Ra Pharmaceuticals (RARX) 10-K 7 Mar 19 2018 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Mar. 01, 2019	Jun. 29, 2018
Document and Entity Information
Entity Registrant Name	Ra Pharmaceuticals, Inc.
Entity Central Index Key	1,481,512
Document Type	10-K
Document Period End Date	Dec. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 226.8
Entity Common Stock, Shares Outstanding		42,188,517
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 209,822	$ 70,381
Prepaid expenses and other current assets	2,585	2,496
Total current assets	212,407	72,877
Property and equipment, net	5,165	5,606
Goodwill	183	183
Intangible assets, net	131	197
Restricted cash	1,334	1,334
Total assets	219,220	80,197
Current liabilities:
Accounts payable	3,245	4,348
Accrued expenses	6,477	3,937
Deferred rent	479	329
Total current liabilities	10,201	8,614
Deferred rent, net of current portion	1,880	2,359
Deferred tax liabilities	21	40
Total liabilities	12,102	11,013
Commitments and contingencies (Note 4 and 6)
Stockholders' equity:
Preferred stock, $0.001 par value; 5,000 shares authorized; no shares issued and outstanding
Common stock, $0.001 par value; 150,000 shares authorized; 42,072 and 22,626 shares issued and outstanding as of December 31, 2018 and 2017, respectively	42	23
Additional paid-in capital	395,233	192,375
Accumulated deficit	(188,157)	(123,214)
Total stockholders' equity	207,118	69,184
Total liabilities and stockholders' equity	$ 219,220	$ 80,197

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Dec. 31, 2018	Dec. 31, 2017
Preferred stock
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000	5,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	150,000	150,000
Common stock, shares issued	42,072	22,626
Common stock, shares outstanding	42,072	22,626

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue	$ 2,500
Operating expenses:
Research and development	54,449	$ 45,251
General and administrative	14,439	9,778
Total operating expenses	68,888	55,029
Loss from operations	(66,388)	(55,029)
Other income (expense):
Interest income	1,464	645
Other income (expense), net	(38)	(74)
Total other income (expense), net	1,426	571
Loss from operations before benefit from income taxes	(64,962)	(54,458)
Benefit from income taxes	(19)	(19)
Net loss	$ (64,943)	$ (54,439)
Net loss per share - basic and diluted (in dollars per share)	$ (2.06)	$ (2.41)
Weighted average number of common shares outstanding - basic and diluted (in shares)	31,542	22,591

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Total
Balance at Dec. 31, 2016	$ 23	$ 185,963	$ (68,764)	$ 117,222
Balance (in shares) at Dec. 31, 2016	22,546
Increase (Decrease) in Stockholders' Equity (Deficit)
Exercise of common stock options		266		266
Exercise of common stock options (in shares)	80
Stock-based compensation		5,573		5,573
Proceeds from disgorgement of stockholder's short-swing profits		670		670
Other, net		(97)	(11)	(108)
Net loss			(54,439)	(54,439)
Balance at Dec. 31, 2017	$ 23	192,375	(123,214)	69,184
Balance (in shares) at Dec. 31, 2017	22,626
Increase (Decrease) in Stockholders' Equity (Deficit)
Issuance of common stock from public offerings, net of underwriter discounts and issuance costs	$ 19	194,281		194,300
Issuance of common stock from public offerings, net of underwriter discounts and issuance costs (in shares)	19,305
Exercise of common stock options		784		784
Exercise of common stock options (in shares)	135
Stock-based compensation		7,695		7,695
Other, net		98		98
Other, net (in shares)	6
Net loss			(64,943)	(64,943)
Balance at Dec. 31, 2018	$ 42	$ 395,233	$ (188,157)	$ 207,118
Balance (in shares) at Dec. 31, 2018	42,072

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities
Net loss	$ (64,943)	$ (54,439)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,597	1,524
Stock-based compensation	7,695	5,573
Other, net	(24)	8
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(49)	(1,023)
Accounts payable and accrued expenses	1,126	2,012
Deferred rent	(329)	(415)
Other, net	(19)	(19)
Net cash used in operating activities	(54,946)	(46,779)
Cash flows from investing activities
Purchase of property and equipment	(1,034)	(1,412)
Net cash used in investing activities	(1,034)	(1,412)
Cash flows from financing activities
Proceeds from common stock offerings, net of underwriter discounts	195,014
Payment of common stock offering costs	(403)	(176)
Proceeds from disgorgement of stockholder's short-swing profits		670
Proceeds from exercises of stock options	784	266
Other, net	26
Net cash provided by financing activities	195,421	760
Net change in cash, cash equivalents and restricted cash	139,441	(47,431)
Cash, cash equivalents and restricted cash, beginning of period	71,715	119,146
Cash, cash equivalents and restricted cash, end of period	211,156	71,715
Noncash investing and financing activity:
Common stock offering costs incurred but unpaid at period end	278	139
Changes in liabilities and prepaid expenses related to fixed asset additions	$ 33	$ 124

Nature of Business

Nature of Business	12 Months Ended
	Dec. 31, 2018
Nature of Business
Nature of Business	1. Nature of Business The Company is a clinical-stage biopharmaceutical company using its proprietary peptide chemistry platform to create novel therapeutics to treat life-threatening diseases that are caused by excessive or uncontrolled activation of the complement system, an essential component of the body’s innate immune system. The Company’s lead product candidate, zilucoplan (formerly RA101495 SC), is being developed as a convenient self-administered subcutaneous (“SC”) injection, which is an injection into the tissue under the skin, for the treatment of various complement-mediated diseases, including generalized myasthenia gravis (“gMG”), paroxysmal nocturnal hemoglobinuria (“PNH”), and other complement-mediated disorders. Additionally, the Company is pursuing discovery and pre-clinical programs targeting selective inhibition of other uncontrolled complement pathway factors to treat a variety of neurologic, renal, and inflammatory diseases. In addition to the Company’s focus on developing novel therapeutics to treat complement-mediated diseases, the Company has validated its Extreme Diversity platform by successfully identifying and delivering orally-available cyclic peptides for a non-complement cardiovascular target with a large market opportunity in a collaboration with Merck & Co., Inc (“Merck”). The Company was incorporated in Delaware on June 27, 2008 and is located in Cambridge, Massachusetts. During 2011, the Company acquired Cosmix Verwaltungs GmbH (“Cosmix”), organized in Germany. In January 2016, the Company formed a wholly-owned subsidiary organized in the United Kingdom (“U.K.”), Ra Europe Limited, for the purpose of conducting clinical trials in Europe and the U.K. In December 2018, the Company formed a wholly owned subsidiary, Ra Pharmaceuticals Security Corporation. The Company is subject to risks common to other life science companies in the development stage including, but not limited to, uncertainty of product development and commercialization, lack of marketing and sales history, development by its competitors of new technological innovations, dependence on key personnel, market acceptance of products, product liability, protection of proprietary technology, ability to raise additional financing, and compliance with Food and Drug Administration and other government regulations. If the Company does not successfully commercialize any of its product candidates, it will be unable to generate recurring product revenue or achieve profitability. If the Company is unable to raise capital when needed or on attractive terms, it would be forced to delay, reduce, eliminate or out-license certain of its research and development programs or future commercialization efforts. Since inception, the Company has generated an accumulated deficit of $188.2 million and $123.2 million as of December 31, 2018 and 2017, respectively. The Company has devoted substantially all of its efforts to research and development, business planning, acquiring operating assets, seeking protection for its technology and product candidates, and raising capital. The Company has financed its operations to date through the public offering and the private placement of its securities and funding from its collaboration and license agreement with Merck (the “Merck Agreement”). Public Offerings On October 31, 2016, the Company completed an initial public offering (“IPO”), in which the Company issued and sold 7,049,230 shares of common stock at a public offering price of $13.00 per share, resulting in net proceeds of $82.8 million after deducting $6.4 million of underwriting discounts and commissions and offering costs of $2.4 million. On November 29, 2016, the Company completed the sale of an additional 1,057,385 shares of common stock to the underwriters under the underwriters’ option in the IPO to purchase additional shares at the public offering price of $13.00 per share, resulting in net proceeds of $12.8 million after deducting underwriting discounts and commissions of $1.0 million. The shares began trading on the Nasdaq Global Market on October 26, 2016. In February 2018, the Company completed a follow-on public offering of 9,660,000 shares of common stock, including the full exercise of the underwriters’ option to purchase an additional 1,260,000 shares, at $6.00 per share and received aggregate net proceeds of $54.1 million, after deducting $3.5 million of underwriting discounts and commissions and approximately $0.4 million of offering expenses. In May 2018, the Company entered into a sales agreement (the "Sales Agreement") with Stifel, Nicolaus & Company, Incorporated ("Stifel") which permitted the Company to sell from time to time, at its option, up to an aggregate of $50.0 million of shares of its common stock through Stifel, as sales agent. In December 2018, the Company terminated the Sales Agreement. Prior to termination, the Company had not sold any Shares pursuant to the Sales Agreement. In December 2018, the Company completed a follow-on public offering of 9,645,161 shares of common stock, including the full exercise of the underwriters’ option to purchase an additional 1,258,064 shares, at $15.50 per share and received aggregate net proceeds of $140.2 million, after deducting $9.0 million of underwriting discounts and commissions and approximately $0.3 million of offering expenses.

Summary of Significant Accounti

Summary of Significant Accounting Policies	12 Months Ended
	Dec. 31, 2018
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Principles of Consolidation The Company’s consolidated financial statements reflect its financial statements and those of its subsidiaries in which the Company holds a controlling financial interest, including Cosmix, Ra Europe Limited, and Ra Pharmaceuticals Security Corporation. Intercompany balances and transactions are eliminated in consolidation. Smaller Reporting Company We meet the Securities and Exchange Commission’s (“SEC’s”) definition of a “Smaller Reporting Company,” and therefore qualify for the SEC’s reduced disclosure requirements for smaller reporting companies. Segment Information Operating segments are defined as components of an enterprise for which separate financial information is available for evaluation by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company operates in one operating segment, the business of developing peptide-based drugs for a variety of therapeutic uses . Use of Estimates The preparation of consolidated financial statements requires that the Company make estimates and judgments that may affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, judgments and methodologies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known. Cash Equivalents The Company considers all highly liquid investments with a maturity when purchased of three months or less to be cash equivalents. As of December 31, 2018 and 2017, cash equivalents were comprised primarily of money market funds. Fair Value Measurements The accounting standard for fair value measurements defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), and requires certain disclosures about fair value measurements. Under this standard, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has certain financial assets and liabilities recorded at fair value which have been classified as Level 1, 2 or 3 within the fair value hierarchy: · Level 1—Fair values are determined utilizing prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. · Level 2—Fair values are determined by utilizing quoted prices for identical or similar assets and liabilities in active markets or other market observable inputs such as interest rates, yield curves, and foreign currency spot rates. · Level 3—Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. The fair value hierarchy level is determined by asset and liability class based on the lowest level of significant input. The observability of inputs may change for certain assets or liabilities. This condition could cause an asset or liability to be reclassified between levels. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each reporting period. Valuation methodologies used for assets measured or disclosed at fair value are as follows: · Cash equivalents—Valued at market prices determined through third-party pricing services. Concentrations of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents and restricted cash. The Company places these investments in highly rated financial institutions and limits the amounts of credit exposure to any one financial institution. Concentrations of Suppliers The Company currently engages third-party manufacturers to provide clinical supplies, nonclinical supplies and fill-finish services for zilucoplan. If any of the Company’s suppliers were to limit or terminate production or otherwise fail to meet the quality or delivery requirements needed to satisfy the supply commitments, the process of locating and qualifying alternate sources could require up to several months, during which time the Company’s production could be delayed. Such delays could have a material adverse effect on the Company’s business and ongoing clinical and nonclinical studies. Property and Equipment Property and equipment, including leasehold improvements, are recorded at cost, and are depreciated when placed into service using the straight-line method based on their estimated useful lives as follows: Asset Estimated useful life Computer equipment and software 3 years Furniture, fixtures, and other 5 years Laboratory equipment 5 years Leasehold improvements Shorter of useful life or term of lease Costs for assets not yet placed into service is capitalized as construction in progress. Maintenance and repair costs are expensed as incurred. Impairment of Long‑lived Assets Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written-down to their fair values. Long-lived assets to be disposed of are carried at fair value less costs to sell. Operating Leases The Company leases office and Revenue Recognition Effective January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, “Revenues from Contracts with Customers” (“ASC 606”). This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. The Company has derived all of its revenue to date from its collaboration agreement with Merck(the “Merck Agreement ”). Refer to Note 7, “ Revenue Recognition .” The Merck Agreement is accounted for under ASC 606 since it does not represent a collaborative arrangement under ASC 808, “Collaborative Arrangements,” as the Company is not an active participant and is not exposed to significant risks and rewards of the arrangement. The terms of the Merck Agreement contain multiple promised goods and services, which include licenses, research and development activities and participation on the joint steering committee. Payments under the agreement include: (i) an upfront nonrefundable license fee; (ii) payments for research and development services performed by the Company, including reimbursement for certain lab supplies and reagents; (iii) payments based upon the achievement of certain development (pre-clinical and clinical), regulatory and commercial milestones; and (iv) royalties on net product sales, if any. Under the new revenue standard, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company recognizes revenue following the five-step model prescribed under ASC 606: · Identification of the contract with the customer; · Identification of the performance obligations; · Determination of the transaction price, including the constraint on variable consideration; · Allocation of the transaction price to the performance obligations in the contract; and · Recognition of revenue when (or as) the Company satisfies each performance obligation. In order to account for contracts with customers, such as the Merck Agreement, the Company identifies the promised goods or services in the contract and evaluates whether such promised goods or services represent performance obligations. The Company accounts for those components as separate performance obligations when the following criteria are met: · the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and · the Company’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. This evaluation requires subjective determinations and requires the Company to make judgments about the promised goods and services and whether such goods and services are separable from the other aspects of the contractual relationship. In determining the performance obligations, the Company evaluates certain criteria, including whether the promised good or service is capable of being distinct and whether such good or service is distinct within the context of the contract, based on consideration of the relevant facts and circumstances for each arrangement. Factors considered in this determination include the research, manufacturing and commercialization capabilities of the partner; the availability of research and manufacturing expertise in the general marketplace; and the level of integration, interrelation, and interdependence among the promises to transfer goods or services. The transaction price is allocated among the performance obligations using the relative selling price method and the applicable revenue recognition criteria are applied to each of the separate performance obligations. At contract inception, the Company determines the standalone selling price for each performance obligation identified in the contract. If an observable price of the promised good or service sold separately is not readily available, the Company utilizes assumptions that require judgment to estimate the standalone selling price, which may include development timelines, probabilities of technical and regulatory success, reimbursement rates for personnel costs, forecasted revenues, potential limitations to the selling price of the product, expected technological life of the product and discount rates. If the license to the intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from the combined performance obligation. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. At the inception of each arrangement that includes precommercial milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant cumulative revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s control, such as regulatory approvals, are not considered probable of being achieved until the uncertainty related to the milestone is resolved. The transaction price is then allocated to each performance obligation on a relative selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjust its estimate of the overall transaction price. For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and where the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of: (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from the Merck Agreement. Research and Development Expenses The Company expenses research and development costs to operations as incurred. The Company defers and capitalizes nonrefundable advance payments made by the Company for research and development activities until the related goods are received or the related services are performed. Research and development expenses comprise costs incurred in performing research and development activities, including salaries, benefits and other employee-related expenses, share-based compensation expense, laboratory supplies and other direct expenses, facilities cost, overhead costs, third-party contract costs relating to pre-clinical studies and clinical trial activities and related contract manufacturing expenses, and other outside costs. Stock‑Based Compensation The Company’s share-based compensation programs grant awards which may include stock options, restricted stock awards (RSAs), restricted stock units (RSUs), and other stock-based awards. Share-based compensation is recognized as an expense in the financial statements based on the grant date fair value over the requisite service period. For awards granted to employees and directors that vest based on service conditions, the Company uses the straight-line method to allocate compensation expense to reporting periods. The fair value of the RSUs and RSAs is based on the market value of the Company’s common stock on the date of grant. The fair value of options is calculated using the Black-Scholes option-pricing model, which requires the use of subjective assumptions, including volatility and expected term. Due to the lack of a public market for the trading of its common stock prior to the IPO in October 2016 and a lack of Company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The Company selected companies with comparable characteristics to it, including enterprise value, risk profiles, position within the industry and with historical share price information sufficient to meet the expected term of the stock-based awards. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. Due to the lack of Company specific historical option activity, the Company estimates the expected term using the “simplified” method. Income Taxes The Company provides for income taxes under the liability method. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to reflect the uncertainty associated with their ultimate realization. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company’s practice is to recognize interest and/or penalties related to uncertain tax positions in income tax expense. Net Loss Per Share The Company calculates basic net income (loss) per share and diluted net loss per share by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income by the diluted number of shares outstanding during the period. Except where the result would be antidilutive to net income, diluted net income per share is computed assuming the conversion of redeemable convertible preferred stock, the exercise of warrants, the exercise of common stock options and the vesting of RSUs and RSAs (using the treasury stock method), as well as their related income tax effects. During periods of income, the Company allocates participating securities a proportional share of income determined by dividing total weighted average participating securities by the sum of the total weighted average common shares and participating securities (the “two class method”). Prior to converting into common shares, shares of the Company’s redeemable convertible preferred stock were entitled to participate in any dividends declared by the Company and were therefore considered to be participating securities. During periods of loss, the Company allocates no loss to participating securities because they have no contractual obligation to share in the losses of the Company. Newly Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers.” The standard, including subsequently issued amendments, replaces most prior revenue recognition guidance in U.S. GAAP and permits the use of either the retrospective or cumulative effect transition method. The standard requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The standard is effective for annual and interim periods beginning after December 15, 2017. The Company has one contract subject to the new standard, the Merck Agreement, and all performance obligations were completed upon the expiration of the research term in April 2016. See Note 4, “Revenue Recognition.” The Company adopted the new standard on January 1, 2018 using the retrospective method. The adoption of ASU 2014-09 did not have a significant impact on the Company’s consolidated financial statements for the periods presented. Newly Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “Leases.” The standard is designed to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements with a lease term of more than 12 months. In July 2018, the FASB issued ASU 2018-10 “Codification Improvements to Topic 842, Leases,” to clarify application of certain aspects of the new leases standard and to remove inconsistencies within the guidance and ASU 2018-11 “Targeted Improvements,” which provides for an alternate transition method. Specifically, ASU 2018-11 allows the new lease standard to be applied as of the adoption date with a cumulative-effect adjustment to the opening balance of retained earnings rather than retroactive restatement of all periods presented. The Company adopted the new standard on January 1, 2019 using the modified retrospective transition approach and elected the package of practical expedients, both provided for under ASU 2018-11, Leases (Topic 842): Targeted Improvements. The package of practical expedients allows us not to reassess whether contracts are or contain leases, lease classification, and whether initial direct costs qualify for capitalization. Additionally, as an accounting policy, for our building leases, we chose not to separate the non-lease components from the lease components and, instead, accounted for each non-lease component and lease component as a single component. The Company is still evaluating the full impact this standard will have on its consolidated financial statements and related disclosures but expects to recognize substantially all of its leases on the balance sheet by recording a right-to-use asset and a corresponding lease liability. The Company has formalized processes and controls to identify, classify and measure new leases in accordance with ASU 2016-02. In June 2018, the FASB issued ASU 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting.” The standard aligns the measurement and classification guidance for share-based payments to nonemployees with the guidance for share-based payments to employees, with certain exceptions. Under the new guidance, the measurement of equity-classified nonemployee awards will be fixed at the grant date. The ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted but not before an entity adopts the new revenue guidance. The new standard was adopted on January 1, 2019. The Company does not expect ASU 2018-07 to have a significant impact on its financial statements.

Fair Value Measurements

Fair Value Measurements	12 Months Ended
	Dec. 31, 2018
Fair Value Measurements
Fair Value Measurements	3. Fair Value Measurements Assets measured at fair value on a recurring basis are summarized below: December 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents—money market funds $ 210,404 $ — $ — $ 210,404 Total assets $ 210,404 $ — $ — $ 210,404 December 31, 2017 Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents—money market funds $ 70,449 $ — $ — $ 70,449 Total assets $ 70,449 $ — $ — $ 70,449 There were no transfers between fair value levels during the years ended December 31, 2018 and 2017.

Supplemental Balance Sheet Info

Supplemental Balance Sheet Information	12 Months Ended
	Dec. 31, 2018
Supplemental Balance Sheet Information
Supplemental Balance Sheet Information	4. Supplemental Balance Sheet Information Property and equipment, net Property and equipment, net consists of the following: December 31, 2018 2017 (in thousands) Computer equipment and software $ 53 $ 20 Furniture, fixtures and office equipment 390 378 Laboratory equipment 6,149 5,116 Leasehold improvements 3,755 3,753 10,347 9,267 Accumulated depreciation (5,182) (3,661) Property and equipment, net $ 5,165 $ 5,606 Depreciation expense was $1.5 million for each of the years ended December 31, 2018 and 2017. Restricted Cash The Company is contingently liable under an unused letter of credit with a bank, related to the Company’s facility leases. Refer to Note 6, “ Commitments and Contingencies .” As a result, as of December 31, 2018 and 2017, the Company had restricted cash as presented in the table below, securing the letters of credit. The cash will be restricted until the termination or modification of the lease arrangement. December 31, 2018 2017 (in thousands) Restricted cash $ 1,334 $ 1,334 Accrued expenses Accrued expenses consist of the following: December 31, 2018 2017 (in thousands) Payroll and employee-related costs $ 3,309 $ 2,063 Research and development costs 2,491 1,464 Other 677 410 Total $ 6,477 $ 3,937

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets	12 Months Ended
	Dec. 31, 2018
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets	5. Goodwill and Other Intangible Assets In February 2011, the Company recorded goodwill of $0.2 million and intangible assets of $0.7 million upon the acquisition of Cosmix. Based on the Company’s step zero goodwill impairment test, completed as of October 31, 2018 and 2017, goodwill was not impaired. Intangible assets are amortized over the pattern in which the economic benefits of the intangible assets are utilized, over an estimated useful life of approximately nine years. Intangible assets were $0.1 million and $0.2 million as of December 31, 2018 and 2017, respectively. Amortization expense of intangible assets for each of the years ended December 31, 2018 and 2017 was approximately $0.1 million and was recorded as a component of research and development expense in the Company’s consolidated statements of operations. Estimated amortization expense for intangible assets for the remaining two years is as follows: Amortization Year Ended December 31, Expense (in thousands) 2019 66 2020 65

Commitments and Contingencies

Commitments and Contingencies	12 Months Ended
	Dec. 31, 2018
Commitments and Contingencies
Commitments and Contingencies	6. Commitments and Contingencies License Agreement In 2010, the Company entered into an exclusive license agreement with an individual. The Company is required to pay an annual license fee of approximately $15,000 until the first commercial sale of a licensed product. The Company is also obligated to pay royalties of 0.25% on net sales of licensed products sold or transferred by the Company. The royalty obligations will continue on a country-by-country basis until the expiration of the last valid patent claim in the applicable country. The Company has the right to terminate the agreement for any reason upon a thirty-day notice. Lease Commitments In September 2015, the Company entered into an operating lease for laboratory and office space at its headquarters in Cambridge, Massachusetts. The lease expires in April 2023 and contains various clauses for renewal at the Company’s option and certain rent escalation clauses. Rent expense under the lease was $0.9 million and $1.0 million for the years ended December 31, 2018 and 2017, respectively. The Company is also obligated to pay operating costs, including property taxes, insurance, maintenance and other operating expenses. In connection with the lease, the Company was provided tenant improvements allowance totaling approximately $2.7 million by the landlord as reimbursement for capital improvements to the facility. As of December 31, 2018, the Company had an unamortized lease incentive obligation of $1.5 million recorded in deferred rent in the consolidated balance sheet. Future minimum commitments due under this operating lease agreement are as follows: Minimum Lease Year Ended December 31, Payments (in thousands) 2019 1,403 2020 1,442 2021 1,483 2022 1,524 Thereafter 513 Total $ 6,365 The Company is contractually obligated to return leased office and laboratory space in good order, repair and condition excluding ordinary wear and tear upon termination of the lease agreement. The Company’s asset retirement obligations were not significant as of December 31, 2018 and 2017. Other Funding Commitments As of December 31, 2018, the Company had several ongoing clinical and nonclinical studies for its various pipeline programs. The Company enters into contracts in the normal course of business with contract research organizations and clinical sites for the conduct of clinical trials, professional consultants for expert advice and other vendors for clinical supply manufacturing or other services. These contracts are not included in the table above as generally they are cancellable, with notice, at the Company’s option and do not have significant cancellation penalties. Guarantees The Company enters into certain agreements with other parties in the ordinary course of business that contain indemnification provisions. These typically include agreements with directors and officers, business partners, contractors, landlords and clinical sites. Under these provisions, the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities. These indemnification provisions generally survive termination of the underlying agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. However, to date the Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the estimated fair value of these obligations is minimal. Litigation The Company is not a party to any known litigation and does not have contingency reserves established for any litigation liabilities.

Revenue Recognition

Revenue Recognition	12 Months Ended
	Dec. 31, 2018
Revenue Recognition
Revenue Recognition	7. Revenue Recognition In April 2013, the Company entered into a multi-target collaboration and license agreement with Merck to use its proprietary drug discovery technology platform to identify orally available cyclic peptides for non-complement program targets nominated by Merck and provide specific research and development services. Under the agreement, the Company granted Merck licenses under certain of its intellectual property rights to manufacture, develop and commercialize compounds and products directed to selected program targets. The agreement consists of a research phase, where the Company and Merck collaborated on identifying and pre-clinically developing orally available cyclic peptides suitable for further development by Merck, and a development and commercialization phase pursuant to which Merck has sole discretion and responsibility, including financial responsibility, for further development and commercialization of these peptides, on a program-by-program basis, from the collaboration. At the signing of the Merck Agreement, Merck paid an upfront nonrefundable, technology license fee of $4.5 million. In addition, the Merck Agreement provides for reimbursement of research and development services provided by the Company and includes low to mid-single digit percentage royalties on future sales, if any, and milestone payments that could total up to $65.0 million, including pre-clinical and clinical milestones of $20.0 million, $6.0 million of which have been received to date, regulatory milestones of $19.0 million, and commercial milestones of $26.0 million. The Company assessed this arrangement in accordance with ASC 606 and concluded that the contract counterparty, Merck, is a customer. The Company has identified the following promised goods and services in connection with the Merck Agreement: (1) rights to use the Company’s technology platform for each program target, and (2) the research and development services provided during the research term, including participation on the joint steering committee. The Company determined that the license to the Company’s early stage intellectual property is not distinct from the research and development services and accounted for all promises as a single combined performance obligation. The primary factor considered in this determination included the expectation that the research and development services will involve significant further development of the initial intellectual property licensed to Merck. At execution and the end of each reporting period, the transaction price allocated to the single performance obligation included the $4.5 million technology license fee received and the payments for research and development services expected to be received by the Company. At execution, none of the pre-clinical, clinical or regulatory milestones has 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 that the receipt of the milestones is outside the control of the Company and contingent upon success of future pre-clinical and clinical studies and Merck’s efforts. The $0.5 million, $3.0 million and $2.5 million pre-clinical milestone payments received to date were added to the transaction price in the fourth quarter of 2013, the second quarter of 2016, and the fourth quarter of 2018, respectively, when they were considered probable of being reached. The Company recognized revenue under the Merck Agreement over time as it satisfied the combined performance obligation during the research term. The research term ended in April 2016 and the Company does not have any future performance obligations under this contract. At the end of each reporting period, the Company continues to assess the probability of achievement of the remaining pre-clinical, clinical or regulatory milestones and any related constraint and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments to the transaction price will be recorded as revenue in the period of adjustment. Any consideration related to the sales-based milestones (including royalties) will be recognized when the related sales occur as they were determined to relate predominantly to the licenses granted to Merck and therefore were excluded from the transaction price. During the year ended December 31, 2018 the Company recognized $2.5 million in revenue for the achievement of a pre-clinical milestone under the Merck Agreement. No revenue was recognized during the year ended December 31, 2017.

Stock Incentive Plans

Stock Incentive Plans	12 Months Ended
	Dec. 31, 2018
Stock Incentive Plans
Stock Incentive Plans	8. Stock Incentive Plans In February 2010, the Company adopted the 2010 Stock Incentive Plan (the “2010 Plan”) under which it was able to grant stock options and restricted stock grants to employees, consultants and directors. The Company had reserved 2,495,607 shares of common stock under the 2010 Plan, prior to the establishment of the 2016 Stock Award and Incentive Plan (the “2016 Plan”), as described below. As of December 31, 2018, options to purchase 1,698,640 shares of common stock were outstanding under the 2010 Plan. In October 2016, the Company’s stockholders approved the 2016 Plan under which stock options, RSAs, RSUs, and other stock-based awards may be granted to employees, officers, directors, or consultants of the Company. There were 1,401,109 shares of common stock reserved for issuance under the 2016 Plan at the time of approval, including 1,300,000 shares initially reserved plus the 101,109 shares available for issuance under the 2010 Plan. The number of shares available for future grant will automatically increase on the first day of each fiscal year by an amount equal to the lesser of: (i) 2,000,000; (ii) 4% of the number of outstanding shares of common stock on immediately preceding December 31; and (iii) an amount determined by the administrator appointed by the board of directors. Awards that are returned to the Company’s equity plans as a result of their expiration, cancellation, termination or repurchase are automatically made available for issuance under the 2016 Plan. As of December 31, 2018, there were 674,926 shares available for future grant under the 2016 Plan and on January 1, 2019, this number increased by 1,682,915 shares. Stock Options Stock options granted to employees and directors under the Company’s equity plans generally have a ten-year term and vest over a period of four years, provided the individual continues to serve at the Company through the vesting dates. Options granted under all equity plans are exercisable at a price per share not less than the fair market value of the underlying common stock on the date of grant and not less than 110% of the fair market value for participants who own more than 10% of the Company’s voting power. The weighted average assumptions used to estimate the grant date fair value of the stock options using the Black-Scholes option pricing model were as follows: Year Ended December 31, 2018 2017 Expected life (in years) 6.0 6.0 Expected volatility 77.7 % 77.5 % Risk-free interest rate 2.7 % 2.0 % Expected dividend yield — % — % The following table summarizes the stock option activity of the Company’s share-based plans: Number of Weighted Weighted Aggregate (in thousands) (in years) (in thousands) Options outstanding as of December 31, 2017 3,470 $ 9.99 Granted 1,220 $ 9.48 Exercised (135) $ 5.82 Cancelled (449) $ 13.05 Options outstanding as of December 31, 2018 4,106 $ 9.64 $ 36,008 Options exercisable as of December 31, 2018 1,889 $ 8.55 $ 18,763 Options vested and expected to vest as of December 31, 2018 3,898 $ 9.55 $ 34,525 The total intrinsic values of options exercised totaled $0.9 million and $1.4 million for the years ended December 31, 2018 and 2017, respectively. The intrinsic value was calculated as the difference between the fair value of the Company’s common stock and the exercise price of the option. The weighted-average grant date fair value of stock options granted was $6.63 and $11.57 for years ending December 31, 2018 and 2017, respectively. As of December 31, 2018, there was approximately $13.7 million of unrecognized share-based compensation, which is expected to be recognized over a weighted average period of approximately 2.30 years. Restricted Stock Units Restricted stock units (RSUs), which represent an unsecured promise to grant at no cost a set number of shares of common stock upon the completion of the vesting schedule; and vest over 3 years. With respect to RSUs, recipients are not entitled to cash dividends and have no voting rights on the stock during the vesting period. The following table summarizes the RSU activity of the Company’s share-based plans: Weighted Average Restricted Grant Date Stock Untis Fair Value (in thousands) Outstanding and unvested at December 31, 2017 — $ — Granted 342 $ 7.18 Vested — $ — Cancelled (35) $ 7.33 Outstanding and unvested at December 31, 2018 307 $ 7.16 As of December 31, 2018, the unrecognized compensation cost related to shares of unvested RSUs expected to vest was $1.6 million, which is expected to be recognized over an estimated weighted-average amortization period of 2.12 years. The total fair value of RSU grants that vested during the year ending December 31, 2018 was zero. Employee Stock Purchase Plan In October 2016, the Company’s stockholders approved the 2016 Employee Stock Purchase Plan (the "2016 ESPP"), which gives eligible employees the right to purchase shares of common stock at the lower of 85% of the fair market value on the first or last day of an offering period. There were 175,000 shares of common stock initially reserved for issuance pursuant to the 2016 ESPP. The number of shares of common stock that may be issued under the 2016 ESPP will automatically increase on each January 1 equal to the lesser of: (i) 300,000, (ii) 1% of the Company’s shares of common stock outstanding on the immediately preceding December 31 or (iii) an amount determined by the administrator of the 2016 ESPP appointed by the Company’s board of directors. During the years ended December 31, 2018 and 2017, the Company issued 6,326 and zero shares of common stock under the 2016 ESPP, respectively. As of December 31, 2018, there were 620,401 shares available for future grant under the 2016 ESPP and on January 1, 2019, this number increased by 300,000 shares. Stock-Based Compensation The following table provides stock-based compensation by the financial statement line item in which it is presented: Year Ended December 31, 2018 2017 (in thousands) Research and development $ 4,128 $ 3,081 General and administrative 3,567 2,492 Total $ 7,695 $ 5,573

401(k) Savings Plan

401(k) Savings Plan	12 Months Ended
	Dec. 31, 2018
401(k) Savings Plan
401(k) Savings Plan	9. 401(k) Savings Plan In 2010, the Company adopted a tax-qualified employee savings and retirement 401(k) Plan, covering all qualified employees. Eligible employees may make pretax contributions to the 401(k) Plan up to statutory limits. At the election of its board of directors, the Company may elect to match employee contributions. Currently, the Company makes matching contributions at a rate of 50% of the first 6% of employee contributions. The Company recorded $0.2 million of expenses related to its 401(k) match for each of the years ended December 31, 2018 and 2017.

Income Taxes

Income Taxes	12 Months Ended
	Dec. 31, 2018
Income Taxes
Income Taxes	10. Income Taxes The following table presents domestic and foreign components of loss from operations before income taxes: Year Ended December 31, 2018 2017 (in thousands) Domestic $ (64,963) $ (54,452) Foreign 1 (6) Total $ (64,962) $ (54,458) The Company recorded no current or deferred tax expense for federal and state purposes and no current foreign tax expense for the years ended December 31, 2018 and 2017. A foreign deferred tax benefit of approximately $19,000 has been recorded for both the years ended December 31, 2018 and 2017. A reconciliation setting forth the differences between the effective tax rate of the Company for the periods ended December 31, 2018 and 2017 and the U.S. federal statutory tax rate is as follows: December 31, 2018 2017 (in thousands) Income tax benefit at U.S. federal statutory rate $ (13,642) $ (18,515) State income taxes, net of federal tax benefit (3,920) (2,644) Nondeductible / nontaxable permanent items 487 1,297 Tax credits (2,201) (2,283) Change in U.S. federal tax rate — 13,645 Other (51) 289 Change in valuation allowance 19,308 8,192 Income tax benefit $ (19) $ (19) Effective tax rate 0.03 % 0.04 % The significant components of the Company’s deferred tax assets are as follows: December 31, 2018 2017 (in thousands) Deferred tax assets: Net operating losses $ 19,837 $ 14,956 R&D credits 7,954 5,747 Accrued expenses 887 545 Deferred rent 644 734 Equity compensation 2,195 934 Capitalized R&D costs 24,669 13,961 Other deferred tax assets 156 189 Total deferred tax assets 56,342 37,066 Deferred tax liabilities: Depreciation related — (33) Purchased intangibles (38) (57) Total deferred tax liabilities (38) (90) Valuation allowance (56,325) (37,016) Net deferred tax liabilities $ (21) $ (40) O n December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “TCJA”) was enacted. This law substantially amended the Internal Revenue Code, including reducing the U.S. corporate tax rates. Upon enactment, the Company re-measured certain deferred tax assets and liabilities based on the rates at which they are anticipated to reverse in the future, which is generally 21%. The provisional amount recorded related to the re-measurement of the deferred tax balance was a tax expense of $13.6 million, which was fully offset by an adjustment to the valuation allowance. As the deferred tax asset is offset in full by valuation allowance, this enacted legislation had no impact on the Company’s financial position or results of operations for the year ended December 31, 2017. The Company completed its accounting for the tax effects of the TJCA as of December 31, 2018 and did not record any adjustments to its original estimate. Management of the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. Management has considered the Company’s history of operating losses and concluded, in accordance with the applicable accounting standards, that it is more likely than not that the Company will not realize the benefit of its deferred tax assets. Accordingly, with the exception of the deferred tax assets recorded at Cosmix, the deferred tax assets have been fully reserved at December 31, 2018 and 2017. Management reevaluates the positive and negative evidence on a quarterly basis. The valuation allowance increased by $19.3 million during the year ended December 31, 2018, primarily due to an increase in net operating losses as a result of increased capitalized research and development costs, research and development credits and stock-based compensation expense. The valuation allowance increased by $8.2 million during the year ended December 31, 2017, primarily due to an increase in capitalized research and development costs, research and development credits and stock-based compensation expense; partially offset by a decrease in net operating losses and a lower U.S. federal tax rate due to the TJCA. Subject to the limitations described below, as of December 31, 2018 and 2017, the Company had federal net operating loss carryforwards of $73.3 million and $55.7 million, respectively, to offset future federal taxable income, which will begin to expire in 2028 and will continue to expire through 2037. The 2018 federal net operating loss of $17.6 million has an indefinite life. As of December 31, 2018 and 2017, the Company had state net operating loss carryforwards of $70.2 million and $51.2 million, respectively, to offset future state taxable income, which will begin to expire in 2031 and will continue to expire through 2038. As of both December 31, 2018 and 2017, the Company has trade net operating loss carryforwards of less than $0.1 million at its German subsidiary. There is no expiration of the German net operating loss carryforwards. As of December 31, 2018 and 2017, the Company had research and development credits for federal income tax purposes of $6.2 million and $4.4 million, respectively, and research and development credits for state income tax purposes of $2.3 million and $1.7 million, respectively. If not utilized, the available research and development credits for federal and state income tax purposes expire at various dates through 2038. Utilization of net operating loss carryforwards and research and development credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that could occur in the future in accordance with Section 382 of the Internal Revenue Code of 1986 (“IRC Section 382”) and with Section 383 of the Internal Revenue Code of 1986, as well as similar state provisions. These ownership changes may limit the amount of net operating loss carryforwards and research and development credit carryforwards that can be utilized annually to offset future taxable income and taxes, respectively. In general, an ownership change, as defined by IRC Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period. The Company has completed several financings since its inception which may result in a change in control as defined by IRC Section 382 or could result in a change in control in the future. As of December 31, 2018 and 2017, the Company had no unrecognized tax benefits and no accrued interest or penalties related to uncertain tax positions. The Company files income tax returns in the U.S. federal, Massachusetts and foreign jurisdictions. The statute of limitations for assessment by the Internal Revenue Service and state tax authorities remains open for all years since the Company’s inception. There are currently no federal or state income tax audits in progress.

Net Loss Per Share

Net Loss Per Share	12 Months Ended
	Dec. 31, 2018
Net Loss Per Share
Net Loss Per Share	11. Net Loss Per Share The following common stock equivalents were excluded from the calculation of net loss per share due to their anti‑dilutive effect: Year Ended December 31, 2018 2017 (in thousands) Outstanding stock options 4,106 3,470 Restricted stock units 307 — Total 4,413 3,470

Quarterly Financial Data (unaud

Quarterly Financial Data (unaudited)	12 Months Ended
	Dec. 31, 2018
Quarterly Financial Data (unaudited)
Quarterly Financial Data (unaudited)	12. Quarterly Financial Data (unaudited) The following table contains selected quarterly financial information for the years ended December 31, 2018 and 2017. The Company believes that the following information reflects all normal recurring adjustments necessary for a fair statement of the information for the periods presented. First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands, except per share data) Year Ended December 31, 2018 Revenue $ — $ — $ — $ 2,500 Operating expenses 16,724 16,126 16,879 19,158 Net loss (16,498) (15,746) (16,504) (16,195) Net loss per share — basic and diluted $ (0.61) $ (0.49) $ (0.51) $ (0.47) Weighted average number of common shares outstanding-basic and diluted 27,242 32,307 32,349 34,185 Year Ended December 31, 2017 Operating expenses $ 11,481 $ 12,812 $ 15,414 $ 15,322 Net loss (11,360) (12,663) (15,275) (15,141) Net loss per share — basic and diluted $ (0.50) $ (0.56) $ (0.68) $ (0.67) Weighted average number of common shares outstanding-basic and diluted 22,549 22,575 22,614 22,626

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2018
Summary of Significant Accounting Policies
Principles of Consolidation	Principles of Consolidation The Company’s consolidated financial statements reflect its financial statements and those of its subsidiaries in which the Company holds a controlling financial interest, including Cosmix, Ra Europe Limited, and Ra Pharmaceuticals Security Corporation. Intercompany balances and transactions are eliminated in consolidation.
Smaller Reporting Company	Smaller Reporting Company We meet the Securities and Exchange Commission’s (“SEC’s”) definition of a “Smaller Reporting Company,” and therefore qualify for the SEC’s reduced disclosure requirements for smaller reporting companies.
Segment Information	Segment Information Operating segments are defined as components of an enterprise for which separate financial information is available for evaluation by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company operates in one operating segment, the business of developing peptide-based drugs for a variety of therapeutic uses .
Use of Estimates	Use of Estimates The preparation of consolidated financial statements requires that the Company make estimates and judgments that may affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, judgments and methodologies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known.
Cash Equivalents	Cash Equivalents The Company considers all highly liquid investments with a maturity when purchased of three months or less to be cash equivalents. As of December 31, 2018 and 2017, cash equivalents were comprised primarily of money market funds.
Fair Value Measurements	Fair Value Measurements The accounting standard for fair value measurements defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), and requires certain disclosures about fair value measurements. Under this standard, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has certain financial assets and liabilities recorded at fair value which have been classified as Level 1, 2 or 3 within the fair value hierarchy: · Level 1—Fair values are determined utilizing prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. · Level 2—Fair values are determined by utilizing quoted prices for identical or similar assets and liabilities in active markets or other market observable inputs such as interest rates, yield curves, and foreign currency spot rates. · Level 3—Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. The fair value hierarchy level is determined by asset and liability class based on the lowest level of significant input. The observability of inputs may change for certain assets or liabilities. This condition could cause an asset or liability to be reclassified between levels. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each reporting period. Valuation methodologies used for assets measured or disclosed at fair value are as follows: · Cash equivalents—Valued at market prices determined through third-party pricing services.
Concentrations of Credit Risk	Concentrations of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents and restricted cash. The Company places these investments in highly rated financial institutions and limits the amounts of credit exposure to any one financial institution.
Concentrations of Suppliers	Concentrations of Suppliers The Company currently engages third-party manufacturers to provide clinical supplies, nonclinical supplies and fill-finish services for zilucoplan. If any of the Company’s suppliers were to limit or terminate production or otherwise fail to meet the quality or delivery requirements needed to satisfy the supply commitments, the process of locating and qualifying alternate sources could require up to several months, during which time the Company’s production could be delayed. Such delays could have a material adverse effect on the Company’s business and ongoing clinical and nonclinical studies.
Property and Equipment	Property and Equipment Property and equipment, including leasehold improvements, are recorded at cost, and are depreciated when placed into service using the straight-line method based on their estimated useful lives as follows: Asset Estimated useful life Computer equipment and software 3 years Furniture, fixtures, and other 5 years Laboratory equipment 5 years Leasehold improvements Shorter of useful life or term of lease Costs for assets not yet placed into service is capitalized as construction in progress. Maintenance and repair costs are expensed as incurred.
Impairment of Long-lived Assets	Impairment of Long‑lived Assets Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written-down to their fair values. Long-lived assets to be disposed of are carried at fair value less costs to sell.
Operating Leases	Operating Leases The Company leases office and
Revenue Recognition	Revenue Recognition Effective January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, “Revenues from Contracts with Customers” (“ASC 606”). This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. The Company has derived all of its revenue to date from its collaboration agreement with Merck(the “Merck Agreement ”). Refer to Note 7, “ Revenue Recognition .” The Merck Agreement is accounted for under ASC 606 since it does not represent a collaborative arrangement under ASC 808, “Collaborative Arrangements,” as the Company is not an active participant and is not exposed to significant risks and rewards of the arrangement. The terms of the Merck Agreement contain multiple promised goods and services, which include licenses, research and development activities and participation on the joint steering committee. Payments under the agreement include: (i) an upfront nonrefundable license fee; (ii) payments for research and development services performed by the Company, including reimbursement for certain lab supplies and reagents; (iii) payments based upon the achievement of certain development (pre-clinical and clinical), regulatory and commercial milestones; and (iv) royalties on net product sales, if any. Under the new revenue standard, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company recognizes revenue following the five-step model prescribed under ASC 606: · Identification of the contract with the customer; · Identification of the performance obligations; · Determination of the transaction price, including the constraint on variable consideration; · Allocation of the transaction price to the performance obligations in the contract; and · Recognition of revenue when (or as) the Company satisfies each performance obligation. In order to account for contracts with customers, such as the Merck Agreement, the Company identifies the promised goods or services in the contract and evaluates whether such promised goods or services represent performance obligations. The Company accounts for those components as separate performance obligations when the following criteria are met: · the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and · the Company’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract. This evaluation requires subjective determinations and requires the Company to make judgments about the promised goods and services and whether such goods and services are separable from the other aspects of the contractual relationship. In determining the performance obligations, the Company evaluates certain criteria, including whether the promised good or service is capable of being distinct and whether such good or service is distinct within the context of the contract, based on consideration of the relevant facts and circumstances for each arrangement. Factors considered in this determination include the research, manufacturing and commercialization capabilities of the partner; the availability of research and manufacturing expertise in the general marketplace; and the level of integration, interrelation, and interdependence among the promises to transfer goods or services. The transaction price is allocated among the performance obligations using the relative selling price method and the applicable revenue recognition criteria are applied to each of the separate performance obligations. At contract inception, the Company determines the standalone selling price for each performance obligation identified in the contract. If an observable price of the promised good or service sold separately is not readily available, the Company utilizes assumptions that require judgment to estimate the standalone selling price, which may include development timelines, probabilities of technical and regulatory success, reimbursement rates for personnel costs, forecasted revenues, potential limitations to the selling price of the product, expected technological life of the product and discount rates. If the license to the intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from the combined performance obligation. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. At the inception of each arrangement that includes precommercial milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant cumulative revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s control, such as regulatory approvals, are not considered probable of being achieved until the uncertainty related to the milestone is resolved. The transaction price is then allocated to each performance obligation on a relative selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjust its estimate of the overall transaction price. For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and where the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of: (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from the Merck Agreement.
Research and Development Expenses	Research and Development Expenses The Company expenses research and development costs to operations as incurred. The Company defers and capitalizes nonrefundable advance payments made by the Company for research and development activities until the related goods are received or the related services are performed. Research and development expenses comprise costs incurred in performing research and development activities, including salaries, benefits and other employee-related expenses, share-based compensation expense, laboratory supplies and other direct expenses, facilities cost, overhead costs, third-party contract costs relating to pre-clinical studies and clinical trial activities and related contract manufacturing expenses, and other outside costs.
Stock-Based Compensation	Stock‑Based Compensation The Company’s share-based compensation programs grant awards which may include stock options, restricted stock awards (RSAs), restricted stock units (RSUs), and other stock-based awards. Share-based compensation is recognized as an expense in the financial statements based on the grant date fair value over the requisite service period. For awards granted to employees and directors that vest based on service conditions, the Company uses the straight-line method to allocate compensation expense to reporting periods. The fair value of the RSUs and RSAs is based on the market value of the Company’s common stock on the date of grant. The fair value of options is calculated using the Black-Scholes option-pricing model, which requires the use of subjective assumptions, including volatility and expected term. Due to the lack of a public market for the trading of its common stock prior to the IPO in October 2016 and a lack of Company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The Company selected companies with comparable characteristics to it, including enterprise value, risk profiles, position within the industry and with historical share price information sufficient to meet the expected term of the stock-based awards. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. Due to the lack of Company specific historical option activity, the Company estimates the expected term using the “simplified” method.
Income Taxes	Income Taxes The Company provides for income taxes under the liability method. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to reflect the uncertainty associated with their ultimate realization. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company’s practice is to recognize interest and/or penalties related to uncertain tax positions in income tax expense.
Net Loss Per Share	Net Loss Per Share The Company calculates basic net income (loss) per share and diluted net loss per share by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income by the diluted number of shares outstanding during the period. Except where the result would be antidilutive to net income, diluted net income per share is computed assuming the conversion of redeemable convertible preferred stock, the exercise of warrants, the exercise of common stock options and the vesting of RSUs and RSAs (using the treasury stock method), as well as their related income tax effects. During periods of income, the Company allocates participating securities a proportional share of income determined by dividing total weighted average participating securities by the sum of the total weighted average common shares and participating securities (the “two class method”). Prior to converting into common shares, shares of the Company’s redeemable convertible preferred stock were entitled to participate in any dividends declared by the Company and were therefore considered to be participating securities. During periods of loss, the Company allocates no loss to participating securities because they have no contractual obligation to share in the losses of the Company.
Newly Adopted and Newly Issued Accounting Pronouncements	Newly Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers.” The standard, including subsequently issued amendments, replaces most prior revenue recognition guidance in U.S. GAAP and permits the use of either the retrospective or cumulative effect transition method. The standard requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The standard is effective for annual and interim periods beginning after December 15, 2017. The Company has one contract subject to the new standard, the Merck Agreement, and all performance obligations were completed upon the expiration of the research term in April 2016. See Note 4, “Revenue Recognition.” The Company adopted the new standard on January 1, 2018 using the retrospective method. The adoption of ASU 2014-09 did not have a significant impact on the Company’s consolidated financial statements for the periods presented. Newly Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “Leases.” The standard is designed to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements with a lease term of more than 12 months. In July 2018, the FASB issued ASU 2018-10 “Codification Improvements to Topic 842, Leases,” to clarify application of certain aspects of the new leases standard and to remove inconsistencies within the guidance and ASU 2018-11 “Targeted Improvements,” which provides for an alternate transition method. Specifically, ASU 2018-11 allows the new lease standard to be applied as of the adoption date with a cumulative-effect adjustment to the opening balance of retained earnings rather than retroactive restatement of all periods presented. The Company adopted the new standard on January 1, 2019 using the modified retrospective transition approach and elected the package of practical expedients, both provided for under ASU 2018-11, Leases (Topic 842): Targeted Improvements. The package of practical expedients allows us not to reassess whether contracts are or contain leases, lease classification, and whether initial direct costs qualify for capitalization. Additionally, as an accounting policy, for our building leases, we chose not to separate the non-lease components from the lease components and, instead, accounted for each non-lease component and lease component as a single component. The Company is still evaluating the full impact this standard will have on its consolidated financial statements and related disclosures but expects to recognize substantially all of its leases on the balance sheet by recording a right-to-use asset and a corresponding lease liability. The Company has formalized processes and controls to identify, classify and measure new leases in accordance with ASU 2016-02. In June 2018, the FASB issued ASU 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting.” The standard aligns the measurement and classification guidance for share-based payments to nonemployees with the guidance for share-based payments to employees, with certain exceptions. Under the new guidance, the measurement of equity-classified nonemployee awards will be fixed at the grant date. The ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted but not before an entity adopts the new revenue guidance. The new standard was adopted on January 1, 2019. The Company does not expect ASU 2018-07 to have a significant impact on its financial statements.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	12 Months Ended
	Dec. 31, 2018
Summary of Significant Accounting Policies
Schedule of estimated useful lives of assets	Asset Estimated useful life Computer equipment and software 3 years Furniture, fixtures, and other 5 years Laboratory equipment 5 years Leasehold improvements Shorter of useful life or term of lease

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	12 Months Ended
	Dec. 31, 2018
Fair Value Measurements
Schedule of assets measured at fair value on a recurring basis	December 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents—money market funds $ 210,404 $ — $ — $ 210,404 Total assets $ 210,404 $ — $ — $ 210,404 December 31, 2017 Level 1 Level 2 Level 3 Total (in thousands) Cash equivalents—money market funds $ 70,449 $ — $ — $ 70,449 Total assets $ 70,449 $ — $ — $ 70,449

Supplemental Balance Sheet In_2

Supplemental Balance Sheet Information (Tables)	12 Months Ended
	Dec. 31, 2018
Supplemental Balance Sheet Information
Schedule of property and equipment, net	December 31, 2018 2017 (in thousands) Computer equipment and software $ 53 $ 20 Furniture, fixtures and office equipment 390 378 Laboratory equipment 6,149 5,116 Leasehold improvements 3,755 3,753 10,347 9,267 Accumulated depreciation (5,182) (3,661) Property and equipment, net $ 5,165 $ 5,606
Schedule of restricted cash	December 31, 2018 2017 (in thousands) Restricted cash $ 1,334 $ 1,334
Schedule of accrued expenses	December 31, 2018 2017 (in thousands) Payroll and employee-related costs $ 3,309 $ 2,063 Research and development costs 2,491 1,464 Other 677 410 Total $ 6,477 $ 3,937

Goodwill and Other Intangible_2

Goodwill and Other Intangible Assets (Tables)	12 Months Ended
	Dec. 31, 2018
Goodwill and Other Intangible Assets
Schedule of estimated amortization expense for intangible assets	Amortization Year Ended December 31, Expense (in thousands) 2019 66 2020 65

Commitments and Contingencies (

Commitments and Contingencies (Tables)	12 Months Ended
	Dec. 31, 2018
Commitments and Contingencies
Schedule of future minimum commitments due under operating lease agreement	Minimum Lease Year Ended December 31, Payments (in thousands) 2019 1,403 2020 1,442 2021 1,483 2022 1,524 Thereafter 513 Total $ 6,365

Stock Incentive Plans (Tables)

Stock Incentive Plans (Tables)	12 Months Ended
	Dec. 31, 2018
Stock Incentive Plans
Schedule of weighted average assumptions used to estimate the [grant date] fair value of the stock options	Year Ended December 31, 2018 2017 Expected life (in years) 6.0 6.0 Expected volatility 77.7 % 77.5 % Risk-free interest rate 2.7 % 2.0 % Expected dividend yield — % — %
Schedule of stock option activity	Number of Weighted Weighted Aggregate (in thousands) (in years) (in thousands) Options outstanding as of December 31, 2017 3,470 $ 9.99 Granted 1,220 $ 9.48 Exercised (135) $ 5.82 Cancelled (449) $ 13.05 Options outstanding as of December 31, 2018 4,106 $ 9.64 $ 36,008 Options exercisable as of December 31, 2018 1,889 $ 8.55 $ 18,763 Options vested and expected to vest as of December 31, 2018 3,898 $ 9.55 $ 34,525
Schedule of Restricted stock unit activity	Weighted Average Restricted Grant Date Stock Untis Fair Value (in thousands) Outstanding and unvested at December 31, 2017 — $ — Granted 342 $ 7.18 Vested — $ — Cancelled (35) $ 7.33 Outstanding and unvested at December 31, 2018 307 $ 7.16
Schedule of stock-based compensation expense	Year Ended December 31, 2018 2017 (in thousands) Research and development $ 4,128 $ 3,081 General and administrative 3,567 2,492 Total $ 7,695 $ 5,573

Income Taxes (Tables)

Income Taxes (Tables)	12 Months Ended
	Dec. 31, 2018
Income Taxes
Schedule of domestic and foreign components of loss from operations before income taxes	Year Ended December 31, 2018 2017 (in thousands) Domestic $ (64,963) $ (54,452) Foreign 1 (6) Total $ (64,962) $ (54,458)
Schedule of reconciliation of the differences between the effective tax rate and the U.S. federal statutory tax rate	December 31, 2018 2017 (in thousands) Income tax benefit at U.S. federal statutory rate $ (13,642) $ (18,515) State income taxes, net of federal tax benefit (3,920) (2,644) Nondeductible / nontaxable permanent items 487 1,297 Tax credits (2,201) (2,283) Change in U.S. federal tax rate — 13,645 Other (51) 289 Change in valuation allowance 19,308 8,192 Income tax benefit $ (19) $ (19) Effective tax rate 0.03 % 0.04 %
Schedule of significant components of deferred tax assets	December 31, 2018 2017 (in thousands) Deferred tax assets: Net operating losses $ 19,837 $ 14,956 R&D credits 7,954 5,747 Accrued expenses 887 545 Deferred rent 644 734 Equity compensation 2,195 934 Capitalized R&D costs 24,669 13,961 Other deferred tax assets 156 189 Total deferred tax assets 56,342 37,066 Deferred tax liabilities: Depreciation related — (33) Purchased intangibles (38) (57) Total deferred tax liabilities (38) (90) Valuation allowance (56,325) (37,016) Net deferred tax liabilities $ (21) $ (40)

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	12 Months Ended
	Dec. 31, 2018
Net Loss Per Share
Schedule of common Stock equivalents excluded from the computation of diluted weighted average shares outstanding due to anti-dilutive effect	Year Ended December 31, 2018 2017 (in thousands) Outstanding stock options 4,106 3,470 Restricted stock units 307 — Total 4,413 3,470

Quarterly Financial Data (una_2

Quarterly Financial Data (unaudited) (Tables)	12 Months Ended
	Dec. 31, 2018
Quarterly Financial Data (unaudited)
Schedule of selected quarterly financial information	First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands, except per share data) Year Ended December 31, 2018 Revenue $ — $ — $ — $ 2,500 Operating expenses 16,724 16,126 16,879 19,158 Net loss (16,498) (15,746) (16,504) (16,195) Net loss per share — basic and diluted $ (0.61) $ (0.49) $ (0.51) $ (0.47) Weighted average number of common shares outstanding-basic and diluted 27,242 32,307 32,349 34,185 Year Ended December 31, 2017 Operating expenses $ 11,481 $ 12,812 $ 15,414 $ 15,322 Net loss (11,360) (12,663) (15,275) (15,141) Net loss per share — basic and diluted $ (0.50) $ (0.56) $ (0.68) $ (0.67) Weighted average number of common shares outstanding-basic and diluted 22,549 22,575 22,614 22,626

Nature of Business - Accumulate

Nature of Business - Accumulated deficit (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Nature of Business
Accumulated deficit	$ 188,157	$ 123,214

Nature of Business - Initial pu

Nature of Business - Initial public offering (Details) - USD ($) $ / shares in Units, $ in Millions	Nov. 29, 2016	Oct. 31, 2016	Dec. 31, 2018	May 31, 2018	Feb. 28, 2018	Dec. 31, 2018
Common Stock
Sale of stock
New share issues			9,645,161		9,660,000	19,305,000
Share price (in dollars per share)			$ 15.50		$ 6	$ 15.50
Proceeds from issuance of common stock			$ 140.2		$ 54.1
Underwriting discounts and commissions			9		3.5
Payment of offering expenses			$ 0.3		$ 0.4
IPO | Common Stock
Sale of stock
New share issues		7,049,230
Share price (in dollars per share)		$ 13
Proceeds from initial public offering		$ 82.8
Underwriting discounts and commissions		6.4
Payment of offering expenses		$ 2.4
Over-Allotment Option | Common Stock
Sale of stock
New share issues	1,057,385		1,258,064		1,260,000
Share price (in dollars per share)	$ 13
Proceeds from initial public offering	$ 12.8
Underwriting discounts and commissions	$ 1
Sales Agreement | Maximum | Stifel
Sale of stock
Aggregate value of shares to be sold				$ 50

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Operating segments (Details)	12 Months Ended
	Dec. 31, 2018segment
Segment Information
Number of operating segment	1

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Estimated useful lives of assets (Details)	12 Months Ended
	Dec. 31, 2018
Computer equipment and software
Property and equipment, net
Estimated useful life	3 years
Furniture, fixtures and other
Property and equipment, net
Estimated useful life	5 years
Laboratory equipment
Property and equipment, net
Estimated useful life	5 years

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Assets measured at fair value
Fair value assets, amount transferred between measurement levels	$ 0	$ 0
Total
Financial Assets
Total	210,404	70,449
Total | Level 1
Financial Assets
Total	210,404	70,449
Total | Money market funds
Financial Assets
Cash equivalents	210,404	70,449
Total | Money market funds | Level 1
Financial Assets
Cash equivalents	$ 210,404	$ 70,449

Supplemental Balance Sheet In_3

Supplemental Balance Sheet Information - Property and equipment, net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Property and equipment, net
Property and equipment, gross	$ 10,347	$ 9,267
Accumulated depreciation	(5,182)	(3,661)
Property and equipment, net	5,165	5,606
Depreciation expense	1,500	1,500
Computer equipment and software
Property and equipment, net
Property and equipment, gross	53	20
Furniture, fixtures and office equipment
Property and equipment, net
Property and equipment, gross	390	378
Laboratory equipment
Property and equipment, net
Property and equipment, gross	6,149	5,116
Leasehold improvements
Property and equipment, net
Property and equipment, gross	$ 3,755	$ 3,753

Supplemental Balance Sheet In_4

Supplemental Balance Sheet Information - Restricted Cash (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Restricted Cash
Restricted cash	$ 1,334	$ 1,334

Supplemental Balance Sheet In_5

Supplemental Balance Sheet Information - Accrued expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Supplemental Balance Sheet Information
Payroll and employee-related costs	$ 3,309	$ 2,063
Research and development costs	2,491	1,464
Other	677	410
Total	$ 6,477	$ 3,937

Goodwill and Other Intangible_3

Goodwill and Other Intangible Assets - Cosmix (Details) - Cosmix $ in Millions	1 Months Ended
	Feb. 28, 2011USD ($)
Goodwill and Other Intangible Assets
Goodwill acquired	$ 0.2
Acquisition of intangible assets	$ 0.7

Goodwill and Other Intangible_4

Goodwill and Other Intangible Assets - Estimated amortization, goodwill and intangibles (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Goodwill and Other Intangible Assets
Estimated useful life (in years)	9 years
Intangible assets, net	$ 131	$ 197
Amortization expense	100	$ 100
Estimated amortization expense for intangible assets
2,019	66
2,020	$ 65

Commitments and Contingencies -

Commitments and Contingencies - License Agreement, Lease Commitments (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2010
Lease Commitments
Rent expense	$ 900,000	$ 1,000,000
Tenant improvements allowance	2,700,000
Deferred rent
Lease Commitments
Unamortized lease incentive obligation	$ 1,500,000
License Agreement | Individual counterparty
License Agreement
Annual license fee			$ 15,000
Royalty percentage			0.25%

Commitments and Contingencies_2

Commitments and Contingencies - Future minimum commitments (Details) $ in Thousands	Dec. 31, 2018USD ($)
Future minimum commitments due under the operating lease agreement
2,019	$ 1,403
2,020	1,442
2,021	1,483
2,022	1,524
Thereafter	513
Total	$ 6,365

Revenue Recognition (Details)

Revenue Recognition (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended			12 Months Ended
	Apr. 30, 2013	Dec. 31, 2018	Jun. 30, 2016	Dec. 31, 2013	Dec. 31, 2018	Dec. 31, 2017
Collaborative Arrangements
Revenues		$ 2,500			$ 2,500
Merck | Product related collaborative arrangement
Collaborative Arrangements
Payments received	$ 4,500
Revenues					2,500	$ 0
Merck | Product related collaborative arrangement | Preclinical and clinical milestones
Collaborative Arrangements
Milestone payment received		$ 2,500	$ 3,000	$ 500	$ 6,000
Future milestone payments	20,000
Merck | Product related collaborative arrangement | Regulatory milestones
Collaborative Arrangements
Future milestone payments	19,000
Merck | Product related collaborative arrangement | Commercial milestones
Collaborative Arrangements
Future milestone payments	26,000
Merck | Product related collaborative arrangement | Maximum | Research and development
Collaborative Arrangements
Future milestone payments	$ 65,000

Stock Incentive Plans - Incenti

Stock Incentive Plans - Incentive plan information and Stock options (Details) - USD ($)	1 Months Ended	12 Months Ended
	Oct. 31, 2016	Dec. 31, 2018	Jan. 01, 2019	Dec. 31, 2017	Feb. 28, 2010
2010 Stock Incentive Plan (the "2010 Plan")
Stock Benefit Plans
Common Stock reserved under the Plan	101,109				2,495,607
Options outstanding		1,698,640
2016 Plan
Stock Benefit Plans
Common Stock reserved under the Plan	1,401,109
Common Stock initially reserved under the Plan	1,300,000
Increase in number of shares reserved for issuance	2,000,000
Percentage on shares of common stock outstanding considered as additional shares authorized	4.00%
Shares available for future grant		674,926
Increase in shares available for future grant			$ 1,682,915
Outstanding stock options
Stock Benefit Plans
Options outstanding		4,106,000		3,470,000
Outstanding stock options | More than 10% voting power
Stock Benefit Plans
Maximum exercise price, as a percent to fair market value of common stock		110.00%
Outstanding stock options | More than 10% voting power | Minimum
Stock Benefit Plans
Voting power (as a percent)		10.00%
Employee and director stock options
Stock Benefit Plans
Expiration period		10 years
Vesting period		4 years

Stock Incentive Plans - Valuati

Stock Incentive Plans - Valuation Assumptions and Stock Option Activity (Details) - Outstanding stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Assumptions used in the valuation model
Expected life (in years)	6 years	6 years
Expected volatility (as a percent)	77.70%	77.50%
Risk-free interest rate (as a percent)	2.70%	2.00%
Number of Shares
Options outstanding at beginning of year (in shares)	3,470
Granted (in shares)	1,220
Exercised (in shares)	(135)
Cancelled (in shares)	(449)
Options outstanding at end of year (in shares)	4,106	3,470
Options exercisable (in shares)	1,889
Options vested and expected to vest (in shares)	3,898
Weighted Average Exercise Price
Options outstanding at beginning of year (in dollars per share)	$ 9.99
Granted (in dollars per share)	9.48
Exercised (in dollars per share)	5.82
Cancelled (in dollars per share)	13.05
Options outstanding at end of year (in dollars per share)	9.64	$ 9.99
Options exercisable (in dollars per share)	8.55
Options vested or expected to vest (in dollars per share)	$ 9.55
Weighted Average Contractual Life
Options outstanding	8 years 1 month 10 days
Options exercisable	7 years 7 months 10 days
Options vested or expected to vest	8 years 29 days
Aggregate Intrinsic Value
Options outstanding	$ 36,008
Options exercisable	18,763
Options vested or expected to vest	34,525
Total intrinsic value of options exercised	$ 900	$ 1,400
Weighted-average grant date fair value per share (in dollars per share)	$ 6.63	$ 11.57

Stock Incentive Plans - Unrecog

Stock Incentive Plans - Unrecognized share-based compensation (Details) $ in Millions	12 Months Ended
	Dec. 31, 2018USD ($)
Unrecognized share-based compensation
Unrecognized compensation expense	$ 13.7
Period over which remaining unrecognized stock-based compensation expense is recognized	2 years 3 months 18 days

Stock Incentive Plans - Restric

Stock Incentive Plans - Restricted Stock Units (Details) $ / shares in Units, shares in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2018USD ($)$ / sharesshares
Weighted Average Grant Date Fair Value
Period over which remaining unrecognized stock-based compensation expense is recognized	2 years 3 months 18 days
Restricted stock units
Number of Shares
Granted (in shares) | shares	342
Cancelled (in shares) | shares	(35)
Outstanding and unvested at end of the year (in shares) | shares	307
Weighted Average Grant Date Fair Value
Granted (in dollars per share) | $ / shares	$ 7.18
Cancelled (in dollars per share) | $ / shares	7.33
Outstanding and unvested at end of the year (in dollars per share) | $ / shares	$ 7.16
Unrecognised compensation cost | $	$ 1.6
Period over which remaining unrecognized stock-based compensation expense is recognized	2 years 1 month 13 days
Fair Value of RSU grants vested | $	$ 0

Stock Incentive Plans - Employe

Stock Incentive Plans - Employee Stock Purchase Plan (Details) - 2016 ESPP - USD ($)	1 Months Ended	12 Months Ended
	Oct. 31, 2016	Dec. 31, 2018	Dec. 31, 2017	Jan. 01, 2019
Stock Benefit Plans
Common Stock reserved under the Plan	175,000
Increase in number of shares reserved for issuance	300,000
Percentage on shares of common stock outstanding considered as additional shares authorized	1.00%
Common stock shares, issued		6,326	0
Shares available for future grant		620,401
Increase in shares available for future grant				$ 300,000
Maximum
Stock Benefit Plans
Purchase price as a percentage of fair market value of a share of common stock on the first or last day of an offering period	85.00%

Stock Incentive Plans - Stock-B

Stock Incentive Plans - Stock-Based Compensation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Stock-Based Compensation
Stock-based compensation expense	$ 7,695	$ 5,573
Research and development
Stock-Based Compensation
Stock-based compensation expense	4,128	3,081
General and administrative
Stock-Based Compensation
Stock-based compensation expense	$ 3,567	$ 2,492

401(k) Savings Plan (Details)

401(k) Savings Plan (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
401(k) Savings Plan
Employer contribution for the first 6% of employee contributions (in percent)	50.00%
Employee contribution for matching of 50% of employer contribution (in percent)	6.00%
Contributions made by the company	$ 0.2	$ 0.2

Income Taxes - Foreign and dome

Income Taxes - Foreign and domestic components of loss from operations before income taxes, benefit from income taxes, reconciliation of effective tax rate to statutory rate and deferred tax assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Domestic and foreign components of loss from operations before income taxes
Domestic	$ (64,963)	$ (54,452)
Foreign	1	(6)
Loss from operations before benefit from income taxes	(64,962)	(54,458)
Income tax provision:
Current federal tax expense	0	0
Deferred federal tax expense	0	0
Current state tax expense	0	0
Deferred state tax expense	0	0
Current foreign tax expense	0	0
Deferred foreign tax benefit	19,000	19,000
Reconciliation of differences between the effective tax rate and the U.S. federal statutory rate:
Income tax benefit at U.S. federal statutory rate	(13,642)	(18,515)
State income taxes, net of federal tax benefit	(3,920)	(2,644)
Nondeductible / nontaxable permanent items	487	1,297
Tax credits	(2,201)	(2,283)
Change in U.S. federal tax rate		13,645
Other	(51)	289
Change in valuation allowance	19,308	8,192
Total income tax benefit	$ (19)	$ (19)
Effective tax rate (as a percent)	0.03%	0.04%
Deferred tax assets:
Net operating losses	$ 19,837	$ 14,956
R&D credits	7,954	5,747
Accrued expenses	887	545
Deferred rent	644	734
Equity compensation	2,195	934
Capitalized R&D costs	24,669	13,961
Other deferred tax assets	156	189
Total deferred tax assets	56,342	37,066
Deferred tax liabilities:
Depreciation related		(33)
Purchased intangibles	(38)	(57)
Total deferred tax liabilities	(38)	(90)
Valuation allowance	(56,325)	(37,016)
Net deferred tax liabilities	$ (21)	$ (40)

Income Taxes - Tax Reform Act (

Income Taxes - Tax Reform Act (Details) $ in Millions	Dec. 22, 2017USD ($)
Income Taxes
Tax rate (in percent)	21.00%
Tax expense	$ 13.6

Income Taxes - Valuation allowa

Income Taxes - Valuation allowance (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Valuation allowance
Increase in valuation allowance	$ 19.3	$ 8.2

Income Taxes - Operating loss c

Income Taxes - Operating loss carryforwards (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Federal
Operating loss carryforwards
Net operating loss carryforwards	$ 73.3	$ 55.7
Indefinite life net operating loss	17.6
State
Operating loss carryforwards
Net operating loss carryforwards	70.2	51.2
Cosmix | Germany
Operating loss carryforwards
Net operating loss carryforwards	$ 0.1	$ 0.1

Income Taxes - Tax credit carry

Income Taxes - Tax credit carryforwards (Details) - Research and development credits - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Federal
Tax credit carryforward
Tax credit carryforward	$ 6.2	$ 4.4
State
Tax credit carryforward
Tax credit carryforward	$ 2.3	$ 1.7

Income Taxes - Unrecognized tax

Income Taxes - Unrecognized tax benefits and accrued interest and penalties (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Income Taxes
Unrecognized tax benefits	$ 0	$ 0
Accrued interest and penalties related to uncertain tax positions	$ 0	$ 0

Net Loss Per Share - Common sto

Net Loss Per Share - Common stock equivalents excluded from the calculation of net loss per share due to their anti dilutive effect (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Common stock equivalents excluded from the computation of net loss per share due to their anti-dilutive effect
Total	4,413	3,470
Outstanding stock options
Common stock equivalents excluded from the computation of net loss per share due to their anti-dilutive effect
Total	4,106	3,470
Restricted stock units
Common stock equivalents excluded from the computation of net loss per share due to their anti-dilutive effect
Total	307

Quarterly Financial Data (una_3

Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Quarterly Financial Data (unaudited)
Revenue	$ 2,500								$ 2,500
Operating expenses	19,158	$ 16,879	$ 16,126	$ 16,724	$ 15,322	$ 15,414	$ 12,812	$ 11,481	68,888	$ 55,029
Net loss	$ (16,195)	$ (16,504)	$ (15,746)	$ (16,498)	$ (15,141)	$ (15,275)	$ (12,663)	$ (11,360)	$ (64,943)	$ (54,439)
Net loss per share - basic and diluted (in dollars per share)	$ (0.47)	$ (0.51)	$ (0.49)	$ (0.61)	$ (0.67)	$ (0.68)	$ (0.56)	$ (0.50)	$ (2.06)	$ (2.41)
Weighted average number of common shares outstanding-basic and diluted (in shares)	34,185	32,349	32,307	27,242	22,626	22,614	22,575	22,549	31,542	22,591