Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 05, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | MYOK | |
Entity Registrant Name | MyoKardia Inc | |
Entity Central Index Key | 1,552,451 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 35,966,061 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 183,865 | $ 224,571 |
Short-term investments | 39,822 | 31,933 |
Receivable from collaboration partner | 1,013 | |
Prepaid expenses and other current assets | 2,320 | 1,876 |
Total current assets | 226,007 | 259,393 |
Property and equipment, net | 4,030 | 3,147 |
Long-term investments | 35,621 | 19,900 |
Other long-term assets | 514 | 368 |
Total assets | 266,172 | 282,808 |
Current liabilities | ||
Accounts payable | 2,292 | 2,301 |
Accrued liabilities | 10,628 | 11,639 |
Prepayment from collaboration partner | 7,701 | 4,432 |
Deferred revenue | 28,227 | 33,558 |
Total current liabilities | 48,848 | 51,930 |
Other long-term liabilities | 151 | 202 |
Total liabilities | 48,999 | 52,132 |
Commitments and contingencies (Note 6) | ||
Stockholders’ equity | ||
Preferred stock, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding | ||
Common stock, $0.0001 par value, 150,000,000 and 150,000,000 shares authorized at March 31, 2018 and December 31, 2017, respectively; 35,922,982 and 35,812,791 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively | 4 | 4 |
Additional paid-in capital | 370,173 | 365,719 |
Accumulated other comprehensive loss | (329) | (192) |
Accumulated deficit | (152,675) | (134,855) |
Total stockholders’ equity | 217,173 | 230,676 |
Total liabilities and stockholders’ equity | $ 266,172 | $ 282,808 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 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 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 35,922,982 | 35,812,791 |
Common stock, shares outstanding | 35,922,982 | 35,812,791 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Collaboration and license revenue | $ 5,331 | $ 2,410 |
Operating expenses: | ||
Research and development | 16,618 | 11,917 |
General and administrative | 7,313 | 5,476 |
Total operating expenses | 23,931 | 17,393 |
Loss from operations | (18,600) | (14,983) |
Interest and other income, net | 780 | 221 |
Net loss | (17,820) | (14,762) |
Other comprehensive loss | (137) | (55) |
Comprehensive loss | (17,957) | (14,817) |
Net loss attributable to common stockholders | $ (17,820) | $ (14,762) |
Net loss per share attributable to common stockholders, basic and diluted | $ (0.50) | $ (0.47) |
Weighted average number of shares used to compute net loss per share attributable to common stockholders, basic and diluted | 35,827,235 | 31,089,310 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flow from operating activities: | ||
Net loss | $ (17,820) | $ (14,762) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Stock-based compensation expense | 3,631 | 1,405 |
Depreciation | 300 | 316 |
Amortization of premiums on investments | 2 | 22 |
Change in operating assets and liabilities: | ||
Receivable from collaboration partner | 1,013 | 45,000 |
Prepaid expenses and other current assets | (444) | (419) |
Other long-term assets | (146) | (105) |
Accounts payable | 212 | 629 |
Accrued liabilities | (1,257) | (1,613) |
Prepayment from collaboration partner | 3,269 | |
Other long-term liabilities | (43) | (44) |
Deferred revenue | (5,331) | (2,410) |
Net cash (used in) provided by operating activities | (16,614) | 28,019 |
Cash flow from investing activities: | ||
Purchases of investments | (31,749) | (32,020) |
Sales of investments | 4,000 | |
Maturities of investments | 8,000 | |
Purchases of property and equipment | (1,188) | (185) |
Proceeds from sale of equipment | 39 | |
Net cash used in investing activities | (24,898) | (28,205) |
Cash flow from financing activities: | ||
Proceeds from exercise of stock options and employee stock purchase plan | 806 | 21 |
Payments of financing-related costs | (38) | |
Net cash provided by (used in) financing activities | 806 | (17) |
Net decrease in cash, cash equivalents and restricted cash | (40,706) | (203) |
Cash, cash equivalents and restricted cash, beginning of period | 224,857 | 136,056 |
Cash, cash equivalents and restricted cash, end of period | 184,151 | 135,853 |
Non-cash investing and financing activities: | ||
Vesting of early exercised options and restricted stock | 18 | 54 |
Unpaid portion of property and equipment purchases included in period-end accounts payable and accrued liabilities | $ 317 | $ 79 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization | 1. Organization MyoKardia, Inc. (the “Company”) is a clinical-stage biopharmaceutical company pioneering a precision medicine approach to discover, develop and commercialize targeted therapies for the treatment of serious and neglected rare cardiovascular diseases. The Company’s initial focus is on the treatment of heritable cardiomyopathies, a group of rare, genetically driven forms of heart failure that result from biomechanical defects in cardiac muscle contraction. The Company has used its precision medicine platform to generate a robust pipeline of therapeutic programs for the chronic treatment of the two most common forms of heritable cardiomyopathy—hypertrophic cardiomyopathy (“HCM”), and dilated cardiomyopathy (“DCM”). The Company was incorporated on June 8, 2012 in Delaware and its corporate headquarters and operations are located in South San Francisco, California. Liquidity The Company has incurred significant operating losses since inception and has an accumulated deficit of $152.7 million as of March 31, 2018. The Company has relied on its ability to fund its operations through private and public equity financings, and to a lesser extent through a license and collaboration arrangement with its collaboration partner, Sanofi S.A. (“Sanofi”) through its subsidiary, Aventis, Inc. The Company has not yet received regulatory approval to commercialize or sell any product and does not have customers. Management expects operating losses and negative operating cash flows to continue for the foreseeable future. As the Company continues to incur losses, the transition to profitability is dependent upon the successful development, approval, and commercialization of its products and product candidates and the achievement of a level of revenues adequate to support its cost structure. The Company’s ultimate success depends on the outcome of its research and development activities. The Company expects to incur additional losses and negative cash flows for the foreseeable future and it anticipates the need to raise additional capital to fully implement its business plan. The Company intends to raise such capital through the issuance of additional equity, debt and/or strategic alliances with partner companies. As of March 31, 2018, the Company had $259.3 million of cash, cash equivalents and short and long-term investments and management believes the existing cash, cash equivalents and short and long-term investments will be sufficient to meet the Company’s anticipated operating and capital expenditure requirements for the twelve months following the date of this Form 10-Q. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements are unaudited, include the Company’s accounts and those of its wholly-owned subsidiary and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All significant intercompany balances and transactions have been eliminated in consolidation. See “ Adopted Accounting Pronouncements – Revenue Recognition ” below for a discussion of certain revisions to prior period financial statements made in connection with the Company’s adoption of new revenue recognition guidance. The Company currently operates in one business segment, which is the identification, development and commercialization of therapies for the treatment of serious and neglected rare The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full fiscal year or any interim period and should be read in conjunction with the audited financial statements for the year ended December 31, 2017 and the notes thereto, which are included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2017. The significant accounting policies used in preparation of these condensed consolidated financial statements for the three months ended March 31, 2018 are consistent with those discussed in Note 2 to the consolidated financial statements in the Company’s 2017 Annual Report on Form 10-K and are updated below as necessary. Reclassifications The cash and cash equivalents on the condensed consolidated statements of cash flows for the three-month period ended March 31, 2017 has been reclassified to include restricted cash to conform to the current period’s presentation. Such reclassifications did not impact the Company’s net loss or financial position. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, other comprehensive gain (loss) and the related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to license and collaboration revenues, accrued clinical trial and manufacturing development expenses and stock-based compensation expense. Significant estimates in these condensed consolidated financial statements include estimates made in connection with accrued research and development expenses, stock-based compensation expense and revenue. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. Significant accounting policies are described in Note 2 to the consolidated financial statements as of and for the year ended December 31, 2017 included in the Annual Report. There have been no changes to the Company’s significant accounting policies during the three months ended March 31, 2018, except as described below. Adopted Accounting Pronouncements - Revenue Recognition Effective January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers Licenses of intellectual property : Upon the inception of a Collaboration Agreement, if the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, up-front 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. For licenses that are bundled with other promises, the Company utilizes judgement 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 proportional performance for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of proportional performance each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone payments : At the inception of each arrangement that includes development, regulatory or commercial milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. ASC 606 suggests two alternatives to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. Whichever method is used, it should be consistently applied throughout the life of the contract; however, it is not necessary for the Company to use the same approach for all contracts. The Company expects to use the most likely amount method for development and regulatory milestone payments. 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 transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. The Company recognizes revenue when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability or achievement of each such milestone and any related constraint, and if necessary, adjusts its estimates 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 the 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 its collaboration arrangement. Up-front payments and fees are recorded as deferred revenue upon receipt or when due, and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Impact of Adoption – ASC 606 The Company entered into a license and collaboration agreement that became effective in August 2014, which is within the scope of ASC 606, under which it has licensed certain rights to its HCM-1 (which includes mavacamten), HCM-2 and DCM-1 (which includes MYK-491) programs to Sanofi, and may enter into other such arrangements in the future. The terms of the arrangement include payment to the Company of one or more of the following: non-refundable, up-front license fees, development and regulatory and commercial milestone payments, and royalties on net sales of licensed products. The Company has applied the five-step model of the new standard to the Company’s contract with Sanofi, as it is the only contract that will be impacted by the adoption of the new revenue standards. The Company has implemented the new revenue standards using the full retrospective transition method and has revised its comparative financial statements as if ASC 606 had been effective for those periods. The following tables summarize the financial statement line items that were affected due to the Company’s implementation of ASC 606 : Condensed Consolidated Balance Sheet As of December 31, 2017 As Originally Reported Effect of Change As Revised Deferred revenue - current $ 22,500 $ 11,058 $ 33,558 Accumulated deficit $ (123,797 ) $ (11,058 ) $ (134,855 ) Condensed Consolidated Statement of Operations and Comprehensive Loss Three Months Ended March 31, 2017 As Originally Reported Effect of Change As Revised Collaboration and license revenue $ 5,625 $ (3,215 ) $ 2,410 Operating expenses: Research and development 11,917 — 11,917 General and administrative 5,476 — 5,476 Total operating expenses 17,393 — 17,393 Loss from operations (11,768 ) (3,215 ) (14,983 ) Interest and other income, net 221 — 221 Net loss (11,547 ) (3,215 ) (14,762 ) Other comprehensive loss (55 ) — (55 ) Comprehensive loss (11,602 ) (3,215 ) (14,817 ) Net loss attributable to common stockholders $ (11,547 ) $ (3,215 ) $ (14,762 ) Net loss per share attributable to common stockholders, basic and diluted $ (0.37 ) $ (0.10 ) $ (0.47 ) Weighted average number of shares used to compute net loss per share attributable to common stockholders, basic and diluted 31,089,310 31,089,310 31,089,310 Condensed Consolidated Statement of Cash Flows Three Months Ended March 31, 2017 As Originally Reported Effect of Change As Revised Net loss $ (11,547 ) $ (3,215 ) $ (14,762 ) Adjustments to reconcile net loss to net cash used in operating activities: Deferred revenue $ (5,625 ) $ 3,215 $ (2,410 ) Cash, cash equivalents and restricted cash, beginning of period $ 135,797 $ 259 $ 136,056 Cash, cash equivalents and restricted cash, end of period $ 135,594 $ 259 $ 135,853 The change to net loss and deferred revenue in the condensed consolidated statement of cash flows, as revised above, reflects (i) the Company’s determination that the Sanofi continuation payment of $45.0 million received in January 2017 relates to three performance obligations that were previously accounted for as one combined unit of accounting and (ii) the result of the Company utilizing a cost-based input method to measure proportional performance for each interim period during the year ending December 31, 2017, instead of straight-line. Impact of Adoption – ASU 2016-18 As discussed in “Adopted Accounting Pronouncements – Other” below, the change to cash, cash equivalents and restricted cash in the table above reflects the Company’s implementation of ASU 2016-18 whereby 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. The Company implemented this change using a retrospective transition method. The following table summarizes the cash balances that were affected due to the Company’s implementation of ASU 2016-18 Condensed Consolidated Statement of Cash Flows March 31, 2018 December 31, 2017 March 31, 2017 December 31, 2016 As Revised As Revised As Revised As Revised Cash and cash equivalents $ 183,865 $ 224,571 $ 135,594 $ 135,797 Restricted cash – noncurrent 286 286 259 259 Total cash, cash equivalents and restricted cash $ 184,151 $ 224,857 $ 135,853 $ 136,056 Adopted Accounting Pronouncements – Other In May 2017, the Financial Accounting Standards Board (“ ASU No. 2017-09—Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. The amendments in this ASU provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718 to address diversity in practice. An entity should account for the effects of a modification unless all the three specified conditions are met. The current disclosure requirements in Topic 718 apply regardless of whether an entity is required to apply modification accounting under the amendments in this ASU. The amendments in this ASU are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. The amendments in this ASU should be applied prospectively to an award modified on or after the adoption date. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements In November 2016, the FASB issued ASU No. 2016-18 (Topic 230), Restricted Cash, Statement of Cash Flows ment 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. Therefore, 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 is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The amendments in this ASU should be applied using a retrospective transition method to each period presented. Other than the change in presentation in the accompanying consolidated statements of cash flows, the adoption of this guidance had no effect on the Company’s financial position, results of operations or liquidity. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company, and has irrevocably elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. In February ASU No. 2016-02 (Topic 842), Leases. modifies lease accounting for lessees to increase transparency and comparability by recording lease assets and liabilities for operating leases and disclosing key information about leasing arrangements. The Company will adopt ASU 2016-02 in its first quarter of 2019 utilizing the modified retrospective transition method. While the Company is currently evaluating the timing and impact of adopting ASU 2016-02, currently the Company anticipates recording lease assets and liabilities for its three facilities in South San Francisco and is currently evaluating and estimating the financial statement impact. It is not expected to have a material impact to the Company’s Consolidated Statements of Operations and the Company has not quantified the impact to its Consolidated Balance Sheets. However, the ultimate impact of adopting ASU 2016-02 will depend on the Company’s lease portfolio as of the adoption date In February 2018, the FASB issued ASU No. 2018-05 (Topic 740) Income Taxes, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 |
Collaboration and License Agree
Collaboration and License Agreement | 3 Months Ended |
Mar. 31, 2018 | |
Collaboration And License Agreement Disclosure [Abstract] | |
Collaboration and License Agreement | 3. Sanofi License and Collaboration Agreement Sanofi (Aventis Inc.) In August 2014, the Company entered into an exclusive License and Collaboration Agreement (“Collaboration Agreement”) with Aventis Inc., a wholly-owned subsidiary of Sanofi, for the research, development and potential commercialization of pharmaceutical products for the treatment, prevention and diagnosis of hypertrophic and dilated cardiomyopathy, as well as potential additional indications. The Company has determined that Sanofi is a related party of the Company due to its close collaborative relationship and that it is the Company’s only partner. In addition, Sanofi is a beneficial shareholder of the Company’s common stock. Under the Collaboration Agreement, the Company granted Sanofi royalty-bearing licenses to develop and commercialize products resulting from its lead candidate programs HCM-1, HCM-2 and DCM-1. The licenses provide Sanofi with worldwide rights in the case of DCM-1 and rights outside the United States with respect to the HCM-1 and HCM-2 programs. The terms of the Collaboration Agreement also state that the Company is responsible for conducting research and development activities through early human efficacy studies for all three programs, except for specified research activities to be conducted by Sanofi. Upon entering into this agreement, the Company received an up-front non-refundable cash payment of $35.0 million and Sanofi made an up-front equity purchase of $10.0 million (additional equity investments from Sanofi totaling $14.0 million were received subsequent to the effective date of the Collaboration Agreement). The Company was also eligible to receive additional payments and services, as follows: (1) a one-time, non-refundable payment of $25.0 million contingent upon submission of an Investigational New Drug (“IND”) application before certain regulatory authority(ies) for its DCM-1 program; (2) up to $45.0 million in funding from Sanofi of approved in-kind research and clinical activities; (3) a non-refundable continuation payment of $45.0 million contingent upon Sanofi’s notification of its decision to continue the agreement beyond December 31, 2016; and, (4) up to $15.0 million in research and development funding per program if studies leading to proof-of-concept (“POC”) are extended beyond December 31, 2018. During the fourth quarter of 2016, the Company submitted an IND application to the U.S. Food and Drug Administration and as a result, the Company received the $25.0 million milestone payment from Sanofi. In December 2016, Sanofi provided notice to the Company of its election to continue the collaboration through December 31, 2018 pursuant to the terms of the Collaboration Agreement. In connection with Sanofi’s decision to continue the collaboration, the Company received the $45.0 million milestone payment. The Company is also entitled to receive tiered royalties ranging from the mid-single digits to the mid-teens on net sales of certain HCM-1, HCM-2 and DCM-1 finished products outside the United States and on net sales of certain DCM-1 finished products in the United States. Sanofi is eligible to receive tiered royalties ranging from the mid-single digits to the low-teens on net sales of certain HCM-1 and HCM-2 finished products in the United States. Revenue Recognition The Company evaluated the Collaboration Agreement under ASC 606 and determined that it had the following performance obligations: (1) the licenses of intellectual property for each of the HCM-1, HCM-2 and DCM-1 programs, and (2) the performance of research and development services, including regulatory support, for each of the three programs. The Company considered whether the licenses have standalone functionality and are capable of being distinct; however, given the fact that the research and development services are of such a specialized nature that can only be performed by the Company and Sanofi cannot benefit from the intellectual property licenses without the Company’s performance, the Company determined that the intellectual property licenses are not distinct from the research and development services and thus the license and research and development services for each program are combined into three separate performance obligations. Contract Term For revenue recognition purposes, the Company determined that the Collaboration Agreement is a period to period contract for which the Company had enforceable rights and obligations from inception through December 31, 2016. Sanofi had the right to terminate the Collaboration Agreement prior to December 31, 2016 or to extend the contract term through December 31, 2018. If Sanofi had elected to terminate the agreement, the termination would have had taken effect on December 31, 2016 and all licensed rights would have reverted to the Company. The Company did not have any obligation to reimburse Sanofi any portion of the payments received if Sanofi had terminated the agreement. In December 2016, Sanofi elected to continue the Collaboration Agreement through an extended term ending December 31, 2018 and made the $45.0 million continuation payment to the Company. The Company determined that the extended term was to be treated as a separate contract because such an extension was not probable at the inception of the contract, the extension represents additional goods and services, and such activities are priced commensurate to the effort required and do not involve any significant discount. It was also concluded that the extended term provides the Company with enforceable rights and obligations for the two-year period ending December 31, 2018. Because Sanofi retains the option in the Collaboration Agreement to extend the arrangement, neither party is committed to perform and the contract does not have enforceable rights and obligations beyond December 31, 2018. Transaction Price The Company’s assessment of the transaction price included an analysis of amounts it expected to be entitled for providing goods or services to the customer which at contract inception consisted of the upfront cash payment, valued at $34.3 million, net of the fair value of $0.7 million allocated to the option provided to Sanofi to acquire equity, and variable consideration of $25.0 million, subject to an IND application. Sanofi paid the Company the $25.0 million milestone upon the Company’s application for the IND. In 2016, after the IND application was made and when the Company determined it was deemed probable that significant reversal in the amount of cumulative revenue recognized will not occur, the Company included this amount in the transaction price. As of December 31, 2016, all performance obligations associated with the initial term were satisfied. The extended term (from January 1, 2017 to December 31, 2018) has a fixed fee of $45.0 million, paid by Sanofi contemporaneously with the notice of continuation of the contract. The Company therefore determined that the transaction price for this extended term is $45.0 million. As previously noted above, the Collaboration Agreement also includes up to $45.0 million in funding from Sanofi of approved in-kind research and clinical activities. Sanofi is the decision maker on how to provide these services and such services are used in the development of joint program technology which is co-owned by both parties. As such the Company concluded that these in-kind contributions do not constitute consideration paid by Sanofi to the Company. Any consideration related to sales-based royalties will be recognized when the related sales occur and therefore have also been excluded from the transaction price. Methodology for Recognition Since the Company has determined that the three performance obligations are satisfied over time, the Company has selected a single revenue recognition method that it believes most faithfully depicts the Company’s performance in transferring control of the services. ASC 606 allows entities to choose between two methods to measure progress toward complete satisfaction of a performance obligation: 1. Output methods - recognize revenue on the basis of direct measurements of the value to the customer of the goods or services transferred to date relative to the remaining goods or services promised under the contract (e.g. surveys of performance completed to date, appraisals of results achieved, milestones reached, time elapsed, and units produced or units delivered); or 2. Input methods - recognize revenue on the basis of the entity’s efforts or inputs to the satisfaction of a performance obligation (e.g., resources consumed, labor hours expended, costs incurred, or time elapsed) relative to the total expected inputs to the satisfaction of that performance obligation. The Company concluded that it will utilize a cost-based input method to measure proportional performance and to calculate the corresponding amount of revenue to recognize. The Company believes this is the best measure of progress because other measures do not reflect how the Company executes its performance obligations under the contract with Sanofi. In applying the cost-based input methods of revenue recognition, the Company uses actual costs incurred relative to budgeted costs to fulfill the combined performance obligations. Revenue will be recognized based on actual costs incurred as a percentage of total actual and budgeted costs as the Company completes its performance obligations, which will be fulfilled by December 31, 2018. A cost-based input method of revenue recognition requires management to make estimates of costs to complete the Company’s performance obligations. In making such estimates, significant judgment is required to evaluate assumptions related to cost estimates. The cumulative effect of revisions to estimated costs to complete the Company’s performance obligations will be recorded in the period in which changes are identified and amounts can be reasonably estimated. A significant change in these assumptions and estimates could have a material impact on the timing and amount of revenue recognized in future periods. For the three months ended March 31, 2017 and 2018, the Company recognized $2.4 million and $5.3 million of license and collaboration revenue, respectively. The following table presents changes in the Company’s contract assets and liabilities, which excludes research and development reimbursements under the mavacamten registration program plan, for the three months ended March 31, 2017 and 2018 (in thousands): Three Months Ended March 31, 2018 Balance at Beginning of Period Additions Deductions Balance at End of Period Contract liabilities: Deferred revenue $ 33,558 $ — $ (5,331 ) $ 28,227 Three Months Ended March 31, 2017 Balance at Beginning of Period Additions Deductions Balance at End of Period Contract assets: Receivable from collaboration partner $ 45,000 $ — $ (45,000 ) $ — Contract liabilities: Deferred revenue $ 45,000 $ — $ (2,410 ) $ 42,590 Deferred revenue of $28.2 million as of March 31, 2018 consists of the $45.0 million continuation payment received in January 2017, less $16.8 million recognized during the five quarters ending March 31, 2018. The $28.2 million in deferred revenue will be recognized through December 31, 2018 as the performance obligations are satisfied. Registration Program Plan Cost Sharing In addition to amounts due to the Company under the Collaboration Agreement, Sanofi is conditionally responsible for sharing one half of the registration program plan (“RPP”) costs after the clinical proof of concept is established for each of the HCM-1, HCM-2 and DCM-1 programs. Effective October 2017, Sanofi is sharing RPP costs for the mavacamten program during the remainder of the contract term. Registration program costs are subject to review and approval by the Company and Sanofi and include amounts incurred relating to clinical trials, development and manufacturing of, and obtaining regulatory approvals for mavacamten and include direct employee costs and direct out-of-pocket costs incurred, by or on behalf of a party, that are specifically identifiable or reasonably and directly allocable to those activities. Estimated reimbursements are invoiced to Sanofi before each interim period based on budgeted amounts. These estimates consist of one half of the Company’s mavacamten development budget in excess of Sanofi’s mavacamten development budget each interim period. After each period end, a review of the actual expenses occurs and adjustments to future invoices are applied as a result of an analysis of the budgeted versus incurred expenses. Actual amounts received from Sanofi for the applicable period are recorded by the Company to reduce its research and development expenses each interim period. The Company recorded a $1.0 million and $0 receivable for reimbursable RPP expenses, as of December 31, 2017 and March 31, 2018, respectively, which is recorded as receivable from collaboration partner and included in current assets in the condensed consolidated balance sheets. The Company received $4.4 million and $6.1 million as prepayments from collaboration partner as of December 31, 2017 and March 31, 2018, respectively, which is included in current liabilities in the condensed consolidated balance sheets. The Company recorded $0 and $2.8 million as reductions to research and development expenses for the three months ending March 31, 2017 and 2018, respectively. The following table presents the RPP related receivables and prepayments (in thousands): Balance at December 31, 2017 Payments Received from Sanofi under RPP Actual Incurred During the Quarter Balance at March 31, 2018 Receivable from collaboration partner $ 1,013 $ 1,013 $ — $ — Prepayment from collaboration partner $ 4,432 $ 6,090 $ (2,821 ) $ 7,701 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements Financial assets and liabilities are recorded at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2—Inputs other than quoted market prices included in Level 1 are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level 3—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands): Fair Value Measurements at March 31, 2018 Total Level 1 Level 2 Level 3 Assets Money market funds $ 183,714 $ 183,714 $ — $ — U.S. government agency obligations 23,875 — 23,875 — Corporate securities 51,568 — 51,568 — Total $ 259,157 $ 183,714 $ 75,443 $ — Fair Value Measurements at December 31, 2017 Total Level 1 Level 2 Level 3 Assets Money market funds $ 223,568 $ 223,568 $ — $ — U.S. government agency obligations 27,878 — 27,878 — Corporate securities 23,955 — 23,955 — Total $ 275,401 $ 223,568 $ 51,833 $ — The following table is a summary of amortized cost, unrealized gain and loss, and fair value of the Company’s marketable securities by contractual maturities (in thousands): Fair Value Measurements at March 31, 2018 Amortized Cost Unrealized Gain Unrealized Loss Fair Value Cash equivalents (due within 90 days) $ 183,714 $ — $ — $ 183,714 Short-term investments (due within one year) 39,998 — (176 ) $ 39,822 Long-term investments (due between one and two years) 35,769 — (148 ) $ 35,621 Total $ 259,481 $ — $ (324 ) $ 259,157 Fair Amortized Cost Unrealized Gain Unrealized Loss Fair Value Cash equivalents (due within 90 days) $ 223,568 $ — $ — $ 223,568 Short-term investments (due within one year) 32,010 — (77 ) 31,933 Long-term investments (due between one and two years) 20,010 — (110 ) 19,900 Total $ 275,588 $ — $ (187 ) $ 275,401 |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | 5. Balance Sheet Components Property and Equipment Property and equipment consist of the following (in thousands): March 31, 2018 December 31, 2017 Scientific equipment $ 7,102 $ 5,935 Furniture and equipment 1,071 1,064 Capitalized software 278 278 Leasehold improvements 340 331 Total 8,791 7,608 Less: Accumulated depreciation (4,761 ) (4,461 ) Property and equipment, net $ 4,030 $ 3,147 Depreciation expense was $0.3 million and $0.3 million for the three months ended March 31, 2018 and 2017, respectively. Accrued Liabilities Accrued liabilities consist of the following (in thousands): March 31, 2018 December 31, 2017 Clinical research and development $ 6,967 $ 5,981 Payroll related liabilities 2,817 4,412 Other 844 1,246 Total accrued liabilities $ 10,628 $ 11,639 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Purchase Commitments The Company conducts product research and development programs through a combination of internal and collaborative programs that include, among others, arrangements with universities, contract research organizations and clinical research sites. The Company has contractual arrangements with these organizations; however, these contracts are generally cancelable on 30 days’ notice and the obligations under these contracts are largely based on services performed. Facility Leases On June 29, 2012, the Company entered into a 66-month lease for approximately 12,000 square feet of office and laboratory space in South San Francisco with annual payments of approximately $0.5 million. In connection with this lease agreement, the Company also entered into a shared facilities and services agreement with Global Blood Therapeutics, Inc. (“GBT”), a co-tenant in the office building. In October 2014, the Company entered into a lease assignment agreement with the owner of the building and GBT to allow GBT to sublease the Company’s portion of the building beginning in March 2015. For the three months ended March 31, 2018 and 2017, the Company recorded approximately $0.1 million and $0.1 million, respectively, of sublease income and $0.1 million and $0.1 million, respectively, of sublease expense, which is recorded in interest and other income, net in the consolidated statements of operations and comprehensive loss. On September 15, 2014, the Company entered into a five-year lease for approximately 34,400 square feet of office and laboratory space in South San Francisco. The Company may extend the lease for an additional three-year term. The initial annual lease payments are $1.3 million, increasing to $1.6 million in the final year of the agreement. The lease period commenced in January 2015. The Company received a lease abatement for the first three months of the lease term, which is recorded as deferred rent and recognized over the lease term. On October 1, 2017, the Company entered into an additional 25-month sublease agreement for approximately 8,000 square feet of office space in South San Francisco with annual payments of approximately $0.3 million. The lease period commenced on October 1, 2017 and expires on October 31, 2019. On January 1, 2018, the Company expanded its office and laboratory space at the same location in South San Francisco by 6,000 square feet for an approximate annual cost of $0.4 million. The Company has provided deposits for letters of credit totaling $0.3 million to secure its obligations under its leases, which have been classified as other long-term assets in the Company’s consolidated balance sheet as of March 31, 2018. Rent expense, net was $0.4 million and $0.3 million for the three months ended March 31, 2018 and 2017, respectively. Contingencies From time to time, the Company may have contingent liabilities that arise in the ordinary course of business activities. The Company accrues for such a liability when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. There were no contingent liabilities requiring accrual or disclosure as of March 31, 2018 or December 31, 2017. Guarantees and Indemnifications The Company enters into standard indemnification arrangements in the ordinary course of business. Pursuant to certain of these arrangements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third-party with respect to the Company’s technology. The term of these indemnification arrangements is generally perpetual. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable because it involves claims that may be made against the Company in the future, but have not yet been made. The Company indemnifies its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at the Company’s request in such capacity, as permitted under Delaware law and in accordance with its certificate of incorporation and bylaws, and agreements providing for indemnification entered into with its officers and directors. The term of the indemnification period lasts as long as an officer or director may be subject to any proceeding arising out of acts or omissions of such officer or director in such capacity. The maximum amount of potential future indemnification of directors and officers is unlimited; however, the Company currently holds director and officer liability insurance. This insurance allows the transfer of risk associated with its exposure and may enable it to recover a portion of any future amounts paid. The Company believes that the fair value of these indemnification obligations is minimal. Accordingly, the Company has not recognized any liabilities relating to these obligations for any period presented. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | 7. Stockholders’ Equity Common Stock Reserved for Issuance The Company has reserved shares of common stock for issuance as follows: March 31, 2018 December 31, 2017 Options and awards issued and outstanding 3,793,364 2,964,549 Shares available for issuance under 2015 Stock Option and Incentive Plan 1,357,043 863,538 Shares available for issuance under 2015 Employee Stock Purchase Plan 807,571 449,444 Total 5,957,978 4,277,531 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 8. Stock-Based Compensation The Company classifies stock-based compensation expense in the accompanying condensed consolidated statements of operations and comprehensive loss based on the department to which a recipient belongs. The following table sets forth stock-based compensation expense related to options granted to employees and consultants for all periods presented (in thousands): Three March 31, 2018 2017 Research and development $ 1,591 $ 590 General and administrative 2,040 815 Total $ 3,631 $ 1,405 The following summarizes option and other equity award activity under the 2012 Equity Incentive Plan and 2015 Stock Option and Incentive Plan: Shares Subject to Weighted Average Outstanding Options and Awards Exercise Price per Share Balance at December 31, 2017 2,964,549 $ 11.54 Options and awards granted 991,932 52.05 Options exercised (110,961 ) 7.26 Options and awards canceled (52,156 ) 19.13 Balance at March 31, 2018 3,793,364 22.15 In relation to stock options to purchase common stock that vest upon the achievement of performance criteria, $153,000 and $174,000 in stock-based compensation expense was recorded for the three months ended March 31, 2018 and 2017, respectively. |
Net Loss per Share Attributable
Net Loss per Share Attributable to Common Stockholders | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss per Share Attributable to Common Stockholders | 9. Net Loss per Share Attributable to Common Stockholders The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share amounts): Three Months Ended March 31, 2018 2017 As Revised (Note 2) Numerator: Net loss $ (17,820 ) $ (14,762 ) Net loss attributable to common stockholders, basic and diluted $ (17,820 ) $ (14,762 ) Denominator: Weighted average shares outstanding 35,889,835 31,428,564 Less: weighted average shares subject to repurchase (62,600 ) (339,254 ) Weighted average shares used to compute basic and diluted net loss per share 35,827,235 31,089,310 Net loss per share attributable to common stockholders, basic and diluted $ (0.50 ) $ (0.47 ) The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive: As of March 31, 2018 2017 Common stock subject to repurchase 51,767 298,915 Stock options to purchase common stock 3,793,364 3,183,304 As of March 31, 2018, the Company has contributions from plan participants of $367,000 under the 2015 ESPP, which if converted, would be equivalent to 11,066 shares based on 85% of the stock price at the beginning of the offering period. As of March 31, 2017, the Company had contributions from plan participants of $338,400 under the 2015 Employee Stock Purchase Plan, which if converted, would have been equivalent to 29,381 shares based on 85% of the stock price at the beginning of the offering period. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income taxes On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“Tax Act”) was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. Also on December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. For the three months ended March 31, 2018, the Company noted no additional guidance or information that affects the provisional amounts initially recorded at zero for the transition tax and the remeasurement of the deferred tax assets for the year ended December 31, 2017. As a result, the Company recorded no adjustment to the transition tax and the remeasurement of the deferred tax assets. The Company will continue to monitor and analyze any additional guidance and information that may be issued by the federal and state tax authorities. Any subsequent adjustment to these amounts will be recorded to current tax expense in the 2018 interim period during which the analysis is complete. |
Basis of Presentation and Sig16
Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements are unaudited, include the Company’s accounts and those of its wholly-owned subsidiary and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All significant intercompany balances and transactions have been eliminated in consolidation. See “ Adopted Accounting Pronouncements – Revenue Recognition ” below for a discussion of certain revisions to prior period financial statements made in connection with the Company’s adoption of new revenue recognition guidance. The Company currently operates in one business segment, which is the identification, development and commercialization of therapies for the treatment of serious and neglected rare The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full fiscal year or any interim period and should be read in conjunction with the audited financial statements for the year ended December 31, 2017 and the notes thereto, which are included in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2017. The significant accounting policies used in preparation of these condensed consolidated financial statements for the three months ended March 31, 2018 are consistent with those discussed in Note 2 to the consolidated financial statements in the Company’s 2017 Annual Report on Form 10-K and are updated below as necessary. |
Reclassifications | Reclassifications The cash and cash equivalents on the condensed consolidated statements of cash flows for the three-month period ended March 31, 2017 has been reclassified to include restricted cash to conform to the current period’s presentation. Such reclassifications did not impact the Company’s net loss or financial position. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, other comprehensive gain (loss) and the related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to license and collaboration revenues, accrued clinical trial and manufacturing development expenses and stock-based compensation expense. Significant estimates in these condensed consolidated financial statements include estimates made in connection with accrued research and development expenses, stock-based compensation expense and revenue. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. Significant accounting policies are described in Note 2 to the consolidated financial statements as of and for the year ended December 31, 2017 included in the Annual Report. There have been no changes to the Company’s significant accounting policies during the three months ended March 31, 2018, except as described below. |
Adopted Accounting Pronouncements | Adopted Accounting Pronouncements - Revenue Recognition Effective January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers Licenses of intellectual property : Upon the inception of a Collaboration Agreement, if the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, up-front 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. For licenses that are bundled with other promises, the Company utilizes judgement 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 proportional performance for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of proportional performance each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone payments : At the inception of each arrangement that includes development, regulatory or commercial milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. ASC 606 suggests two alternatives to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. Whichever method is used, it should be consistently applied throughout the life of the contract; however, it is not necessary for the Company to use the same approach for all contracts. The Company expects to use the most likely amount method for development and regulatory milestone payments. 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 transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. The Company recognizes revenue when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability or achievement of each such milestone and any related constraint, and if necessary, adjusts its estimates 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 the 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 its collaboration arrangement. Up-front payments and fees are recorded as deferred revenue upon receipt or when due, and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Impact of Adoption – ASC 606 The Company entered into a license and collaboration agreement that became effective in August 2014, which is within the scope of ASC 606, under which it has licensed certain rights to its HCM-1 (which includes mavacamten), HCM-2 and DCM-1 (which includes MYK-491) programs to Sanofi, and may enter into other such arrangements in the future. The terms of the arrangement include payment to the Company of one or more of the following: non-refundable, up-front license fees, development and regulatory and commercial milestone payments, and royalties on net sales of licensed products. The Company has applied the five-step model of the new standard to the Company’s contract with Sanofi, as it is the only contract that will be impacted by the adoption of the new revenue standards. The Company has implemented the new revenue standards using the full retrospective transition method and has revised its comparative financial statements as if ASC 606 had been effective for those periods. The following tables summarize the financial statement line items that were affected due to the Company’s implementation of ASC 606 : Condensed Consolidated Balance Sheet As of December 31, 2017 As Originally Reported Effect of Change As Revised Deferred revenue - current $ 22,500 $ 11,058 $ 33,558 Accumulated deficit $ (123,797 ) $ (11,058 ) $ (134,855 ) Condensed Consolidated Statement of Operations and Comprehensive Loss Three Months Ended March 31, 2017 As Originally Reported Effect of Change As Revised Collaboration and license revenue $ 5,625 $ (3,215 ) $ 2,410 Operating expenses: Research and development 11,917 — 11,917 General and administrative 5,476 — 5,476 Total operating expenses 17,393 — 17,393 Loss from operations (11,768 ) (3,215 ) (14,983 ) Interest and other income, net 221 — 221 Net loss (11,547 ) (3,215 ) (14,762 ) Other comprehensive loss (55 ) — (55 ) Comprehensive loss (11,602 ) (3,215 ) (14,817 ) Net loss attributable to common stockholders $ (11,547 ) $ (3,215 ) $ (14,762 ) Net loss per share attributable to common stockholders, basic and diluted $ (0.37 ) $ (0.10 ) $ (0.47 ) Weighted average number of shares used to compute net loss per share attributable to common stockholders, basic and diluted 31,089,310 31,089,310 31,089,310 Condensed Consolidated Statement of Cash Flows Three Months Ended March 31, 2017 As Originally Reported Effect of Change As Revised Net loss $ (11,547 ) $ (3,215 ) $ (14,762 ) Adjustments to reconcile net loss to net cash used in operating activities: Deferred revenue $ (5,625 ) $ 3,215 $ (2,410 ) Cash, cash equivalents and restricted cash, beginning of period $ 135,797 $ 259 $ 136,056 Cash, cash equivalents and restricted cash, end of period $ 135,594 $ 259 $ 135,853 The change to net loss and deferred revenue in the condensed consolidated statement of cash flows, as revised above, reflects (i) the Company’s determination that the Sanofi continuation payment of $45.0 million received in January 2017 relates to three performance obligations that were previously accounted for as one combined unit of accounting and (ii) the result of the Company utilizing a cost-based input method to measure proportional performance for each interim period during the year ending December 31, 2017, instead of straight-line. Impact of Adoption – ASU 2016-18 As discussed in “Adopted Accounting Pronouncements – Other” below, the change to cash, cash equivalents and restricted cash in the table above reflects the Company’s implementation of ASU 2016-18 whereby 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. The Company implemented this change using a retrospective transition method. The following table summarizes the cash balances that were affected due to the Company’s implementation of ASU 2016-18 Condensed Consolidated Statement of Cash Flows March 31, 2018 December 31, 2017 March 31, 2017 December 31, 2016 As Revised As Revised As Revised As Revised Cash and cash equivalents $ 183,865 $ 224,571 $ 135,594 $ 135,797 Restricted cash – noncurrent 286 286 259 259 Total cash, cash equivalents and restricted cash $ 184,151 $ 224,857 $ 135,853 $ 136,056 Adopted Accounting Pronouncements – Other In May 2017, the Financial Accounting Standards Board (“ ASU No. 2017-09—Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. The amendments in this ASU provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718 to address diversity in practice. An entity should account for the effects of a modification unless all the three specified conditions are met. The current disclosure requirements in Topic 718 apply regardless of whether an entity is required to apply modification accounting under the amendments in this ASU. The amendments in this ASU are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. The amendments in this ASU should be applied prospectively to an award modified on or after the adoption date. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements In November 2016, the FASB issued ASU No. 2016-18 (Topic 230), Restricted Cash, Statement of Cash Flows ment 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. Therefore, 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 is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The amendments in this ASU should be applied using a retrospective transition method to each period presented. Other than the change in presentation in the accompanying consolidated statements of cash flows, the adoption of this guidance had no effect on the Company’s financial position, results of operations or liquidity. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company, and has irrevocably elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. In February ASU No. 2016-02 (Topic 842), Leases. modifies lease accounting for lessees to increase transparency and comparability by recording lease assets and liabilities for operating leases and disclosing key information about leasing arrangements. The Company will adopt ASU 2016-02 in its first quarter of 2019 utilizing the modified retrospective transition method. While the Company is currently evaluating the timing and impact of adopting ASU 2016-02, currently the Company anticipates recording lease assets and liabilities for its three facilities in South San Francisco and is currently evaluating and estimating the financial statement impact. It is not expected to have a material impact to the Company’s Consolidated Statements of Operations and the Company has not quantified the impact to its Consolidated Balance Sheets. However, the ultimate impact of adopting ASU 2016-02 will depend on the Company’s lease portfolio as of the adoption date In February 2018, the FASB issued ASU No. 2018-05 (Topic 740) Income Taxes, Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 |
Revenue Recognition | Revenue Recognition The Company evaluated the Collaboration Agreement under ASC 606 and determined that it had the following performance obligations: (1) the licenses of intellectual property for each of the HCM-1, HCM-2 and DCM-1 programs, and (2) the performance of research and development services, including regulatory support, for each of the three programs. The Company considered whether the licenses have standalone functionality and are capable of being distinct; however, given the fact that the research and development services are of such a specialized nature that can only be performed by the Company and Sanofi cannot benefit from the intellectual property licenses without the Company’s performance, the Company determined that the intellectual property licenses are not distinct from the research and development services and thus the license and research and development services for each program are combined into three separate performance obligations. |
Contract Term | Contract Term For revenue recognition purposes, the Company determined that the Collaboration Agreement is a period to period contract for which the Company had enforceable rights and obligations from inception through December 31, 2016. Sanofi had the right to terminate the Collaboration Agreement prior to December 31, 2016 or to extend the contract term through December 31, 2018. If Sanofi had elected to terminate the agreement, the termination would have had taken effect on December 31, 2016 and all licensed rights would have reverted to the Company. The Company did not have any obligation to reimburse Sanofi any portion of the payments received if Sanofi had terminated the agreement. In December 2016, Sanofi elected to continue the Collaboration Agreement through an extended term ending December 31, 2018 and made the $45.0 million continuation payment to the Company. The Company determined that the extended term was to be treated as a separate contract because such an extension was not probable at the inception of the contract, the extension represents additional goods and services, and such activities are priced commensurate to the effort required and do not involve any significant discount. It was also concluded that the extended term provides the Company with enforceable rights and obligations for the two-year period ending December 31, 2018. Because Sanofi retains the option in the Collaboration Agreement to extend the arrangement, neither party is committed to perform and the contract does not have enforceable rights and obligations beyond December 31, 2018. |
Transaction Price | Transaction Price The Company’s assessment of the transaction price included an analysis of amounts it expected to be entitled for providing goods or services to the customer which at contract inception consisted of the upfront cash payment, valued at $34.3 million, net of the fair value of $0.7 million allocated to the option provided to Sanofi to acquire equity, and variable consideration of $25.0 million, subject to an IND application. Sanofi paid the Company the $25.0 million milestone upon the Company’s application for the IND. In 2016, after the IND application was made and when the Company determined it was deemed probable that significant reversal in the amount of cumulative revenue recognized will not occur, the Company included this amount in the transaction price. As of December 31, 2016, all performance obligations associated with the initial term were satisfied. The extended term (from January 1, 2017 to December 31, 2018) has a fixed fee of $45.0 million, paid by Sanofi contemporaneously with the notice of continuation of the contract. The Company therefore determined that the transaction price for this extended term is $45.0 million. As previously noted above, the Collaboration Agreement also includes up to $45.0 million in funding from Sanofi of approved in-kind research and clinical activities. Sanofi is the decision maker on how to provide these services and such services are used in the development of joint program technology which is co-owned by both parties. As such the Company concluded that these in-kind contributions do not constitute consideration paid by Sanofi to the Company. Any consideration related to sales-based royalties will be recognized when the related sales occur and therefore have also been excluded from the transaction price. |
Methodology for Recognition | Methodology for Recognition Since the Company has determined that the three performance obligations are satisfied over time, the Company has selected a single revenue recognition method that it believes most faithfully depicts the Company’s performance in transferring control of the services. ASC 606 allows entities to choose between two methods to measure progress toward complete satisfaction of a performance obligation: 1. Output methods - recognize revenue on the basis of direct measurements of the value to the customer of the goods or services transferred to date relative to the remaining goods or services promised under the contract (e.g. surveys of performance completed to date, appraisals of results achieved, milestones reached, time elapsed, and units produced or units delivered); or 2. Input methods - recognize revenue on the basis of the entity’s efforts or inputs to the satisfaction of a performance obligation (e.g., resources consumed, labor hours expended, costs incurred, or time elapsed) relative to the total expected inputs to the satisfaction of that performance obligation. The Company concluded that it will utilize a cost-based input method to measure proportional performance and to calculate the corresponding amount of revenue to recognize. The Company believes this is the best measure of progress because other measures do not reflect how the Company executes its performance obligations under the contract with Sanofi. In applying the cost-based input methods of revenue recognition, the Company uses actual costs incurred relative to budgeted costs to fulfill the combined performance obligations. Revenue will be recognized based on actual costs incurred as a percentage of total actual and budgeted costs as the Company completes its performance obligations, which will be fulfilled by December 31, 2018. A cost-based input method of revenue recognition requires management to make estimates of costs to complete the Company’s performance obligations. In making such estimates, significant judgment is required to evaluate assumptions related to cost estimates. The cumulative effect of revisions to estimated costs to complete the Company’s performance obligations will be recorded in the period in which changes are identified and amounts can be reasonably estimated. A significant change in these assumptions and estimates could have a material impact on the timing and amount of revenue recognized in future periods. For the three months ended March 31, 2017 and 2018, the Company recognized $2.4 million and $5.3 million of license and collaboration revenue, respectively. The following table presents changes in the Company’s contract assets and liabilities, which excludes research and development reimbursements under the mavacamten registration program plan, for the three months ended March 31, 2017 and 2018 (in thousands): Three Months Ended March 31, 2018 Balance at Beginning of Period Additions Deductions Balance at End of Period Contract liabilities: Deferred revenue $ 33,558 $ — $ (5,331 ) $ 28,227 Three Months Ended March 31, 2017 Balance at Beginning of Period Additions Deductions Balance at End of Period Contract assets: Receivable from collaboration partner $ 45,000 $ — $ (45,000 ) $ — Contract liabilities: Deferred revenue $ 45,000 $ — $ (2,410 ) $ 42,590 Deferred revenue of $28.2 million as of March 31, 2018 consists of the $45.0 million continuation payment received in January 2017, less $16.8 million recognized during the five quarters ending March 31, 2018. The $28.2 million in deferred revenue will be recognized through December 31, 2018 as the performance obligations are satisfied. |
Registration Program Plan Cost Sharing | Registration Program Plan Cost Sharing In addition to amounts due to the Company under the Collaboration Agreement, Sanofi is conditionally responsible for sharing one half of the registration program plan (“RPP”) costs after the clinical proof of concept is established for each of the HCM-1, HCM-2 and DCM-1 programs. Effective October 2017, Sanofi is sharing RPP costs for the mavacamten program during the remainder of the contract term. Registration program costs are subject to review and approval by the Company and Sanofi and include amounts incurred relating to clinical trials, development and manufacturing of, and obtaining regulatory approvals for mavacamten and include direct employee costs and direct out-of-pocket costs incurred, by or on behalf of a party, that are specifically identifiable or reasonably and directly allocable to those activities. Estimated reimbursements are invoiced to Sanofi before each interim period based on budgeted amounts. These estimates consist of one half of the Company’s mavacamten development budget in excess of Sanofi’s mavacamten development budget each interim period. After each period end, a review of the actual expenses occurs and adjustments to future invoices are applied as a result of an analysis of the budgeted versus incurred expenses. Actual amounts received from Sanofi for the applicable period are recorded by the Company to reduce its research and development expenses each interim period. The Company recorded a $1.0 million and $0 receivable for reimbursable RPP expenses, as of December 31, 2017 and March 31, 2018, respectively, which is recorded as receivable from collaboration partner and included in current assets in the condensed consolidated balance sheets. The Company received $4.4 million and $6.1 million as prepayments from collaboration partner as of December 31, 2017 and March 31, 2018, respectively, which is included in current liabilities in the condensed consolidated balance sheets. The Company recorded $0 and $2.8 million as reductions to research and development expenses for the three months ending March 31, 2017 and 2018, respectively. The following table presents the RPP related receivables and prepayments (in thousands): Balance at December 31, 2017 Payments Received from Sanofi under RPP Actual Incurred During the Quarter Balance at March 31, 2018 Receivable from collaboration partner $ 1,013 $ 1,013 $ — $ — Prepayment from collaboration partner $ 4,432 $ 6,090 $ (2,821 ) $ 7,701 |
Fair Value Measurements | 4. Fair Value Measurements Financial assets and liabilities are recorded at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2—Inputs other than quoted market prices included in Level 1 are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level 3—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. |
Contingencies | Contingencies From time to time, the Company may have contingent liabilities that arise in the ordinary course of business activities. The Company accrues for such a liability when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. |
Guarantees and Indemnifications | Guarantees and Indemnifications Pursuant to certain of these arrangements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third-party with respect to the Company’s technology. The Company indemnifies its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at the Company’s request in such capacity, as permitted under Delaware law and in accordance with its certificate of incorporation and bylaws, and agreements providing for indemnification entered into with its officers and directors. |
Income Taxes | Also on December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. For the three months ended March 31, 2018, the Company noted no additional guidance or information that affects the provisional amounts initially recorded at zero for the transition tax and the remeasurement of the deferred tax assets for the year ended December 31, 2017. |
Basis of Presentation and Sig17
Basis of Presentation and Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |
Summary of Cash Balance Affected due to Implementation of ASU 2016-18 | The following table summarizes the cash balances that were affected due to the Company’s implementation of ASU 2016-18 Condensed Consolidated Statement of Cash Flows March 31, 2018 December 31, 2017 March 31, 2017 December 31, 2016 As Revised As Revised As Revised As Revised Cash and cash equivalents $ 183,865 $ 224,571 $ 135,594 $ 135,797 Restricted cash – noncurrent 286 286 259 259 Total cash, cash equivalents and restricted cash $ 184,151 $ 224,857 $ 135,853 $ 136,056 |
Accounting Standards Update 2014-09 | |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |
Summary of Financial Statement Line Items Affected due to Implementation of Topic 606 | The following tables summarize the financial statement line items that were affected due to the Company’s implementation of ASC 606 : Condensed Consolidated Balance Sheet As of December 31, 2017 As Originally Reported Effect of Change As Revised Deferred revenue - current $ 22,500 $ 11,058 $ 33,558 Accumulated deficit $ (123,797 ) $ (11,058 ) $ (134,855 ) Condensed Consolidated Statement of Operations and Comprehensive Loss Three Months Ended March 31, 2017 As Originally Reported Effect of Change As Revised Collaboration and license revenue $ 5,625 $ (3,215 ) $ 2,410 Operating expenses: Research and development 11,917 — 11,917 General and administrative 5,476 — 5,476 Total operating expenses 17,393 — 17,393 Loss from operations (11,768 ) (3,215 ) (14,983 ) Interest and other income, net 221 — 221 Net loss (11,547 ) (3,215 ) (14,762 ) Other comprehensive loss (55 ) — (55 ) Comprehensive loss (11,602 ) (3,215 ) (14,817 ) Net loss attributable to common stockholders $ (11,547 ) $ (3,215 ) $ (14,762 ) Net loss per share attributable to common stockholders, basic and diluted $ (0.37 ) $ (0.10 ) $ (0.47 ) Weighted average number of shares used to compute net loss per share attributable to common stockholders, basic and diluted 31,089,310 31,089,310 31,089,310 Condensed Consolidated Statement of Cash Flows Three Months Ended March 31, 2017 As Originally Reported Effect of Change As Revised Net loss $ (11,547 ) $ (3,215 ) $ (14,762 ) Adjustments to reconcile net loss to net cash used in operating activities: Deferred revenue $ (5,625 ) $ 3,215 $ (2,410 ) Cash, cash equivalents and restricted cash, beginning of period $ 135,797 $ 259 $ 136,056 Cash, cash equivalents and restricted cash, end of period $ 135,594 $ 259 $ 135,853 |
Collaboration and License Agr18
Collaboration and License Agreement (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Collaboration And License Agreement Disclosure [Abstract] | |
Changes in Contract Assets and Liabilities | The following table presents changes in the Company’s contract assets and liabilities, which excludes research and development reimbursements under the mavacamten registration program plan, for the three months ended March 31, 2017 and 2018 (in thousands): Three Months Ended March 31, 2018 Balance at Beginning of Period Additions Deductions Balance at End of Period Contract liabilities: Deferred revenue $ 33,558 $ — $ (5,331 ) $ 28,227 Three Months Ended March 31, 2017 Balance at Beginning of Period Additions Deductions Balance at End of Period Contract assets: Receivable from collaboration partner $ 45,000 $ — $ (45,000 ) $ — Contract liabilities: Deferred revenue $ 45,000 $ — $ (2,410 ) $ 42,590 |
Schedule of Receivables and Prepayments From Collaboration Partner | The following table presents the RPP related receivables and prepayments (in thousands): Balance at December 31, 2017 Payments Received from Sanofi under RPP Actual Incurred During the Quarter Balance at March 31, 2018 Receivable from collaboration partner $ 1,013 $ 1,013 $ — $ — Prepayment from collaboration partner $ 4,432 $ 6,090 $ (2,821 ) $ 7,701 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value Assets and Liabilities Measured on Recurring Basis | The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands): Fair Value Measurements at March 31, 2018 Total Level 1 Level 2 Level 3 Assets Money market funds $ 183,714 $ 183,714 $ — $ — U.S. government agency obligations 23,875 — 23,875 — Corporate securities 51,568 — 51,568 — Total $ 259,157 $ 183,714 $ 75,443 $ — Fair Value Measurements at December 31, 2017 Total Level 1 Level 2 Level 3 Assets Money market funds $ 223,568 $ 223,568 $ — $ — U.S. government agency obligations 27,878 — 27,878 — Corporate securities 23,955 — 23,955 — Total $ 275,401 $ 223,568 $ 51,833 $ — |
Summary of Fair Value Measurement of Available-for-sale Securities | The following table is a summary of amortized cost, unrealized gain and loss, and fair value of the Company’s marketable securities by contractual maturities (in thousands): Fair Value Measurements at March 31, 2018 Amortized Cost Unrealized Gain Unrealized Loss Fair Value Cash equivalents (due within 90 days) $ 183,714 $ — $ — $ 183,714 Short-term investments (due within one year) 39,998 — (176 ) $ 39,822 Long-term investments (due between one and two years) 35,769 — (148 ) $ 35,621 Total $ 259,481 $ — $ (324 ) $ 259,157 Fair Amortized Cost Unrealized Gain Unrealized Loss Fair Value Cash equivalents (due within 90 days) $ 223,568 $ — $ — $ 223,568 Short-term investments (due within one year) 32,010 — (77 ) 31,933 Long-term investments (due between one and two years) 20,010 — (110 ) 19,900 Total $ 275,588 $ — $ (187 ) $ 275,401 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Summary of Property and Equipment | Property and equipment consist of the following (in thousands): March 31, 2018 December 31, 2017 Scientific equipment $ 7,102 $ 5,935 Furniture and equipment 1,071 1,064 Capitalized software 278 278 Leasehold improvements 340 331 Total 8,791 7,608 Less: Accumulated depreciation (4,761 ) (4,461 ) Property and equipment, net $ 4,030 $ 3,147 |
Summary of Accrued Liabilities | Accrued liabilities consist of the following (in thousands): March 31, 2018 December 31, 2017 Clinical research and development $ 6,967 $ 5,981 Payroll related liabilities 2,817 4,412 Other 844 1,246 Total accrued liabilities $ 10,628 $ 11,639 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of Common Stock Reserved for Issuance | The Company has reserved shares of common stock for issuance as follows: March 31, 2018 December 31, 2017 Options and awards issued and outstanding 3,793,364 2,964,549 Shares available for issuance under 2015 Stock Option and Incentive Plan 1,357,043 863,538 Shares available for issuance under 2015 Employee Stock Purchase Plan 807,571 449,444 Total 5,957,978 4,277,531 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Stock-Based Compensation Expense Related to Options Granted to Employees and Consultants | The following table sets forth stock-based compensation expense related to options granted to employees and consultants for all periods presented (in thousands): Three March 31, 2018 2017 Research and development $ 1,591 $ 590 General and administrative 2,040 815 Total $ 3,631 $ 1,405 |
Summary of Stock Option and Other Equity Award Activity Under Plans | The following summarizes option and other equity award activity under the 2012 Equity Incentive Plan and 2015 Stock Option and Incentive Plan: Shares Subject to Weighted Average Outstanding Options and Awards Exercise Price per Share Balance at December 31, 2017 2,964,549 $ 11.54 Options and awards granted 991,932 52.05 Options exercised (110,961 ) 7.26 Options and awards canceled (52,156 ) 19.13 Balance at March 31, 2018 3,793,364 22.15 |
Net Loss per Share Attributab23
Net Loss per Share Attributable to Common Stockholders (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Loss per Share | The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share amounts): Three Months Ended March 31, 2018 2017 As Revised (Note 2) Numerator: Net loss $ (17,820 ) $ (14,762 ) Net loss attributable to common stockholders, basic and diluted $ (17,820 ) $ (14,762 ) Denominator: Weighted average shares outstanding 35,889,835 31,428,564 Less: weighted average shares subject to repurchase (62,600 ) (339,254 ) Weighted average shares used to compute basic and diluted net loss per share 35,827,235 31,089,310 Net loss per share attributable to common stockholders, basic and diluted $ (0.50 ) $ (0.47 ) |
Summary of Potentially Dilutive Securities Excluded from Computation of Diluted Net Loss per Share | The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive: As of March 31, 2018 2017 Common stock subject to repurchase 51,767 298,915 Stock options to purchase common stock 3,793,364 3,183,304 |
Organization - Additional Infor
Organization - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Date of incorporation | Jun. 8, 2012 | |
Accumulated deficit | $ 152,675 | $ 134,855 |
Cash, cash equivalents and short and long-term investments | $ 259,300 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) $ in Millions | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Mar. 31, 2018SegmentPerformanceObligation | |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Number of reportable and operating segment | Segment | 1 | ||
Sanofi (Aventis Inc.) | Collaborative Agreement | |||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Continuation payment, amount received | $ | $ 45 | $ 45 | |
Number of performance obligations | PerformanceObligation | 3 |
Basis of Presentation and Sum26
Basis of Presentation and Summary of Significant Accounting Policies - Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||
Deferred revenue - current | $ 28,227 | $ 33,558 |
Accumulated deficit | $ (152,675) | (134,855) |
As Originally Reported | Accounting Standards Update 2014-09 | ||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||
Deferred revenue - current | 22,500 | |
Accumulated deficit | (123,797) | |
Effect of Change | Accounting Standards Update 2014-09 | ||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||
Deferred revenue - current | 11,058 | |
Accumulated deficit | $ (11,058) |
Basis of Presentation and Sum27
Basis of Presentation and Summary of Significant Accounting Policies - Condensed Consolidated Statement of Operations and Comprehensive Loss (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||
Collaboration and license revenue | $ 5,331 | $ 2,410 |
Operating expenses: | ||
Research and development | 16,618 | 11,917 |
General and administrative | 7,313 | 5,476 |
Total operating expenses | 23,931 | 17,393 |
Loss from operations | (18,600) | (14,983) |
Interest and other income, net | 780 | 221 |
Net loss | (17,820) | (14,762) |
Other comprehensive loss | (137) | (55) |
Comprehensive loss | (17,957) | (14,817) |
Net loss attributable to common stockholders | $ (17,820) | $ (14,762) |
Net loss per share attributable to common stockholders, basic and diluted | $ (0.50) | $ (0.47) |
Weighted average number of shares used to compute net loss per share attributable to common stockholders, basic and diluted | 35,827,235 | 31,089,310 |
As Originally Reported | Accounting Standards Update 2014-09 | ||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||
Collaboration and license revenue | $ 5,625 | |
Operating expenses: | ||
Research and development | 11,917 | |
General and administrative | 5,476 | |
Total operating expenses | 17,393 | |
Loss from operations | (11,768) | |
Interest and other income, net | 221 | |
Net loss | (11,547) | |
Other comprehensive loss | (55) | |
Comprehensive loss | (11,602) | |
Net loss attributable to common stockholders | $ (11,547) | |
Net loss per share attributable to common stockholders, basic and diluted | $ (0.37) | |
Weighted average number of shares used to compute net loss per share attributable to common stockholders, basic and diluted | 31,089,310 | |
Effect of Change | Accounting Standards Update 2014-09 | ||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||
Collaboration and license revenue | $ (3,215) | |
Operating expenses: | ||
Loss from operations | (3,215) | |
Net loss | (3,215) | |
Comprehensive loss | (3,215) | |
Net loss attributable to common stockholders | $ (3,215) | |
Net loss per share attributable to common stockholders, basic and diluted | $ (0.10) | |
Weighted average number of shares used to compute net loss per share attributable to common stockholders, basic and diluted | 31,089,310 |
Basis of Presentation and Sum28
Basis of Presentation and Summary of Significant Accounting Policies - Condensed Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net loss | $ (17,820) | $ (14,762) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Deferred revenue | (5,331) | (2,410) |
Cash, cash equivalents and restricted cash, beginning of period | 224,857 | 136,056 |
Cash, cash equivalents and restricted cash, end of period | $ 184,151 | 135,853 |
As Originally Reported | Accounting Standards Update 2014-09 | ||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net loss | (11,547) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Deferred revenue | (5,625) | |
Cash, cash equivalents and restricted cash, beginning of period | 135,797 | |
Cash, cash equivalents and restricted cash, end of period | 135,594 | |
Effect of Change | Accounting Standards Update 2014-09 | ||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net loss | (3,215) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Deferred revenue | 3,215 | |
Cash, cash equivalents and restricted cash, beginning of period | 259 | |
Cash, cash equivalents and restricted cash, end of period | $ 259 |
Basis of Presentation and Sum29
Basis of Presentation and Summary of Significant Accounting Policies - Summary of Cash Balance Affected due to Implementation of ASU 2016-18 (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 183,865 | $ 224,571 | $ 135,594 | $ 135,797 |
Restricted cash – noncurrent | 286 | 286 | 259 | 259 |
Total cash, cash equivalents and restricted cash | $ 184,151 | $ 224,857 | $ 135,853 | $ 136,056 |
Collaboration and License Agr30
Collaboration and License Agreement - Additional Information (Details) - USD ($) $ in Thousands | Aug. 31, 2014 | Jan. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Mar. 31, 2018 | Dec. 31, 2018 | Mar. 31, 2018 |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||
Collaboration and license revenue | $ 5,331 | $ 2,410 | ||||||||
Deferred revenue | $ 45,000 | 28,227 | 42,590 | $ 45,000 | $ 33,558 | $ 28,227 | $ 28,227 | |||
Short-term receivable from collaboration partner | 45,000 | 45,000 | 1,013 | |||||||
Collaborative Agreement | Sanofi (Aventis Inc.) | ||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||
Upfront cash received under collaboration agreement | $ 35,000 | |||||||||
Up-front equity investment | 10,000 | |||||||||
Additional equity investments received | 14,000 | |||||||||
Eligible to receive one-time, non-refundable contingent payment | 25,000 | |||||||||
Project non-refundable continuation payment | 45,000 | |||||||||
Milestone payment received | 25,000 | $ 25,000 | ||||||||
Continuation payment, amount received | $ 45,000 | $ 45,000 | ||||||||
Upfront cash payment | 34,300 | |||||||||
Net fair value allocated to equity | 700 | |||||||||
Variable consideration | 25,000 | |||||||||
Collaboration and license revenue | 5,300 | 2,400 | ||||||||
Deferred revenue | 28,200 | 28,200 | 28,200 | |||||||
Deferred revenue recognized | 16,800 | |||||||||
Short-term receivable from collaboration partner | 0 | 1,013 | $ 0 | $ 0 | ||||||
Prepayment from collaboration partner | 6,090 | $ 4,400 | ||||||||
Reduction in research and development expenses due to RPP reimbursements | $ 2,800 | $ 0 | ||||||||
Collaborative Agreement | Sanofi (Aventis Inc.) | Forecast | ||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||
Fixed fee | $ 45,000 | |||||||||
Transaction price for extended term | $ 45,000 | |||||||||
Collaborative Agreement | Maximum | Sanofi (Aventis Inc.) | ||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||
Funding from approved in-kind research and clinical activities | 45,000 | |||||||||
Additional research and development funding for collaboration | $ 15,000 |
Collaboration and License Agr31
Collaboration and License Agreement - Changes in Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Contract liabilities: | ||
Deferred revenue, Balance at Beginning of Period | $ 33,558 | $ 45,000 |
Deferred revenue, Deductions | (5,331) | (2,410) |
Deferred revenue, Balance at End of Period | 28,227 | 42,590 |
Contract assets: | ||
Receivable from collaboration partner, Balance at Beginning of Period | $ 1,013 | 45,000 |
Receivable from collaboration partner, Deductions | $ (45,000) |
Collaboration and License Agr32
Collaboration and License Agreement - Schedule of Receivables and Prepayments From Collaboration Partner (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||
Receivable from collaboration partner, Balance at Beginning of Period | $ 1,013 | $ 45,000 | $ 45,000 |
Payments Received | 1,013 | $ 45,000 | |
Receivable from collaboration partner, Balance at End of Period | 1,013 | ||
Balance at December 31, 2017 | 4,432 | ||
Balance at March 31, 2018 | 7,701 | 4,432 | |
Collaborative Agreement | Sanofi (Aventis Inc.) | |||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||
Receivable from collaboration partner, Balance at Beginning of Period | 1,013 | ||
Payments Received | 1,013 | ||
Receivable from collaboration partner, Balance at End of Period | 0 | 1,013 | |
Balance at December 31, 2017 | 4,432 | ||
Payments Received | 6,090 | 4,400 | |
Actual Expenses Incurred During the Quarter | (2,821) | ||
Balance at March 31, 2018 | $ 7,701 | $ 4,432 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Fair Value Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Assets fair value | $ 259,157 | $ 275,401 |
Money market funds | ||
Assets | ||
Assets fair value | 183,714 | 223,568 |
Fair Value Measurements on Recurring Basis | Level 1 | ||
Assets | ||
Assets fair value | 183,714 | 223,568 |
Fair Value Measurements on Recurring Basis | Level 1 | Money market funds | ||
Assets | ||
Assets fair value | 183,714 | 223,568 |
Fair Value Measurements on Recurring Basis | Level 2 | ||
Assets | ||
Assets fair value | 75,443 | 51,833 |
U.S. government agency obligations | ||
Assets | ||
Assets fair value | 23,875 | 27,878 |
U.S. government agency obligations | Fair Value Measurements on Recurring Basis | Level 2 | ||
Assets | ||
Assets fair value | 23,875 | 27,878 |
Corporate securities | ||
Assets | ||
Assets fair value | 51,568 | 23,955 |
Corporate securities | Fair Value Measurements on Recurring Basis | Level 2 | ||
Assets | ||
Assets fair value | $ 51,568 | $ 23,955 |
Fair Value Measurements - Sum34
Fair Value Measurements - Summary of Fair Value Measurement of Available-for-sale Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 259,481 | $ 275,588 |
Unrealized Loss | (324) | (187) |
Fair Value | 259,157 | 275,401 |
Cash equivalents (due within 90 days) | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 183,714 | 223,568 |
Fair Value | 183,714 | 223,568 |
Short-term investments (due within one year) | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 39,998 | 32,010 |
Unrealized Loss | (176) | (77) |
Fair Value | 39,822 | 31,933 |
Long-term investments (due between one and two years) | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 35,769 | 20,010 |
Unrealized Loss | (148) | (110) |
Fair Value | $ 35,621 | $ 19,900 |
Balance Sheet Components - Summ
Balance Sheet Components - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Property Plant And Equipment [Line Items] | ||
Property and equipment | $ 8,791 | $ 7,608 |
Less: Accumulated depreciation | (4,761) | (4,461) |
Property and equipment, net | 4,030 | 3,147 |
Scientific Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 7,102 | 5,935 |
Furniture and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 1,071 | 1,064 |
Capitalized Software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 278 | 278 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | $ 340 | $ 331 |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Balance Sheet Related Disclosures [Abstract] | ||
Depreciation expense | $ 300 | $ 316 |
Balance Sheet Components - Su37
Balance Sheet Components - Summary of Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||
Clinical research and development | $ 6,967 | $ 5,981 |
Payroll related liabilities | 2,817 | 4,412 |
Other | 844 | 1,246 |
Total accrued liabilities | $ 10,628 | $ 11,639 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | Jan. 02, 2018USD ($)ft² | Oct. 01, 2017USD ($)ft² | Sep. 15, 2014USD ($)ft² | Jun. 29, 2012USD ($)ft² | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) |
Commitments And Contingencies Disclosure [Line Items] | |||||||
Purchase commitment cancellation notice period | 30 days | ||||||
Deposits for letter of credit | $ 300,000 | ||||||
Rent expense net | 400,000 | $ 300,000 | |||||
Contingent liability for accrual | 0 | $ 0 | |||||
Facility Leases | |||||||
Commitments And Contingencies Disclosure [Line Items] | |||||||
Lease period | 5 years | 66 months | |||||
Area of leased property | ft² | 34,400 | 12,000 | |||||
Annual lease payments | $ 500,000 | ||||||
Sublease income | 100,000 | 100,000 | |||||
Sublease expense | $ 100,000 | $ 100,000 | |||||
Additional period of extension in lease contract | 3 years | ||||||
Initial annual lease payments | $ 1,300,000 | ||||||
Increase in lease payments at final year of agreement | $ 1,600,000 | ||||||
Lease commencement period | 2015-01 | ||||||
Lease abatement period | 3 months | ||||||
Sublease Agreement | |||||||
Commitments And Contingencies Disclosure [Line Items] | |||||||
Lease period | 25 months | ||||||
Area of leased property | ft² | 6,000 | 8,000 | |||||
Annual lease payments | $ 400,000 | $ 300,000 | |||||
Lease commencement period | Oct. 1, 2017 | ||||||
Lease expiration date | Oct. 31, 2019 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Common Stock Reserved for Issuance (Details) - shares | Mar. 31, 2018 | Dec. 31, 2017 |
Class Of Stock [Line Items] | ||
Shares reserved for future issuance, shares | 5,957,978 | 4,277,531 |
Options and Awards Issued and Outstanding | ||
Class Of Stock [Line Items] | ||
Shares reserved for future issuance, shares | 3,793,364 | 2,964,549 |
2015 Stock Option and Incentive Plan | ||
Class Of Stock [Line Items] | ||
Shares reserved for future issuance, shares | 1,357,043 | 863,538 |
2015 Employee Stock Purchase Plan | ||
Class Of Stock [Line Items] | ||
Shares reserved for future issuance, shares | 807,571 | 449,444 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense Related to Options Granted to Employees and Consultants (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 3,631 | $ 1,405 |
Research and development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 1,591 | 590 |
General and administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 2,040 | $ 815 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option and Other Equity Award Activity Under Plans (Details) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Shares Subject to Outstanding Options and Awards, Beginning Balance | shares | 2,964,549 |
Shares Subject to Outstanding Options and Awards, granted | shares | 991,932 |
Shares Subject to Outstanding Options and Awards, exercised | shares | (110,961) |
Shares Subject to Outstanding Options and Awards, canceled | shares | (52,156) |
Shares Subject to Outstanding Options and Awards, Ending Balance | shares | 3,793,364 |
Weighted Average Exercise Price per Share, Beginning Balance | $ / shares | $ 11.54 |
Weighted Average Exercise Price per Share, granted | $ / shares | 52.05 |
Weighted Average Exercise Price per Share, exercised | $ / shares | 7.26 |
Weighted Average Exercise Price per Share, canceled | $ / shares | 19.13 |
Weighted Average Exercise Price per Share, Ending Balance | $ / shares | $ 22.15 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) | Mar. 31, 2018 | Mar. 31, 2017 |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Unrecognized share based compensation expense | $ 153,000 | $ 174,000 |
Net Loss per Share Attributab43
Net Loss per Share Attributable to Common Stockholders - Computation of Basic and Diluted Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator: | ||
Net loss | $ (17,820) | $ (14,762) |
Net loss attributable to common stockholders, basic and diluted | $ (17,820) | $ (14,762) |
Denominator: | ||
Weighted average shares outstanding | 35,889,835 | 31,428,564 |
Less: weighted average shares subject to repurchase | (62,600) | (339,254) |
Weighted average shares used to compute basic and diluted net loss per share | 35,827,235 | 31,089,310 |
Net loss per share attributable to common stockholders, basic and diluted | $ (0.50) | $ (0.47) |
Net Loss per Share Attributab44
Net Loss per Share Attributable to Common Stockholders - Summary of Potentially Dilutive Securities Excluded from Computation of Diluted Net Loss per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Common stock subject to repurchase | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from earnings per share | 51,767 | 298,915 |
Stock options to purchase common stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from earnings per share | 3,793,364 | 3,183,304 |
Net Loss per Share Attributab45
Net Loss per Share Attributable to Common Stockholders - Additional Information (Details) - 2015 ESPP - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Line Items] | ||
ESPP contributions from plan participants | $ 367,000 | $ 338,400 |
Contributions converted shares under benefit plan | 11,066 | 29,381 |
Percentage of stock price at the beginning of offering period | 85.00% | 85.00% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory income tax rate | 21.00% | 35.00% |