Loxo Oncology (LOXO) 10-Q 8 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Jul. 31, 2017
Document and Entity Information
Entity Registrant Name	Loxo Oncology, Inc.
Entity Central Index Key	1,581,720
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		29,852,695
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 260,267	$ 30,376
Short-term investments	207,318	108,935
Other prepaid expenses and current assets	3,831	2,483
Total current assets	471,416	141,794
Long term investments		2,499
Property and equipment, net	364	248
Other assets	657	771
Total assets	472,437	145,312
Current liabilities:
Accounts payable	2,175	1,061
Accrued expenses and other current liabilities	9,008	14,083
Total liabilities	11,183	15,144
Commitments and contingencies
Stockholders' equity:
Common stock, $0.0001 par value; 125,000,000 shares authorized; 29,839,268 and 21,681,236 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively	3	2
Additional paid-in capital	655,581	269,423
Accumulated deficit	(194,165)	(139,236)
Accumulated other comprehensive loss	(165)	(21)
Total stockholders' equity	461,254	130,168
Total liabilities and stockholders' equity	$ 472,437	$ 145,312

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2017	Dec. 31, 2016
Condensed Consolidated Balance Sheets
Common stock, Par Value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	125,000,000	125,000,000
Common stock, shares issued	29,839,268	21,681,236
Common stock, shares outstanding	29,839,268	21,681,236

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Operating expenses:
Research and development	$ 24,398	$ 12,331	$ 44,567	$ 20,687
General and administrative	6,515	3,786	11,288	7,180
Total operating expenses and loss from operations	(30,913)	(16,117)	(55,855)	(27,867)
Interest income, net	512	201	926	354
Net loss	$ (30,401)	$ (15,916)	$ (54,929)	$ (27,513)
Per share information:
Net loss per share of common stock, basic and diluted (in dollars per share)	$ (1.14)	$ (0.77)	$ (2.10)	$ (1.36)
Weighted average shares outstanding, basic and diluted (in shares)	26,586,610	20,587,848	26,129,869	20,177,162

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Condensed Consolidated Statements of Comprehensive Loss
Net loss	$ (30,401)	$ (15,916)	$ (54,929)	$ (27,513)
Other comprehensive income (loss):
Unrealized gain (loss) on available for sale securities		53	(144)	110
Comprehensive loss	$ (30,401)	$ (15,863)	$ (55,073)	$ (27,403)

Condensed Consolidated Stateme6

Condensed Consolidated Statement of Stockholders' Equity - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands	Common stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss	Total
Balance at Dec. 31, 2016	$ 2	$ 269,423	$ (139,236)	$ (21)	$ 130,168
Balance (in shares) at Dec. 31, 2016	21,681,236
Changes in Stockholders' Equity
Stock-based compensation expense		9,410			9,410
Stock options exercises		1,472			1,472
Stock option exercises (in shares)	85,032
Issuance of common stock, net of offering costs	$ 1	375,276			375,277
Issuance of common stock, net of offering costs (in shares)	8,073,000
Other comprehensive loss				(144)	(144)
Net loss			(54,929)		(54,929)
Balance at Jun. 30, 2017	$ 3	$ 655,581	$ (194,165)	$ (165)	$ 461,254
Balance (in shares) at Jun. 30, 2017	29,839,268

Condensed Consolidated Stateme7

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Operating activities:
Net loss	$ (54,929)	$ (27,513)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of premium and discounts on investments	122	246
Depreciation of property and equipment	48	28
Stock-based compensation	9,410	2,629
Changes in operating assets and liabilities:
Prepaid expenses and other assets	(1,234)	285
Accounts payable	1,114	408
Accrued expenses and other current liabilities	(5,075)	2,535
Net cash used in operating activities	(50,544)	(21,382)
Investing activities:
Purchases of available-for-sale securities	(168,708)	(102,672)
Proceeds from maturing available-for-sale securities	72,558	69,420
Purchase of property and equipment	(164)	(231)
Net cash used in investing activities	(96,314)	(33,483)
Financing activities:
Proceeds from issuance of common stock, net	375,277	38,733
Proceeds from the exercise of stock options	1,472	861
Net cash provided by financing activities	376,749	39,594
Net increase (decrease) in cash and cash equivalents	229,891	(15,271)
Cash and cash equivalents-beginning of period	30,376	68,177
Cash and cash equivalents-end of period	$ 260,267	$ 52,906

Organization and Description of

Organization and Description of the Business	6 Months Ended
	Jun. 30, 2017
Organization and Description of the Business
Organization and Description of the Business	1. Organization and Description of the Business Loxo Oncology, Inc. (the “Company”) was incorporated on May 9, 2013 in the State of Delaware. The Company is a biopharmaceutical company innovating the development of highly selective medicines for patients with genetically defined cancers. Its pipeline focuses on cancers that are uniquely dependent on single gene abnormalities, such that a single drug has the potential to treat the cancer with dramatic effect. The Company operates in one segment and has its principal office in Stamford, Connecticut. Liquidity At June 30, 2017, the Company had working capital of $460.2 million, an accumulated deficit of $194.2 million and cash, cash equivalents and investments of $467.6 million. The Company has not generated any product revenues and has not achieved profitable operations. There is no assurance that profitable operations will ever be achieved, and, if achieved, could be sustained on a continuing basis. In addition, development activities, clinical and preclinical testing, and commercialization of the Company’s products will require significant additional financing. The Company believes that its existing cash, cash equivalents and investments, will be sufficient to enable the Company to continue as a going concern through at least August 8, 2018. However, the Company will need to secure additional funding in the future, from one or more equity or debt financings, collaborations, or other sources, in order to carry out all of its planned research and development activities. If the Company is unable to obtain additional financing or generate license or product revenue, the lack of liquidity could have a material adverse effect on the Company’s future prospects.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2017
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the results of operations of the Company and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). Unaudited Interim Financial Information The accompanying balance sheet as of December 31, 2016, was derived from the Company’s audited financial statements included in Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 7, 2017. It is suggested that the interim unaudited condensed consolidated financial statements be read in conjunction with the annual financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K. The accompanying balance sheet as of June 30, 2017, the statements of operations for the three and six months ended June 30, 2017 and 2016, the statements of comprehensive loss for the three and six months ended June 30, 2017 and 2016, the statements of stockholders’ equity for the period from January 1, 2017 to June 30, 2017 and the statements of cash flows for the six months ended June 30, 2017 and 2016 are unaudited. The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of June 30, 2017, the results of its operations for the three and six months ended June 30, 2017 and 2016 and its cash flows for the six months ended June 30, 2017 and 2016. The interim unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. Significant Accounting Policies The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended December 31, 2016 included in the Company’s Form 10-K filed with the SEC on March 7, 2017. Since the date of such financial statements, there have been no changes to the Company’s significant accounting policies, except as it relates to principles of consolidation and the impact of the adoption of ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”) and ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”), as described below. Principles of Consolidation The consolidated financial statements include the accounts of Loxo Oncology, Inc. and its wholly owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation. Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, which provides for simplification of certain aspects of employee share-based payment accounting including income taxes, classification of awards as either equity or liabilities, accounting for forfeitures and classification on the statement of cash flows. ASU 2016-09 was effective for the Company in the first quarter of 2017. The standard requires the recognition of any pre-adoption date net operating loss (“NOL”) carryforwards from share-based compensation arrangements to be recognized on a modified retrospective basis, through an opening retained earnings adjustment on January 1, 2017. Any income tax effects from share-based compensation arrangements arising after January 1, 2017 will be recognized prospectively in the income statement. Upon adoption, the Company recognized all previously unrecognized tax benefits. These previously unrecognized tax benefits were recorded as a deferred tax asset, which was fully offset by a valuation allowance on January 1, 2017, thus there was no net impact from the adoption of ASU 2016-09 as of the same date. The Company’s adoption of the standard did not have any impact to the consolidated statements of cash flows as no NOL carryforwards from share-based compensation arrangements were recognized prior to January 1, 2017. The Company has elected to continue to estimate forfeitures under the true-up provision of ASC 718. In November 2015, the FASB issued ASU 2015-17, which eliminates the current requirement to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, entities will be required to classify all deferred tax assets and liabilities as noncurrent. ASU 2015-17 was effective for the Company in the first quarter of 2017. The adoption of the ASU 2015-17 did not have a material impact on the Company’s financial statements. Recent Accounting Pronouncements Not Yet Adopted In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which provides additional guidance on evaluating whether transactions should be accounted for as acquisitions of assets or businesses. ASU 2017-01 requires an entity to evaluate if substantially all of the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the new guidance would define this as an asset acquisition; otherwise, the entity then evaluates whether the asset meets the requirement that a business include, at a minimum, an input and substantive process that together significantly contribute to the ability to create outputs. ASU 2017-01 is effective for the Company on a prospective basis beginning on January 1, 2018, with early adoption permitted. The Company is currently in the process of assessing the impact of ASU 2017-01 on the Company’s financial statements and related disclosures. In November 2016, the FASB issued ASU No. 2016-18 , Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which amended the existing accounting standards for the statement of cash flows by requiring restricted cash to 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 will be effective in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and early adoption is permitted. The amendments should be applied retrospectively to all periods presented. The Company is currently in the process of assessing the impact of ASU 2016-18 on the Company’s financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15 , Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which amended the existing accounting standards for the statement of cash flows by providing guidance on eight classification issues related to the statement of cash flows. ASU 2016-15 will be effective in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and early adoption is permitted. The amendments should be applied retrospectively to all periods presented. For issues that are impracticable to apply retrospectively, the amendments may be applied prospectively as of the earliest date practicable. The Company is currently in the process of assessing the impact of ASU 2016-15 on the Company’s financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) , which requires lessees to recognize assets and liabilities for the rights and obligations created by most leases on their balance sheet. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. ASU 2016-02 requires modified retrospective adoption for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact the standard may have on the Company’s financial statements and related disclosures. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 will be effective for annual periods and interim periods within those annual periods beginning after December 15, 2017 and early adoption is not permitted. The Company is currently evaluating the impact that the standard will have on the Company’s financial statements and related disclosures.

Net Loss Per Common Share

Net Loss Per Common Share	6 Months Ended
	Jun. 30, 2017
Net Loss Per Common Share
Net Loss Per Common Share	3. Net Loss Per Common Share The following table sets forth the computation of basic and diluted net loss per common share for the periods indicated (in thousands, except share and per share data): Three Months Ended Six Months Ended 2017 2016 2017 2016 Basic and diluted net loss per common share calculation: Net loss $ ) $ ) $ ) $ ) Weighted average common shares outstanding — basic and diluted Net loss per share of common stock — basic and diluted $ ) $ ) $ ) $ ) The following outstanding securities at June 30, 2017 and 2016 have been excluded from the computation of diluted weighted average shares outstanding, as they are anti-dilutive: June 30, 2017 June 30, 2016 Unvested restricted stock Stock options Total

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 2017
Fair Value Measurements
Fair Value Measurements	4. Fair Value Measurements Financial Instruments The financial instruments recorded in the Company’s balance sheets include cash and cash equivalents, investments, and accounts payable. Included in cash and cash equivalents are money market funds representing a type of mutual fund required by law to invest in low-risk securities (for example, U.S. government bonds, U.S. treasury bills and commercial paper) and overnight repurchase agreements. Money market funds are structured to maintain the fund’s net asset value at $1.00 per unit, which assists in providing adequate liquidity upon demand by the holder. Money market funds pay dividends that generally reflect short-term interest rates. Thus, only the dividend yield fluctuates. Also included in cash and cash equivalents are U.S. government sponsored enterprise debt securities that have a maturity of 3 months or less from their original acquisition date. Due to their short-term maturity, the carrying amounts of cash and cash equivalents (including money market funds), and accounts payable approximate their fair values. The Company classifies its remaining investments as available-for-sale. Gains or losses on securities sold are based on the specific identification method. For investments classified as available-for-sale, the Company records unrealized gains or losses resulting from changes in fair value between measurement dates as a component of other comprehensive loss. (amounts in thousands) Amortized Gross Gross Fair Value June 30, 2017 Overnight repurchase agreements $ $ — $ — $ Money market funds — — Total included in cash and cash equivalents — — U.S. Government debt securities — ) Government enterprise debt securities — ) Short-term available-for-sale securities — ) Total fair value financial instruments $ $ — $ ) $ December 31, 2016 Overnight repurchase agreements $ $ — $ — $ Money market funds — — Total included in cash and cash equivalents — — U.S. Government debt securities — Government enterprise debt securities — ) Short-term available-for-sale securities ) U.S. Government debt securities — ) Long-term available-for-sale securities — ) Total fair value financial instruments $ $ $ ) $ Fair value guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: · Level 1—Quoted prices in active markets for identical assets or liabilities. · Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s financial assets measured at fair value on a recurring basis at June 30, 2017 were as follows (in thousands): Fair Value Measurements at Measurement Date: Quoted Prices in Active Significant Other Significant Unobservable Total as of Assets: Cash and cash equivalents Cash $ $ — $ — $ Overnight repurchase agreements — — Money market funds — — Total cash and cash equivalents — — Short-term investments Government enterprise debt securities — — U.S. Government debt securities — — Total short-term investments — Totals $ $ $ — $ The Company’s financial assets measured at fair value on a recurring basis at December 31, 2016 were as follows (in thousands): Fair Value Measurements at Measurement Date: Quoted Prices in Active Significant Other Significant Total as of Assets: Cash and cash equivalents Cash $ $ — $ — $ Overnight repurchase agreements — — Money market funds — — Total cash and cash equivalents — — Short-term investments Government enterprise debt securities — — U.S. Government debt securities — — Total short-term investments — Long-term investments U.S. Government debt securities — — Total long-term investments — — Totals $ $ $ — $ There were no items that were accounted for at fair value on a non-recurring basis for the six months ended June 30, 2017 and 2016. Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. At June 30, 2017 and December 31, 2016, the Company’s cash and cash equivalents were held by two financial institutions and the amounts on deposit were in excess of Federal Deposit Insurance Company insurance limits. The Company mitigates this risk by depositing its uninsured cash in major well capitalized financial institutions, and by investing excess operating cash in overnight repurchase agreements which are 100% collateralized by U.S. government backed securities with the Company’s bank. The Company has not recognized any losses on its cash and cash equivalents.

Accrued Expenses and Other Curr

Accrued Expenses and Other Current Liabilities	6 Months Ended
	Jun. 30, 2017
Accrued Expenses and Other Current Liabilities
Accrued Expenses and Other Current Liabilities	5. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): June 30, December 31, Research and development accrued expenses $ $ General and administrative accrued expenses $ $ Included in the above amounts is $0.8 million and $1.5 million of accrued bonuses at June 30, 2017 and December 31, 2016, respectively.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 30, 2017
Stock-Based Compensation
Stock-Based Compensation	6. Stock-Based Compensation Equity Incentive Plan (the “Plan”) Effective July 2013, the Company adopted the 2013 Equity Incentive Plan, which was amended in November 2013 (the “2013 Plan”). The 2013 Plan provided for the granting of incentive stock options, non-statutory stock options and the issuance of restricted stock awards. As of June 30, 2017, the Company reserved 1,544,615 shares of common stock authorized for issuance in connection with the 2013 Plan. Certain options are eligible for exercise prior to vesting. Exercised but unvested shares are subject to repurchase by the Company at the initial exercise price. In connection with the Company’s initial public offering, no further grants will be made under this plan and all remaining shares available for grant were transferred to the 2014 Equity Incentive Plan. The Company adopted the 2014 Equity Incentive Plan (the “2014 Plan”) that became effective on July 30, 2014 and serves as the successor to the 2013 Plan. The 2014 Plan provides for the grant of awards to employees, directors, consultants, independent contractors and advisors, provided the consultants, independent contractors, directors and advisors are natural persons that render services other than in connection with the offer and sale of securities in a capital-raising transaction. The exercise price of stock options must be at least equal to the fair market value of the Company’s common stock on the date of grant. The Company has reserved 2,828,874 shares of its common stock to be issued under the 2014 Plan of which 837,907 shares were available for future issuance as of June 30, 2017. Shares authorized will increase automatically on January 1 of each of 2015 through 2024 by the number of shares equal to 3.0% of the aggregate number of outstanding shares of the Company’s common stock as of the immediately preceding December 31. The Company’s Board may reduce the amount of the increase in any particular year. The 2014 Plan authorizes the award of stock options, restricted stock awards, or RSAs, stock appreciation rights, or SARs, restricted stock units, or RSUs, performance awards and stock bonuses. The following table summarizes stock option activity under the Plan for the period from January 1, 2017 through June 30, 2017: Average Weighted- Remaining Aggregate Number Average Contractual Intrinsic Value of Shares Exercise Price Term (in years) (in thousands) Outstanding at January 1, 2017 $ $ Granted Exercised ) Forfeited and expired ) Outstanding at June 30, 2017 $ $ Vested and expected to vest at June 30, 2017 $ $ Exercisable at June 30, 2017 $ $ Weighted-average grant date fair value of options granted during the six months ended June 30, 2017 $ As of June 30, 2017, there was $35.0 million of total unrecognized compensation expense related to options granted but not yet vested of which $5.5 million is attributable to non-employee awards and subject to re-measurement until vested. The total unrecognized compensation expense of $35.0 million will be recognized as expense over a weighted-average period of 2.7 years. The Company uses the Black-Scholes option pricing model to estimate the fair value of option awards with the following weighted-average assumptions, certain of which are based on industry comparative information, for the period indicated: Six Months Risk-free interest rate % Expected dividend yield % Expected stock price volatility % Expected term of options (in years) Expected forfeiture rate % The weighted-average valuation assumptions were determined as follows: · Risk-free interest rate: The Company bases the risk-free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected option term. · Expected annual dividends: The estimate for annual dividends is 0%, because the Company has not historically paid, and does not expect for the foreseeable future to pay, a dividend. · Expected stock price volatility: The expected volatility used is based on historical volatilities of similar entities within the Company’s industry which were commensurate with the Company’s expected term assumption. · Expected term of options: The expected term of options represents the period of time options are expected to be outstanding. The expected term of the options granted to employees is derived from the “simplified” method as described in Staff Accounting Bulletin 107 relating to stock-based compensation. The expected term for options granted to non-employees is equal to the contractual term of the awards. · Expected forfeiture rate: The Company’s estimated annual forfeiture rate is based on historical forfeiture experience of its various employee groups. · Estimated fair value of the Company’s stock-based awards: The estimated fair value of the Company’s stock-based awards is amortized on a straight-line basis over the awards’ service period for those awards with graded vesting and which contain only a service condition. For awards with graded vesting and a performance and service condition, when achievement of the performance condition is deemed probable, the Company recognizes compensation cost using the accelerated recognition method over the awards’ service period. Share-based compensation expense recognized was as follows (in thousands): Three Months Ended Six Months Ended 2017 2016 2017 2016 Research and development $ $ $ $ General and administrative $ $ $ $

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2017
Commitments and Contingencies
Commitments and Contingencies	7. Commitments and Contingencies Operating Leases The Company leases office space under operating leases for its locations in South San Francisco, California and in Stamford, Connecticut. The Company’s lease agreements contain escalation clauses; accordingly, the Company straight-lines the rent expense over the lease term. Rent expense under operating leases for the three months ended June 30, 2017 and 2016 was $227,555 and $175,670, respectively. Rent expense under operating leases for the six months ended June 30, 2017 and 2016 was $398,047 and $354,646, respectively. Future minimum lease payments as of June 30, 2017 are as follows (in thousands): Operating 2017 $ 2018 2019 2020 2021 Thereafter $ In January 2017, the Company entered into an office lease agreement to replace its existing leased space in South San Francisco, CA. The Company’s previous lease expired June 30, 2017. The new lease provides for a term of 51 months, commenced when the landlord delivered the premise to the Company on May 1, 2017 and, unless otherwise terminated, continues until July 31, 2021. The Company has the option to extend the term of the lease for one additional five-year period. The Company expects to incur approximately $240,000 of annual rent expense associated with the lease. Array Bio Pharma (“Array”) Collaboration On July 3, 2013, the Company signed a multi-year strategic collaboration agreement with Array, and this agreement was subsequently amended on November 26, 2013, April 10, 2014, October 13, 2014, March 31, 2015 and February 18, 2016. Under the terms of the collaboration agreement, the Company obtained certain rights to Array’s tropomyosin receptor kinase (“TRK”) inhibitor program, as well as additional novel oncology targets, including LOXO-195, LOXO-292, and fibroblast growth factor receptor (“FGFR”). The Company has worldwide commercial rights to each product candidate from the collaboration and Array participates in any potential successes through milestones and royalties. With respect to the discovery and preclinical program, the collaboration agreement, as amended, runs through September 30, 2017, and the Company has the option to extend the term for up to one additional one-year renewal period by providing written notice to Array at least three months before the end of the initial discovery and preclinical development programs term. This option was exercised during the three-month period ended June 30, 2017. Before the February 2016 amendment, in addition to larotrectinib, formerly referred to as LOXO-101, the parties designated 12 discovery targets, of which seven were selected for additional study in January 2015, which was to be reduced to four on or before January 2016. The Company had the option to maintain the total target number at five for an additional payment, and the Company exercised this option to maintain five discovery programs in January 2016. In the February 2016 amendment, the parties designated a total of six discovery targets. An additional payment was due at contract signing, satisfying a prior obligation of the April 2014 amendment. As part of the agreement the Company agreed to pay Array a fixed amount per month, based on Array’s commitment to provide full-time equivalents and other support relating to the conduct of the discovery and preclinical development programs. For the three months ended June 30, 2017 and 2016, the Company recorded $2.0 million and $3.1 million of research and development expenses related to the collaboration agreement, respectively. For the six months ended June 30, 2017 and 2016, the Company recorded $3.9 million and $6.4 million of research and development expenses related to the collaboration agreement, respectively. Milestones With respect to product candidates directed to TRK, including larotrectinib and its back-up compounds, the Company could be required to pay Array up to $223 million in milestone payments for each compound, the substantial majority of which are due upon the achievement of commercial milestones. The Company has made or accrued $7.0 million and $0.3 million in larotrectinib and LOXO-195 milestone payments, respectively, from inception through June 30, 2017. With respect to product candidates directed to targets other than TRK, the Company could be required to pay Array up to $213 million in milestone payments, the substantial majority of which are due upon the achievement of commercial milestones. The Company has made or accrued $1.3 million in LOXO-292 milestone payments from inception through June 30, 2017, of which $1.0 million was paid in the three month period ended June 30, 2017. Royalties The Company is required to pay Array mid-single digit royalties on worldwide net sales of products. With respect to the royalty on products directed to targets other than TRK, the Company has the right to credit certain milestone payments against royalties on sales of products directed to such target. Research and Development Arrangements In the course of normal business operations, the Company enters into agreements with contract research organizations, or CROs, to assist in the performance of research and development and preclinical activities. Expenditures to CROs may represent a significant cost in preclinical and clinical development for the Company in future periods. The Company can elect to discontinue the work under these agreements at any time. The Company has also entered into an agreement with Roche, to develop and commercialize a companion diagnostic. The Company could also enter into additional collaborative research, contract research, manufacturing, and supplier agreements in the future, which may require upfront payments and long-term commitments of cash. Legal Proceedings The Company is not involved in any legal proceeding that it expects to have a material effect on its business, financial condition, results of operations and cash flows.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jun. 30, 2017
Related Party Transactions
Related Party Transactions	8. Related Party Transactions Dr. Lori Kunkel, a board member, had a consulting agreement with the Company to assist in the Company’s drug development process which was modified effective as of October 31, 2015, to provide that she receives only the standard director compensation for her services. Dr. Kunkel also received stock option grants in 2013 and 2014 as compensation for her consulting services which continue to vest. During the three and six months ended June 30, 2017, the Company recognized stock-based compensation expense of $0.7 million and $1.5 million, respectively, in accordance with the terms of the consulting agreement, which are included as a component of research and development expenses. No stock-based compensation expense was recognized during the three or six months ended June 30, 2016. Dr. Keith Flaherty, a board member, has an agreement with the Company to serve as Scientific Advisor Board (“SAB”) Chair for which he receives cash compensation. Dr. Flaherty also received stock option grants in 2013 and 2014 as compensation for his SAB services which continue to vest. Both cash compensation that was expensed as incurred and stock-based compensation are recorded as a component of research and development expenses. During the three months ended June 30, 2017 and 2016, the Company recognized cash compensation expense of $15,000 and $18,000, respectively, and stock-based compensation expense of $1.2 million and less than $0.1 million, respectively, in accordance with the terms of the SAB agreement. During the six months ended June 30, 2017 and 2016, the Company recognized cash compensation expense of $30,000 and $36,000 and stock-based compensation expense of $1.9 million and $0.1 million in accordance with the terms of the SAB agreement, respectively.

Subsequent Event

Subsequent Event	6 Months Ended
	Jun. 30, 2017
Subsequent Event
Subsequent Event	9. Subsequent Event On July 28, 2017, the Company entered into and closed on an Agreement for the Assignment of Patents and other Rights and for the Novation of Certain Agreements, including for Product Manufacturing, with Redx Pharma Plc and Redx Oncology Limited (collectively, “Redx”), pursuant to which the Company paid $40 million to acquire patents and other rights related to the Redx Bruton’s tyrosine kinase (“BTK”) inhibitor discovery program, including lead candidate LOXO-305. The Company is not subject to any milestone or royalty payments related to this transaction.

Summary of Significant Accoun17

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2017
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the results of operations of the Company and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).
Unaudited Interim Financial Information	Unaudited Interim Financial Information The accompanying balance sheet as of December 31, 2016, was derived from the Company’s audited financial statements included in Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 7, 2017. It is suggested that the interim unaudited condensed consolidated financial statements be read in conjunction with the annual financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K. The accompanying balance sheet as of June 30, 2017, the statements of operations for the three and six months ended June 30, 2017 and 2016, the statements of comprehensive loss for the three and six months ended June 30, 2017 and 2016, the statements of stockholders’ equity for the period from January 1, 2017 to June 30, 2017 and the statements of cash flows for the six months ended June 30, 2017 and 2016 are unaudited. The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of June 30, 2017, the results of its operations for the three and six months ended June 30, 2017 and 2016 and its cash flows for the six months ended June 30, 2017 and 2016. The interim unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.
Significant Accounting Policies	Significant Accounting Policies The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended December 31, 2016 included in the Company’s Form 10-K filed with the SEC on March 7, 2017. Since the date of such financial statements, there have been no changes to the Company’s significant accounting policies, except as it relates to principles of consolidation and the impact of the adoption of ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”) and ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”), as described below.
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of Loxo Oncology, Inc. and its wholly owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation.
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, which provides for simplification of certain aspects of employee share-based payment accounting including income taxes, classification of awards as either equity or liabilities, accounting for forfeitures and classification on the statement of cash flows. ASU 2016-09 was effective for the Company in the first quarter of 2017. The standard requires the recognition of any pre-adoption date net operating loss (“NOL”) carryforwards from share-based compensation arrangements to be recognized on a modified retrospective basis, through an opening retained earnings adjustment on January 1, 2017. Any income tax effects from share-based compensation arrangements arising after January 1, 2017 will be recognized prospectively in the income statement. Upon adoption, the Company recognized all previously unrecognized tax benefits. These previously unrecognized tax benefits were recorded as a deferred tax asset, which was fully offset by a valuation allowance on January 1, 2017, thus there was no net impact from the adoption of ASU 2016-09 as of the same date. The Company’s adoption of the standard did not have any impact to the consolidated statements of cash flows as no NOL carryforwards from share-based compensation arrangements were recognized prior to January 1, 2017. The Company has elected to continue to estimate forfeitures under the true-up provision of ASC 718. In November 2015, the FASB issued ASU 2015-17, which eliminates the current requirement to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, entities will be required to classify all deferred tax assets and liabilities as noncurrent. ASU 2015-17 was effective for the Company in the first quarter of 2017. The adoption of the ASU 2015-17 did not have a material impact on the Company’s financial statements.
Recent Accounting Pronouncements Not Yet Adopted	Recent Accounting Pronouncements Not Yet Adopted In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which provides additional guidance on evaluating whether transactions should be accounted for as acquisitions of assets or businesses. ASU 2017-01 requires an entity to evaluate if substantially all of the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the new guidance would define this as an asset acquisition; otherwise, the entity then evaluates whether the asset meets the requirement that a business include, at a minimum, an input and substantive process that together significantly contribute to the ability to create outputs. ASU 2017-01 is effective for the Company on a prospective basis beginning on January 1, 2018, with early adoption permitted. The Company is currently in the process of assessing the impact of ASU 2017-01 on the Company’s financial statements and related disclosures. In November 2016, the FASB issued ASU No. 2016-18 , Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which amended the existing accounting standards for the statement of cash flows by requiring restricted cash to 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 will be effective in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and early adoption is permitted. The amendments should be applied retrospectively to all periods presented. The Company is currently in the process of assessing the impact of ASU 2016-18 on the Company’s financial statements and related disclosures. In August 2016, the FASB issued ASU No. 2016-15 , Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which amended the existing accounting standards for the statement of cash flows by providing guidance on eight classification issues related to the statement of cash flows. ASU 2016-15 will be effective in fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and early adoption is permitted. The amendments should be applied retrospectively to all periods presented. For issues that are impracticable to apply retrospectively, the amendments may be applied prospectively as of the earliest date practicable. The Company is currently in the process of assessing the impact of ASU 2016-15 on the Company’s financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) , which requires lessees to recognize assets and liabilities for the rights and obligations created by most leases on their balance sheet. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. ASU 2016-02 requires modified retrospective adoption for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact the standard may have on the Company’s financial statements and related disclosures. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 will be effective for annual periods and interim periods within those annual periods beginning after December 15, 2017 and early adoption is not permitted. The Company is currently evaluating the impact that the standard will have on the Company’s financial statements and related disclosures.

Net Loss Per Common Share (Tabl

Net Loss Per Common Share (Tables)	6 Months Ended
	Jun. 30, 2017
Net Loss Per Common Share
Schedule of computation of basic and diluted net loss per common share	The following table sets forth the computation of basic and diluted net loss per common share for the periods indicated (in thousands, except share and per share data): Three Months Ended Six Months Ended 2017 2016 2017 2016 Basic and diluted net loss per common share calculation: Net loss $ ) $ ) $ ) $ ) Weighted average common shares outstanding — basic and diluted Net loss per share of common stock — basic and diluted $ ) $ ) $ ) $ )
Schedule of outstanding securities excluded from the computation of diluted weighted average shares outstanding, as they are anti-dilutive	June 30, 2017 June 30, 2016 Unvested restricted stock Stock options Total

Fair Value Measurements (Table)

Fair Value Measurements (Table)	6 Months Ended
	Jun. 30, 2017
Fair Value Measurements
Schedule of available-for-sale securities unrealized gains or losses from changes in fair value	(amounts in thousands) Amortized Gross Gross Fair Value June 30, 2017 Overnight repurchase agreements $ $ — $ — $ Money market funds — — Total included in cash and cash equivalents — — U.S. Government debt securities — ) Government enterprise debt securities — ) Short-term available-for-sale securities — ) Total fair value financial instruments $ $ — $ ) $ December 31, 2016 Overnight repurchase agreements $ $ — $ — $ Money market funds — — Total included in cash and cash equivalents — — U.S. Government debt securities — Government enterprise debt securities — ) Short-term available-for-sale securities ) U.S. Government debt securities — ) Long-term available-for-sale securities — ) Total fair value financial instruments $ $ $ ) $
Schedule of financial assets measured at fair value on a recurring basis	The Company’s financial assets measured at fair value on a recurring basis at June 30, 2017 were as follows (in thousands): Fair Value Measurements at Measurement Date: Quoted Prices in Active Significant Other Significant Unobservable Total as of Assets: Cash and cash equivalents Cash $ $ — $ — $ Overnight repurchase agreements — — Money market funds — — Total cash and cash equivalents — — Short-term investments Government enterprise debt securities — — U.S. Government debt securities — — Total short-term investments — Totals $ $ $ — $ The Company’s financial assets measured at fair value on a recurring basis at December 31, 2016 were as follows (in thousands): Fair Value Measurements at Measurement Date: Quoted Prices in Active Significant Other Significant Total as of Assets: Cash and cash equivalents Cash $ $ — $ — $ Overnight repurchase agreements — — Money market funds — — Total cash and cash equivalents — — Short-term investments Government enterprise debt securities — — U.S. Government debt securities — — Total short-term investments — Long-term investments U.S. Government debt securities — — Total long-term investments — — Totals $ $ $ — $

Accrued Expenses and Other Cu20

Accrued Expenses and Other Current Liabilities (Tables)	6 Months Ended
	Jun. 30, 2017
Accrued Expenses and Other Current Liabilities
Schedule of accrued expenses and other current liabilities	Accrued expenses and other current liabilities consisted of the following (in thousands): June 30, December 31, Research and development accrued expenses $ $ General and administrative accrued expenses $ $

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2017
Stock-Based Compensation
Summary of stock option activity under the Plan	Average Weighted- Remaining Aggregate Number Average Contractual Intrinsic Value of Shares Exercise Price Term (in years) (in thousands) Outstanding at January 1, 2017 $ $ Granted Exercised ) Forfeited and expired ) Outstanding at June 30, 2017 $ $ Vested and expected to vest at June 30, 2017 $ $ Exercisable at June 30, 2017 $ $ Weighted-average grant date fair value of options granted during the six months ended June 30, 2017 $
Schedule of weighted-average assumptions under the Black-Scholes option pricing model to estimate the fair value of option awards	Six Months Risk-free interest rate % Expected dividend yield % Expected stock price volatility % Expected term of options (in years) Expected forfeiture rate %
Schedule of share-based compensation expense recognized	Share-based compensation expense recognized was as follows (in thousands): Three Months Ended Six Months Ended 2017 2016 2017 2016 Research and development $ $ $ $ General and administrative $ $ $ $

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
	Jun. 30, 2017
Commitments and Contingencies
Schedule of future minimum lease payments	Future minimum lease payments as of June 30, 2017 are as follows (in thousands): Operating 2017 $ 2018 2019 2020 2021 Thereafter $

Organization and Description 23

Organization and Description of the Business (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2017USD ($)segment	Dec. 31, 2016USD ($)
Organization and Description of the Business
Number of operating segments | segment	1
Working capital	$ 460,200
Accumulated deficit	194,165	$ 139,236
Cash, cash equivalents and investments	467,600
Revenues	$ 0

Net Loss Per Common Share (Deta

Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Anti-dilutive securities excluded from computation of diluted weighted-average shares outstanding
Total (in shares)			3,095,293	2,326,969
Basic and diluted net loss per common share calculation:
Net loss	$ (30,401)	$ (15,916)	$ (54,929)	$ (27,513)
Weighted average common shares outstanding - basic and diluted (in shares)	26,586,610	20,587,848	26,129,869	20,177,162
Net loss per share of common stock - basic and diluted (in dollars per share)	$ (1.14)	$ (0.77)	$ (2.10)	$ (1.36)
Unvested restricted stock
Anti-dilutive securities excluded from computation of diluted weighted-average shares outstanding
Total (in shares)			5,502	71,550
Stock options
Anti-dilutive securities excluded from computation of diluted weighted-average shares outstanding
Total (in shares)			3,089,791	2,255,419

Fair Value Measurements - Amort

Fair Value Measurements - Amortized Costs and Fair Values (Details) - USD ($) $ / shares in Units, $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Fair value measurements
Net asset value for money market funds (in dollars per unit)	$ 1
Overnight repurchase agreements
Fair value measurements
Amortized Cost	$ 40,000	$ 10,000
Fair Value	40,000	10,000
Money market funds
Fair value measurements
Amortized Cost	213,801	12,146
Fair Value	213,801	12,146
Cash and cash equivalents
Fair value measurements
Amortized Cost	253,801	22,146
Fair Value	253,801	22,146
U.S. Government debt securities, Short-term
Fair value measurements
Amortized Cost	61,095	12,769
Gross Unrealized Gains		995
Gross Unrealized Losses	(48)
Fair Value	61,047	13,764
Government enterprise debt securities
Fair value measurements
Amortized Cost	146,388	96,184
Gross Unrealized Losses	(117)	(1,013)
Fair Value	146,271	95,171
Short-term available-for-sale securities
Fair value measurements
Amortized Cost	207,483	108,953
Gross Unrealized Gains		995
Gross Unrealized Losses	(165)	(1,013)
Fair Value	207,318	108,935
U.S. Government debt securities, Long-term
Fair value measurements
Amortized Cost		2,502
Gross Unrealized Losses		(3)
Fair Value		2,499
Long-term available-for-sale securities
Fair value measurements
Amortized Cost		2,502
Gross Unrealized Losses		(3)
Fair Value		2,499
Available-for-sale securities
Fair value measurements
Amortized Cost	461,284	133,601
Gross Unrealized Gains		995
Gross Unrealized Losses	(165)	(1,016)
Fair Value	$ 461,119	$ 133,580

Fair Value Measurements - Recur

Fair Value Measurements - Recurring Basis of Measurement (Details) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017USD ($)Institution	Dec. 31, 2016USD ($)Institution	Jun. 30, 2016USD ($)
Financial assets measured at fair value on a recurring and non-recurring basis
Number of financial institutions that hold cash and cash equivalents | Institution	2	2
Percentage of repurchase agreements collateralized by U.S. Government backed securities (as a percent)	100.00%	100.00%
Recurring
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale	$ 467,585	$ 141,810
Recurring | Cash and cash equivalents
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale	260,267	30,376
Recurring | Short-term investments
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale	207,318	108,935
Recurring | Long-term investments
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale		2,499
Non-recurring
Financial assets measured at fair value on a recurring and non-recurring basis
Investments	0		$ 0
Level 1 | Recurring
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale	321,314	46,639
Level 1 | Recurring | Cash and cash equivalents
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale	260,267	30,376
Level 1 | Recurring | Short-term investments
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale	61,047	13,764
Level 1 | Recurring | Long-term investments
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale		2,499
Level 2 | Recurring
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale	146,271	95,171
Level 2 | Recurring | Short-term investments
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale	146,271	95,171
Cash | Recurring | Cash and cash equivalents
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale	6,466	8,230
Cash | Level 1 | Recurring | Cash and cash equivalents
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale	6,466	8,230
Overnight repurchase agreements | Recurring | Cash and cash equivalents
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale	40,000	10,000
Overnight repurchase agreements | Level 1 | Recurring | Cash and cash equivalents
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale	40,000	10,000
Money market funds | Recurring | Cash and cash equivalents
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale	213,801	12,146
Money market funds | Level 1 | Recurring | Cash and cash equivalents
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale	213,801	12,146
Government enterprise debt securities | Recurring | Short-term investments
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale	146,271	95,171
Government enterprise debt securities | Level 2 | Recurring | Short-term investments
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale	146,271	95,171
U.S. Government debt securities | Recurring | Short-term investments
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale	61,047	13,764
U.S. Government debt securities | Recurring | Long-term investments
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale		2,499
U.S. Government debt securities | Level 1 | Recurring | Short-term investments
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale	$ 61,047	13,764
U.S. Government debt securities | Level 1 | Recurring | Long-term investments
Financial assets measured at fair value on a recurring and non-recurring basis
Available-for-sale		$ 2,499

Accrued Expenses and Other Cu27

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Accrued Expenses And Other Current Liabilities
Accrued expenses and other current liabilities	$ 9,008	$ 14,083
Accrued bonuses	800	1,500
Research and development
Accrued Expenses And Other Current Liabilities
Accrued expenses and other current liabilities	6,503	12,120
General and administrative
Accrued Expenses And Other Current Liabilities
Accrued expenses and other current liabilities	$ 2,505	$ 1,963

Stock-Based Compensation - Ince

Stock-Based Compensation - Incentive Plans (Details)	6 Months Ended
	Jun. 30, 2017shares
2013 Plan
2013 and 2014 Equity Incentive Plan
Shares authorized for issuance (in shares)	1,544,615
Shares available for future issuance (in shares)	0
2014 Plan
2013 and 2014 Equity Incentive Plan
Shares authorized for issuance (in shares)	2,828,874
Shares available for future issuance (in shares)	837,907
Increase in common stock reserved for issuance as percentage of the aggregate number of outstanding shares of common stock (as a percent)	3.00%

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Weighted-average assumptions used to estimate fair value of option awards using Black Scholes option pricing model
Unrecognized compensation expense	$ 35,000
2013 and 2014 Equity Incentive Plans | Stock option
Number of Shares
Outstanding at the beginning of the period (in shares)	2,825,851
Granted (in shares)	404,800
Exercised (in shares)	(85,032)
Forfeited and expired (in shares)	(55,828)
Outstanding at the end of the period (in shares)	3,089,791	2,825,851
Vested and expected to vest at the end of the period (in shares)	2,970,838
Exercisable at the end of the period (in shares)	1,516,336
Weighted-Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 15.35
Granted (in dollars per share)	53.06
Exercised (in dollars per share)	17.31
Forfeited and expired (in dollars per share)	26.45
Outstanding at the end of the period (in dollars per share)	20.04	$ 15.35
Vested and expected to vest at the end of the period (in dollars per share)	19.59
Exercisable at the end of the period (in dollars per share)	10.38
Weighted average grant date fair value of options granted (in dollars per share)	$ 36.47
Average Remaining Contractual Term (in years)
Outstanding Contractual term (in years)	8 years 29 days	8 years 4 months 2 days
Vested and expected to vest at the end of the period (in years)	8 years 15 days
Exercisable at the end of the period (in years)	7 years 3 months 15 days
Aggregate Intrinsic Value
Outstanding at the end of the period	$ 185,850	$ 47,364
Vested and expected to vest at the end of the period	180,024
Exercisable at the end of the period	$ 105,850
Weighted-average assumptions used to estimate fair value of option awards using Black Scholes option pricing model
Risk-free interest rate (as a percent)	2.03%
Expected dividend yield (as a percent)	0.00%
Expected stock price volatility (as a percent)	79.48%
Expected term of options (in years)	6 years 1 month 6 days
Expected forfeiture rate (as a percent)	12.34%
Unrecognized compensation expense	$ 35,000
Weighted-average period for recognition	2 years 8 months 12 days
Non-employees | 2013 and 2014 Equity Incentive Plans | Stock option
Weighted-average assumptions used to estimate fair value of option awards using Black Scholes option pricing model
Unrecognized compensation expense	$ 5,500

Stock-Based Compensation - Rest

Stock-Based Compensation - Restricted Stock Information (Details) - 2013 and 2014 Equity Incentive Plans - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Stock based compensation expense
Share-based compensation expense	$ 5,435	$ 1,287	$ 9,410	$ 2,629
Research and development
Stock based compensation expense
Share-based compensation expense	3,456	211	5,862	507
General and administrative
Stock based compensation expense
Share-based compensation expense	$ 1,979	$ 1,076	$ 3,548	$ 2,122

Commitments and Contingencies31

Commitments and Contingencies (Details)	1 Months Ended				3 Months Ended		6 Months Ended
	Jan. 31, 2017USD ($)item	Feb. 29, 2016item	Jan. 31, 2016item	Jan. 31, 2015item	Jun. 30, 2017USD ($)	Jun. 30, 2016USD ($)	Jun. 30, 2017USD ($)item	Jun. 30, 2016USD ($)
Commitments and Contingencies
Rent expense under operating leases					$ 227,555	$ 175,670	$ 398,047	$ 354,646
2,017					427,000		427,000
2,018					919,000		919,000
2,019					913,000		913,000
2,020					934,000		934,000
2,021					846,000		846,000
Thereafter					683,000		683,000
Total					4,722,000		4,722,000
Lease term	51 months
Number of additional renewal periods options available to the entity to extend agreement term (in periods) | item	1
Term of additional renewal periods options available to the entity to extend agreement term (in years)	5 years
Expected annual lease rent expense	$ 240,000
Research and development costs under collaboration agreement					24,398,000	12,331,000	44,567,000	20,687,000
Array | Larotrectinib
Commitments and Contingencies
Milestone payments made or accrued from inception through June 30, 2017					7,000,000		7,000,000
Array | LOXO-195
Commitments and Contingencies
Milestone payments made or accrued from inception through June 30, 2017					300,000		300,000
Array | LOXO- 292
Commitments and Contingencies
Milestone payments made or accrued from inception through June 30, 2017					1,300,000		$ 1,300,000
Milestone payments made					1,000,000
Array | Collaboration agreement
Commitments and Contingencies
Term of additional renewal periods options available to the entity to extend agreement term (in years)							1 year
Number of discovery targets designated by the parties (in targets) | item		6	5	12
Number of discovery targets which are to be selected for additional study on or before January 2015 (in targets) | item				7
Number of discovery targets which are to be selected for additional study on or before January 2016 | item			4
Maximum number of candidates which can be selected by the entity for modest additional payment (in candidates) | item							5
Research and development costs under collaboration agreement					2,000,000	$ 3,100,000	$ 3,900,000	$ 6,400,000
Array | Collaboration agreement | Maximum
Commitments and Contingencies
Number of additional renewal periods options available to the entity to extend agreement term (in periods) | item							1
Array | Collaboration agreement | Product candidates directed to TRK
Commitments and Contingencies
Maximum milestone payments which the entity could be required to pay					223,000,000		$ 223,000,000
Array | Collaboration agreement | Product candidates directed to targets other than TRK
Commitments and Contingencies
Maximum milestone payments which the entity could be required to pay					$ 213,000,000		$ 213,000,000

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Related Party Transactions
Stock-based compensation expense			$ 9,410,000	$ 2,629,000
Consulting Letter Agreement | Dr. Lori Kunkel | Research and development
Related Party Transactions
Stock-based compensation expense	$ 700,000	$ 0	1,500,000	0
SAB Agreement | Dr. Keith Flaherty | Research and development
Related Party Transactions
Stock-based compensation expense	1,200,000	100,000	1,900,000	100,000
Cash compensation expense	$ 15,000	$ 18,000	$ 30,000	$ 36,000

Subsequent Event (Details)

Subsequent Event (Details) $ in Millions	Jul. 28, 2017USD ($)
Subsequent event | Redx
Subsequent Events
Payments made to acquire patents and other rights	$ 40