restricted stock units 1,082,460 716,767 Warrants 39,474 39,474 8,600,223 6,869,189

Stock options (Tables)

Stock options (Tables)	3 Months Ended
	Mar. 31, 2021
Share-based Payment Arrangement [Abstract]
Schedule of stock option activity under Plan	A summary of stock option activity is as follows: Number Weighted- Outstanding at January 1, 2021 6,112,948 $ 7.84 Granted 1,650,507 20.78 Exercised (148,472) 5.15 Cancelled (136,694) 7.00 Outstanding at March 31, 2021 7,478,289 $ 10.77 Exercisable at March 31, 2021 3,243,294 $ 5.31
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, 2021 716,767 Granted 500,786 Vested (73,954) Forfeited (61,139) Unvested at March 31, 2021 1,082,460
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 2021 2020 Stock options $ 3,114 $ 1,233 Restricted stock units 806 310 Employee stock purchase plan 119 66 Stock-based compensation expense included in total operating expenses $ 4,039 $ 1,609
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 2021 2020 Research and development $ 2,301 $ 797 General and administrative 1,738 812 Stock-based compensation expense included in total operating expenses $ 4,039 $ 1,609
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 2021 2020 Risk-free interest rate 0.6 % 1.6 % Expected dividend yield — % — % Expected term (years) 6.06 6.04 Expected stock price volatility 83 % 69 %

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2021
Leases [Abstract]
Schedule of future minimum payments under operating leases	The components of lease expense were as follows: Operating leases Finance leases 2021 (excluding the three months ended March 31, 2021) $ 2,169 $ 123 2022 2,843 128 2023 2,928 121 2024 3,016 60 2025 and thereafter 3,889 56 Total lease payments 14,845 488 Present value adjustment (3,549) (36) Present value of lease liabilities $ 11,296 $ 452
Schedule of future minimum payments under finance leases	The components of lease expense were as follows: Operating leases Finance leases 2021 (excluding the three months ended March 31, 2021) $ 2,169 $ 123 2022 2,843 128 2023 2,928 121 2024 3,016 60 2025 and thereafter 3,889 56 Total lease payments 14,845 488 Present value adjustment (3,549) (36) Present value of lease liabilities $ 11,296 $ 452

Nature of business and basis _2

Nature of business and basis of presentation - (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net loss	$ 34,693	$ 28,844	$ 22,489	$ 19,786	$ 16,926
Accumulated deficit	$ (315,112)	$ (280,419)

Summary of significant accoun_4

Summary of significant accounting policies - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Cash, cash equivalents and restricted cash
Cash and cash equivalents	$ 228,430	$ 255,094	$ 60,450	$ 62,351
Restricted cash included in other assets, noncurrent	321	321	321	321
Total cash, cash equivalents and restricted cash per statement of cash flows	$ 228,751	$ 255,415	$ 60,771	$ 62,672

Summary of significant accoun_5

Summary of significant accounting policies - Other Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Other Assets
Other assets	$ 3,520	$ 2,153
Held by service provider	3,199	1,832
Security deposit	$ 321	$ 321

Summary of significant accoun_6

Summary of significant accounting policies - Net loss per share (Details) - shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Anti-dilutive securities
Anti-dilutive securities (in shares)	8,600,223	6,848,955
Stock options
Anti-dilutive securities
Anti-dilutive securities (in shares)	7,478,289	6,049,288
Unvested restricted stock units
Anti-dilutive securities
Anti-dilutive securities (in shares)	1,082,460	760,193
Warrants
Anti-dilutive securities
Anti-dilutive securities (in shares)	39,474	39,474

Summary of significant accoun_7

Summary of significant accounting policies - Recently Issued Accounting Pronouncement (Details)	Mar. 31, 2021
Accounting Standards Update 2019-12
New Accounting pronouncements
Change in Accounting Principle, Accounting Standards Update, Adopted	true

Collaboration agreements - Merc

Collaboration agreements - Merck KGaA (Details) - Merck KGaA	1 Months Ended
	Jun. 30, 2014USD ($)target	Mar. 31, 2021USD ($)target	Dec. 31, 2017target
Collaboration agreements
Upfront payment received	$ 12,000,000
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
	Mar. 31, 2021USD ($)target	Mar. 31, 2020USD ($)	Dec. 31, 2020USD ($)	Dec. 31, 2019USD ($)
Collaboration agreements
Collaboration revenue	$ 11	$ 11
Deferred revenue	3,976	4,804	$ 3,987	$ 4,815
Merck KGaA Agreement and Merck KGaA Supply Agreement
Collaboration agreements
Deferred revenue	$ 3,976		$ 3,987
Merck KGaA
Collaboration agreements
Number of targets with satisfied performance obligations | target	4
Collaboration revenue	$ 11	11
Merck KGaA Supply Agreement
Collaboration agreements
Collaboration revenue	$ 0	$ 0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | Merck KGaA | Rights to future technological improvements
Collaboration agreements
Expected recognition period	10 years
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | Merck KGaA | Joint research committee services
Collaboration agreements
Expected recognition period	5 years

Collaboration Agreements - Cont

Collaboration Agreements - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Dec. 31, 2019
Collaboration agreements
Contract assets	$ 0	$ 0	$ 0	$ 0
Contract liabilities
Deferred revenue, Balance at Beginning of Period	3,987	4,815
Deferred revenue, Additions	0	0
Deferred revenue, Deductions	11	11
Deferred revenue, Balance at End of Period	3,976	4,804
Revenue recognized in the period from:
Amounts included in the contract liability at the beginning of the period	11	11
Performance obligations satisfied in previous periods	$ 0	$ 0

Collaboration Agreements - Othe

Collaboration Agreements - Other Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Collaboration agreements
Collaboration revenue	$ 11	$ 11
Asana BioSciences
Collaboration agreements
Next potential milestone payment eligible to receive	2,500
Asana BioSciences | Limited services
Collaboration agreements
Collaboration revenue	$ 0	$ 0

Accrued expenses (Details)

Accrued expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Accrued Liabilities, Current [Abstract]
Accrued preclinical, manufacturing and clinical expenses	$ 13,399	$ 9,902
Accrued payroll and related expenses	2,972	5,412
Accrued professional fees and insurance	993	757
Accrued other	132	75
Total	$ 17,496	$ 16,146

Debt - Agreement Narrative (Det

Debt - Agreement Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Aug. 28, 2020
Debt
Outstanding debt	$ 5,200,000
Interest expense	88,000	$ 51,000
Amendment To Credit Facility | Line of Credit
Debt
Maximum borrowing capacity			$ 30,000,000
Outstanding debt	$ 5,200,000
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) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Debt Disclosure [Abstract]
Outstanding debt	$ 5,200
Less: Current portion of long-term-debt	0
Long-term debt, net	5,200
Debt financing costs, net of accretion	(229)
Accretion related to final payment	39
Long-term debt, net	$ 5,010	$ 4,977

Debt - Future payments (Details

Debt - Future payments (Details) $ in Thousands	Mar. 31, 2021USD ($)
Estimated future principal payments
2021 (excluding the three months ended March 31, 2021)	$ 0
2022	1,213
2023	2,080
2024	1,907
Total debt	$ 5,200

Stockholders' Equity - Preferre

Stockholders' Equity - Preferred stock (Details) - shares	Mar. 31, 2021	Dec. 31, 2020
Stockholders' Equity Note [Abstract]
Preferred stock, shares authorized (in shares)	25,000,000	25,000,000
Preferred stock, shares issued (in shares)	0	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	Mar. 31, 2021	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
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 stock issuance, net of issuance costs	$ 163,990,000

Stockholders' Equity - Warrants

Stockholders' Equity - Warrants (Details) - $ / shares	12 Months Ended
	Dec. 31, 2013	Mar. 31, 2021
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 (in shares)		39,474

Stockholders' Equity - Exchange

Stockholders' Equity - Exchange Warrants (Details) - $ / shares	Mar. 02, 2020	Nov. 26, 2019	Mar. 31, 2021	Dec. 31, 2013
Class of Stock [Line Items]
Number of shares of common stock into which warrants may be converted (in shares)			39,474
Warrant exercise price per share (in dollars per share)				$ 0.05
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 (in shares)		2,575,000
Warrant exercise price per share (in dollars per share)		$ 0.0001
Common Stock
Class of Stock [Line Items]
Exercise of common stock warrant in exchange for common stock (in shares)	2,574,971		0

Stockholders' Equity - Common s

Stockholders' Equity - Common stock (Details) - shares	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Common stock
Common stock voting rights	The holders of the common stock are entitled to one vote for each share held.
Number of shares reserved for future issuance (in shares)	8,600,223	6,869,189
Share-based payments | Stock options
Common stock
Number of shares reserved for future issuance (in shares)	7,478,289	6,112,948
Share-based payments | Unvested restricted stock units
Common stock
Number of shares reserved for future issuance (in shares)	1,082,460	716,767
Warrants
Common stock
Number of shares reserved for future issuance (in shares)	39,474	39,474

Stock options - Plans narrative

Stock options - Plans narrative (Details) - shares	1 Months Ended		3 Months Ended
	Jan. 31, 2021	Jun. 30, 2017	Mar. 31, 2021	Dec. 31, 2020
Stock options
Number of shares outstanding (in shares)			7,478,289	6,112,948
2007 Plan
Stock options
Number of shares outstanding (in shares)		3,141,625
2017 Plan
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)	2,753,651
Number of shares available for future issuance (in shares)			2,188,263
Number of options granted in period (in shares)			2,051,293
Inducement Award Program
Stock options
Number of shares outstanding (in shares)			420,000
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 - Inducement awar

Stock options - Inducement awards narrative (Details) - shares	Mar. 31, 2021	Dec. 31, 2020
Stock options
Number of shares outstanding (in shares)	7,478,289	6,112,948
Inducement Award Program
Stock options
Number of shares outstanding (in shares)	420,000

Stock options - Activity under

Stock options - Activity under stock option plan (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Number of Shares
Outstanding at beginning of period (in shares)	6,112,948
Granted (in shares)	1,650,507
Exercised (in shares)	(148,472)
Cancelled (in shares)	(136,694)
Outstanding at end of period (in shares)	7,478,289
Options exercisable, at end of period (in shares)	3,243,294
Weighted- Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 7.84
Granted (in dollars per share)	20.78
Exercised (in dollars per share)	5.15
Cancelled (in dollars per share)	7
Outstanding at end of period (in dollars per share)	10.77
Options exercisable, at end of period (in dollars per share)	5.31
Additional Disclosures
Weighted-average grant date fair value of options granted (in dollars per share)	$ 14.51	$ 3.79
Cash received from the exercise of stock options (in dollars)	$ 764	$ 119

Stock options - Restricted stoc

Stock options - Restricted stock units (Details) - Unvested restricted stock units - shares	1 Months Ended	3 Months Ended
	Jul. 31, 2019	Mar. 31, 2021
Stock options
Vesting period (in years)	2 years	4 years
Restricted stock units
Unvested at beginning of period (in shares)		716,767
Granted (in shares)		500,786
Vested (in shares)		(73,954)
Forfeited (in shares)		(61,139)
Unvested at end of period (in shares)		1,082,460
New Hires
Stock options
Vesting period (in years)		2 years

Stock options - Stock based com

Stock options - Stock based compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Stock options
Stock-based compensation expense included in total operating expenses	$ 4,039	$ 1,609
Research and development
Stock options
Stock-based compensation expense included in total operating expenses	2,301	797
General and administrative
Stock options
Stock-based compensation expense included in total operating expenses	1,738	812
Stock options
Stock options
Stock-based compensation expense included in total operating expenses	3,114	1,233
Unrecognized stock compensation cost	$ 39,697
Weighted-average amortization period of unrecognized stock compensation cost	3 years 1 month 6 days
Unvested restricted stock units
Stock options
Stock-based compensation expense included in total operating expenses	$ 806	310
Unrecognized stock compensation cost	$ 12,100
Weighted-average amortization period of unrecognized stock compensation cost	3 years 6 months
Employee stock purchase plan
Stock options
Stock-based compensation expense included in total operating expenses	$ 119	$ 66

Stock options - Fair value assu

Stock options - Fair value assumptions (Details)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Risk-free interest rate (as a percent)	0.60%	1.60%
Expected dividend yield	0.00%	0.00%
Expected term (years)	6 years 21 days	6 years 14 days
Expected stock price volatility (as a percent)	83.00%	69.00%

Stock options - Employee stock

Stock options - Employee stock purchase plan narrative (Details) - shares	Jan. 01, 2020	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Dec. 31, 2017
Employee Stock Purchase Plan
Number of shares reserved for future issuance (in shares)		8,600,223		6,869,189
Number of shares issued (in shares)		0	0
Employee stock purchase plan
Employee Stock Purchase Plan
Number of shares reserved for future issuance (in shares)					225,000
Number of shares available for future issuance (in shares)		644,818
Additional shares authorized (in shares)	450,000

Leases - Description (Details)

Leases - Description (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Leases
Security deposit	$ 321	$ 321
Assets under finance leases	$ 213
Minimum
Leases
Remaining lease term	1 year
Maximum
Leases
Remaining lease term	5 years
Office space, Cambridge, MA
Leases
Option to extend	true
Renewal term	5 years

Leases - Future minimum lease p

Leases - Future minimum lease payments (Details) $ in Thousands	Mar. 31, 2021USD ($)
Operating leases
2021 (excluding the three months ended March 31, 2021)	$ 2,169
2022	2,843
2023	2,928
2024	3,016
2025 and thereafter	3,889
Total lease payments	14,845
Present value adjustment	(3,549)
Present value of lease liabilities	11,296
Finance leases
2021 (excluding the three months ended March 31, 2021)	123
2022	128
2023	121
2024	60
2025 and thereafter	56
Total lease payments	488
Present value adjustment	(36)
Total finance lease liability	$ 452

Commitments - (Details)

Commitments - (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
License Agreement, Upfront Payments
Commitments
Research and development expense	$ 0	$ 0
License Agreement, Milestone Payments
Commitments
Research and development expense	$ 0	$ 0

Subsequent Events (Details)

Subsequent Events (Details) - USD ($) $ in Thousands	Apr. 05, 2021	Mar. 31, 2021
Subsequent Event [Line Items]
Lease liability		$ 11,296
Subsequent Event | Rivertech Associates II LLC
Subsequent Event [Line Items]
Lease term	5 years
Lease liability	$ 4,983
Increase in security deposit	$ 156