Verastem (VSTM) 10-Q 8 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 06, 2018
Document and Entity Information
Entity Registrant Name	Verastem, Inc.
Entity Central Index Key	1,526,119
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		73,592,263
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 168,692	$ 82,176
Short-term investments		4,496
Prepaid expenses and other current assets	1,745	1,115
Total current assets	170,437	87,787
Property and equipment, net	1,270	861
Restricted cash	242	162
Other assets	969	981
Total assets	172,918	89,791
Current liabilities:
Accounts payable	8,514	9,186
Accrued expenses	12,234	7,942
Current portion of long-term debt	1,384
Total current liabilities	22,132	17,128
Non-current liabilities:
Long-term debt	23,520	14,828
Other non-current liabilities	399	151
Total liabilities	46,051	32,107
Stockholders' equity
Preferred stock, $0.0001 par value; 5,000 shares authorized, no shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively
Common stock, $0.0001 par value; 100,000 shares authorized, 73,580 and 50,801 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively	7	5
Additional paid-in capital	469,415	360,823
Accumulated other comprehensive income (loss)	4	(2)
Accumulated deficit	(342,559)	(303,142)
Total stockholders' equity	126,867	57,684
Total liabilities and stockholders' equity	$ 172,918	$ 89,791

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
CONDENSED CONSOLIDATED BALANCE SHEETS
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	73,580,000	50,801,000
Common stock, shares outstanding	73,580,000	50,801,000

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenue
License revenue	$ 10,000		$ 10,000
Total revenue	10,000		10,000
Operating expenses:
Research and development	12,381	$ 9,042	23,315	$ 17,427
General and administrative	15,813	4,425	25,640	9,188
Total operating expenses	28,194	13,467	48,955	26,615
Loss from operations	(18,194)	(13,467)	(38,955)	(26,615)
Interest income	343	140	534	295
Interest expense	(516)	(109)	(996)	(121)
Net loss	$ (18,367)	$ (13,436)	$ (39,417)	$ (26,441)
Net loss per share - basic and diluted	$ (0.30)	$ (0.36)	$ (0.70)	$ (0.71)
Weighted-average number of common shares used in net loss per share-basic and diluted (in shares)	61,256	36,992	56,074	36,992
Net loss	$ (18,367)	$ (13,436)	$ (39,417)	$ (26,441)
Unrealized gain (loss) on available-for-sale securities	4	(17)	6	(34)
Comprehensive loss	$ (18,363)	$ (13,453)	$ (39,411)	$ (26,475)

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Operating activities
Net loss	$ (39,417)	$ (26,441)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	792	290
Stock-based compensation expense	2,867	2,410
Amortization of deferred financing costs, debt discounts and premiums and discounts on available-for-sale marketable securities	178	105
Gain on sale of fixed assets	(79)
Changes in operating assets and liabilities:
Prepaid expenses, other current assets and other assets	(457)	(1,479)
Accounts payable	(1,436)	2,730
Accrued expenses and other liabilities	4,785	(2,748)
Net cash used in operating activities	(32,767)	(25,133)
Investing activities
Purchases of property and equipment	(677)
Sales of property and equipment	82
Purchase of investments		(6,461)
Maturities of investments	4,500	24,580
Net cash provided by investing activities	3,905	18,119
Financing activities
Proceeds from long-term debt, net	9,900	2,386
Proceeds from the exercise of stock options	262
Proceeds from the issuance of common stock, net	105,457	(138)
Net cash provided by financing activities	115,619	2,248
Increase (decrease) in cash, cash equivalents and restricted cash	86,757	(4,766)
Cash, cash equivalents and restricted cash at beginning of period	82,338	32,511
Cash, cash equivalents and restricted cash at end of period	169,095	$ 27,745
Supplemental disclosure of non-cash financing activities
Purchase of property and equipment in accounts payable	527
Common stock issuance costs included in accounts payable and accrued expenses	$ 316

Nature of business

Nature of business	6 Months Ended
	Jun. 30, 2018
Nature of business
Nature of business	1. Nature of business Verastem, Inc. (the Company) is a biopharmaceutical company focused on developing and commercializing medicines to improve the survival and quality of life for cancer patients. The Company’s operations to date have been limited to organizing and staffing the Company, business planning, raising capital, identifying and acquiring potential product candidates and undertaking preclinical studies and clinical trials of its product candidates. The Company is subject to a number of risks similar to other life science companies, including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical testing or clinical trials, inability to obtain marketing approval of product candidates, competitors developing new technological innovations, market acceptance of the Company’s products and protection of proprietary technology. If the Company does not successfully commercialize any of its product candidates, it will be unable to generate product revenue or achieve profitability and may need to raise additional capital. The Company has historical losses from operations and anticipates that it will continue to incur losses for the foreseeable future as it continues the research and development and clinical trials of its product candidates, and seeks marketing approval for its lead product candidate, duvelisib. During the quarter ended June 30, 2018, the Company raised in excess of $125.0 million through a number of strategic financings and a license arrangement. As of June 30, 2018, the Company had cash and cash equivalents of $168.7 million and accumulated deficit of $342.6 million. The Company expects that its cash and cash equivalents outstanding at June 30, 2018 will be sufficient to fund its obligations for at least twelve months from the date of issuance of these condensed consolidated financial statements.

Summary of significant accounti

Summary of significant accounting policies	6 Months Ended
	Jun. 30, 2018
Summary of significant accounting policies
Summary of significant accounting policies	2. Summary of significant accounting policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) for interim financial reporting and as required by Regulation S-X, Rule 10-01. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (including those which are normal and recurring) considered necessary for a fair presentation of the interim financial information have been included. When preparing financial statements in conformity with GAAP, the Company must make estimates and assumptions that affect the reported amounts and related disclosures at the date of the financial statements. Actual results could differ from those estimates. Additionally, operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2018. For further information, refer to the financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 as filed with the Securities and Exchange Commission (SEC) on March 13, 2018. Significant Accounting Policies The significant accounting policies identified in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 that require the Company to make estimates and assumptions include accrued research and development expenses and stock-based compensation. During the six months ended June 30, 2018, there were no material changes to the significant accounting policies, except for the adoption of Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, issued by the Financial Accounting Standards Board (the FASB), as well as significant accounting policies over revenue recognition and collaborative arrangements, each of which is detailed below. Revenue Recognition - Effective January 1, 2018, the Company adopted 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. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception and once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract, determines which goods and services are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company may enter into collaboration and licensing arrangements for research and development, manufacturing, and commercialization activities, which have components within the scope of ASC 606, with collaboration partners for the development and commercialization of therapeutic candidates. The arrangements generally contain multiple elements or deliverables, which may include (1) licenses, or options to obtain licenses, to the Company's intellectual property, (2) research and development activities performed for the collaboration partner, (3) participation on joint steering committees, and (4) the manufacturing of commercial, clinical or preclinical material. Payments pursuant to these arrangements typically include non-refundable, upfront payments, milestone payments upon achieving significant development events, research and development reimbursements, sales milestones, and royalties on future product sales. The amount of variable consideration is constrained until it is probable that the revenue is not at a significant risk of reversal in a future period. The contracts into which the Company enters generally do not include significant financing components. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract within the scope of ASC 606; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. As part of the accounting for these arrangements, the Company must use significant judgment to determine: a) the number of performance obligations based on the determination under step (ii) above; b) the transaction price under step (iii) above; c) the stand-alone selling price for each performance obligation identified in the contract for the allocation of transaction price in step (iv) above; and d) the measure of progress in step (v) above. The Company uses judgment to determine whether milestones or other variable consideration, except for royalties, should be included in the transaction price as described further below. Exclusive Licenses - If the license to the Company’s intellectual property is determined to be distinct from the other promises or performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. In assessing whether a promise or performance obligation is distinct from the other elements, the Company considers factors such as the research, development, manufacturing and commercialization capabilities of the collaboration partner and the availability of its associated expertise in the general marketplace. In addition, the Company considers whether the collaboration partner can benefit from a promise for its intended purpose without the receipt of the remaining elements, whether the value of the promise is dependent on the unsatisfied promise, whether there are other vendors that could provide the remaining promise, and whether it is separately identifiable from the remaining promise. For licenses that are combined 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. The Company evaluates the measure of progress of each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The measure of progress, and thereby periods over which revenue should be recognized, is subject to estimates by management and may change over the course of the agreement. Such a change could have a material impact on the amount of revenue the Company records in future periods. Customer Options - If an arrangement is determined to contain customer options that allow the customer to acquire additional goods or services such as research and development services or manufacturing services, the goods and services underlying the customer options are not considered to be performance obligations at the inception of the arrangement; rather, such goods and services are contingent on exercise of the option, and the associated option fees are not included in the transaction price. The Company evaluates customer options for material rights or options to acquire additional goods or services for free or at a discount. If a customer option is determined to represent a material right, the material right is recognized as a separate performance obligation at the outset of the arrangement. The Company allocates the transaction price to material rights based on the relative standalone selling price, which is determined based on the identified discount and the estimated probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until, at the earliest, the option is exercised. Milestone Payments - At the inception of each arrangement that includes milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The Company evaluates factors such as the scientific, clinical, regulatory, commercial, and other risks that must be overcome to achieve the respective milestone in making this assessment. There is considerable judgment involved in determining whether it is probable that a significant revenue reversal would not occur. At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of all milestones subject to constraint and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. Royalties - For arrangements that include sales-based royalties, including milestone payments based on a level of sales, and 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 any of its licensing arrangements. Collaborative Arrangements - Contracts are considered to be collaborative arrangements when they satisfy the following criteria defined in ASC 808, Collaborative Arrangements : (i) the parties to the contract must actively participate in the joint operating activity and (ii) the joint operating activity must expose the parties to the possibility of significant risk and rewards, based on whether or not the activity is successful. Payments received from or made to a partner that are the result of a collaborative relationship with a partner, instead of a customer relationship, such as co-development activities, are recorded as a reduction or increase to research and development expense, respectively. For a complete discussion of the Company’s accounting for its license and collaboration agreement, see Note 11, License and Collaboration Agreement . Recently Issued Accounting Standards Updates In June 2018, the FASB issued Accounting Standards Update (ASU) 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 specifies that Topic 718 applies to all share-based payment transactions in which the grantor acquires goods and services to be used or consumed in its own operations by issuing share-based payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606. ASU 2018-07 is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted, but no earlier than the date on which ASC 606 is adopted. The Company has not elected to early adopt this standard and is currently evaluating the impact the adoption of the standard will have on its condensed consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the guidance under FASB Accounting Standards Codification (ASC) Topic 840, Leases , resulting in the creation of FASB ASC Topic 842, Leases. ASU 2016-02 requires lessees to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for both finance and operating leases. The guidance also eliminates the current real estate-specific provisions for all entities. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The Company has not elected to early adopt this standard and is currently evaluating the impact the adoption of the standard will have on its condensed consolidated financial statements and related disclosures. Recently Adopted Accounting Standards Updates In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting . ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based award require an entity to apply modification accounting under Topic 718. Specifically, an entity would not apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after a modification. ASU 2017-09 was effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. The Company adopted this standard prospectively effective January 1, 2018. The adoption of this ASU did not have an effect on the Company’s condensed consolidated financial statements or related disclosures. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 was effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. The Company adopted this standard effective January 1, 2018. Upon adoption of ASU 2016-18, the Company applied the retrospective transition method for each period presented and included approximately $162,000 of restricted cash in the beginning-of-period and end-of-period cash, cash equivalents and restricted cash balance reflected in the condensed consolidated statement of cash flows for the six months ended June 30, 2017. A reconciliation of cash, cash equivalents and restricted cash for each period presented is provided in Note 3 to the condensed consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 adds or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows. The standard was effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. The Company adopted this standard effective January 1, 2018. The adoption of this ASU did not have an effect on the Company’s condensed consolidated financial statements or related disclosures. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) which amends the guidance for accounting for revenue from contracts with customers. This ASU supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition . In 2015 and 2016, the FASB issued additional ASUs related to ASC 606 that delayed the effective date of the guidance and clarified various aspects of the new revenue guidance, including principal versus agent considerations, identifying performance obligations, and licensing, and they include other improvements and practical expedients. The Company adopted this new standard on January 1, 2018 using the full retrospective method. There was no change to the Company’s condensed consolidated financial statements as a result of the adoption. The Company’s license and collaboration agreement with Yakult Honsha Co., Ltd (Yakult) was accounted for under ASC 606. See Note 11, License and Collaboration Agreement .

Cash, cash equivalents and rest

Cash, cash equivalents and restricted cash	6 Months Ended
	Jun. 30, 2018
Cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash	3. Cash, cash equivalents and restricted cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows (in thousands): June 30, 2018 December 31, 2017 Cash and cash equivalents $ 168,692 $ 82,176 Restricted cash (included in prepaid expenses and other current assets) 161 — Restricted cash 242 162 Total cash, cash equivalents and restricted cash $ 169,095 $ 82,338 Amounts included in restricted cash represent cash held to collateralize outstanding letters of credit in the amount of approximately $403,000 and $162,000 as of June 30, 2018 and December 31, 2017, respectively, provided as a security deposit for the Company’s office space located in Needham, Massachusetts.

Fair value of financial instrum

Fair value of financial instruments	6 Months Ended
	Jun. 30, 2018
Fair value of financial instruments
Fair value of financial instruments	4. Fair value of financial instruments The Company determines the fair value of its financial instruments based upon the fair value hierarchy, which prioritizes valuation inputs based on the observable nature of those inputs. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The hierarchy defines three levels of valuation inputs: Level 1 inputs Quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date. Level 2 inputs Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Items Measured at Fair Value on a Recurring Basis The following table presents information about the Company’s financial instruments that are measured at fair value on a recurring basis (in thousands): June 30, 2018 Description Total Level 1 Level 2 Level 3 Financial assets Cash equivalents $ 167,710 $ 150,741 $ 16,969 $ — Total financial assets $ 167,710 $ 150,741 $ 16,969 $ — December 31, 2017 Description Total Level 1 Level 2 Level 3 Financial assets Cash equivalents $ 80,894 $ 75,478 $ 5,416 $ — Short-term investments 4,496 — 4,496 — Total financial assets $ 85,390 $ 75,478 $ 9,912 $ — The Company’s cash equivalents and investments are comprised of U.S. Government money market funds and corporate bonds and commercial paper of publicly traded companies. These investments and cash equivalents have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third party pricing services or other market observable data. The pricing services utilize industry standard valuation models, including both income and market-based approaches and observable market inputs to determine value. These observable market inputs include reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates and other industry and economic events. The Company validates the prices provided by third party pricing services by reviewing their pricing methods and matrices, obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming that the relevant markets are active. After completing its validation procedures, the Company did not adjust or override any fair value measurements provided by the pricing services as of June 30, 2018 and December 31, 2017. Fair Value of Financial Instruments The fair value of the Company’s long-term debt is determined using a discounted cash flow analysis using current applicable rates for similar instruments as of the condensed consolidated balance sheet dates. The carrying value of the Company’s long-term debt, including the current portion, at June 30, 2018 and December 31, 2017, was approximately $24.9 million and $14.8 million, respectively. At June 30, 2018, the Company estimates that the fair value of its long-term debt, including the current portion, was approximately $26.9 million. The fair value of the Company’s long-term debt was determined using Level 3 inputs.

Investments

Investments	6 Months Ended
	Jun. 30, 2018
Investments
Investments	5. Investments Cash, cash equivalents, and investments consist of the following (in thousands): June 30, 2018 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Cash and cash equivalents: Cash and money market accounts $ 151,723 $ — $ — $ 151,723 Corporate bonds and commercial paper $ 16,965 $ 5 $ (1) $ 16,969 Total cash and cash equivalents $ 168,688 $ 5 $ (1) $ 168,692 December 31, 2017 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Cash and cash equivalents: Cash and money market accounts $ 76,760 $ — $ — $ 76,760 Corporate bonds and commercial paper (due within 90 days) 5,418 $ — $ (2) $ 5,416 Total cash and cash equivalents $ 82,178 $ — $ (2) $ 82,176 Investments: Corporate bonds and commercial paper (due within 1 year) $ 4,496 $ — $ — $ 4,496 Total investments $ 4,496 $ — $ — $ 4,496 Total cash, cash equivalents and investments $ 86,674 $ — $ (2) $ 86,672 There were no realized gains or losses on investments for the three and six months ended June 30, 2018 or 2017, respectively. There were two and five investments in an unrealized loss position as of June 30, 2018 and December 31, 2017, respectively. None of these investments had been in an unrealized loss position for more than 12 months as of June 30, 2018 and December 31, 2017, respectively. The aggregate unrealized loss on these securities as of June 30, 2018 and December 31, 2017 was approximately $1,000 and $2,000, respectively, and the fair value was $2.5 million and $9.9 million, respectively. The Company considered the decline in the market value for these investments to be primarily attributable to current economic conditions. As it was not more likely than not that the Company would be required to sell these investments before the recovery of their amortized cost basis, which may be at maturity, the Company did not consider these investments to be other-than-temporarily impaired as of June 30, 2018 and December 31, 2017, respectively.

Accrued expenses

Accrued expenses	6 Months Ended
	Jun. 30, 2018
Accrued expenses
Accrued expenses	6. Accrued expenses Accrued expenses consist of the following (in thousands): June 30, 2018 December 31, 2017 Contract research organization costs $ 7,847 $ 3,774 Compensation and related benefits 3,225 2,622 Professional fees 472 617 Consulting fees 358 579 Other 332 350 Total accrued expenses $ 12,234 $ 7,942

Long-term debt

Long-term debt	6 Months Ended
	Jun. 30, 2018
Long-term debt
Long-term debt	7. Long-term debt On March 21, 2017 (Closing Date), Verastem, Inc. (the Borrower) entered into a term loan facility of up to $25.0 million with Hercules. The term loan facility is governed by a loan and security agreement, dated March 21, 2017 (the Original Loan Agreement), which was amended on January 4, 2018 and March 6, 2018 (the Amended Loan Agreement) to increase the total borrowing limit under the Original Loan Agreement from up to $25.0 million to up to $50.0 million (the Term Loan), pursuant to certain conditions of funding. As of June 30, 2018, the Company has borrowed a total of $25.0 million in term loans, which includes $10.0 million borrowed in June 2018. The availability of the remaining $25.0 million of borrowing capacity under the Amended Loan Agreement is subject to Hercules’ sole discretion, and may be drawn as term loans (each a Term F Loan Advance) in minimum increments of $5.0 million. The Term Loan will mature on December 1, 2020 (Loan Maturity Date). Each advance accrues interest at a floating per annum rate equal to the greater of either (a) 10.5% or (b) the lesser of (i) 12.75% and (ii) the sum of (x) 10.5% plus (y) (A) the prime rate minus (B) 4.5%. The Term Loan provided for interest-only payments until November 1, 2018, which was extended to May 1, 2019 pursuant to the Amended Loan Agreement upon the Borrower’s receipt of a minimum of $20.0 million in cash proceeds from a sale of equity securities in December 2017. Thereafter, amortization payments will be payable monthly in 20 installments of principal and interest (subject to recalculation upon a change in prime rates). The Term Loan is secured by a lien on substantially all of the assets of the Borrower, other than intellectual property, and contains customary covenants and representations. The Company assessed all terms and features of the Amended Loan Agreement in order to identify any potential embedded features that would require bifurcation or any beneficial conversion features. As part of this analysis, the Company assessed the economic characteristics and risks of the Amended Loan Agreement, including put and call features. The Company determined that all features of the Amended Loan Agreement were clearly and closely associated with a debt host and did not require bifurcation as a derivative liability, or the fair value of the feature was immaterial to the Company’s condensed consolidated financial statements. The Company reassesses the features on a quarterly basis to determine if they require separate accounting. There have been no changes to the Company’s original assessment through June 30, 2018. The future principal payments under the Amended Loan Agreement are as follows as of June 30, 2018 (in thousands): Remainder of 2018 $ — 2019 5,984 2020 19,016 Total principal payments $ 25,000

Net loss per share

Net loss per share	6 Months Ended
	Jun. 30, 2018
Net loss per share
Net loss per share	8. Net loss per share Basic and diluted net loss per common share is calculated by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for common stock equivalents. The Company’s potentially dilutive shares, which include outstanding stock options and restricted stock units (RSUs), are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. The following potentially dilutive securities were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect: Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Outstanding stock options 11,390,340 7,573,155 11,390,340 7,573,155 Outstanding restricted stock units 162,125 — 162,125 — Total potentially dilutive securities 11,552,465 7,573,155 11,552,465 7,573,155

Stock-based compensation

Stock-based compensation	6 Months Ended
	Jun. 30, 2018
Stock-based compensation
Stock-based compensation	9. Stock‑based compensation Stock options A summary of the Company’s stock option activity and related information for the six months ended June 30, 2018 is as follows: Weighted-average Weighted-average remaining Aggregate exercise price per contractual term intrinsic value Shares share (years) (in thousands) Outstanding at December 31, 2017 8,719,978 $ 5.19 7.9 $ 6,150 Granted 3,297,891 $ 3.54 Exercised (186,206) $ 1.40 Forfeited/cancelled (441,323) $ 3.40 Outstanding at June 30, 2018 11,390,340 $ 4.84 7.9 $ 34,810 Vested at June 30, 2018 5,539,332 $ 6.48 6.5 $ 13,582 Vested and expected to vest at June 30, 2018(1) 11,047,340 $ 4.90 7.9 $ 33,502 (1) This represents the number of vested options as of June 30, 2018, plus the number of unvested options expected to vest as of June 30, 2018. The fair value of each stock option granted during the six months ended June 30, 2018 and 2017 was estimated on the grant date using the Black-Scholes option-pricing model using the following weighted-average assumptions: Six months ended June 30, 2018 2017 Risk-free interest rate 2.51 % 2.05 % Volatility 81 % 79 % Dividend yield — — Expected term (years) During the first quarter of 2018, the Company granted stock options to purchase a total of 582,500 shares of common stock to certain executives that vest only upon the achievement of specified performance conditions. During the quarter ended June 30, 2018, the Company determined that one of the performance conditions had been achieved and that one other performance condition continues to be probable of achievement. As a result, the Company has recognized approximately $158,000 and $508,000 of stock-based compensation expense during the three and six months ended June 30, 2018, respectively related to awards that vest upon the achievement of performance conditions. At June 30, 2018, there was $12.2 million of total unrecognized compensation cost related to unvested stock options and the Company expects to recognize this cost over a remaining weighted-average period of approximately 3 years. Restricted stock units The Company awards RSUs to employees under its 2012 Incentive Plan. Each RSU entitles the holder to receive one share of the Company’s common stock when the RSU vests. The RSUs vest in four substantially equal installments on each of the first four anniversaries of the vesting commencement date, subject to the employee’s continued employment with, or service to, the Company on such vesting date. Compensation expense is recognized on a straight-line basis. A summary of RSU activity during the six months ended June 30, 2018 is as follows: Shares Weighted-average grant date fair value per share Outstanding at December 31, 2017 — $ — Granted 175,000 $ 3.00 Vested — $ — Forfeited (12,875) $ 3.00 Outstanding at June 30, 2018 162,125 $ 3.00 At June 30, 2018, there was approximately $457,000 of total unrecognized compensation cost related to unvested RSUs and the Company expects to recognize this cost over a remaining weighted-average period of approximately 4 years.

Common stock

Common stock	6 Months Ended
	Jun. 30, 2018
Common stock.
Common stock	10. Common stock At-the-market equity offering programs In March 2017, the Company terminated the at-the-market equity offering program established in December 2013 and established a new at-the-market equity offering program pursuant to which it was able to offer and sell up to $35.0 million of its common stock at then current market prices from time to time through Cantor Fitzgerald & Co. (Cantor) as sales agent. In August 2017, the Company amended its sales agreement with Cantor to increase the maximum aggregate offering price of shares of common stock that can be sold under the at-the-market equity offering program to $75.0 million. During the three and six months ended June 30, 2018, the Company sold 6,314,410 and 6,481,475 shares under this program for net proceeds of approximately $23.7 million and $24.3 million (after deducting commissions and other offering expenses), respectively. Through June 30, 2018, the Company has sold a total of 11,518,354 shares under this program for net proceeds of approximately $47.3 million (after deducting commissions and other offering expenses). Equity offerings On May 16, 2018, the Company entered into an Underwriting Agreement with Cantor relating to the underwritten offering of 7,777,778 shares (the Shares) of the Company’s common stock. Cantor agreed to purchase the Shares pursuant to the Underwriting Agreement at a price of $4.31 per share. In addition, the Company granted Cantor an option to purchase, at the public offering price less any underwriting discounts and commissions, an additional 1,166,666 shares of the Company’s common stock, exercisable for 30 days from the date of the prospectus supplement. The option was exercised by Cantor in full on May 23, 2018. The aggregate proceeds from Cantor, net of underwriting discounts and offering costs, were approximately $38.3 million. On June 14, 2018, the Company entered into a Purchase Agreement with Consonance Capital Master Account L.P. and P Consonance Opportunities Ltd. (collectively, Consonance) relating to the registered offering of 7,166,666 shares of its common stock at a price of $6.00 per share. The aggregate proceeds from Consonance, net of offering costs, were approximately $42.8 million.

License and Collaboration Agree

License and Collaboration Agreement	6 Months Ended
	Jun. 30, 2018
License and Collaboration Agreement
License and Collaboration Agreement	11. License and Collaboration Agreement On June 5, 2018, the Company entered into a license and collaboration agreement (the Agreement) with Yakult, under which the Company granted exclusive rights to Yakult to develop and commercialize products containing duvelisib in Japan for the treatment, prevention, palliation or diagnosis of all oncology indications in humans or animals. Under the terms of the Agreement, Yakult received an exclusive right to develop and commercialize products containing duvelisib in Japan under mutually agreed development and commercialization plans at its own cost and expense. Yakult also received certain limited manufacturing rights in the event that the Company is unable to manufacture or supply sufficient quantities of duvelisib or products containing duvelisib to Yakult during the term of the Agreement. The Company retained all rights to duvelisib outside of Japan. Yakult paid the Company an upfront, non-refundable payment of $10.0 million in June 2018. The Company is also entitled to receive aggregate payments of up to $90.0 million if certain development, regulatory and commercial milestones are successfully achieved. Yakult is obligated to pay the Company a double-digit royalty on net sales of products containing duvelisib in Japan, subject to reduction in certain circumstances, and to fund certain global development costs related to worldwide clinical trials conducted by the Company in which Yakult has opted to participate (Global Clinical Trials) on a pro-rata basis. Unless earlier terminated by either party, the Agreement will expire upon the fulfillment of Yakult’s royalty obligations to the Company for the sale of any products containing duvelisib in Japan, which royalty obligations expire, on a product-by-product basis, upon the last to occur of (a) expiration of valid claims covering such product, (b) expiration of regulatory exclusivity for such product or (c) 10 years from first commercial sale of such product. Yakult may terminate the Agreement in its entirety at any time with 180 days’ written notice. Either party may terminate the Agreement in its entirety with 60 days’ written notice for the other party’s material breach if such party fails to cure the breach. The Company may terminate the Agreement if (i) Yakult fails to use commercially reasonable efforts to develop and commercialize products containing duvelisib in Japan or (ii) Yakult challenges any patent licensed by the Company to Yakult under the Agreement. Either party may terminate the Agreement in its entirety upon certain insolvency events involving the other party. The Company first assessed the Agreement under ASC 808 to determine whether the Agreement (or part of the Agreement) represents a collaborative arrangement based on the risks and rewards and activities of the parties pursuant to the Agreement. The Company accounts for collaborative arrangements (or elements within the contract that are deemed part of a collaborative arrangement), which represent a collaborative relationship and not a customer relationship, outside the scope of ASC 606. For a component of the Agreement, the Company concluded that both the Company and Yakult are exposed to significant risks while developing duvelisib and ultimately would share in the reward upon successful commercialization of duvelisib. The Company then considered each remaining component in the Agreement to determine if ASC 606 should be applied to those components. Generally, the components in the Agreement fall under one of two potential research and development activities: (i) the parties’ joint participation in Global Clinical Trials and (ii) the territory-specific development of duvelisib. For the parties’ participation in the Global Clinical Trials, the Company concluded that the research and development activities and payments related to such activities are not within the scope of ASC 606 as Yakult is not a customer of the Company with regards to these activities in the context of the Agreement. As such, costs incurred to execute the Global Clinical Trials will be recorded as research and development expense and payments received from Yakult related to such will be recorded as a reduction of research and development expense. For Territory-specific activities, the Company concluded that Yakult is a customer with regard to this component in the context of the Agreement. As such, the Territory-specific component and all related payments are within the scope of ASC 606. The Company determined that there were two material promises associated with the territory-specific activities: (i) an exclusive license to develop, manufacture and commercialize duvelisib in the territory and (ii) the initial technology transfer. The Company determined that the exclusive license and initial technology transfer were not distinct from another, as the license has limited value without the initial technology. Therefore, the exclusive license and initial technology transfer are combined as a single performance obligation. The Company evaluated the option rights for manufacturing and supply services to determine whether they represent material rights to Yakult and concluded that the options were not issued at a significant and incremental discount and therefore do not represent material rights. As such, they are not performance obligations at the outset of the arrangement. Based on this assessment, the Company concluded one performance obligation exists at the outset of the Agreement: the exclusive license combined with the initial technology transfer. The Company determined that the upfront payment of $10.0 million constituted the transaction price as of the outset of the Agreement. Future potential milestone payments were fully constrained as the risk of significant revenue reversal related to these amounts has not yet been resolved. The achievement of the future potential milestones is not within the Company’s control and is subject to certain research and development success or regulatory approvals and therefore carry significant uncertainty. The Company will reevaluate the likelihood of achieving future milestones at the end of each reporting period. As all performance obligations have been satisfied, if the risk of significant revenue reversal is resolved, any future milestone revenue from the arrangement will be added to the transaction price (and thereby recognized as revenue) in the period the risk is relieved. The Company satisfied the performance obligation upon delivery of the license and initial technology transfer and recognized the upfront payment of $10.0 million as license revenue during the three months ended June 30, 2018. There was no deferred revenue as of June 30, 2018.

Commitments and contingencies

Commitments and contingencies	6 Months Ended
	Jun. 30, 2018
Commitments and contingencies
Commitments and contingencies	12. Commitments and contingencies On April 15, 2014, the Company entered into a lease agreement for approximately 15,197 square feet of office and laboratory space in Needham, Massachusetts. Effective February 15, 2018, the Company amended its lease agreement to relocate within the facility to another location consisting of 27,810 square feet of office space (the Amended Lease Agreement). The Amended Lease Agreement extends the expiration date of the lease from September 2019 through May 2025. Pursuant to the Amended Lease Agreement, the initial annual base rent amount is approximately $660,000, which increases during the lease term to $1.1 million for the last twelve-month period. The deferred rent obligation is included in accrued expenses (current portion) and other liabilities (noncurrent portion) in the condensed consolidated balance sheets. The Company has also agreed to pay its proportionate share of increases in operating expenses and property taxes for the building in which the leased space is located. The minimum aggregate future lease commitments as of June 30, 2018 are as follows (in thousands): Remainder of 2018 $ 220 2019 716 2020 971 2021 1,020 2022 1,041 Thereafter 2,600 Total $ 6,568 In conjunction with the execution of the Amended Lease Agreement, the Company increased its security deposit by increasing its existing letter of credit to approximately $403,000. The amount is included in prepaids and other current assets and restricted cash on the condensed consolidated balance sheets as of June 30, 2018.

Subsequent events

Subsequent events	6 Months Ended
	Jun. 30, 2018
Subsequent events.
Subsequent events	13. Subsequent events The Company reviews all activity subsequent to the end of the quarter but prior to issuance of the condensed consolidated financial statements for events that could require disclosure or that could impact the carrying value of assets or liabilities as of the balance sheet date. There are no material subsequent events to the three and six months ended June 30, 2018.

Cash, cash equivalents and re19

Cash, cash equivalents and restricted cash (Tables)	6 Months Ended
	Jun. 30, 2018
Cash, cash equivalents and restricted cash
Schedule of reconciliation of cash, cash equivalents and restricted cash	The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows (in thousands): June 30, 2018 December 31, 2017 Cash and cash equivalents $ 168,692 $ 82,176 Restricted cash (included in prepaid expenses and other current assets) 161 — Restricted cash 242 162 Total cash, cash equivalents and restricted cash $ 169,095 $ 82,338

Fair value of financial instr20

Fair value of financial instruments (Tables)	6 Months Ended
	Jun. 30, 2018
Fair value of financial instruments
Schedule of financial instruments measured at fair value on a recurring basis	The following table presents information about the Company’s financial instruments that are measured at fair value on a recurring basis (in thousands): June 30, 2018 Description Total Level 1 Level 2 Level 3 Financial assets Cash equivalents $ 167,710 $ 150,741 $ 16,969 $ — Total financial assets $ 167,710 $ 150,741 $ 16,969 $ — December 31, 2017 Description Total Level 1 Level 2 Level 3 Financial assets Cash equivalents $ 80,894 $ 75,478 $ 5,416 $ — Short-term investments 4,496 — 4,496 — Total financial assets $ 85,390 $ 75,478 $ 9,912 $ —

Investments (Tables)

Investments (Tables)	6 Months Ended
	Jun. 30, 2018
Investments
Schedule of cash, cash equivalents and investments	Cash, cash equivalents, and investments consist of the following (in thousands): June 30, 2018 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Cash and cash equivalents: Cash and money market accounts $ 151,723 $ — $ — $ 151,723 Corporate bonds and commercial paper $ 16,965 $ 5 $ (1) $ 16,969 Total cash and cash equivalents $ 168,688 $ 5 $ (1) $ 168,692 December 31, 2017 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Cash and cash equivalents: Cash and money market accounts $ 76,760 $ — $ — $ 76,760 Corporate bonds and commercial paper (due within 90 days) 5,418 $ — $ (2) $ 5,416 Total cash and cash equivalents $ 82,178 $ — $ (2) $ 82,176 Investments: Corporate bonds and commercial paper (due within 1 year) $ 4,496 $ — $ — $ 4,496 Total investments $ 4,496 $ — $ — $ 4,496 Total cash, cash equivalents and investments $ 86,674 $ — $ (2) $ 86,672

Accrued expenses (Tables)

Accrued expenses (Tables)	6 Months Ended
	Jun. 30, 2018
Accrued expenses
Schedule of accrued expenses	Accrued expenses consist of the following (in thousands): June 30, 2018 December 31, 2017 Contract research organization costs $ 7,847 $ 3,774 Compensation and related benefits 3,225 2,622 Professional fees 472 617 Consulting fees 358 579 Other 332 350 Total accrued expenses $ 12,234 $ 7,942

Long-term debt (Tables)

Long-term debt (Tables)	6 Months Ended
	Jun. 30, 2018
Long-term debt
Schedule of future principal payments under the Loan Agreement	The future principal payments under the Amended Loan Agreement are as follows as of June 30, 2018 (in thousands): Remainder of 2018 $ — 2019 5,984 2020 19,016 Total principal payments $ 25,000

Net loss per share (Tables)

Net loss per share (Tables)	6 Months Ended
	Jun. 30, 2018
Net loss per share
Schedule of potentially anti-dilutive securities excluded from calculation of diluted net loss per share	Three months ended June 30, Six months ended June 30, 2018 2017 2018 2017 Outstanding stock options 11,390,340 7,573,155 11,390,340 7,573,155 Outstanding restricted stock units 162,125 — 162,125 — Total potentially dilutive securities 11,552,465 7,573,155 11,552,465 7,573,155

Stock-based compensation (Table

Stock-based compensation (Tables)	6 Months Ended
	Jun. 30, 2018
Stock-based compensation
Summary of stock option activity and related information	Weighted-average Weighted-average remaining Aggregate exercise price per contractual term intrinsic value Shares share (years) (in thousands) Outstanding at December 31, 2017 8,719,978 $ 5.19 7.9 $ 6,150 Granted 3,297,891 $ 3.54 Exercised (186,206) $ 1.40 Forfeited/cancelled (441,323) $ 3.40 Outstanding at June 30, 2018 11,390,340 $ 4.84 7.9 $ 34,810 Vested at June 30, 2018 5,539,332 $ 6.48 6.5 $ 13,582 Vested and expected to vest at June 30, 2018(1) 11,047,340 $ 4.90 7.9 $ 33,502 (1) This represents the number of vested options as of June 30, 2018, plus the number of unvested options expected to vest as of June 30, 2018.
Schedule of assumptions used to estimate fair value of each stock option on grant date	Six months ended June 30, 2018 2017 Risk-free interest rate 2.51 % 2.05 % Volatility 81 % 79 % Dividend yield — — Expected term (years)
Schedule of restricted stock units	Shares Weighted-average grant date fair value per share Outstanding at December 31, 2017 — $ — Granted 175,000 $ 3.00 Vested — $ — Forfeited (12,875) $ 3.00 Outstanding at June 30, 2018 162,125 $ 3.00

Commitments and contingencies (

Commitments and contingencies (Tables)	6 Months Ended
	Jun. 30, 2018
Commitments and contingencies
Schedule of minimum aggregate future lease commitments	The minimum aggregate future lease commitments as of June 30, 2018 are as follows (in thousands): Remainder of 2018 $ 220 2019 716 2020 971 2021 1,020 2022 1,041 Thereafter 2,600 Total $ 6,568

Nature of business (Details)

Nature of business (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Nature of business
Cash and cash equivalents	$ 168,692	$ 82,176
Accumulated deficit	$ 342,559	$ 303,142
Substantial doubt about the ability to continue as a going concern	false
Minimum
Nature of business
Proceeds from strategic financings and a license arrangement	$ 125,000

Summary of significant accoun28

Summary of significant accounting policies (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017
Recently Adopted Accounting Standards Updates
Restricted cash	$ 242,000	$ 162,000
ASU 2016-18 | Adjustment
Recently Adopted Accounting Standards Updates
Restricted cash		$ 162,000	$ 162,000

Cash, cash equivalents and re29

Cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017	Dec. 31, 2016
Cash, cash equivalents and restricted cash
Cash and cash equivalents	$ 168,692	$ 82,176
Restricted cash (included in prepaid expenses and other current assets)	161
Restricted cash	242	162
Cash, cash equivalents and restricted cash	$ 169,095	$ 82,338	$ 27,745	$ 32,511

Cash, cash equivalents and re30

Cash, cash equivalents and restricted cash - Security deposit (Details) - USD ($)	Jun. 30, 2018	Feb. 15, 2018	Dec. 31, 2017
Letter of credit | Office and Laboratory Space in Needham, Massachusetts
Operating lease
Security deposit	$ 403,000	$ 403,000	$ 162,000

Fair value of financial instr31

Fair value of financial instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Financial liabilities
Long-term debt	$ 24,900	$ 14,800
Recurring basis
Financial assets
Cash equivalents	167,710	80,894
Short-term investments		4,496
Total financial assets	167,710	85,390
Level 1 | Recurring basis
Financial assets
Cash equivalents	150,741	75,478
Total financial assets	150,741	75,478
Level 2 | Recurring basis
Financial assets
Cash equivalents	16,969	5,416
Short-term investments		4,496
Total financial assets	16,969	$ 9,912
Level 3
Financial liabilities
Fair value of long-term debt	$ 26,900

Investments (Details)

Investments (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018USD ($)item	Jun. 30, 2017USD ($)	Jun. 30, 2018USD ($)item	Jun. 30, 2017USD ($)	Dec. 31, 2017USD ($)item
Investments
Cash and cash equivalents	$ 168,692,000		$ 168,692,000		$ 82,176,000
Gross unrealized gains	5,000		5,000
Gross unrealized losses	(1,000)		(1,000)		$ (2,000)
Realized gains or losses on investments	$ 0	$ 0	$ 0	$ 0
Number of investments in unrealized loss position | item	2		2		5
Number of investments in unrealized loss position for more than 12 months | item	0		0		0
Aggregate unrealized loss	$ 1,000		$ 1,000		$ 2,000
Unrealized loss on fair value	2,500,000		2,500,000		$ 9,900,000
Corporate bonds and commercial paper
Investments
Original maturity period, cash and cash equivalents					90 days
Gross unrealized gains	5,000		5,000
Gross unrealized losses	(1,000)		(1,000)		$ (2,000)
Corporate bonds and commercial paper
Investments
Maximum maturity period, investments					1 year
Amortized Cost
Investments
Cash and cash equivalents					$ 82,178,000
Investments					4,496,000
Total cash, cash equivalents, and investments	168,688,000		168,688,000		86,674,000
Amortized Cost | Cash and money market accounts
Investments
Cash and cash equivalents	151,723,000		151,723,000		76,760,000
Amortized Cost | Corporate bonds and commercial paper
Investments
Cash and cash equivalents	16,965,000		16,965,000		5,418,000
Amortized Cost | Corporate bonds and commercial paper
Investments
Due within 1 year					4,496,000
Fair Value
Investments
Cash and cash equivalents, Fair value					82,176,000
Short-term investments					4,496,000
Total cash, cash equivalents, and investments, Fair Value	168,692,000		168,692,000		86,672,000
Fair Value | Cash and money market accounts
Investments
Cash and cash equivalents, Fair value	151,723,000		151,723,000		76,760,000
Fair Value | Corporate bonds and commercial paper
Investments
Cash and cash equivalents, Fair value	$ 16,969,000		$ 16,969,000		5,416,000
Fair Value | Corporate bonds and commercial paper
Investments
Due within 1 year					$ 4,496,000

Accrued expenses (Details)

Accrued expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Accrued expenses
Contract research organization costs	$ 7,847	$ 3,774
Compensation and related benefits	3,225	2,622
Professional fees	472	617
Consulting fees	358	579
Other	332	350
Total accrued expenses	$ 12,234	$ 7,942

Long-term debt (Details)

Long-term debt (Details) $ in Thousands	Mar. 06, 2018USD ($)item	Jun. 30, 2018USD ($)	Jun. 30, 2018USD ($)	Jun. 30, 2017USD ($)	Dec. 31, 2017USD ($)	Mar. 21, 2017USD ($)
Long-term debt
Amount drawn			$ 9,900	$ 2,386
Future principal payments
Total		$ 24,900	24,900		$ 14,800
Term loan
Long-term debt
Maximum borrowing capacity	$ 50,000					$ 25,000
Outstanding amount		25,000	25,000
Amount drawn		10,000
Remaining borrowing capacity		25,000	25,000
Interest rate	10.50%
Basis spread	(4.50%)
Minimum cash proceeds to extend interest only payment period	$ 20,000
Amortization payments, installments | item	20
Future principal payments
2,019		5,984	5,984
2,020		19,016	19,016
Total		25,000	$ 25,000
Term loan | Minimum
Long-term debt
Interest rate	10.50%
Term loan | Minimum | Plan
Long-term debt
Amount drawn		$ 5,000
Term loan | Maximum
Long-term debt
Interest rate	12.75%

Net loss per share (Details)

Net loss per share (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Net loss per share
Potentially anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)	11,552,465	7,573,155	11,552,465	7,573,155
Stock options
Net loss per share
Potentially anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)	11,390,340	7,573,155	11,390,340	7,573,155
Restricted Stock Units
Net loss per share
Potentially anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)	162,125		162,125

Stock-based compensation - Stoc

Stock-based compensation - Stock Options (Details) - Stock options	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018USD ($)item$ / sharesshares	Mar. 31, 2018USD ($)$ / sharesshares	Jun. 30, 2018USD ($)$ / sharesshares	Jun. 30, 2017	Dec. 31, 2017USD ($)$ / sharesshares
Shares
Outstanding at the beginning of the period (in shares)		8,719,978	8,719,978
Granted (in shares)			3,297,891
Exercised (in shares)			(186,206)
Forfeited/cancelled (in shares)			(441,323)
Outstanding at the end of the period (in shares)	11,390,340		11,390,340		8,719,978
Vested at the end of the period (in shares)			5,539,332
Vested and expected to vest at end of period (in shares)	11,047,340		11,047,340
Weighted-average exercise price per share
Outstanding at the beginning of the period (in dollars per share) | $ / shares		$ 5.19	$ 5.19
Granted (in dollars per share) | $ / shares			3.54
Exercised (in dollars per share) | $ / shares			1.40
Forfeited/cancelled (in dollars per share) | $ / shares			3.40
Outstanding at the end of the period (in dollars per share) | $ / shares	$ 4.84		4.84		$ 5.19
Vested at the end of the period (in dollars per share) | $ / shares	6.48		6.48
Vested and expected to vest at end of the period (in dollars per share) | $ / shares	$ 4.90		$ 4.90
Weighted-average remaining contractual term
Outstanding at the end of the period			7 years 10 months 24 days		7 years 10 months 24 days
Vested at the end of the period			6 years 6 months
Vested and expected to vest at the end of the period			7 years 10 months 24 days
Exercisable at the end of the period			6 years 6 months
Aggregate intrinsic value
Outstanding at the beginning of the period (in dollars) | $		$ 6,150,000	$ 6,150,000
Outstanding at the end of the period (in dollars) | $	$ 34,810,000		34,810,000		$ 6,150,000
Vested at the end of the period (in dollars) | $	13,582,000		13,582,000
Vested and expected to vest at end of the period (in dollars) | $	33,502,000		$ 33,502,000
Assumptions used to estimate fair value of each stock-based award on the grant date
Risk-free interest rate (as a percent)			2.51%	2.05%
Volatility (as a percent)			81.00%	79.00%
Expected term			6 years	6 years 4 months 24 days
Additional disclosures
Total unrecognized stock-based compensation expense (in dollars) | $	$ 12,200,000		$ 12,200,000
Weighted-average recognition period			3 years
Executives
Shares
Granted (in shares)		582,500
Additional disclosures
Number of performance conditions achieved | item	1
Number of performance conditions considered probable of achievement | item	1
Stock-based compensation expense | $	$ 158,000		$ 508,000

Stock-based compensation - Rest

Stock-based compensation - Restricted Stock (Details) - Restricted Stock Units	6 Months Ended
	Jun. 30, 2018USD ($)item$ / sharesshares
Stock-based compensation
Number of shares holder to receive when RSU vests	1
Number of installments | item	4
Number of anniversaries | item	4
Shares
Granted (in shares)	175,000
Forfeited (in shares)	(12,875)
Unvested at the end of the period (in shares)	162,125
Weighted-average grant date fair value
Granted (in dollars per share) | $ / shares	$ 3
Forfeited (in dollars per share) | $ / shares	3
Unvested at the end of the period (in dollars per share) | $ / shares	$ 3
Additional disclosures
Total unrecognized stock-based compensation expense (in dollars) | $	$ 457,000
Weighted-average recognition period	4 years

Common stock (Details)

Common stock (Details) - USD ($) $ / shares in Units, $ in Thousands	Jun. 14, 2018	May 23, 2018	May 16, 2018	Aug. 31, 2017	Mar. 31, 2017	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018
Common stock
Number of shares of common stock issued	7,166,666	1,166,666	7,777,778
Net proceeds from issuance of stock	$ 42,800	$ 38,300					$ 105,457	$ (138)
Share price (in dollars per share)	$ 6		$ 4.31
At-the-market equity offering program
Common stock
Maximum value of common stock allowed to be sold				$ 75,000	$ 35,000
Number of shares of common stock issued						6,314,410	6,481,475		11,518,354
Net proceeds from issuance of stock						$ 23,700	$ 24,300		$ 47,300

Common stock - Equity offerings

Common stock - Equity offerings (Details) - USD ($) $ / shares in Units, $ in Thousands	Jun. 14, 2018	May 23, 2018	May 16, 2018	Jun. 30, 2018	Jun. 30, 2017
Common stock.
Number of shares of common stock offered	7,166,666	1,166,666	7,777,778
Share price (in dollars per share)	$ 6		$ 4.31
Net proceeds from issuance of stock	$ 42,800	$ 38,300		$ 105,457	$ (138)
Options are exercisable from date of prospectus supplement		30 days

License and Collaboration Agr40

License and Collaboration Agreement (Details) $ in Thousands	Jun. 05, 2018item	Jun. 30, 2018USD ($)	Jun. 30, 2018USD ($)	Jun. 30, 2018USD ($)
Revenue recognized			$ 10,000	$ 10,000
The Agreement | Yakult
Upfront fees received		$ 10,000
Maximum aggregate payments entitled to receive if all milestones successfully achieved		90,000
Agreement obligations expire from first commercial sale of product (in years)	10 years
Number of days written prior notice required for other party to terminate agreement	180 days
Number of days written notice required to terminate agreement if fails to cure breach	60 days
Number of material promises | item	2
Revenue recognized			10,000
Deferred revenue		$ 0	$ 0	$ 0

Commitments and contingencies41

Commitments and contingencies (Details) - Office and Laboratory Space in Needham, Massachusetts	Feb. 15, 2018USD ($)ft²	Apr. 15, 2014ft²
Operating Leased Assets
Area of space | ft²	27,810	15,197
Initial annual base rent	$ 660,000
Base rent for last twelve-month period	$ 1,100,000

Commitments and contingencies -

Commitments and contingencies - Future Lease Commitments (Details) $ in Thousands	Jun. 30, 2018USD ($)
Minimum aggregate future lease commitments
Remainder of 2018	$ 220
2,019	716
2,020	971
2,021	1,020
2,022	1,041
Thereafter	2,600
Total	$ 6,568

Commitments and contingencies43

Commitments and contingencies - Security deposit (Details) - USD ($)	Jun. 30, 2018	Feb. 15, 2018	Dec. 31, 2017
Letter of credit | Office and Laboratory Space in Needham, Massachusetts
Operating Leased Assets
Security deposit	$ 403,000	$ 403,000	$ 162,000