Mersana Therapeutics (MRSN) 10-Q 7 Nov 22 2022 Q3 Quarterly report Financial data

Cover Page

Cover Page - shares	9 Months Ended
	Sep. 30, 2022	Nov. 03, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
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		99,773,857
Entity Central Index Key	0001442836
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 184,082	$ 177,947
Short-term marketable securities	106,044	0
Prepaid expenses and other current assets	9,911	10,951
Total current assets	300,037	188,898
Property and equipment, net	3,136	1,968
Operating lease right-of-use assets	11,061	12,889
Other assets, noncurrent	616	2,356
Total assets	314,850	206,111
Current liabilities:
Accounts payable	13,732	12,321
Accrued expenses	41,204	28,716
Deferred revenue	30,924	3,944
Operating lease liabilities	2,697	2,303
Other current liabilities	237	239
Total current liabilities	88,794	47,523
Operating lease liabilities, noncurrent	9,291	11,247
Long-term debt, net	24,853	24,626
Deferred revenue, noncurrent	101,417	0
Other liabilities, noncurrent	266	974
Total liabilities	224,621	84,370
Commitments (Note 11)
Stockholders' equity:
Preferred stock, $0.0001 par value; 25,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	0	0
Common stock, $0.0001 par value; 350,000,000 and 175,000,000 shares authorized at September 30, 2022 and December 31, 2021, respectively ; 98,582,583 and 73,709,056 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	10	7
Additional paid-in capital	700,217	572,213
Accumulated other comprehensive (loss) income	(231)	0
Accumulated deficit	(609,767)	(450,479)
Total stockholders’ equity	90,229	121,741
Total liabilities and stockholders’ equity	$ 314,850	$ 206,111

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
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)	350,000,000	175,000,000
Common stock, shares issued (in shares)	98,582,583	73,709,056
Common stock, shares outstanding (in shares)	98,582,583	73,709,056

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Collaboration revenue	$ 5,573	$ 11	$ 11,893	$ 32
Operating expenses:
Research and development	50,639	35,275	127,676	94,645
General and administrative	14,573	10,124	42,158	26,214
Total operating expenses	65,212	45,399	169,834	120,859
Other income (expense):
Interest income	708	15	1,017	36
Interest expense	(880)	(98)	(2,364)	(286)
Total other income (expense), net	(172)	(83)	(1,347)	(250)
Net loss	(59,811)	(45,471)	(159,288)	(121,077)
Unrealized loss on marketable securities	(105)	0	(231)	0
Comprehensive loss	(59,916)	(45,471)	(159,519)	(121,077)
Net loss attributable to common stockholders — basic	(59,811)	(45,471)	(159,288)	(121,077)
Net loss attributable to common stockholders — diluted	$ (59,811)	$ (45,471)	$ (159,288)	$ (121,077)
Net loss per share attributable to common stockholders — basic (in dollars per share)	$ (0.61)	$ (0.63)	$ (1.75)	$ (1.73)
Net loss per share attributable to common stockholders — diluted (in dollars per share)	$ (0.61)	$ (0.63)	$ (1.75)	$ (1.73)
Weighted-average number of shares of common stock used in net loss per share attributable to common stockholders — basic (in shares)	97,641,936	71,753,004	91,173,989	70,129,236
Weighted-average number of shares of common stock used in net loss per share attributable to common stockholders — diluted (in shares)	97,641,936	71,753,004	91,173,989	70,129,236

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	At market equity offering programs	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Balance at beginning of period (in shares) at Dec. 31, 2020			68,841,288
Balance at beginning 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
Exercise of stock options	764			764
Vesting of restricted stock units, net of employee tax obligations (in shares)			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)
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)
Balance at beginning of period (in shares) at Dec. 31, 2020			68,841,288
Balance at beginning of period at Dec. 31, 2020	228,087		$ 7	508,499	0	(280,419)
Increase (Decrease) in Stockholders' Equity
Net (loss) income	(121,077)
Balance at end of period (in shares) at Sep. 30, 2021			71,865,399
Balance at end of period at Sep. 30, 2021	155,549		$ 7	557,038	0	(401,496)
Balance at beginning of period (in shares) at Mar. 31, 2021			69,051,438
Balance at beginning of period at Mar. 31, 2021	197,938		$ 7	513,043	0	(315,112)
Increase (Decrease) in Stockholders' Equity
Issuance of common stock under public offering, net of issuance costs (in shares)			2,271,074
Issuance of common stock under public offering, net of issuance costs	33,287			33,287
Exercise of stock options (in shares)			42,506
Exercise of stock options	202			202
Purchase of common stock under ESPP (in shares)			36,198
Purchase of common stock under ESPP	417			417
Stock-based compensation expense	4,582			4,582
Net (loss) income	(40,913)					(40,913)
Balance at end of period (in shares) at Jun. 30, 2021			71,401,216
Balance at end of period at Jun. 30, 2021	195,513		$ 7	551,531	0	(356,025)
Increase (Decrease) in Stockholders' Equity
Stock issuance costs		$ 746
Exercise of stock options (in shares)			137,301
Exercise of stock options	579			579
Vesting of restricted stock units, net of employee tax obligations (in shares)			326,882
Stock-based compensation expense	4,928			4,928
Net (loss) income	(45,471)					(45,471)
Balance at end of period (in shares) at Sep. 30, 2021			71,865,399
Balance at end of period at Sep. 30, 2021	155,549		$ 7	557,038	0	(401,496)
Balance at beginning of period (in shares) at Dec. 31, 2021			73,709,056
Balance at beginning of period at Dec. 31, 2021	121,741		$ 7	572,213		(450,479)
Increase (Decrease) in Stockholders' Equity
Issuance of common stock under public offering, net of issuance costs (in shares)			13,169,903
Issuance of common stock under public offering, net of issuance costs	60,462		$ 2	60,460
Exercise of stock options (in shares)			26,951
Exercise of stock options	96			96
Vesting of restricted stock units, net of employee tax obligations (in shares)			167,174
Stock-based compensation expense	5,485			5,485
Net (loss) income	(47,258)					(47,258)
Balance at end of period (in shares) at Mar. 31, 2022			87,073,084
Balance at end of period at Mar. 31, 2022	140,526		$ 9	638,254		(497,737)
Increase (Decrease) in Stockholders' Equity
Stock issuance costs		1,322
Balance at beginning of period (in shares) at Dec. 31, 2021			73,709,056
Balance at beginning of period at Dec. 31, 2021	$ 121,741		$ 7	572,213		(450,479)
Increase (Decrease) in Stockholders' Equity
Exercise of common stock warrant in exchange for common stock (in shares)			16,654
Exercise of stock options (in shares)	54,299
Net (loss) income	$ (159,288)
Balance at end of period (in shares) at Sep. 30, 2022			98,582,583
Balance at end of period at Sep. 30, 2022	90,229		$ 10	700,217	(231)	(609,767)
Balance at beginning of period (in shares) at Mar. 31, 2022			87,073,084
Balance at beginning of period at Mar. 31, 2022	140,526		$ 9	638,254		(497,737)
Increase (Decrease) in Stockholders' Equity
Issuance of common stock under public offering, net of issuance costs (in shares)			9,904,964
Issuance of common stock under public offering, net of issuance costs	39,899		$ 1	39,898
Exercise of common stock warrant in exchange for common stock (in shares)			16,654
Purchase of common stock under ESPP (in shares)			154,235
Purchase of common stock under ESPP	606			606
Vesting of restricted stock units, net of employee tax obligations (in shares)			17,417
Stock-based compensation expense	5,348			5,348
Other comprehensive income (loss), net of tax, portion attributable to parent	(126)				(126)
Net (loss) income	(52,219)					(52,219)
Balance at end of period (in shares) at Jun. 30, 2022			97,166,354
Balance at end of period at Jun. 30, 2022	134,034		$ 10	684,106	(126)	(549,956)
Increase (Decrease) in Stockholders' Equity
Stock issuance costs		941
Issuance of common stock under public offering, net of issuance costs (in shares)			1,382,631
Issuance of common stock under public offering, net of issuance costs	10,626			10,626
Exercise of stock options (in shares)			27,348
Exercise of stock options	110			110
Vesting of restricted stock units, net of employee tax obligations (in shares)			6,250
Stock-based compensation expense	5,375			5,375
Other comprehensive income (loss), net of tax, portion attributable to parent	(105)				(105)
Net (loss) income	(59,811)					(59,811)
Balance at end of period (in shares) at Sep. 30, 2022			98,582,583
Balance at end of period at Sep. 30, 2022	$ 90,229		$ 10	$ 700,217	$ (231)	$ (609,767)
Increase (Decrease) in Stockholders' Equity
Stock issuance costs		$ 251

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021
At market equity offering programs
Stock issuance costs	$ 251	$ 941	$ 1,322	$ 746

Condensed Consolidated Statem_4

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities
Net loss	$ (159,288)	$ (121,077)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	645	644
Net amortization of premiums and discounts on marketable securities	(396)	0
Stock-based compensation	16,208	13,549
Other non-cash items	574	119
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	2,459	(4,104)
Other assets	0	(617)
Accounts payable	1,153	(2,429)
Accrued expenses	11,848	16,047
Operating lease right-of-use assets	2,127	1,548
Operating lease liabilities	(1,861)	(1,236)
Deferred revenue	128,397	(32)
Net cash provided by (used in) operating activities	1,866	(97,588)
Cash flows from investing activities
Maturities of marketable securities	54,000	0
Purchase of marketable securities	(159,878)	0
Purchase of property and equipment	(1,412)	(493)
Net cash used in investing activities	(107,290)	(493)
Cash flows from financing activities
Net proceeds from at-the-market facilities	110,954	33,287
Proceeds from exercise of stock options	206	1,545
Proceeds from purchases of common stock under ESPP	606	417
Payment of employee tax obligations related to vesting of restricted stock units	0	(259)
Payments under finance lease obligations	(207)	(139)
Net cash provided by financing activities	111,559	34,851
Increase (decrease) in cash, cash equivalents and restricted cash	6,135	(63,230)
Cash, cash equivalents and restricted cash, beginning of period	178,425	255,415
Cash, cash equivalents and restricted cash, end of period	184,560	192,185
Supplemental disclosures of non-cash activities:
Purchases of property and equipment in accounts payable and accrued expenses	407	46
Cash paid for interest	1,746	187
Right-of-use assets obtained in exchange for operating lease liabilities	298	3,783
Right-of-use assets obtained in exchange for financing lease liabilities	$ 0	$ 609

Nature of business and basis of

Nature of business and basis of presentation	9 Months Ended
	Sep. 30, 2022
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 over 20 years of industry learning in the ADC field to develop proprietary and differentiated technology platforms that enable it to develop ADCs that are designed to have improved efficacy, safety and tolerability relative to existing ADC therapies. The Company’s innovative platforms include Dolaflexin and Dolasynthen, each of which deliver the DolaLock payload, as well as Immunosynthen, which delivers the novel stimulator of interferon genes ("STING") agonist ImmunoLock payload. The Company’s product candidates include upifitamab rilsodotin ("UpRi"), XMT-1660 and XMT-2056. The Company's lead product candidate, UpRi, is a first-in-class Dolaflexin ADC targeting NaPi2b, an antigen broadly expressed in ovarian cancer and other cancers with limited expression in healthy tissues. The Company is currently evaluating UpRi in platinum-resistant ovarian cancer in a single-arm registrational trial, referred to as UPLIFT. The Company is also conducting a placebo-controlled Phase 3 clinical trial, referred to as UP-NEXT, to investigate UpRi as a single-agent maintenance treatment in patients with platinum-sensitive ovarian cancer that have high NaPi2b expression. Additionally, the Company is conducting a Phase 1/2 combination trial, referred to as UPGRADE-A. UPGRADE-A is exploring the combination of UpRi with carboplatin, a standard platinum chemotherapy broadly used in the treatment of platinum-sensitive ovarian cancer. The Company may explore other combinations as part of a series of UPGRADE trials in the future. The Company is also investigating XMT-1660, a B7-H4-directed Dolasynthen ADC, in a Phase 1 clinical trial enrolling patients with solid tumors, including in breast, endometrial and ovarian cancers. Additionally, the Company is developing XMT-2056, an Immunosynthen STING-agonist ADC that targets a novel epitope of human epidermal growth factor receptor 2 ("HER2"). The Company also has two additional earlier stage preclinical candidates, XMT-2068 and XMT-2175, that leverage the Company's Immunosynthen platform and target tumor-associated antigens. 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 studies and clinical trials, 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 September 30, 2022, the net loss was $59.8 million, compared to $45.5 million in the three months ended September 30, 2021. For the nine months ended September 30, 2022, the net loss was $159.3 million, compared to $121.1 million in the nine months ended September 30, 2021. The Company expects to continue to incur operating losses for at least the next several years. As of September 30, 2022, the Company had an accumulated deficit of $609.8 million. 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"). 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, 2021 and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 28, 2022. 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, 2022, the results of its operations for the three and nine months ended September 30, 2022 and 2021, the statements of stockholders’ equity for the three and nine months ended September 30, 2022 and 2021 and statements of cash flows for the nine months ended September 30, 2022 and 2021. Such adjustments are of a normal and recurring nature. The results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results for the year ending December 31, 2022, or for any future period.

Summary of significant accounti

Summary of significant accounting policies	9 Months Ended
	Sep. 30, 2022
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 and nine months ended September 30, 2022 are consistent with those discussed in Note 2, Summary of Significant Accounting Policies , in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. 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 820, Fair Value Measurement, 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. Concentration of Credit Risk and Off-balance Sheet Risk Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash equivalents and marketable securities. Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. The Company does not believe that it is subject to any significant concentrations of credit risk from these financial instruments. The Company has no financial instruments with off-balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Marketable Securities The Company’s investment strategy is focused on capital preservation. The Company invests in instruments that meet the credit quality standards outlined in the Company’s investment policy. 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. Fair value is determined based on quoted market prices. Amortization and accretion of discounts and premiums are recorded as interest income within other income (expense), net. Realized gains and losses are included in other income (expense), net. The Company assesses its available-for-sale debt securities under the available-for-sale debt security impairment model in ASC 326, Financial Instruments - Credit Losses , as of each reporting date in order to determine if a portion of any decline in fair value below carrying value recognized on its available-for-sale debt securities is the result of a credit loss. The Company records credit losses in the consolidated statements of operations and comprehensive loss as a component of other income (expense), net, which is limited to the difference between the fair value and the amortized cost of the security. To date, the Company has not recorded any credit losses on its available-for-sale debt securities. 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. The Company determined that these investments are subject to minimal credit and market risks. Cash and cash equivalents are stated at cost, which approximates market value. Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed below, the Company does not believe that the adoption of recently issued standards have or may have a material impact on the Company's condensed consolidated financial statements or disclosures.

Collaboration agreements

Collaboration agreements	9 Months Ended
	Sep. 30, 2022
Collaboration agreements
Collaboration agreements	Collaboration agreements GlaxoSmithKline Intellectual Property (No. 4) Limited On August 6, 2022, the Company entered into a Collaboration, Option and License Agreement (the "GSK Agreement") with GlaxoSmithKline Intellectual Property (No. 4) Limited ("GSK"), pursuant to which the Company granted GSK an exclusive option to obtain an exclusive license (the “Option”) to co-develop and to commercialize products containing XMT-2056 (the "Licensed Products"), exercisable within a specified time period (the “Option Period”) after the Company delivers to GSK data resulting from completion of dose escalation with enrichment for breast cancer patients in a Phase 1 single-agent clinical trial of XMT-2056. GSK’s exercise of the Option may require clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Clearance” and GSK’s exercise of the Option following any applicable HSR Clearance, the “GSK Option Exercise”). Prior to the GSK Option Exercise, the Company will lead and will be responsible for the costs of manufacturing, research, and early clinical development related to its XMT-2056 program. After the GSK Option Exercise, if any, GSK may elect to manufacture XMT-2056, and GSK and the Company will co-develop XMT-2056 aimed at the approval of Licensed Product(s) in the United States and the European Union, with GSK being responsible for the majority of the development costs. GSK will be responsible for all development costs aimed solely at gaining approval outside the United States and European Union. Pursuant to the GSK Agreement, following the GSK Option Exercise and subject to certain exceptions and specified payment obligations, the Company’s aggregate shared development costs are capped at a fixed amount, with any amounts in excess to be borne by GSK unless and until the Company exercises its option to receive (or bear) a specified share of U.S. profits (or losses) for any Licensed Products (“Profit Share Election”). The excess development costs will accrue interest as specified in the GSK Agreement and will later either be repaid by the Company or offset against future regulatory and sales milestones or royalty payments that may become due to the Company. If the Company exercises its Profit Share Election, the cap on the Company’s share of development costs shall no longer apply, and the Company must pay any then-outstanding excess plus accrued interest costs. Additionally, if the Company exercises its Profit Share Election, it may also simultaneously elect to co-promote any Licensed Products in the United States. Pursuant to the GSK Agreement, GSK paid the Company a non-refundable, upfront fee of $100.0 million in August 2022. Following the GSK Option Exercise, if any, GSK is obligated to pay the Company an option exercise payment of $90.0 million (the "Option Payment"). The Company is eligible to receive future development, regulatory, and commercial milestone payments up to approximately $1.3 billion and, if the Company does not exercise its Profit Share Election, tiered royalties up to the mid-twenty percent range based on global sales of Licensed Products. Included in the aggregate milestone payments amount is $30 million that the Company is eligible to earn upon the satisfaction of early clinical development milestones that may occur prior to the GSK Option Exercise. If the Company exercises its Profit Share Election, the Company will be eligible to receive reduced development, regulatory, and commercial milestone payments and reduced royalty rates on sales outside of the United States. Whether or not the Company exercises its Profit Share Election, GSK will be responsible for certain milestone payments or royalties due to specified third parties with which the Company currently has agreements that relate to the XMT-2056 program. The GSK Agreement will terminate at the end of the Option Period if GSK does not exercise its Option. In the event of the GSK Option Exercise, unless earlier terminated, the GSK Agreement will continue in effect until the date on which the royalty term and all payment obligations with respect to all Licensed Products in all countries have expired. Accounting Analysis The Company assessed the GSK Agreement in accordance with ASC 606, Revenue from Contracts with Customers , and concluded that the contract counterparty, GSK, is a customer. The Company identified the following two material performance obligations under the GSK Agreement: (i) development activities, including manufacturing, research and early clinical development activities, necessary to deliver the package of data, information and materials specified in the GSK agreement (the "Development Activities") and (ii) the Option to co-develop and to commercialize Licensed Products (the "License Option"). The Company concluded that the Development Activities are one distinct performance obligation, as the underlying activities are not distinguishable in the context of the contract and are inputs to an integrated development program that will generate data and information providing value to GSK in determining whether to exercise the Option. The License Option is considered a material right as the value of the license exceeds the Option Payment, and is therefore a distinct performance obligation. In accordance with ASC 606, the Company determined that the initial transaction price under the GSK Agreement equals $100.0 million, consisting of the upfront, non-refundable and non-creditable payment paid by GSK. None of the early clinical development milestones that may occur prior to the GSK Option Exercise have been included in the initial transaction price, as all milestone amounts were fully constrained. As part of its evaluation of the constraint, the Company considered numerous factors, including stage of development and the remaining risks associated with the development required to achieve the milestones, as well as whether the achievement of the milestones is outside the control of the Company or GSK. At the end of each subsequent reporting period, the Company will re-evaluate the probability of achievement and any related constraint and, if necessary, adjust its estimate of the overall transaction price. Any such adjustments will be recorded on a cumulative catch-up basis, which would affect the reported amount of revenues in the period of adjustment. The GSK Option payment is excluded from the initial transaction price at contract inception along with any future development, regulatory, and commercial milestone payments (including royalties) following the GSK Option Exercise. Consistent with the allocation objective under ASC 606, the Company allocated the $100.0 million fixed upfront payment in the transaction price to the Development Activities and the License Option based on each performance obligation’s relative standalone selling price. The standalone selling price for the Development Activities was calculated using a cost-plus margin approach for the estimated pre-option development timeline. For the standalone selling price of the License Option, the Company utilized an income-based approach which included the following key assumptions: post-option development timeline and costs, revenue forecast, discount rates and probabilities of technical and regulatory success. The Company is recognizing revenue related to the Development Activities performance obligation over the estimated period of the pre-option development using a proportional performance model as the underlying activities are performed. Th e C ompany measures proportional performance based on the costs incurred relative to the total costs expected to be incurred. The Company will defer revenue recognition related to the License Option. If the License Option is exercised and GSK obtains an exclusive license, the Company will recognize revenue as it fulfills its obligations under the GSK Agreement. If the Option is not exercised, the Company will recognize the entirety of the revenue in the period when the Option expires. During the three and nine months ended September 30, 2022, the Company recorded collaboration revenue of $0.7 million related to its efforts under the GSK Agreement. As of September 30, 2022, the Company had recorded $99.3 million in deferred revenue related to the unsatisfied performance obligations under the GSK Agreement. This deferred revenue will be recognized over the remaining performance period and classified as current or noncurrent on the consolidated balance sheets. Summary of Contract Assets and Liabilities The Company did not record any contract assets as of September 30, 2022 related to the GSK Agreement. The following table presents changes in the balances of the Company's contract liabilities related to the GSK Agreement during the nine months ended September 30, 2022: (in thousands) Balance at Additions Deductions Balance at Nine months ended September 30, 2022 Contract liabilities: Deferred revenue $ — $ 100,000 $ 655 $ 99,345 During the three and nine months ended September 30, 2022, the Company recognized the following revenues related to the GSK Agreement as a result of changes in the contract liability balances in the respective periods: Three Months Ended Nine Months Ended (in thousands) 2022 2022 Revenue recognized in the period from: Amounts included in the contract liability at the beginning of the period $ — $ — Performance obligations satisfied in previous periods $ — $ — Janssen Biotech Inc. In February 2022, the Company entered into a research collaboration and license agreement with Janssen Biotech Inc. ("Janssen" and such agreement, the "Janssen Agreement") focused on the research, development and commercialization of novel ADCs for three oncology targets by leveraging Mersana’s ADC expertise and Dolasynthen platform with Janssen’s proprietary antibodies. Upon execution of the Janssen Agreement, the Company received a non-refundable upfront payment of $40.0 million from Janssen. Pursuant to the Janssen Agreement, the Company granted Janssen two exclusive, non-transferrable, worldwide licenses - the Research License and the Commercialization License (together, the "Licenses"). The Research License provides Janssen, on a target-by-target basis, rights under the Company’s technology and the Company’s interest in the technology developed jointly through the collaboration solely to conduct Janssen’s activities under the research and Chemistry, Manufacturing and Controls ("CMC") plans with respect to each target. The Commercialization License is a royalty-bearing license granted on a target-by-target basis under the Company’s technology and the Company’s interest in the technology developed jointly through the collaboration to develop, manufacture, commercialize and otherwise exploit licensed ADCs and any licensed products containing licensed ADCs directed toward a target. Janssen may select up to three targets and may substitute each target once prior to a substitution deadline. Janssen is not required to pay a fee for its first substitution right, but must pay a one-time fee for access to the subsequent substitution rights following its exercise of its second substitution right. Pursuant to mutually agreed research and CMC plans, the Company will perform bioconjugation, production development, preclinical manufacturing, and certain related research and preclinical development activities, in order to progress the targets through investigational new drug application ("IND") submission for further development, manufacture and commercialization by Janssen. Janssen will have sole responsibility for IND-enabling studies, IND submission, clinical development, regulatory activities and commercialization of the licensed ADCs. Both the Company and Janssen will have equal representation on a Joint Research Committee and Joint Manufacturing Committee to oversee the research and CMC activities. The Company estimates that its activities under the research plans for the targets will be performed through 2024. The Company's CMC activities will be compensated by Janssen at agreed upon rates. Assuming successful development and commercialization of all three targets by Janssen, the Company could receive up to an additional $505 million in development and regulatory milestones and $530 million in sales milestones as well as tiered mid single-digit to low double-digit royalties on aggregate net sales of the ADC products. To date, the Company has not achieved any of the specified milestones. Unless earlier terminated, the Janssen Agreement will expire upon the expiration of the last royalty term for a product under the Janssen Agreement. The Janssen Agreement contains customary provisions for termination by either party, including in the event of breach of the Janssen Agreement, subject to cure, by Janssen for convenience and by Mersana upon a challenge of the licensed patents, and customary provisions regarding the effects of termination. Janssen may request that the Company perform clinical manufacturing services under a separate clinical supply agreement. Janssen may also request that the Company perform a technology transfer of bioconjugation and manufacturing process technology, at Janssen's cost, at an agreed upon rate. Accounting Analysis The Company assessed the Janssen Agreement in accordance with ASC 606 and concluded that the contract counter party, Janssen, is a customer. The Company identified the following seven material performance obligations under the Janssen Agreement: (i) exclusive Licenses and research activities for each of the three designated targets, (ii) CMC activities for each of the three designated targets and (iii) the first target substitution right. The Company concluded that the Licenses and research activities are one combined performance obligation for each target as the Licenses are not capable of being distinct from the research activities given their proprietary nature. The CMC activities are considered a distinct performance obligation for each target as the activities could be performed by a third-party provider. The first target substitution right is considered a material right as there is no option exercise fee and, as such, is a distinct performance obligation. In accordance with ASC 606, the Company determined that the initial transaction price under the Janssen Agreement equals $40.0 million, consisting of the upfront, non-refundable and non-creditable payment. None of the development and the regulatory milestones have been included in the transaction price, as all milestone amounts were fully constrained. As part of its evaluation of the constraint, the Company considered numerous factors, including stage of development and the remaining risks associated with the development required to achieve the milestones, as well as whether the achievement of the milestones is outside the control of the Company or Janssen. Any consideration related to sales-based milestones (including royalties) will be recognized when the related sales occur as such milestones were determined to relate predominantly to the license granted to Janssen and therefore have also been excluded from the transaction price. At the end of each subsequent reporting period, the Company will re-evaluate the probability of achievement of each milestone and any related constraint and, if necessary, adjust its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect the reported amount of revenues in the period of adjustment. The Company determined that the consideration for CMC activities represents variable consideration. The Company has not included potential cost reimbursements within the transaction price as no CMC activities for any of the three targets have been initiated. The Company elected to apply the Right to Invoice practical expedient under ASC 606. As such, the Company will recognize revenue related to the CMC activities when the services are performed. Consistent with the allocation objective under ASC 606, the Company allocated the $40.0 million fixed upfront payment in the transaction price to the Licenses and research activities and first substitution right based on each performance obligation’s relative standalone selling price. Each of the standalone selling prices for the Licenses and research activities and for the first substitution right were estimated utilizing an income approach, along with the likelihood of exercise for the substitution right and included the following key assumptions: the development timeline, revenue forecast, discount rate and probabilities of technical and regulatory success. The Company is recognizing revenue related to the Licenses and research services performance obligation over the estimated period of the research 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. The Company will recognize revenue related to the first target substitution right over time in congruence with the Licenses and research activities, upon the exercise of the option. If the first target substitution option is not exercised, the Company will recognize the entirety of the revenue in the period when the option expires. During the three and nine months ended September 30, 2022, the Company recorded collaboration revenue of $4.9 million and $10.9 million, respectively, related to its efforts under the Janssen Agreement. As of September 30, 2022, the Company had recorded $29.1 million in deferred revenue related to the Janssen Agreement that will be recognized over the remaining performance period and classified as current or noncurrent on the consolidated balance sheets based upon the expected timing of satisfaction of respective performance obligations. The aggregate amount of the transaction price allocated to unsatisfied performance obligations was $29.1 million as of September 30, 2022, which is expected to be recognized over the period the associated research activities are performed for each target. Summary of Contract Assets and Liabilities The Company did not record any contract assets as of September 30, 2022 related to the Janssen Agreement. The following table presents changes in the balances of the Company's contract liabilities related to the Janssen Agreement during the nine months ended September 30, 2022: (in thousands) Balance at Additions Deductions Balance at Nine months ended September 30, 2022 Contract liabilities: Deferred revenue $ — $ 40,000 $ 10,916 $ 29,084 During the three and nine months ended September 30, 2022, the Company recognized the following revenues related to the Janssen Agreement as a result of changes in the contract liability balances in the respective periods: Three Months Ended Nine Months Ended (in thousands) 2022 2022 Revenue recognized in the period from: Amounts included in the contract liability at the beginning of the period $ 4,908 $ — Performance obligations satisfied in previous periods $ — $ — 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 non-refundable technology access fee of $12.0 million for the right to develop ADCs directed to six exclusive targets over a specified period of time. No additional fees are due when a target is designated and the commercial license to the target is granted. Merck KGaA will be responsible for the product development and marketing of any products resulting from this collaboration. Under the terms of the 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. 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 $0.5 million 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. 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-good manufacturing practice ("non-GMP") ADC drug substance and clinical good manufacturing practice ("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 concluded that Merck KGaA is a customer and accounted for the Merck KGaA Agreement in accordance with ASC 606. 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 September 30, 2022, the Company had completed its research service obligations associated with four of the six designated targets. The Company did not recognize any corresponding research and development expense related to the Merck KGaA Supply Agreement during the three and nine months ended September 30, 2022 and 2021. As of September 30, 2022 and December 31, 2021, the Company had $3.9 million in deferred revenue related to the Merck KGaA Agreement and Merck KGaA Supply Agreement. Such amounts will be recognized over the remaining performance period. Summary of Contract Assets and Liabilities The Company did not record any contract assets as of September 30, 2022 and December 31, 2021. The following table presents changes in the balances of the Company's contract liabilities related to the Merck KGaA Agreement and Merck KGaA Supply Agreement during the nine months ended September 30, 2022 and 2021: (in thousands) Balance at Additions Deductions Balance at Nine months ended September 30, 2022 Contract liabilities: Deferred revenue $ 3,944 $ — $ 32 $ 3,912 (in thousands) Balance at Additions Deductions Balance at Nine months ended September 30, 2021 Contract liabilities: Deferred revenue $ 3,987 $ — $ 32 $ 3,955 During the three and nine months ended September 30, 2022 and 2021, the Company recognized the following revenues related to the Merck KGaA Agreement and Merck KGaA Supply Agreement as a result of changes in the contract liability balances in the respective periods: Three Months Ended Nine Months Ended (in thousands) 2022 2021 2022 2021 Revenue recognized in the period from: Amounts included in the contract liability at the beginning of the period $ 11 $ 11 $ 32 $ 32 Performance obligations satisfied in previous periods $ — $ — $ — $ — Other Revenue The Company has provided limited services for a collaboration partner, Asana BioSciences, LLC ("Asana Biosciences"). During the nine months ended September 30, 2022, the Company recognized revenue of $0.3 million related to these services and did not recognize revenue related to these services during the three months ended September 30, 2022 or during the three and nine months ended September 30, 2021. The next potential milestone the Company is eligible to receive is $2.5 million upon dosing the fifth patient in a Phase 1 clinical trial by Asana BioSciences. While the first patient was dosed in April 2022, as of September 30, 2022, 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 the collaboration partner continues to evaluate its candidate in the Phase 1 trial. 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, 2022
Fair Value Disclosures [Abstract]
Fair value measurements	Fair value measurements The following table presents information about the Company's assets measured at fair value on a recurring basis and indicates the level within fair value hierarchy of the valuation techniques utilized to determine such value. The Company had no marketable securities as of December 31, 2021. September 30, 2022 (in thousands) Total Quoted Prices Significant Significant Cash equivalents Money market funds $ 29,509 $ 29,509 $ — $ — Marketable securities U.S. treasury securities $ 101,118 $ 101,118 $ — $ — U.S. government agency securities $ 4,926 $ — $ 4,926 $ — The money market funds noted above are included in cash and cash equivalents in the accompanying condensed consolidated balance sheets. There were no changes in valuation techniques or transfers between fair value measurement levels during the nine months ended September 30, 2022. Marketable securities classified as Level 1 within the valuation hierarchy generally consists of U.S. treasury securities, as the fair value is readily determinable based on active daily markets for identical securities. Marketable securities classified as Level 2 within the valuation hierarchy generally consists of U.S. government agency securities, as the fair value is readily determinable based on active daily markets for similar securities and other observable inputs. The Company estimates the fair values of marketable securities by taking into consideration valuations obtained from third-party pricing sources. 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, 2022 and December 31, 2021, the carrying value of the Company’s outstanding borrowing under the New Credit Facility (as defined in Note 7) approximated fair value (a Level 2 fair value measurement), reflecting interest rates currently available to the Company. The New Credit Facility is discussed in more detail in Note 7, Debt .

Cash, cash equivalents, and sho

Cash, cash equivalents, and short-term marketable securities	9 Months Ended
	Sep. 30, 2022
Investments, Debt and Equity Securities [Abstract]
Cash, cash equivalents, and short-term marketable securities	Cash, cash equivalents, and short-term marketable securities Cash and cash equivalents The following table summarizes the Company's cash, cash equivalents, and restricted cash as of September 30, 2022 and 2021. Nine Months Ended Nine Months Ended (in thousands) Beginning End Beginning End Cash and cash equivalents $ 177,947 $ 184,082 $ 255,094 $ 191,707 Restricted cash included in other assets, noncurrent 478 478 321 478 Total cash, cash equivalents and restricted cash per statement of cash flows $ 178,425 $ 184,560 $ 255,415 $ 192,185 Marketable securities The following table summarizes the Company's marketable securities held at September 30, 2022. The Company had no marketable securities as of December 31, 2021. September 30, 2022 (in thousands) Amortized Gross Gross Fair Marketable securities U.S. treasury securities $ 101,342 $ 4 $ (228) $ 101,118 U.S. government agency securities $ 4,933 $ — $ (7) $ 4,926 All of the Company's marketable securities are due within one year or less. The Company did not realize any gains or losses recognized on the sale or maturity of marketable securities during the nine months ended September 30, 2022, and, as a result, the Company did not reclassify any amounts out of accumulated comprehensive loss.

Accrued expenses

Accrued expenses	9 Months Ended
	Sep. 30, 2022
Accrued Liabilities, Current [Abstract]
Accrued expenses	Accrued expenses Accrued expenses consisted of the following as of September 30, 2022 and December 31, 2021: (in thousands) September 30, December 31, Accrued manufacturing expenses $ 13,230 $ 8,476 Accrued clinical expenses 10,972 7,879 Accrued research and non-clinical expenses 5,811 3,848 Accrued payroll and related expenses 9,083 7,319 Accrued professional fees 1,822 909 Accrued other 286 285 $ 41,204 $ 28,716

Debt

Debt	9 Months Ended
	Sep. 30, 2022
Debt Disclosure [Abstract]
Debt	Debt On May 8, 2019, the Company entered into a loan and security agreement (the "Prior Credit Facility") with Silicon Valley Bank ("SVB"), which was subsequently amended on June 29, 2019, August 28, 2020, and August 27, 2021. Refer to Note 7, Debt, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 for more information regarding the Prior Credit Facility. On October 29, 2021, the Company entered into a loan and security agreement (the "New Credit Facility") with SVB and Oxford Finance, LLC ("Oxford" and, together with SVB, the "Lenders"). Pursuant to the New Credit Facility, as amended, the Company can borrow term loans in an aggregate amount of $100.0 million, which includes (i) $60.0 million in up to three principal advances through December 31, 2022, (ii) an additional $20.0 million in one principal advance, if the Company reaches certain development milestone events through June 30, 2023, (iii) and an additional tranche of $20.0 million, subject to conditional approval from the Lenders. The New Credit Facility is secured by substantially all of the Company's personal property owned or later acquired, excluding intellectual property (but including the rights to payments and proceeds from intellectual property), and a negative pledge on intellectual property. The Company drew $25.0 million upon execution of the New Credit Facility, of which $5.5 million of the proceeds was used to repay the existing balance under the Prior Credit Facility and satisfy its obligations to SVB. Upon entering into the New Credit Facility, the Company terminated all commitments by SVB to extend further credit under the Prior Credit Facility and all guarantees and security interests granted by the Company to SVB under the Prior Credit Facility. Refer to Note 7, Debt , in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 for more information regarding the New Credit Facility. As of September 30, 2022, the Company was in compliance with all covenants under the New Credit Facility. There are no events of default as of September 30, 2022. Unamortized debt financing costs are recorded as a reduction of the carrying amount on the term loan and amortized as interest expense using the effective-interest method. Unamortized deferred financing costs of $0.1 million were recorded in other assets as of September 30, 2022 related to the Company's right to borrow additional amounts from the Lenders in the future and amortized to interest expense over the relevant draw period on a straight-line basis. The following is a summary of obligations under the term loan as of September 30, 2022: (in thousands) September 30, Total debt $ 25,000 Less: Current portion of long-term debt — Total debt, net of current portion 25,000 Debt financing costs, net of accretion (345) Accretion related to final payment 198 Long-term debt, net $ 24,853

Stockholders' equity

Stockholders' equity	9 Months Ended
	Sep. 30, 2022
Stockholders' Equity Note [Abstract]
Stockholders’ equity	Stockholders’ equity Preferred stock As of September 30, 2022, the Company had 25,000,000 shares of authorized preferred stock. No shares of preferred stock have been issued. At-the-market ("ATM") equity offering program In May 2020, the Company established an ATM equity offering program (the "2020 ATM"), pursuant to which it was able to offer and sell up to $100.0 million of its common stock from time to time at prevailing market prices. During the first quarter of 2022, the Company sold 11,740,210 shares of common stock and received net proceeds of $54.8 million under the 2020 ATM. As of March 31, 2022, the 2020 ATM had been fully utilized. In February 2022, the Company established a new ATM equity offering program (the "2022 ATM"), pursuant to which it is able to offer and sell up to $100.0 million of its common stock from time to time at prevailing market prices. During the nine months ended September 30, 2022, the Company sold 12,717,288 shares of common stock and received net proceeds of $56.5 million under the 2022 ATM. As of September 30, 2022, approximately $42.4 million remained unsold and available for sale under the 2022 ATM. Warrants In connection with a 2013 Series A-1 Preferred Stock issuance, the Company granted to certain investors warrants to purchase 129,491 shares of common stock. The warrants have a $0.05 per share exercise price and a contractual life of 10 years. The fair value of these warrants was recorded as a component of equity at the time of issuance. As of September 30, 2022, there were warrants to purchase 22,590 shares of common stock outstanding. During the nine months ended September 30, 2022, the Company issued 16,654 shares of common stock upon the exercise of warrants. Common stock At the 2022 Annual Meeting of Stockholders on June 9, 2022, the Company's stockholders approved an amendment to the Company’s Fifth Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock, $0.0001 par value per share, from 175,000,000 to 350,000,000. This increase became effective upon filing of a Certificate of Amendment with the Secretary of State of Delaware on June 9, 2022. The holders of the common stock are entitled to one vote for each share held. Common stockholders are not entitled to receive dividends, unless declared by the Board of Directors (the "Board"). As of September 30, 2022 and December 31, 2021, there were 12,418,052 and 9,199,512, respectively, shares of common stock reserved for the exercise of outstanding stock options, restricted stock units ("RSUs") and warrants. September 30, December 31, Stock options 10,524,780 8,342,429 Restricted stock units 1,870,682 817,609 Warrants 22,590 39,474 12,418,052 9,199,512

Stock-based compensation

Stock-based compensation	9 Months Ended
	Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]
Stock-based compensation	Stock-based compensation Stock incentive 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 or forfeitures of options granted under the 2007 Plan will increase the options available under the 2017 Stock Incentive Plan (the "2017 Plan"), as described below. In June 2017, the Company’s stockholders approved the 2017 Plan. Under the 2017 Plan initially, up to 2,255,000 shares of common stock could be granted to the Company's employees, officers, directors, consultants and advisors in the form of options, RSUs or other stock-based awards. The number of shares of common stock issuable under the 2017 Plan will be cumulatively increased annually on January 1 by the lesser of (a) 4% of the outstanding shares on the immediately preceding December 31 or (b) such other 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 or forfeitures of options granted under the 2007 Plan, which expired in June 2017, would increase the number of shares that could be granted under the 2017 Plan. On January 1, 2022, the number of shares of common stock issuable under the 2017 Plan was increased by 2,948,362 shares. As of September 30, 2022, there were 1,372,006 shares available for future issuance under the 2017 Plan. During the nine months ended September 30, 2022, the Company granted 3,532,433 RSUs and options to purchase shares of common stock to employees and non-employee directors under the 2017 Plan. Under the 2017 Plan, both with respect to incentive stock options and nonqualified stock options, the exercise price per share will not be less than the fair market value of the common stock on the date of grant and the vesting period is generally four years. Options granted under the 2017 Plan expire no later than 10 years from the date of grant. Options under the 2007 Plan were granted at an exercise price established by the Board (or a committee thereof) that was not less than the fair market value of the underlying common stock on the date of grant and subject to such vesting provisions determined by the Board (or a committee thereof). The Board may accelerate vesting or otherwise adjust the terms of granted options in the case of a merger, consolidation, dissolution, or liquidation of the Company. Inducement awards From time to time, the Company grants to its employees, upon approval by the Board or an authorized committee thereof, options to purchase shares of common stock as an inducement to employment in accordance with Nasdaq Listing Rule 5635(c)(4). Prior to February 2022, these options were granted outside of an existing equity incentive plan. These options are subject to terms substantially the same as the 2017 Plan. In February 2022, the Board adopted the Company's 2022 Inducement Stock Incentive Plan (the "Inducement Plan"), which provides for the grant of nonstatutory options, stock appreciation rights, restricted stock, RSUs and other stock-based awards, with respect to an aggregate of 2,000,000 shares of the Company's common stock (subject to adjustment as provided in the Inducement Plan). During the nine months ended September 30, 2022, the Company granted 612,450 RSUs and options to purchase shares of common stock to newly hired employees under the Inducement Plan. As of September 30, 2022, there were 1,403,975 shares available for future issuance under the Inducement Plan. As of September 30, 2022, there were 757,500 options to purchase shares of common stock outstanding which were granted as inducement awards prior to the establishment of the Inducement Plan. Stock option activity A summary of stock option activity is as follows: Number Weighted- Outstanding at January 1, 2022 8,342,429 $ 11.25 Granted 2,765,034 5.41 Exercised (54,299) 3.81 Cancelled (528,384) 13.33 Outstanding at September 30, 2022 10,524,780 $ 9.65 Vested and expected to vest at September 30, 2022 10,524,780 $ 9.65 Exercisable at September 30, 2022 5,339,351 $ 8.96 The weighted-average grant date fair value of options granted during the nine months ended September 30, 2022 and 2021 was $3.96 and $12.37 per share, respectively. The total intrinsic value of options exercised during the nine months ended September 30, 2022 and 2021 was $0.1 million and $3.9 million, respectively. The aggregate intrinsic value represents the difference between the exercise price and the selling price received by option holders upon the exercise of stock options during the period. Cash received from the exercise of stock options was $0.2 million and $1.5 million for the nine months ended September 30, 2022 and 2021, respectively. Restricted stock units The Company periodically issues RSUs with a service condition to certain officers and other employees that typically vest between one year and four years from the grant date. A summary of the RSU activity is as follows: Number of Shares Unvested at January 1, 2022 817,609 Granted 1,379,849 Vested (190,841) Forfeited (135,935) Unvested at September 30, 2022 1,870,682 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. 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 statements of operations and comprehensive loss: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Stock options $ 3,901 $ 3,986 $ 11,952 $ 10,617 Restricted stock units 1,365 881 3,832 2,636 Employee stock purchase plan 109 61 424 296 Stock-based compensation expense included in total operating expenses $ 5,375 $ 4,928 $ 16,208 $ 13,549 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 September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Research and development $ 2,890 $ 2,607 $ 8,569 $ 7,410 General and administrative 2,485 2,321 7,639 6,139 Stock-based compensation expense included in total operating expenses $ 5,375 $ 4,928 $ 16,208 $ 13,549 As of September 30, 2022, there was $34.5 million and $12.6 million of unrecognized stock-based compensation expense related to unvested stock options and unvested RSUs, respectively, that is expected to be recognized over a weighted-average period of 2.2 years and 2.8 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 September 30, 2022 2021 2022 2021 Risk-free interest rate 2.9 % 1.0 % 2.0 % 0.8 % Expected dividend yield — % — % — % — % Expected term (years) 6.11 6.11 5.99 6.05 Expected stock price volatility 94 % 82 % 88 % 83 % 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 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 issued 154,235 shares under the 2017 ESPP during the nine months ended September 30, 2022 and issued 36,198 shares under the 2017 ESPP during the nine months ended September 30, 2021. As of September 30, 2022, there were 412,330 shares available for issuance under the 2017 ESPP.

Net loss per share

Net loss per share	9 Months Ended
	Sep. 30, 2022
Earnings Per Share [Abstract]
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. For purposes of the diluted net loss per share calculation, stock options, unvested 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 and Nine Months Ended Three and Nine Months Ended Stock options 10,524,780 8,215,549 Unvested restricted stock units 1,870,682 800,466 Warrants 22,590 39,474 12,418,052 9,055,489

Commitments

Commitments	9 Months Ended
	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments	Commitments License agreements During the three months ended September 30, 2022 and the three and nine months ended September 30, 2021, the Company did not record research and development expense related to non-refundable license payments. During the nine months ended September 30, 2022, the Company recorded research and development expense related to non-refundable license payments of $1.5 million. During the three and nine months ended September 30, 2022, the Company recorded research and development expense related to development milestones of $0.7 million related to development milestones associated with XMT-1660. During the three and nine months ended September 30, 2021, the Company recorded research and development expense of $1.2 million and $2.1 million, respectively, related to development milestones associated with UpRi.

Summary of significant accoun_2

Summary of significant accounting policies (Policies)	9 Months Ended
	Sep. 30, 2022
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 820, Fair Value Measurement, 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.
Concentration Risk, Credit Risk, Policy	Concentration of Credit Risk and Off-balance Sheet RiskFinancial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash equivalents and marketable securities. Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. The Company does not believe that it is subject to any significant concentrations of credit risk from these financial instruments. The Company has no financial instruments with off-balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements.
Off-Balance-Sheet Credit Exposure, Policy	Concentration of Credit Risk and Off-balance Sheet RiskFinancial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash equivalents and marketable securities. Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. The Company does not believe that it is subject to any significant concentrations of credit risk from these financial instruments. The Company has no financial instruments with off-balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements.
Marketable Securities	Marketable Securities The Company’s investment strategy is focused on capital preservation. The Company invests in instruments that meet the credit quality standards outlined in the Company’s investment policy. 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. Fair value is determined based on quoted market prices. Amortization and accretion of discounts and premiums are recorded as interest income within other income (expense), net. Realized gains and losses are included in other income (expense), net. The Company assesses its available-for-sale debt securities under the available-for-sale debt security impairment model in ASC 326, Financial Instruments - Credit Losses , as of each reporting date in order to determine if a portion of any decline in fair value below carrying value recognized on its available-for-sale debt securities is the result of a credit loss. The Company records credit losses in the consolidated statements of operations and comprehensive loss as a component of other income (expense), net, which is limited to the difference between the fair value and the amortized cost of the security. To date, the Company has not recorded any credit losses on its available-for-sale debt securities.
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. The Company determined that these investments are subject to minimal credit and market risks. Cash and cash equivalents are stated at cost, which approximates market value.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed below, the Company does not believe that the adoption of recently issued standards have or may have a material impact on the Company's condensed consolidated financial statements or disclosures.
Net Loss per Share	Net loss per shareBasic 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 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.

Collaboration agreements (Table

Collaboration agreements (Tables)	9 Months Ended
	Sep. 30, 2022
Collaboration agreements
Schedule of Changes in the Balance of Our Contract Assets and Liabilities and Recognized Revenue	The following table presents changes in the balances of the Company's contract liabilities related to the GSK Agreement during the nine months ended September 30, 2022: (in thousands) Balance at Additions Deductions Balance at Nine months ended September 30, 2022 Contract liabilities: Deferred revenue $ — $ 100,000 $ 655 $ 99,345 During the three and nine months ended September 30, 2022, the Company recognized the following revenues related to the GSK Agreement as a result of changes in the contract liability balances in the respective periods: Three Months Ended Nine Months Ended (in thousands) 2022 2022 Revenue recognized in the period from: Amounts included in the contract liability at the beginning of the period $ — $ — Performance obligations satisfied in previous periods $ — $ — (in thousands) Balance at Additions Deductions Balance at Nine months ended September 30, 2022 Contract liabilities: Deferred revenue $ — $ 40,000 $ 10,916 $ 29,084 During the three and nine months ended September 30, 2022, the Company recognized the following revenues related to the Janssen Agreement as a result of changes in the contract liability balances in the respective periods: Three Months Ended Nine Months Ended (in thousands) 2022 2022 Revenue recognized in the period from: Amounts included in the contract liability at the beginning of the period $ 4,908 $ — Performance obligations satisfied in previous periods $ — $ — (in thousands) Balance at Additions Deductions Balance at Nine months ended September 30, 2022 Contract liabilities: Deferred revenue $ 3,944 $ — $ 32 $ 3,912 (in thousands) Balance at Additions Deductions Balance at Nine months ended September 30, 2021 Contract liabilities: Deferred revenue $ 3,987 $ — $ 32 $ 3,955 During the three and nine months ended September 30, 2022 and 2021, the Company recognized the following revenues related to the Merck KGaA Agreement and Merck KGaA Supply Agreement as a result of changes in the contract liability balances in the respective periods: Three Months Ended Nine Months Ended (in thousands) 2022 2021 2022 2021 Revenue recognized in the period from: Amounts included in the contract liability at the beginning of the period $ 11 $ 11 $ 32 $ 32 Performance obligations satisfied in previous periods $ — $ — $ — $ —

Fair value measurements (Tables

Fair value measurements (Tables)	9 Months Ended
	Sep. 30, 2022
Fair Value Disclosures [Abstract]
Fair Value, Assets Measured on Recurring Basis	The following table presents information about the Company's assets measured at fair value on a recurring basis and indicates the level within fair value hierarchy of the valuation techniques utilized to determine such value. The Company had no marketable securities as of December 31, 2021. September 30, 2022 (in thousands) Total Quoted Prices Significant Significant Cash equivalents Money market funds $ 29,509 $ 29,509 $ — $ — Marketable securities U.S. treasury securities $ 101,118 $ 101,118 $ — $ — U.S. government agency securities $ 4,926 $ — $ 4,926 $ —

Cash, cash equivalents, and s_2

Cash, cash equivalents, and short-term marketable securities (Tables)	9 Months Ended
	Sep. 30, 2022
Investments, Debt and Equity Securities [Abstract]
Schedule of Restricted Cash	The following table summarizes the Company's cash, cash equivalents, and restricted cash as of September 30, 2022 and 2021. Nine Months Ended Nine Months Ended (in thousands) Beginning End Beginning End Cash and cash equivalents $ 177,947 $ 184,082 $ 255,094 $ 191,707 Restricted cash included in other assets, noncurrent 478 478 321 478 Total cash, cash equivalents and restricted cash per statement of cash flows $ 178,425 $ 184,560 $ 255,415 $ 192,185
Debt Securities, Available-for-Sale	The following table summarizes the Company's marketable securities held at September 30, 2022. The Company had no marketable securities as of December 31, 2021. September 30, 2022 (in thousands) Amortized Gross Gross Fair Marketable securities U.S. treasury securities $ 101,342 $ 4 $ (228) $ 101,118 U.S. government agency securities $ 4,933 $ — $ (7) $ 4,926

Accrued expenses (Tables)

Accrued expenses (Tables)	9 Months Ended
	Sep. 30, 2022
Accrued Liabilities, Current [Abstract]
Schedule of Accrued Expenses	Accrued expenses consisted of the following as of September 30, 2022 and December 31, 2021: (in thousands) September 30, December 31, Accrued manufacturing expenses $ 13,230 $ 8,476 Accrued clinical expenses 10,972 7,879 Accrued research and non-clinical expenses 5,811 3,848 Accrued payroll and related expenses 9,083 7,319 Accrued professional fees 1,822 909 Accrued other 286 285 $ 41,204 $ 28,716

Debt (Tables)

Debt (Tables)	9 Months Ended
	Sep. 30, 2022
Debt Disclosure [Abstract]
Schedule of Debt	The following is a summary of obligations under the term loan as of September 30, 2022: (in thousands) September 30, Total debt $ 25,000 Less: Current portion of long-term debt — Total debt, net of current portion 25,000 Debt financing costs, net of accretion (345) Accretion related to final payment 198 Long-term debt, net $ 24,853

Stockholders' equity (Tables)

Stockholders' equity (Tables)	9 Months Ended
	Sep. 30, 2022
Stockholders' Equity Note [Abstract]
Schedule for Number of Common Stock Reserved for Exercise of Outstanding Stock Options and Warrants	As of September 30, 2022 and December 31, 2021, there were 12,418,052 and 9,199,512, respectively, shares of common stock reserved for the exercise of outstanding stock options, restricted stock units ("RSUs") and warrants. September 30, December 31, Stock options 10,524,780 8,342,429 Restricted stock units 1,870,682 817,609 Warrants 22,590 39,474 12,418,052 9,199,512

Stock-based compensation (Table

Stock-based compensation (Tables)	9 Months Ended
	Sep. 30, 2022
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, 2022 8,342,429 $ 11.25 Granted 2,765,034 5.41 Exercised (54,299) 3.81 Cancelled (528,384) 13.33 Outstanding at September 30, 2022 10,524,780 $ 9.65 Vested and expected to vest at September 30, 2022 10,524,780 $ 9.65 Exercisable at September 30, 2022 5,339,351 $ 8.96
Schedule of Restricted Stock Activity	A summary of the RSU activity is as follows: Number of Shares Unvested at January 1, 2022 817,609 Granted 1,379,849 Vested (190,841) Forfeited (135,935) Unvested at September 30, 2022 1,870,682
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 statements of operations and comprehensive loss: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Stock options $ 3,901 $ 3,986 $ 11,952 $ 10,617 Restricted stock units 1,365 881 3,832 2,636 Employee stock purchase plan 109 61 424 296 Stock-based compensation expense included in total operating expenses $ 5,375 $ 4,928 $ 16,208 $ 13,549
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 September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Research and development $ 2,890 $ 2,607 $ 8,569 $ 7,410 General and administrative 2,485 2,321 7,639 6,139 Stock-based compensation expense included in total operating expenses $ 5,375 $ 4,928 $ 16,208 $ 13,549
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 September 30, 2022 2021 2022 2021 Risk-free interest rate 2.9 % 1.0 % 2.0 % 0.8 % Expected dividend yield — % — % — % — % Expected term (years) 6.11 6.11 5.99 6.05 Expected stock price volatility 94 % 82 % 88 % 83 %

Net loss per share (Tables)

Net loss per share (Tables)	9 Months Ended
	Sep. 30, 2022
Earnings Per Share [Abstract]
Schedule of Outstanding Potentially Dilutive Securities	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 and Nine Months Ended Three and Nine Months Ended Stock options 10,524,780 8,215,549 Unvested restricted stock units 1,870,682 800,466 Warrants 22,590 39,474 12,418,052 9,055,489

Nature of business and basis _2

Nature of business and basis of presentation (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net loss	$ (59,811)	$ (52,219)	$ (47,258)	$ (45,471)	$ (40,913)	$ (34,693)	$ (159,288)	$ (121,077)
Accumulated deficit	$ (609,767)						$ (609,767)		$ (450,479)

Summary of significant accoun_3

Summary of significant accounting policies - Narrative (Details)	9 Months Ended
	Sep. 30, 2022 segment
Cash and Cash Equivalents [Abstract]
Number of operating segments	1

Collaboration agreements - Glax

Collaboration agreements - GlaxoSmithKline (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Aug. 31, 2022
Collaboration agreements
Collaboration revenue	$ 5,573,000	$ 11,000	$ 11,893,000	$ 32,000
GSK Agreement
Collaboration agreements
Deferred revenue	99,300,000		99,300,000		$ 100,000,000
Collaboration arrangement, potential option exercise receivable					90,000,000
Collaboration revenue	700,000
Contract assets	$ 0		$ 0
GSK Agreement | Development, Regulatory & Commercial
Collaboration agreements
Collaboration arrangements, maximum aggregate milestones					1,300,000,000
GSK Agreement | Early Clinical Development
Collaboration agreements
Collaboration arrangements, maximum aggregate milestones					$ 30,000,000

Collaboration agreements - Cont

Collaboration agreements - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
GSK Agreement
Contract liabilities
Balance at Beginning of Period			$ 0
Additions			100,000
Deductions			655
Balance at End of Period	$ 99,345		99,345
Amounts included in the contract liability at the beginning of the period	0		0
Performance obligations satisfied in previous periods	0		0
Janssen Agreement
Contract liabilities
Balance at Beginning of Period			0
Additions			40,000
Deductions			10,916
Balance at End of Period	29,084		29,084
Amounts included in the contract liability at the beginning of the period	4,908		0
Performance obligations satisfied in previous periods	0		0
License and supply agreement Merck KGaA
Contract liabilities
Balance at Beginning of Period			3,944	$ 3,987
Additions			0	0
Deductions			32	32
Balance at End of Period	3,912	$ 3,955	3,912	3,955
Amounts included in the contract liability at the beginning of the period	11	11	32	32
Performance obligations satisfied in previous periods	$ 0	$ 0	$ 0	$ 0

Collaboration agreements - Jans

Collaboration agreements - Janssen Biotech (Details)	1 Months Ended	3 Months Ended		9 Months Ended
	Feb. 28, 2022 USD ($) target	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)
Collaboration agreements
Collaboration revenue		$ 5,573,000	$ 11,000	$ 11,893,000	$ 32,000
Janssen Agreement
Collaboration agreements
Number of targets designated | target	3
Proceeds from collaborators	$ 40,000,000
Collaboration revenue		4,900,000		10,900,000
Deferred revenue		29,100,000		29,100,000
Remaining performance obligation		29,100,000		29,100,000
Contract assets		$ 0		$ 0
Development, Regulatory & Commercial | Janssen Agreement
Collaboration agreements
Collaboration arrangements, maximum aggregate milestones	505,000,000
Commercial | Janssen Agreement
Collaboration agreements
Collaboration arrangements, maximum aggregate milestones	$ 530,000,000

Collaboration agreements - Merc

Collaboration agreements - Merck KGaA (Details)	1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 30, 2014 USD ($) target	Sep. 30, 2022 USD ($) target	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) target	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2017 target
Collaboration agreements
Research and development		$ 50,639,000	$ 35,275,000	$ 127,676,000	$ 94,645,000
Merck KGaA
Collaboration agreements
Proceeds from collaborators	$ 12,000,000
Number of targets designated | target	6	6		6				6
Amount of additional fees receivable when target is designated and commercial license to target is granted	$ 0
Next potential development milestone payment eligible to receive		$ 500,000		$ 500,000
Number of targets with satisfied performance obligations | target				4
Merck KGaA | Rights to Future Technological Improvements | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01
Collaboration agreements
Expected recognition period		10 years		10 years
Merck KGaA | Joint Research Committee Services | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01
Collaboration agreements
Expected recognition period		5 years		5 years
License and supply agreement Merck KGaA
Collaboration agreements
Deferred revenue		$ 3,912,000	3,955,000	$ 3,912,000	3,955,000	$ 3,944,000	$ 3,987,000
Merck KGaA Supply Agreement
Collaboration agreements
Research and development		$ 0	$ 0	$ 0	$ 0

Collaboration agreements - Othe

Collaboration agreements - Other Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Collaboration agreements
Collaboration revenue	$ 5,573	$ 11	$ 11,893	$ 32
Asana BioSciences
Collaboration agreements
Next potential milestone payment eligible to receive	2,500		2,500
Asana BioSciences | Limited services
Collaboration agreements
Collaboration revenue	$ 0	$ 0	$ 300	$ 0

Fair value measurements - Fair

Fair value measurements - Fair Value, Assets Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Assets, Fair Value Disclosure [Abstract]
Short-term marketable securities	$ 106,044	$ 0
U.S. treasury securities
Assets, Fair Value Disclosure [Abstract]
Short-term marketable securities	101,118
U.S. government agency securities
Assets, Fair Value Disclosure [Abstract]
Short-term marketable securities	4,926
Recurring basis | Money market funds
Assets, Fair Value Disclosure [Abstract]
Cash equivalents	29,509
Recurring basis | U.S. treasury securities
Assets, Fair Value Disclosure [Abstract]
Short-term marketable securities	101,118
Recurring basis | U.S. government agency securities
Assets, Fair Value Disclosure [Abstract]
Short-term marketable securities	4,926
Recurring basis | Quoted Prices in Active Markets (Level 1) | Money market funds
Assets, Fair Value Disclosure [Abstract]
Cash equivalents	29,509
Recurring basis | Quoted Prices in Active Markets (Level 1) | U.S. treasury securities
Assets, Fair Value Disclosure [Abstract]
Short-term marketable securities	101,118
Recurring basis | Quoted Prices in Active Markets (Level 1) | U.S. government agency securities
Assets, Fair Value Disclosure [Abstract]
Short-term marketable securities	0
Recurring basis | Significant Other Observable Inputs (Level 2) | Money market funds
Assets, Fair Value Disclosure [Abstract]
Cash equivalents	0
Recurring basis | Significant Other Observable Inputs (Level 2) | U.S. treasury securities
Assets, Fair Value Disclosure [Abstract]
Short-term marketable securities	0
Recurring basis | Significant Other Observable Inputs (Level 2) | U.S. government agency securities
Assets, Fair Value Disclosure [Abstract]
Short-term marketable securities	4,926
Recurring basis | Significant Unobservable Inputs (Level 3) | Money market funds
Assets, Fair Value Disclosure [Abstract]
Cash equivalents	0
Recurring basis | Significant Unobservable Inputs (Level 3) | U.S. treasury securities
Assets, Fair Value Disclosure [Abstract]
Short-term marketable securities	0
Recurring basis | Significant Unobservable Inputs (Level 3) | U.S. government agency securities
Assets, Fair Value Disclosure [Abstract]
Short-term marketable securities	$ 0

Cash, cash equivalents, and s_3

Cash, cash equivalents, and short-term marketable securities - Schedule of Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021
Investments, Debt and Equity Securities [Abstract]
Cash and cash equivalents at beginning of period	$ 177,947	$ 191,707	$ 255,094
Cash and cash equivalents at end of period	184,082	177,947	191,707
Restricted cash, beginning of period	478	478	321
Restricted cash, end of period	478	478	478
Cash, cash equivalents and restricted cash, beginning of period	178,425	192,185	255,415
Cash, cash equivalents and restricted cash, end of period	$ 184,560	$ 178,425	$ 192,185

Cash, cash equivalents, and s_4

Cash, cash equivalents, and short-term marketable securities - Debt Securities, Available-for-Sale (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Debt Securities, Available-for-sale [Line Items]
Fair Value	$ 106,044	$ 0
U.S. treasury securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	101,342
Gross Unrealized Gains	4
Gross Unrealized Losses	(228)
Fair Value	101,118
U.S. government agency securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	4,933
Gross Unrealized Gains	0
Gross Unrealized Losses	(7)
Fair Value	$ 4,926

Cash, cash equivalents, and s_5

Cash, cash equivalents, and short-term marketable securities - Narrative (Details) $ in Millions	Sep. 30, 2022 USD ($) security
Debt Securities, Available-for-sale [Line Items]
Number of securities in unrealized loss position | security	23
Debt securities, available-for-sale, unrealized loss position, accumulated loss | $	$ 96.1
Securities in unrealized loss position greater than 12 months | security	0
Charges for credit-related impairments | $	$ 0

Accrued expenses (Details)

Accrued expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Accrued Liabilities, Current [Abstract]
Accrued manufacturing expenses	$ 13,230	$ 8,476
Accrued clinical expenses	10,972	7,879
Accrued research and non-clinical expenses	5,811	3,848
Accrued payroll and related expenses	9,083	7,319
Accrued professional fees	1,822	909
Accrued other	286	285
Total	$ 41,204	$ 28,716

Debt - Narrative (Details)

Debt - Narrative (Details)		3 Months Ended		9 Months Ended
	Oct. 29, 2021 USD ($) advance	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)
Debt
Unamortized deferred financing costs		$ 100,000		$ 100,000
Line of Credit
Debt
Principal advances | advance	3
New Credit Facility
Debt
Interest expense		800,000	$ 0	2,300,000	$ 0
New Credit Facility | Line of Credit
Debt
Maximum borrowing capacity	$ 100,000,000
Proceeds from line of credit	25,000,000
New Credit Facility, Tranche One | Line of Credit
Debt
Maximum borrowing capacity	60,000,000
New Credit Facility, Tranche Two | Line of Credit
Debt
Maximum borrowing capacity	60,000,000
New Credit Facility, Tranche Three | Line of Credit
Debt
Maximum borrowing capacity	60,000,000
New Credit Facility, Tranche Four | Line of Credit
Debt
Maximum borrowing capacity	$ 20,000,000
Principal advances | advance	1
New Credit Facility, Tranche Five | Line of Credit
Debt
Maximum borrowing capacity	$ 20,000,000
Amendment To Credit Facility
Debt
Interest expense		$ 0	$ 100,000	$ 0	$ 300,000
Amendment To Credit Facility | Line of Credit
Debt
Repayments of lines of credit	$ 5,500,000

Debt - Schedule of Debt (Detail

Debt - Schedule of Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Debt Disclosure [Abstract]
Total debt	$ 25,000
Less: Current portion of long-term debt	0
Total debt, net of current portion	25,000
Debt financing costs, net of accretion	(345)
Accretion related to final payment	198
Long-term debt, net	$ 24,853	$ 24,626

Stockholders' equity - Narrativ

Stockholders' equity - Narrative (Details) - USD ($)	3 Months Ended				9 Months Ended		12 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2013	Jun. 09, 2022	Jun. 08, 2022	Feb. 28, 2022	Dec. 31, 2021	May 31, 2020
Class of Stock [Line Items]
Preferred stock, shares authorized (in shares)	25,000,000				25,000,000						25,000,000
Preferred stock, shares issued (in shares)	0				0						0
Net proceeds from public offering of common stock					$ 110,954,000	$ 33,287,000
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)	22,590				22,590
Common stock, par value (in dollars per share)	$ 0.0001				$ 0.0001			$ 0.0001			$ 0.0001
Common stock, shares authorized (in shares)	350,000,000				350,000,000			350,000,000	175,000,000		175,000,000
Common stock voting rights					The holders of the common stock are entitled to one vote for each share held.
Common Stock
Class of Stock [Line Items]
Issuance of common stock under public offering, net of issuance costs (in shares)	1,382,631	9,904,964	13,169,903	2,271,074
Exercise of common stock warrant in exchange for common stock (in shares)		16,654			16,654
2020 ATM
Class of Stock [Line Items]
Amount of shares authorized to be offered and sold												$ 100,000,000
2020 ATM | Common Stock
Class of Stock [Line Items]
Issuance of common stock under public offering, net of issuance costs (in shares)			11,740,210
Net proceeds from public offering of common stock			$ 54,800,000
2022 ATM
Class of Stock [Line Items]
Amount of shares authorized to be offered and sold										$ 100,000,000
2022 ATM | Common Stock
Class of Stock [Line Items]
Issuance of common stock under public offering, net of issuance costs (in shares)					12,717,288
Net proceeds from public offering of common stock					$ 56,500,000
Remaining unsold and available amount	$ 42,400,000				$ 42,400,000

Stockholders' equity - Common s

Stockholders' equity - Common stock (Details) - shares	Sep. 30, 2022	Dec. 31, 2021
Common stock
Number of shares reserved for future issuance (in shares)	12,418,052	9,199,512
Share-based payments | Stock options
Common stock
Number of shares reserved for future issuance (in shares)	10,524,780	8,342,429
Share-based payments | Restricted stock units
Common stock
Number of shares reserved for future issuance (in shares)	1,870,682	817,609
Warrants
Common stock
Number of shares reserved for future issuance (in shares)	22,590	39,474

Stock-based compensation - Plan

Stock-based compensation - Plans Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended	3 Months Ended		9 Months Ended
	Jan. 01, 2022	Jun. 30, 2017	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Feb. 28, 2022	Dec. 31, 2021
Stock options
Number of shares outstanding (in shares)			10,524,780		10,524,780			8,342,429
Weighted-average grant date fair value of options granted (in dollars per share)					$ 3.96	$ 12.37
Share-Based compensation arrangement by share-based payment award, options, exercises in period, intrinsic value					$ 100	$ 3,900
Cash received from the exercise of stock options					$ 206	$ 1,545
Expected dividend yield			0%	0%	0%	0%
Stock options
Stock options
Unrecognized stock compensation cost			$ 34,500		$ 34,500
Weighted-average amortization period of unrecognized stock compensation cost					2 years 2 months 12 days
Restricted stock units
Stock options
Unrecognized stock compensation cost			$ 12,600		$ 12,600
Weighted-average amortization period of unrecognized stock compensation cost					2 years 9 months 18 days
Restricted stock units | Maximum
Stock options
Vesting period					4 years
Restricted stock units | Minimum
Stock options
Vesting period					1 year
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		4%
Additional shares authorized (in shares)	2,948,362
Number of shares available for future issuance (in shares)			1,372,006		1,372,006
Number of options granted in period (in shares)					3,532,433
2017 Plan | Maximum
Stock options
Expiration period					10 years
2017 Plan | Stock options
Stock options
Vesting period					4 years
Inducement award program
Stock options
Number of shares authorized (in shares)							2,000,000
Number of shares available for future issuance (in shares)			1,403,975		1,403,975
Number of options granted in period (in shares)					612,450
Inducement award prior to inducement award program
Stock options
Number of shares outstanding (in shares)			757,500		757,500
2017 ESPP
Stock options
Number of shares available for future issuance (in shares)			412,330		412,330
Purchase of common stock under ESPP (in shares)					154,235	36,198

Stock-based compensation - Acti

Stock-based compensation - Activity Under Stock Option Plan (Details) - $ / shares	9 Months Ended
	Sep. 30, 2022
Number of Shares
Outstanding at beginning of period (in shares)	8,342,429
Granted (in shares)	2,765,034
Exercised (in shares)	(54,299)
Cancelled (in shares)	(528,384)
Outstanding at end of period (in shares)	10,524,780
Vested and expected to vest (in shares)	10,524,780
Options exercisable, at end of period (in shares)	5,339,351
Weighted- Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 11.25
Granted (in dollars per share)	5.41
Exercised (in dollars per share)	3.81
Cancelled (in dollars per share)	13.33
Outstanding at end of period (in dollars per share)	9.65
Vested and expected to vest (in dollars per share)	9.65
Options exercisable, at end of period (in dollars per share)	$ 8.96

Stock-based compensation - Rest

Stock-based compensation - Restricted Stock Units (Details) - Restricted stock units - shares	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Stock options
Awards outstanding (in shares)	1,870,682	817,609
Granted (in shares)	1,379,849
Vested (in shares)	(190,841)
Share-based compensation arrangement by share-based payment award, equity instruments other than options, forfeited in period	(135,935)

Stock-based compensation - Stoc

Stock-based compensation - Stock Based Compensation Expense by Award Type (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Stock options
Stock-based compensation expense included in total operating expenses	$ 5,375	$ 4,928	$ 16,208	$ 13,549
Stock options
Stock options
Stock-based compensation expense included in total operating expenses	3,901	3,986	11,952	10,617
Restricted stock units
Stock options
Stock-based compensation expense included in total operating expenses	1,365	881	3,832	2,636
Employee stock purchase plan
Stock options
Stock-based compensation expense included in total operating expenses	$ 109	$ 61	$ 424	$ 296

Stock-based compensation - Sche

Stock-based compensation - Schedule of Stock-Based Compensation Expense as Reflected in the Company's Condensed Consolidated Statements of Operations and Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Stock options
Share-based compensation expense	$ 5,375	$ 4,928	$ 16,208	$ 13,549
Research and development
Stock options
Share-based compensation expense	2,890	2,607	8,569	7,410
General and administrative
Stock options
Share-based compensation expense	$ 2,485	$ 2,321	$ 7,639	$ 6,139

Stock-based compensation - Fair

Stock-based compensation - Fair Value Assumptions (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Risk-free interest rate	2.90%	1%	2%	0.80%
Expected dividend yield	0%	0%	0%	0%
Expected term (years)	6 years 1 month 9 days	6 years 1 month 9 days	5 years 11 months 26 days	6 years 18 days
Expected stock price volatility	94%	82%	88%	83%

Net loss per share (Details)

Net loss per share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Anti-dilutive securities
Anti-dilutive securities (in shares)	12,418,052	9,055,489	12,418,052	9,055,489
Stock options
Anti-dilutive securities
Anti-dilutive securities (in shares)	10,524,780	8,215,549	10,524,780	8,215,549
Unvested restricted stock units
Anti-dilutive securities
Anti-dilutive securities (in shares)	1,870,682	800,466	1,870,682	800,466
Warrants
Anti-dilutive securities
Anti-dilutive securities (in shares)	22,590	39,474	22,590	39,474

Commitments (Details)

Commitments (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
License Agreement, Upfront Payments
Commitments
Research and development expense	$ 0	$ 0	$ 1.5	$ 0
License Agreement, Milestone Payments
Commitments
Research and development expense	$ 0.7	$ 1.2	$ 0.7	$ 2.1