Ra Pharmaceuticals (RARX) 10-Q 9 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 02, 2019
Document and Entity Information
Entity Registrant Name	Ra Pharmaceuticals, Inc.
Entity Central Index Key	0001481512
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Trading Symbol	RARX
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Common Stock, Shares Outstanding		42,303,138
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 191,647	$ 209,822
Prepaid expenses and other current assets	3,911	2,585
Total current assets	195,558	212,407
Property and equipment, net	5,015	5,165
Operating lease right-of-use assets, net	2,864
Restricted cash	1,334	1,334
Other assets	298	314
Total assets	205,069	219,220
Current liabilities:
Accounts payable	3,364	3,245
Accrued expenses	5,322	6,477
Operating lease liabilities	1,042
Deferred rent		479
Total current liabilities	9,728	10,201
Operating lease liabilities, net of current portion	4,066
Deferred rent, net of current portion		1,880
Deferred tax liabilities	21	21
Total liabilities	13,815	12,102
Commitments and contingencies
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; 42,254 and 42,072 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively	42	42
Additional paid-in capital	398,408	395,233
Accumulated deficit	(207,196)	(188,157)
Total stockholders' equity	191,254	207,118
Total liabilities and stockholders' equity	$ 205,069	$ 219,220

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Mar. 31, 2019	Dec. 31, 2018
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	42,254	42,072
Common stock, shares outstanding	42,254	42,072

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Operating expenses:
Research and development	$ 15,282	$ 13,412
General and administrative	4,807	3,312
Total operating expenses	20,089	16,724
Loss from operations	(20,089)	(16,724)
Other income (expense), net	1,050	226
Net loss	$ (19,039)	$ (16,498)
Net loss per common share - basic and diluted (in dollars per share)	$ (0.45)	$ (0.61)
Weighted average number of common shares outstanding - basic and diluted (in shares)	42,174	27,242

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Balance at Dec. 31, 2017	$ 23	$ 192,375	$ (123,214)	$ 69,184
Balance (in shares) at Dec. 31, 2017	22,626,000
Increase (Decrease) in Stockholders' Equity (Deficit)
Stock-based compensation		1,946		1,946
Shares issued under stock option and employee purchase plans, net of tax withholdings				0
Issuance of common stock from public offerings, net of underwriter discounts and issuance costs	$ 9	54,034		54,043
Issuance of common stock from public offerings, net of underwriter discounts and issuance costs (in shares)	9,660,000
Net loss			(16,498)	(16,498)
Balance at Mar. 31, 2018	$ 32	248,355	(139,712)	108,675
Balance (in shares) at Mar. 31, 2018	32,286,000
Balance at Dec. 31, 2018	$ 42	395,233	(188,157)	207,118
Balance (in shares) at Dec. 31, 2018	42,072,000
Increase (Decrease) in Stockholders' Equity (Deficit)
Exercise of common stock options		769		769
Exercise of common stock options (in shares)	118,000
Stock-based compensation		2,890		2,890
Shares issued under stock option and employee purchase plans, net of tax withholdings		(484)		$ (484)
Shares issued under stock option and employee purchase plans, net of tax withholdings (in shares)	64,000			23,038
Net loss			(19,039)	$ (19,039)
Balance at Mar. 31, 2019	$ 42	$ 398,408	$ (207,196)	$ 191,254
Balance (in shares) at Mar. 31, 2019	42,254,000

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities
Net loss	$ (19,039)	$ (16,498)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	530	386
Stock-based compensation	2,890	1,946
Other, net	49
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(1,326)	692
Accounts payable and accrued expenses	(887)	(2,051)
Operating lease liabilities	(239)
Other, net		8
Net cash used in operating activities	(18,022)	(15,517)
Cash flows from investing activities
Purchase of property and equipment	(195)	(29)
Net cash used in investing activities	(195)	(29)
Cash flows from financing activities
Proceeds from common stock offering, net of underwriter discounts		54,482
Payment of common stock offering costs	(243)	(195)
Payments for restricted stock units vesting	(484)
Proceeds from exercises of stock options	769
Net cash provided by financing activities	42	54,287
Net increase (decrease) in cash, cash equivalents and restricted cash	(18,175)	38,741
Cash, cash equivalents and restricted cash, beginning of period	211,156	71,715
Cash, cash equivalents and restricted cash, end of period	192,981	110,456
Reconciliation of cash, cash equivalents and restricted cash:
Cash, cash equivalents and restricted cash, end of period	211,156	71,715
Noncash investing and financing activities:
Common stock offering costs incurred but unpaid at period end		176
Changes in accounts payable and accrued expenses related to fixed asset additions	$ 93	$ 355

Nature of Business and Basis of

Nature of Business and Basis of Presentation	3 Months Ended
	Mar. 31, 2019
Nature of Business and Basis of Presentation
Nature of Business and Basis of Presentation	1. Nature of Business and Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and have been prepared by Ra Pharmaceuticals, Inc. (the “Company”) in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission. The year-end condensed consolidated balance sheet data was derived from the Company’s audited financial statements, but does not include all disclosures required by U.S. GAAP. These condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The condensed consolidated financial statements, in the opinion of management, reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position and results of operations. Description 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, 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”) 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 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 $207.2 million as of March 31, 2019 and 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. As of March 31, 2019, we had cash and cash equivalents of $191.6 million, which is expected to fund operating expenses and capital expenditure requirements through at least the first quarter of 2021. Principles of Consolidation The Company’s condensed 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. Reclassifications Certain reclassifications have been made to the prior year condensed consolidated balance sheet to conform to the current year presentation. These reclassifications have no impact on the Company’s net loss or cash flows. Use of Estimates The preparation of condensed consolidated financial statements in accordance with U.S. GAAP 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. Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. There have been no material changes to the significant accounting policies during the period ended March 31, 2019, except as described below. Leases Effective January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”), Topic 842, Leases (“ASC 842”), using the required modified retrospective approach and utilizing the effective date as its date of initial application. The prior period is presented in accordance with the previous guidance in ASC 840, Leases . At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as incentives received. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In accordance with the guidance in ASC 842, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.). Then the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components. Although separation of lease and non-lease components is required, certain practical expedients are available. Entities may elect the practical expedient to not separate lease and non-lease components. Rather, they would account for each lease component and the related non-lease component together as a single component. For new and amended leases beginning in 2019 and after, the Company has elected to account for the lease and non-lease components for leases for classes of all underlying assets and allocate all of the contract consideration to the lease component only. Newly Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “ Leases ”, (“ASU 2016-02”), which superseded the lease accounting requirements in ASC 840, Leases and created a new ASC 842, Leases. ASC 842 requires a lessee to recognize assets and liabilities on the balance sheet for most leases and changes many key definitions, including the definition of a lease. The new standard includes a short-term lease exception for leases with a term of 12 months or less, as part of which a lessee can make an accounting policy election not to recognize lease assets and lease liabilities. Lessees will continue to differentiate between finance leases (previously referred to as capital leases) and operating leases using classification criteria that are substantially similar to the previous guidance. ASU 2016-02 became effective on January 1, 2019, requiring the use of a modified retrospective transition approach applied at the beginning of the earliest comparative period presented in the financial statements. In July 2018, the FASB issued ASU 2018-11, Leases, Targeted Improvements, (“ASU 2018-11”), which contains certain amendments to ASU 2016-02 intended to provide relief in implementing the new standard. ASU 2018-11 provides registrants with an option to not restate comparative periods presented in the financial statements. The Company adopted this new standard on January 1, 2019 using a cumulative-effect adjustment on the effective date of the standard, for which comparative periods are presented in accordance with the previous guidance in ASC 840, Leases. In adopting the new standard, the Company elected to utilize the available package of practical expedients permitted under the transition guidance within the new standard, which does not require the reassessment of the following: i) whether existing or expired arrangements are or contain a lease, ii) the lease classification of existing or expired leases, and iii) whether previous initial direct costs would qualify for capitalization under the new lease standard. Additionally, the Company made an accounting policy election to keep leases with a term of 12 months or less off of its balance sheet. The initial adoption of this standard resulted in the recognition of 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 is fixed at the grant date. The Company adopted this new standard on January 1, 2019. The adoption of ASU 2018-07 did not have a significant impact on its financial statements.

Supplemental Balance Sheet Info

Supplemental Balance Sheet Information	3 Months Ended
	Mar. 31, 2019
Supplemental Balance Sheet Information
Supplemental Balance Sheet Information	2. Supplemental Balance Sheet Information Property and equipment, net Property and equipment, net consists of the following (in thousands): March 31, 2019 December 31, 2018 Computer equipment and software $ 60 $ 53 Furniture, fixtures and office equipment 390 390 Laboratory equipment 6,197 6,149 Construction in progress 147 — Leasehold improvements 3,744 3,755 10,538 10,347 Accumulated depreciation (5,523) (5,182) Property and equipment, net $ 5,015 $ 5,165 Depreciation expense was $0.4 million for each of the three month periods ended March 31, 2019 and 2018 , respectively. Restricted cash The Company is contingently liable under an unused letter of credit with a bank, related to the Company’s facility lease. As a result, as of March 31, 2019 and December 31, 2018, the Company had restricted cash securing the letters of credit. The cash will be restricted until the termination or modification of the lease arrangement. Accrued expenses Accrued expenses consist of the following (in thousands): March 31, 2019 December 31, 2018 Payroll and employee-related costs $ 1,586 $ 3,309 Research and development costs 3,176 2,491 Other 560 677 Total $ 5,322 $ 6,477

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2019
Fair Value Measurements
Fair Value Measurements	3. Fair Value Measurements The Company has certain assets recorded at fair value, which may be 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. During the three months ended March 31, 2019, there were no transfers between levels. The fair value of the cash equivalents was determined through quoted prices provided by third-party pricing services. Assets measured at fair value on a recurring basis are summarized below (in thousands): March 31, 2019 Level 1 Level 2 Level 3 Total Cash equivalents - Money market funds $ 192,050 $ — $ — $ 192,050 Total assets $ 192,050 $ — $ — $ 192,050 December 31, 2018 Level 1 Level 2 Level 3 Total Cash equivalents - Money market funds $ 210,404 $ — $ — $ 210,404 Total assets $ 210,404 $ — $ — $ 210,404

Leases

Leases	3 Months Ended
	Mar. 31, 2019
Leases
Leases	4. Leases We lease certain office space, laboratory space, and equipment. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. The Company does not recognize right-of-use assets or lease liabilities for leases determined to have a term of 12 months or less. For new and amended leases beginning in 2019 and after, the Company has elected to account for the lease and non-lease components for leases for classes of all underlying assets and allocate all of the contract consideration to the lease component only. 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. 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 March 31, 2019, the Company’s balance sheet included operating lease liabilities and right-of-use assets of $5.1 million and $2.9 million, respectively. The difference between the account balances relates to the write-off of the previously existing ASC 840 balances, which was primarily driven by the tenant improvements allowance. Lease related financial information is summarized below (in thousands): Operating leases March 31, 2019 Operating lease cost $ 230 Short-term lease cost 10 Variable lease cost 230 Total operating lease costs $ 470 Other information March 31, 2019 Operating cash flows used for operating leases $ 344 Weighted average remaining lease term in years 4.2 Weighted average discount rate 8 % Maturity of Lease Year Ended December 31, Liabilities 2019 (remaining nine months) $ 1,059 2020 1,442 2021 1,483 2022 1,524 2023 513 Total lease payments 6,021 Less: imputed interest (913) Total operating lease liabilities $ 5,108 The above table excludes approximately $0.1 million of legally binding future lease payments for leases signed but not yet commenced as of March 31, 2019. The Company adopted ASU 2016-02 on January 1, 2019 as noted above, and as required, the following disclosure is provided for periods prior to adoption. Future minimum commitments due under operating lease agreements as of December 31, 2018 were as follows (in thousands): Minimum Lease Year Ended December 31, Payments 2019 $ 1,403 2020 1,442 2021 1,483 2022 1,524 2023 513 Total operating lease liabilities $ 6,365

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2019
Stock-Based Compensation
Stock-Based Compensation	5. Stock-Based Compensation The Company has stock-based compensation plans under which employees, directors and non-employees may be granted stock-based awards such as stock options, stock appreciation rights, restricted stock awards, unrestricted stock awards, restricted stock units, performance-based awards or dividend equivalent rights. The following table provides stock-based compensation by the financial statement line item in which it is reflected (in thousands): Three Months Ended March 31, 2019 2018 Research and development $ 1,658 $ 1,031 General and administrative 1,232 915 Total $ 2,890 $ 1,946 During the three months ended March 31, 2019, the Company issued 1.5 million stock options with a per share weighted-average grant date fair value of $14.38. During the three months ended March 31, 2019, the maximum number of common shares to be issued upon vesting of RSUs granted is 87,000 shares. During the three months ended March 31, 2019, 23,038 shares were net settled with an aggregate value of $0.5 million in satisfaction of tax withholdings. No such net settlement occurred during the three months ended March 31, 2018.

Net Loss Per Share

Net Loss Per Share	3 Months Ended
	Mar. 31, 2019
Net Loss Per Share
Net Loss Per Share	6. Net Loss Per Share The Company computes basic and diluted earnings (loss) per share using a methodology that gives effect to the impact of outstanding participating securities (the “two-class method”). As the three months ended March 31, 2019 and 2018 resulted in net losses, there is no income allocation required under the two-class method or dilution attributed to weighted average shares outstanding in the calculation of diluted loss per share. The following common stock equivalents were excluded from the computation of diluted weighted average shares outstanding as their effect would be anti-dilutive (in thousands): As of March 31, 2019 2018 Stock options 5,411 4,004 Restricted stock units 213 291 Total 5,624 4,295

Nature of Business and Basis _2

Nature of Business and Basis of Presentation (Policies)	3 Months Ended
	Mar. 31, 2019
Nature of Business and Basis of Presentation
Principles of Consolidation	Principles of Consolidation The Company’s condensed 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.
Reclassifications	Reclassifications Certain reclassifications have been made to the prior year condensed consolidated balance sheet to conform to the current year presentation. These reclassifications have no impact on the Company’s net loss or cash flows.
Use of Estimates	Use of Estimates The preparation of condensed consolidated financial statements in accordance with U.S. GAAP 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.
Leases	Leases Effective January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”), Topic 842, Leases (“ASC 842”), using the required modified retrospective approach and utilizing the effective date as its date of initial application. The prior period is presented in accordance with the previous guidance in ASC 840, Leases . At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as incentives received. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In accordance with the guidance in ASC 842, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.). Then the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components. Although separation of lease and non-lease components is required, certain practical expedients are available. Entities may elect the practical expedient to not separate lease and non-lease components. Rather, they would account for each lease component and the related non-lease component together as a single component. For new and amended leases beginning in 2019 and after, the Company has elected to account for the lease and non-lease components for leases for classes of all underlying assets and allocate all of the contract consideration to the lease component only.
Newly Adopted Accounting Pronouncements	Newly Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, “ Leases ”, (“ASU 2016-02”), which superseded the lease accounting requirements in ASC 840, Leases and created a new ASC 842, Leases. ASC 842 requires a lessee to recognize assets and liabilities on the balance sheet for most leases and changes many key definitions, including the definition of a lease. The new standard includes a short-term lease exception for leases with a term of 12 months or less, as part of which a lessee can make an accounting policy election not to recognize lease assets and lease liabilities. Lessees will continue to differentiate between finance leases (previously referred to as capital leases) and operating leases using classification criteria that are substantially similar to the previous guidance. ASU 2016-02 became effective on January 1, 2019, requiring the use of a modified retrospective transition approach applied at the beginning of the earliest comparative period presented in the financial statements. In July 2018, the FASB issued ASU 2018-11, Leases, Targeted Improvements, (“ASU 2018-11”), which contains certain amendments to ASU 2016-02 intended to provide relief in implementing the new standard. ASU 2018-11 provides registrants with an option to not restate comparative periods presented in the financial statements. The Company adopted this new standard on January 1, 2019 using a cumulative-effect adjustment on the effective date of the standard, for which comparative periods are presented in accordance with the previous guidance in ASC 840, Leases. In adopting the new standard, the Company elected to utilize the available package of practical expedients permitted under the transition guidance within the new standard, which does not require the reassessment of the following: i) whether existing or expired arrangements are or contain a lease, ii) the lease classification of existing or expired leases, and iii) whether previous initial direct costs would qualify for capitalization under the new lease standard. Additionally, the Company made an accounting policy election to keep leases with a term of 12 months or less off of its balance sheet. The initial adoption of this standard resulted in the recognition of 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 is fixed at the grant date. The Company adopted this new standard on January 1, 2019. The adoption of ASU 2018-07 did not have a significant impact on its financial statements.

Supplemental Balance Sheet In_2

Supplemental Balance Sheet Information (Tables)	3 Months Ended
	Mar. 31, 2019
Supplemental Balance Sheet Information
Schedule of property and equipment, net	Property and equipment, net consists of the following (in thousands): March 31, 2019 December 31, 2018 Computer equipment and software $ 60 $ 53 Furniture, fixtures and office equipment 390 390 Laboratory equipment 6,197 6,149 Construction in progress 147 — Leasehold improvements 3,744 3,755 10,538 10,347 Accumulated depreciation (5,523) (5,182) Property and equipment, net $ 5,015 $ 5,165
Schedule of accrued expenses	Accrued expenses consist of the following (in thousands): March 31, 2019 December 31, 2018 Payroll and employee-related costs $ 1,586 $ 3,309 Research and development costs 3,176 2,491 Other 560 677 Total $ 5,322 $ 6,477

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2019
Fair Value Measurements
Schedule of assets measured at fair value on a recurring basis	Assets measured at fair value on a recurring basis are summarized below (in thousands): March 31, 2019 Level 1 Level 2 Level 3 Total Cash equivalents - Money market funds $ 192,050 $ — $ — $ 192,050 Total assets $ 192,050 $ — $ — $ 192,050 December 31, 2018 Level 1 Level 2 Level 3 Total Cash equivalents - Money market funds $ 210,404 $ — $ — $ 210,404 Total assets $ 210,404 $ — $ — $ 210,404

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2019
Leases
Schedule of total operating lease costs	Operating leases March 31, 2019 Operating lease cost $ 230 Short-term lease cost 10 Variable lease cost 230 Total operating lease costs $ 470
Schedule of other information	Other information March 31, 2019 Operating cash flows used for operating leases $ 344 Weighted average remaining lease term in years 4.2 Weighted average discount rate 8 %
Schedule of maturity of lease liabilities	Maturity of Lease Year Ended December 31, Liabilities 2019 (remaining nine months) $ 1,059 2020 1,442 2021 1,483 2022 1,524 2023 513 Total lease payments 6,021 Less: imputed interest (913) Total operating lease liabilities $ 5,108
Schedule of future minimum commitments due under operating lease agreements	Future minimum commitments due under operating lease agreements as of December 31, 2018 were as follows (in thousands): Minimum Lease Year Ended December 31, Payments 2019 $ 1,403 2020 1,442 2021 1,483 2022 1,524 2023 513 Total operating lease liabilities $ 6,365

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2019
Stock-Based Compensation
Schedule of stock-based compensation expense	The following table provides stock-based compensation by the financial statement line item in which it is reflected (in thousands): Three Months Ended March 31, 2019 2018 Research and development $ 1,658 $ 1,031 General and administrative 1,232 915 Total $ 2,890 $ 1,946

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	3 Months Ended
	Mar. 31, 2019
Net Loss Per Share
Schedule of common stock equivalents excluded from the computation of diluted weighted average shares outstanding due to anti-dilutive effect	The following common stock equivalents were excluded from the computation of diluted weighted average shares outstanding as their effect would be anti-dilutive (in thousands): As of March 31, 2019 2018 Stock options 5,411 4,004 Restricted stock units 213 291 Total 5,624 4,295

Nature of Business and Basis _3

Nature of Business and Basis of Presentation - Description of Business (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Nature of Business and Basis of Presentation
Accumulated deficit	$ 207,196	$ 188,157
Cash and cash equivalents	$ 191,647	$ 209,822	$ 109,122

Nature of Business and Basis _4

Nature of Business and Basis of Presentation - Newly Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 01, 2019
Newly Adopted Accounting Pronouncements
Operating lease liabilities	$ 5,108
Right-of-use assets	$ 2,864
ASU 2016-02
Newly Adopted Accounting Pronouncements
Difference between account balances relates to the write-off of tenant improvements allowance		$ 2,300
Restatement Adjustment | ASU 2016-02
Newly Adopted Accounting Pronouncements
Operating lease liabilities		5,300
Right-of-use assets		$ 3,000

Supplemental Balance Sheet In_3

Supplemental Balance Sheet Information - Property and equipment, net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Property and equipment, net
Property and equipment, gross	$ 10,538		$ 10,347
Accumulated depreciation	(5,523)		(5,182)
Property and equipment, net	5,015		5,165
Depreciation expense	400	$ 400
Computer equipment and software
Property and equipment, net
Property and equipment, gross	60		53
Furniture, fixtures and office equipment
Property and equipment, net
Property and equipment, gross	390		390
Laboratory equipment
Property and equipment, net
Property and equipment, gross	6,197		6,149
Construction in progress
Property and equipment, net
Property and equipment, gross	147
Leasehold improvements
Property and equipment, net
Property and equipment, gross	$ 3,744		$ 3,755

Supplemental Balance Sheet In_4

Supplemental Balance Sheet Information - Accrued expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Supplemental Balance Sheet Information
Payroll and employee-related costs	$ 1,586	$ 3,309
Research and development costs	3,176	2,491
Other	560	677
Total	$ 5,322	$ 6,477

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Assets measured at fair value
Fair value assets, amount transferred between measurement levels	$ 0
Fair value liabilities, amount transferred between measurement levels	0
Total
Financial Assets
Total	192,050	$ 210,404
Total | Level 1
Financial Assets
Total	192,050	210,404
Total | Money market funds
Financial Assets
Cash equivalents	192,050	210,404
Total | Money market funds | Level 1
Financial Assets
Cash equivalents	$ 192,050	$ 210,404

Leases (Details)

Leases (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2015
Leases
Tenant improvements allowance		$ 2,700
Operating lease liabilities	$ 5,108
Right-of-use assets	$ 2,864

Leases - Operating leases (Deta

Leases - Operating leases (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Operating leases
Operating lease cost	$ 230
Short-term lease cost	10
Variable lease cost	230
Total operating lease costs	$ 470

Leases - Other information (Det

Leases - Other information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Other information
Operating cash flows used for operating leases	$ 344
Weighted average remaining lease term in years	4 years 2 months 12 days
Weighted average discount rate (as a percent)	8.00%

Leases - Maturity of Lease Liab

Leases - Maturity of Lease Liabilities (Details) $ in Thousands	Mar. 31, 2019USD ($)
Maturity of lease liabilities
2019 (remaining nine months)	$ 1,059
2020	1,442
2021	1,483
2022	1,524
2023	513
Total lease payments	6,021
Less: imputed interest	(913)
Total operating lease liabilities	5,108
Future lease payments for leases not yet commenced	$ 100

Leases -Future minimum commitme

Leases -Future minimum commitments under operating lease agreements (Details) $ in Thousands	Dec. 31, 2018USD ($)
Future minimum commitments due under the operating lease agreements
2019	$ 1,403
2020	1,442
2021	1,483
2022	1,524
2023	513
Total operating lease liabilities	$ 6,365

Stock-Based Compensation - (Det

Stock-Based Compensation - (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Stock-Based Compensation
Stock-based compensation expense	$ 2,890	$ 1,946
Shares issued, net settled of tax withholdings (in shares)	23,038
Aggregate value of shares, net settled in satisfaction of tax withholdings	$ (484)	0
Stock options
Stock-Based Compensation
Number of options granted	1,500,000
Weighted-average grant date fair value per share (in dollars per share)	$ 14.38
Restricted stock units
Stock-Based Compensation
Number of RSUs granted	87,000
Research and development
Stock-Based Compensation
Stock-based compensation expense	$ 1,658	1,031
General and administrative
Stock-Based Compensation
Stock-based compensation expense	$ 1,232	$ 915

Net Loss Per Share - (Details)

Net Loss Per Share - (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Common stock equivalents excluded from the computation of of diluted weighted average shares outstanding as their effect would be anti-dilutive
Total	5,624	4,295
Stock options
Common stock equivalents excluded from the computation of of diluted weighted average shares outstanding as their effect would be anti-dilutive
Total	5,411	4,004
Restricted stock units
Common stock equivalents excluded from the computation of of diluted weighted average shares outstanding as their effect would be anti-dilutive
Total	213	291