Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 03, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | Corvus Pharmaceuticals, Inc. | |
Entity Central Index Key | 1,626,971 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 20,911,933 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 5,576 | $ 4,105 |
Marketable securities | 139,547 | 90,281 |
Prepaid and other current assets | 913 | 1,277 |
Total current assets | 146,036 | 95,663 |
Property and equipment, net | 2,858 | 1,845 |
Deferred offering costs | 951 | |
Other assets | 869 | |
Total assets | 149,763 | 98,459 |
Current liabilities: | ||
Accounts payable | 2,416 | 1,575 |
Accrued and other liabilities | 3,180 | 1,495 |
Total current liabilities | 5,596 | 3,070 |
Other liabilities | 1,257 | 710 |
Total liabilities | 6,853 | 3,780 |
Commitments and contingencies (Note 13) | ||
Convertible preferred stock: $0.0001 par value; 0 and 14,274,741 shares authorized at September 30, 2016 and December 31, 2015, respectively; 0 and 14,274,741 issued and outstanding at September 30, 2016 and December 31, 2015, respectively (liquidation preference of $0 and $108,500 at September 30, 2016 and December 31, 2015, respectively) | 125,780 | |
Stockholders' equity (deficit): | ||
Preferred stock: $0.0001 par value; 10,000,000 and 0 shares authorized at September 30, 2016 and December 31, 2015, respectively; no shares issued and outstanding at September 30, 2016 and December 31, 2015 | ||
Common stock: $0.0001 par value; 290,000,000 and 20,000,000 shares authorized at September 30, 2016 and December 31, 2015, respectively; 20,911,933 and 1,431,615 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 2 | |
Additional paid-in capital | 199,652 | 440 |
Accumulated other comprehensive income (loss) | 41 | (45) |
Accumulated deficit | (56,785) | (31,496) |
Total stockholders' equity (deficit) | 142,910 | (31,101) |
Total liabilities, convertible preferred stock and stockholders' equity (deficit) | $ 149,763 | $ 98,459 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
CONDENSED BALANCE SHEETS | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Convertible preferred stock, shares authorized | 0 | 14,274,741 |
Convertible preferred stock, shares issued | 0 | 14,274,741 |
Convertible preferred stock, shares outstanding | 0 | 14,274,741 |
Convertible preferred stock, liquidation preference (in dollars) | $ 0 | $ 108,500 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 290,000,000 | 20,000,000 |
Common stock, shares issued | 20,911,933 | 1,431,615 |
Common stock, shares outstanding | 20,911,933 | 1,431,615 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Operating expenses: | ||||
Research and development | $ 7,707 | $ 2,514 | $ 20,224 | $ 6,443 |
General and administrative | 2,769 | 606 | 5,502 | 1,223 |
Total operating expenses | 10,476 | 3,120 | 25,726 | 7,666 |
Loss from operations | (10,476) | (3,120) | (25,726) | (7,666) |
Change in fair value of convertible preferred stock liability | (17,600) | |||
Interest income and other expense, net | 179 | (31) | 437 | (30) |
Net loss | $ (10,297) | $ (3,151) | $ (25,289) | $ (25,296) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.51) | $ (7.97) | $ (1.83) | $ (72.98) |
Shares used to compute net loss per share, basic and diluted (in shares) | 20,183,497 | 395,320 | 13,797,927 | 346,621 |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on marketable securities | $ (36) | $ 1 | $ 86 | $ 3 |
Total other comprehensive income (loss) | (36) | 1 | 86 | 3 |
Comprehensive loss | $ (10,333) | $ (3,150) | $ (25,203) | $ (25,293) |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities | ||
Net loss | $ (25,289) | $ (25,296) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 409 | 91 |
Amortization/accretion related to marketable securities | 519 | (20) |
Stock-based compensation | 2,781 | 142 |
Change in fair value of convertible preferred stock liability | 17,600 | |
Other | 40 | |
Changes in operating assets and liabilities: | ||
Prepaid and other current assets | 513 | (764) |
Other assets | (869) | 232 |
Accounts payable | 1,131 | 443 |
Accrued and other liabilities | 1,808 | 142 |
Other long-term liabilities | 547 | |
Net cash used in operating activities | (18,450) | (7,390) |
Cash flows from investing activities | ||
Purchases of marketable securities | (164,773) | (26,622) |
Maturities of marketable securities | 114,925 | 6,300 |
Purchase of property and equipment | (1,586) | (883) |
Net cash used in investing activities | (51,434) | (21,205) |
Cash flows from financing activities | ||
Proceeds from issuance of common stock in IPO, net of issuance costs | 71,355 | |
Proceeds from issuance of convertible preferred stock, net of issuance costs | 95,569 | |
Proceeds from exercise of common stock options | 108 | |
Net cash provided by financing activities | 71,355 | 95,677 |
Net increase in cash and cash equivalents | 1,471 | 67,082 |
Cash and cash equivalents at beginning of the period | 4,105 | 12,517 |
Cash and cash equivalents at end of the period | 5,576 | 79,599 |
Supplemental disclosures of cash flow information | ||
Purchases of property and equipment incurred but not paid | $ 122 | 158 |
Convertible preferred stock issuance costs incurred but not paid | $ 84 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2016 | |
Organization | |
Organization | 1. Organization Corvus Pharmaceuticals, Inc. (“Corvus” or the “Company”) was incorporated in Delaware on January 27, 2014 and commenced operations in November 2014. Corvus is a clinical stage biopharmaceutical company focused on the development and commercialization of novel immuno-oncology therapies. The Company’s primary activities have been establishing its facilities, recruiting personnel, conducting research and development of its product candidates, including conducting a clinical trial, and raising capital. The Company’s operations are located in Burlingame, California. Initial Public Offering On March 22, 2016, the Company’s registration statement on Form S-1 (File No. 333-208850) relating to its initial public offering (“IPO”) of its common stock was declared effective by the Securities and Exchange Commission (“SEC”) and the shares of its common stock began trading on the NASDAQ Global Market on March 23, 2016. The public offering price of the shares sold in the IPO was $15.00 per share. The IPO closed on March 29, 2016, pursuant to which the Company sold 4,700,000 shares of its common stock. On April 26, 2016, the Company sold an additional 502,618 shares of its common stock to the underwriters upon partial exercise of their over-allotment option, at the initial offering price of $15.00 per share. The Company received aggregate net proceeds of approximately $70.6 million, after underwriting discounts, commissions and offering expenses. Immediately prior to the consummation of the IPO, all outstanding shares of convertible preferred stock were converted into common stock. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s functional and reporting currency is the U.S. dollar. Unaudited Interim Financial Information The accompanying interim condensed financial statements and related disclosures are unaudited, have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The condensed results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period. The accompanying condensed financial statements should be read in conjunction with the audited financial statements and the related notes for the year ended December 31, 2015 included in the Company’s Prospectus dated March 22, 2016 filed pursuant to Rule 424(b)(4) with the SEC. Use of Estimates The preparation of the Company’s financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from such estimates. Concentrations of Credit Risk and Other Risks and Uncertainties Substantially all of the Company’s cash and cash equivalents are deposited in accounts with two financial institutions that management believes are of high credit quality. Such deposits may, at times, exceed federally insured limits. The Company maintains its cash with an accredited financial institution and accordingly, such funds are subject to minimal credit risk. The Company’s marketable securities are direct obligations of the United States government. The Company has not experienced any losses on its deposits of cash, cash equivalents or marketable securities. Since inception, the Company has incurred recurring net losses and negative cash flows from operations. At September 30, 2016, the Company had an accumulated deficit of $56.8 million and does not expect to experience positive cash flows from operations in the near future. The Company has financed its operations to date primarily through private placements of convertible preferred stock and proceeds from its IPO. As of September 30, 2016, the Company had cash, cash equivalents and marketable securities of $145.1 million. The Company is subject to a number of risks similar to other early stage biopharmaceutical companies, including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical testing or clinical trials, its reliance on third parties to conduct its clinical trials, the need to obtain marketing approval for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of the Company’s product candidates, its right to develop and commercialize its product candidates pursuant to the terms and conditions of the licenses granted to the Company, and protection of proprietary technology. If the Company does not successfully commercialize or partner any of its product candidates, it will be unable to generate product revenue or achieve profitability. Segments Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment, that of the development of and commercialization of novel immuno-oncology therapies that are designed to harness the immune system to attack cancer cells. Cash and Cash Equivalents and Marketable Securities The Company considers all highly liquid investment securities with remaining maturities at the date of purchase of three months or less to be cash equivalents. Investments with remaining maturities, at the date of purchase, greater than three months, but less than one year are considered short-term. The Company determines the appropriate classification of marketable securities at the time of purchase and evaluates such designation as of each balance sheet date. To date, all marketable securities have been classified as available-for-sale and are carried at fair value with unrealized gains and losses, if any, included as a component of accumulated other comprehensive income (loss) in stockholders’ equity (deficit). Interest and realized gains and losses are included in interest income. Realized gains and losses are recognized based on the specific identification method. Fair Value Measurements Fair value accounting is applied for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The carrying amount of the Company’s financial instruments, including cash equivalents, accounts payable and accrued liabilities, approximate fair value due to their short-term maturities. Deferred Offering Costs Deferred offering costs consist primarily of direct incremental costs related to the Company’s initial public offering of its common stock. Upon completion of the initial public offering in March 2016, these amounts were offset against the proceeds of the offering. Property and Equipment, Net Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the respective assets: Laboratory equipment 5 years Computer equipment and purchased software 3 years Leasehold improvements Shorter of asset’s useful life or remaining term of lease Maintenance and repairs that do not extend the life or improve the asset are expensed when incurred. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in operations. Impairment of Long-Lived Assets The Company regularly reviews the carrying value and estimated lives of all of its long-lived assets, including property and equipment, to determine whether indicators of impairment may exist which warrant adjustments to carrying values or estimated useful lives. The determinants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flow in future periods as well as the strategic significance of the assets to the Company’s business objectives. Should impairment exist, the impairment loss to be recognized is measured by the amount by which the carrying amount of the asset exceeds the projected discounted future net cash flows arising from the asset. All long-lived assets are maintained in the United States of America. Convertible Preferred Stock Liability The Company determined that the Company’s obligation to issue additional shares of the Company’s convertible preferred stock represented a freestanding financial instrument, which was accounted for as a liability. The freestanding convertible preferred stock liability was initially recorded at fair value, with fair value changes recognized in the statements of operations and comprehensive loss. The Company estimated the fair value of this liability using an option-pricing model that included assumptions for future financings, expected volatility, expected life and risk-free interest rate. At the time of the exercise of the option (June 2015), the remaining value of the convertible preferred stock liability was reclassified to convertible preferred stock with no further remeasurement required. Research and Development Expense The Company records research and development expenses as incurred. The Company accounts for nonrefundable advance payments for goods and services that will be used in future research and development activities as expenses when the goods have been received or when the service has been performed rather than when the payment is made. Research and development expenses consist of costs incurred by the Company for the discovery and development of the Company’s product candidates and include: · employee-related expenses, including salaries, benefits, travel and non-cash stock-based compensation expense; · external research and development expenses incurred under arrangements with third parties, such as contract research organizations, contract manufacturing organizations, academic and non-profit institutions and consultants; · costs to acquire technologies to be used in research and development that have not reached technological feasibility and have no alternative future use; · license fees; and · other expenses, which include direct and allocated expenses for laboratory, facilities and other costs. Clinical Trial Accruals Costs for preclinical studies and clinical trial activities are recognized based on an evaluation of the vendors’ progress towards completion of specific tasks, using data such as clinical site activations, patient enrollment or information provided to the Company by its vendors regarding their actual costs incurred. Payments for these activities are based on the terms of individual contracts and payment timing may differ significantly from the period in which the services are performed. The Company determines accrual estimates through reports from and discussions with applicable personnel and outside service providers as to the progress or state of completion, or the services completed. The Company’s estimates of accrued expenses as of each balance sheet date are based on the facts and circumstances known at the time. Stock-Based Compensation The Company maintains incentive plans under which incentive stock options and nonqualified stock options may be granted to employees and non-employee service providers. The Company accounts for stock-based employee compensation arrangements in accordance with the provisions of ASC 718, “ Compensation — Stock Compensation .” For stock options granted to employees, the Company recognizes compensation expense for all stock-based awards based on the grant-date estimated fair values. The value of the award is recognized as an expense ratably over the requisite service period. The fair value of stock options is determined using the Black-Scholes option pricing model. Forfeitures are accounted for when they occur. Stock-based compensation expense related to stock options granted to non-employees is recognized based on the fair value of the stock options, determined using the Black-Scholes option pricing model. The expense for options granted to non-employees is periodically re-measured as the underlying options vest. The awards generally vest over the time period the Company expects to receive service from the non-employee. Income Taxes The Company accounts for income taxes under the asset and liability method. The Company estimates actual current tax exposure together with assessing temporary differences resulting from differences in accounting for reporting purposes and tax purposes for certain items, such as accruals and allowances not currently deductible for tax purposes. These temporary differences result in deferred tax assets and liabilities, which are included in the Company’s balance sheets. In general, deferred tax assets represent future tax benefits to be received when certain expenses previously recognized in the Company’s statements of operations and comprehensive loss become deductible expenses, under applicable income tax laws or when net operating loss or credit carryforwards are utilized. Accordingly, realization of the Company’s deferred tax assets is dependent on future taxable income against which these deductions, losses and credits can be utilized. The Company must assess the likelihood that the Company’s deferred tax assets will be recovered from future taxable income and a valuation allowance is recorded when it is more likely than not that the deferred tax asset will not be recovered. The Company applies judgment in the determination of the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Based on the available evidence, the Company is unable, at this time, to support the determination that it is more likely than not that its deferred tax assets will be utilized in the future. Accordingly, the Company recorded a full valuation allowance for all periods presented. The Company intends to maintain valuation allowances until sufficient evidence exists to support its reversal. The Company recognizes any material interest and penalties related to unrecognized tax benefits in income tax expense. The Company recognizes benefits of uncertain tax positions if it is more likely than not such positions will be sustained upon examination based solely on their technical merits as the largest amount of benefit that is more likely than not to be realized upon the ultimate settlement. The Company is required to file income tax returns in the U.S. federal jurisdiction. The Company currently is not under examination by the Internal Revenue Service or other jurisdictions for any tax years. Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders. The Company’s only element of other comprehensive loss in any period presented was unrealized gains on available for sale marketable securities. Net Loss per Share Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, the convertible preferred stock, common stock subject to repurchase, and stock options are considered to be potentially dilutive securities. Because the Company has reported a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share for those periods. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, which required an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU No. 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective January 1, 2018 for public companies. Early application is permitted as of January 1, 2017. The standard permits the use of either the retrospective or cumulative effect transition method. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which clarifies the implementation guidance on principal versus agent considerations in ASU No. 2014-09. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarifies certain aspects of identifying performance obligations and licensing implementation guidance. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients , which relates to disclosures of remaining performance obligations, as well as other amendments to guidance on collectability, non-cash consideration and the presentation of sales and other similar taxes collected from customers. These standards have the same effective date and transition date of January 1, 2018. The Company does not believe adopting this guidance will have a material impact on its financial statements as the Company is not yet generating revenues. In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern . This standard update provides guidance around management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The new guidance is effective for all annual and interim periods ending after December 15, 2016. The Company does not believe that adopting ASU 2014-15 will have a material impact on its financial statements. In November 2015, the FASB issued ASU No 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes . This standard amends the accounting for income taxes and requires all deferred tax assets and liabilities to be classified as non-current on the balance sheet. The new standard is effective for reporting periods beginning after December 15, 2016, with early adoption permitted. The standard may be adopted either prospectively or retrospectively. We are currently evaluating the impact of ASU 2015-17. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) that replaces existing lease guidance. The new standard requires lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet. The new guidance will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income. The standard is effective for the Company beginning June 1, 2019, with early application permitted. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. The Company is currently assessing the impact of this guidance on its financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The updated guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The update to the standard is effective for the Company beginning June 1, 2017, with early application permitted. The Company has adopted the provisions of this standard early, the impact of which on its financial statements was not significant. |
Net Loss per Share
Net Loss per Share | 9 Months Ended |
Sep. 30, 2016 | |
Net Loss per Share | |
Net Loss per Share | 3. Net Loss per Share The following table shows the calculation of net loss per share (in thousands, except share and per share data): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Numerator: Net loss - basic and diluted $ ) $ ) $ ) $ ) Denominator: Weighted average common shares outstanding Less: weighted average common shares subject to repurchase ) ) ) ) Weighted average common shares outstanding used to compute basic and diluted net loss per share Net loss per share, basic and diluted $ ) $ ) $ ) $ ) During the preparation of the financial statements as of and for the year ended December 31, 2015, the Company identified an error within the Company’s earnings per share calculation for the nine months ended September 30, 2015, which financial statements were revised to correct the errors. The Company revised the Company’s weighted average shares and earnings per share calculation for the nine months ended September 30, 2015. Weighted average shares outstanding used to compute the basic and diluted net loss per share decreased from 425,242 to 346,621 shares. The earnings per share calculation was revised to increase basic net loss per share from $(59.49) to $(72.98). The Company evaluated the error and concluded that it was not material to the financial statements for the nine months ended September 30, 2015. The amounts in the table below were excluded from the calculation of diluted net loss per share, due to their anti-dilutive effect: Three and Nine Months Ended September 30, 2016 2015 Convertible preferred stock — Common stock subject to repurchase Outstanding options Total shares of common stock equivalents |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | 4. Fair Value Measurements Financial assets and liabilities are measured and recorded at fair value. The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. The fair value hierarchy prioritizes valuation inputs based on the observable nature of those inputs. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The hierarchy defines three levels of valuation inputs: Level 1—Quoted prices in active markets for identical assets or liabilities Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly Level 3—Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability There have been no transfers of assets and liabilities between levels of hierarchy. The following tables present information as of September 30, 2016 and December 31, 2015 about the Company’s assets that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy the Company utilized to determine such fair values (in thousands): September 30, 2016 Fair Value Measured Using Total (Level 1) (Level 2) (Level 3) Balance Assets Cash equivalents $ $ — $ — $ Marketable securities — — $ $ — $ — $ December 31, 2015 Fair Value Measured Using Total (Level 1) (Level 2) (Level 3) Balance Assets Cash equivalents $ $ — $ — $ Marketable securities — — $ $ — $ — $ The Company’s marketable securities are invested in direct obligations of the United States government for all periods. As of September 30, 2016, marketable securities had a maximum remaining maturity of five months and consisted of U.S. Treasury securities. The following table presents the issuances, changes in fair value, exercise and reclassification of the Company’s Level 3 financial instrument which is measured at fair value on a recurring basis (in thousands): Convertible Balance as of December 31, 2014 $ Change in fair value of convertible preferred stock liability through March 31, 2015 ) Balance as of March 31, 2015 Change in fair value of convertible preferred stock liability through date of Series A second tranche issuance Recognition of fair value upon issuance of second tranche Series A convertible preferred stock ) Balance as of September 30, 2015 $ — As of September 30, 2016 and December 31, 2015, the fair value of available for sale marketable securities by type of security were as follows (in thousands): September 30, 2016 Amortized Gross Gross Fair Value U.S. Treasury securities $ $ $ ) $ December 31, 2015 Amortized Gross Gross Fair Value U.S. Treasury securities $ $ — $ ) $ |
License and Collaboration Agree
License and Collaboration Agreements | 9 Months Ended |
Sep. 30, 2016 | |
License and Collaboration Agreements | |
License and Collaboration Agreements | 5. License and Collaboration Agreements Scripps Licensing Agreement In December 2014, the Company entered into a license agreement with The Scripps Research Institute (“Scripps”), pursuant to which it was granted a non-exclusive, world-wide license for all fields of use under Scripps’ rights in certain know-how and technology related to a mouse hybridoma clone expressing an anti-human CD73 antibody, and to progeny, mutants or unmodified derivatives of such hybridoma and any antibodies expressed by such hybridoma. Scripps also granted the Company the right to grant sublicenses in conjunction with other proprietary rights the Company holds, or to others collaborating with or performing services for the Company. Under this license agreement, Scripps has agreed not to grant any additional commercial licenses with respect to such materials, other than march-in rights granted to the U.S. government. Upon execution of the agreement, the Company made a one-time cash payment to Scripps of $10,000 in 2015 and is also obligated to pay a minimum annual fee to Scripps of $25,000. The one-time cash payment was recorded as research and development expense as technological feasibility of the asset had not been established and there was no alternative future use. The first minimum annual fee payment is due on the first anniversary of effective date of the agreement and will be due on each subsequent anniversary of the effective date for the term of the agreement. The Company is also required to make performance-based cash payments upon successful completion of clinical and sales milestones. The aggregate potential milestone payments are $2.6 million. The Company is also required to pay royalties on net sales of licensed products sold by it, its affiliates and its sublicensees at a rate in the low-single digits. In addition, should the Company sublicense the rights licensed under the agreement, it has agreed to pay a percentage of sublicense revenue received at specified rates that start at double digit percentages and decrease to single digit percentages based on the elapsed time from the effective date of the agreement and the time of entry into such sublicense. To date, no milestone payments have been made. The Company’s license agreement with Scripps will terminate upon expiration of its obligation to pay royalties to Scripps under the license agreement. The Company’s license agreement with Scripps is terminable by the consent of the parties, at will by the Company upon providing 90 days written notice to Scripps, or by Scripps for certain material breaches, or if the Company undergoes a bankruptcy event. In addition, Scripps may terminate the license on a product-by-product basis, or the entire agreement, if the Company fails to meet specified diligence obligations related to the development and commercialization of licensed products. Scripps may also terminate the agreement after the third anniversary of the effective date of the agreement if it reasonably believes, based on reports the Company provides to Scripps, that the Company has not used commercially reasonable efforts as required under the agreement, subject to a specified notice and cure period. Vernalis Licensing Agreement In February 2015, the Company entered into a license agreement with Vernalis (R&D) Limited (“Vernalis”), which was subsequently amended as of November 5, 2015, and, pursuant to which the Company was granted an exclusive, worldwide license under certain patent rights and know-how, including a limited right to grant sublicenses, for all fields of use to develop, manufacture and commercialize products containing certain adenosine receptor antagonists, including CPI-444. Pursuant to this agreement, a one-time cash payment to Vernalis in the amount of $1.0 million, which was recorded as research and development expense as technological feasibility of the asset had not been established and there was no alternative future use. The Company is also required to make cash milestone payments to Vernalis upon the successful completion of clinical and regulatory milestones for licensed products depending on the indications for which such licensed products are developed and upon achievement of certain sales milestones. The aggregate potential milestone payments exceed $200 million for all indications. To date, no milestone payments have been made. The Company has also agreed to pay Vernalis tiered incremental royalties based on the annual net sales of licensed products containing CPI-444 on a product-by-product and country-by-country basis, subject to certain offsets and reductions. The tiered royalty rates for products containing CPI-444 range from the mid-single digits up to the low-double digits on a country-by-country net sales basis. The royalties on other licensed products that do not include CPI-444 also increase with the amount of net sales on a product-by-product and country-by-country basis and range from the low-single digits up to the mid-single digits on a country-by-country net sales basis. The Company is also obligated to pay to Vernalis certain sales milestones as indicated above when worldwide net sales reach specified levels over an agreed upon time period. The agreement will expire on a product-by-product and country-by-country basis upon the expiration of the Company’s payment obligations to Vernalis in respect of a particular product and country. Both parties have the right to terminate the agreement for an uncured material breach by the other party. The Company may also terminate the agreement at its convenience by providing 90 days written notice, provided that the Company has not received notice of its own default under the agreement at the time the Company exercises such termination right. Vernalis may also terminate the agreement if the Company challenges a licensed patent or undergoes a bankruptcy event. Genentech Collaboration Agreement In October 2015, the Company entered into a clinical trial collaboration agreement with Genentech to evaluate the safety, tolerability and preliminary efficacy of CPI-444 combined with Genentech’s investigational cancer immunotherapy, TECENTRIQ ® (atezolizumab), a fully humanized monoclonal antibody targeting protein programmed cell death ligand 1(“PD-L1”), in a variety of solid tumors in a Phase 1/1b clinical trial. Pursuant to this agreement, the Company will be responsible for the conduct and cost of the relevant studies, under the supervision of a joint development committee made up of representatives of the Company and representatives of Genentech. Genentech will supply TECENTRIQ. As part of the agreement, the Company granted Genentech certain rights of first negotiation to participate in future clinical trials that the Company may conduct evaluating the administration of CPI-444 in combination with an anti-PD-1 or anti-PD-L1 antibody. If the Company and Genentech do not reach agreement on the terms of any such participation by Genentech within a specified time period, the Company retains the right to collaborate with third parties in such activities. The Company also granted Genentech certain rights of first negotiation should it decide to license development and commercialization rights to CPI-444. Should the Company and Genentech not reach agreement on the terms of such a license within a specified time period, it retains the right to enter into a license with another third party. The Company and Genentech each have the right to terminate the agreement for material breach by the other party. In addition, the agreement may be terminated by either party due to safety considerations, if directed by a regulatory authority or if development of CPI-444 or TECENTRIQ is discontinued. Further, the agreement will expire after a set period of time following the provision by the Company of the final clinical study report to Genentech. |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
Sep. 30, 2016 | |
Balance Sheet Components | |
Balance Sheet Components | 6. Balance Sheet Components (in thousands): September 30, December 31, 2016 2015 Prepaid and Other Current Assets Interest receivable $ $ — Prepaid insurance Prepaid research and development manufacturing expenses Tenant improvement allowance receivable — Other $ $ Property and Equipment, net Leasehold improvements $ $ Laboratory equipment Computer equipment and purchased software Construction in progress Less: accumulated depreciation and amortization ) ) $ $ Accrued and Other Liabilities Accrued clinical trial related $ $ Accrued manufacturing expense Personnel related Deferred rent Accrued legal and accounting Accrued contruction in progress costs Other accrued expenses $ $ Other Liabilities Deferred rent $ $ Shares subject to vesting $ $ |
Convertible Preferred Stock
Convertible Preferred Stock | 9 Months Ended |
Sep. 30, 2016 | |
Convertible Preferred Stock | |
Convertible Preferred Stock | 7. Convertible Preferred Stock Under the amended and restated certificate of incorporation in effect as of September 30, 2016, the Company is authorized to issue two classes of stock: preferred stock and common stock. Immediately prior to the consummation of the IPO on March 29, 2016, all outstanding shares of Series A and B convertible preferred stock were converted into 14,274,741 shares of common stock on a one-for-one basis. Convertible preferred stock as of December 31, 2015 consisted of the following (in thousands, except share data): Shares Net Shares Issued Carrying Liquidation Authorized & Outstanding Value Value Series A $ $ Series B Total $ $ |
Convertible Preferred Stock Lia
Convertible Preferred Stock Liability | 9 Months Ended |
Sep. 30, 2016 | |
Convertible Preferred Stock Liability | |
Convertible Preferred Stock Liability | 8. Convertible Preferred Stock Liability On November 26, 2014, the Company executed the Series A Convertible Preferred Stock Purchase Agreement for the issuance of up to 8,921,438 shares of Series A convertible preferred stock and issued 3,395,468 shares for net proceeds of $12.6 million in connection with the first closing of the first tranche. In January 2015, in connection with the second closing of the first tranche, the Company issued 1,065,246 shares of Series A convertible preferred stock for net proceeds of $4.0 million and in June 2015, in connection with the closing of the second tranche, an additional 4,460,715 shares of Series A convertible preferred stock were issued for net proceeds of $16.7 million. The Series A Convertible Preferred Stock Purchase Agreement provided that, upon the earliest to occur of any of three defined triggers, each investor of the first tranche agreed to purchase its pro-rata portion of the shares to be issued in the second tranche and the Company agreed to sell and issue said shares of Series A convertible preferred stock on the same terms as the first tranche. A convertible preferred stock liability was recorded for the Company’s obligation to sell the second tranche of the Series A convertible preferred stock to the first tranche stockholders at a fixed price of $3.755 per share upon the satisfaction of certain conditions. A liability was initially recorded in connection with the first tranche of the Series A convertible preferred stock financing at its initial estimated fair value of $2.6 million, with gains and losses arising from changes in fair value recognized in the statements of operations at each period while such instrument was classified as a liability. A gain of $0.3 million was recorded for the change in estimated fair value of the Series A convertible preferred stock liability for the period from January 1, 2015 through March 31, 2015. A $17.9 million charge was recorded for the change in estimated fair value of the Series A convertible preferred stock liability for the period from April 1, 2015 to the closing of the second tranche in June 2015. Upon the closing of the second tranche in June 2015, the liability terminated and the balance of the liability of $20.2 million was reclassified to convertible preferred stock. The preferred stock liability related to Series A convertible preferred stock was valued at issuance and at December 31, 2014 and March 31, 2015 using a backsolve option-pricing method based on the consideration paid for the Series A convertible preferred stock and the convertible preferred stock liability using an assumed term of 1.0 years and 0.75 years, an interest rate of 0.13% and 0.20% and a volatility of 85% and 85%, respectively. Immediately prior to its exercise on June 10, 2015, the convertible preferred stock liability’s fair value was estimated based on its intrinsic value, with the fair value of the Series A convertible preferred stock estimated as of June 10, 2015 and compared to the exercise price of the Series A convertible preferred stock liability. To estimate the fair value of the Series A convertible preferred stock as of June 10, 2015, the enterprise value of the Company was estimated based on potential IPO and sale estimates. The enterprise value was then allocated to the various classes of securities using an option pricing model that assumed a term of two years to a liquidity event, an interest rate of 0.75% and a volatility of 75% based on market conditions and expectations as of the June valuation date. |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2016 | |
Common Stock. | |
Common Stock | 9. Common Stock As of September 30, 2016, the amended and restated certificate of incorporation authorizes the Company to issue 290 million shares of common stock and 10 million shares of preferred stock. Each share of common stock is entitled to one vote. Common stockholders are entitled to dividends if and when declared by the board of directors. As of September 30, 2016, no dividends on common stock had been declared. The Company has reserved shares of common stock for issuance as follows: September 30, December 31, 2016 2015 Convertible preferred stock — Shares available for future option grants Outstanding options Unvested restricted common stock (founders and early exercise of stock options) Shares reserved for employee stock purchase plan — Total |
Stock Option Plans
Stock Option Plans | 9 Months Ended |
Sep. 30, 2016 | |
Stock Option Plans | |
Stock Option Plans | 10. Stock Option Plans In February 2014, the Company adopted the 2014 Equity Incentive Plan (the “2014 Plan”), which was subsequently amended in November 2014, July 2015 and September 2015, under which it granted incentive stock options (“ISOs”) or non-qualified stock options (“NSOs”). Terms of stock agreements, including vesting requirements, are determined by the board of directors or a committee authorized by the board of directors, subject to the provisions of the 2014 Plan. In general, awards granted by the Company vest over four years and have maximum exercise term of 10 years. The 2014 Plan provides that grants must be at an exercise price of 100% of fair market value of the Company’s common stock as determined by the board of directors on the date of the grant. In connection with the consummation of the IPO in March 2016, the 2016 Equity Incentive Award Plan (the “2016 Plan”), became effective. Under the 2016 Plan. incentive stock options, non-statutory stock options, stock purchase rights and other stock-based awards may be granted. Terms of stock agreements, including vesting requirements, are determined by the board of directors or a committee authorized by the board of directors, subject to the provisions of the 2016 Plan. In general, awards granted by the Company vest over four years and have maximum exercise term of 10 years. The 2016 Plan provides that grants must be at an exercise price of 100% of fair market value of the Company’s common stock as determined by the board of directors on the date of the grant. In conjunction with adopting the 2016 Plan, the 2014 Plan was terminated and no further awards will be granted under the 2014 Plan. Options outstanding under the 2014 Plan as of the effective date of the 2016 Plan that are forfeited or lapse unexercised may be re-issued under the 2016 Plan, up to a maximum of 1,136,229 shares. Activity under the Company’s stock option plans is set forth below: Options Outstanding Weighted- Shares Average Available Number Exercise for Grant of Options Price Balance at December 31, 2015 $ Additional shares authorized — Options granted ) Options exercised — ) Options forfeited ) Balance at September 30, 2016 $ |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Stock-Based Compensation | |
Stock-Based Compensation | 11. Stock-Based Compensation The Company’s results of operations include expenses relating to employee and non-employee stock-based awards as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Research and development $ $ $ $ General and administrative Total $ $ $ $ |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Taxes | |
Income Taxes | 12. Income Taxes The Company did not record a provision or benefit for income taxes during the three or nine months ended September 30, 2016 or 2015. The Company continues to maintain a full valuation allowance against its net deferred tax assets. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 13. Commitments and Contingencies Facility Lease In January 2015, the Company signed an operating lease, effective February 1, 2015, for 8,138 square feet of office and laboratory space located in Burlingame, California with a one-year term. In March 2015, the Company signed the first amendment to the lease, effective April 15, 2015, whereby the original premises were expanded by an additional 3,163 square feet and the lease term was extended through January 2017. In August 2015, the Company signed the second amendment to the lease whereby the size of the existing premises was increased by adding 10,834 square feet and the term of the lease was extended through January 2021. The landlord agreed to provide $1.6 million to fund qualifying tenant improvements, defined as building design, permits and construction costs. Tenant improvements associated with the tenant improvement allowance were $1.6 million. In June 2016, the Company signed the third amendment to the lease to add a net of 4,523 square feet of space. After completing approximately $250,000 of improvements, the Company plans to occupy the space in November 2016. In August 2016, the Company signed the fourth amendment to the lease, effective February 1, 2017, to add another 1,973 square feet of space. The lease agreement includes an annual rent escalation clause, a right to extend the term at the then current market rate for three years and a right of first refusal on certain space. The Company records rent expense on a straight-line basis over the effective term of the lease, including any free rent periods and incentives. The lease requires the Company to pay additional amounts for operating and maintenance expenses. Rent expense related to the facilities lease for the three and nine months ended September 30, 2016 was approximately $122,000 and $378,000, respectively. Rent expense for the three and nine months ended September 30, 2015 was approximately $101,000 and $221,000, respectively. As of September 30, 2016, future minimum lease payments under the facility lease were as follows (in thousands): Operating Leases 2016 * $ 2017 2018 2019 2020 Thereafter Total $ *Remainder of the year Pursuant to the Company’s license agreements with each of Vernalis and Scripps, it has obligations to make future milestone and royalty payments to these parties, respectively. However, because these amounts are contingent, they have not been included on the Company’s balance sheet. Indemnifications In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. There have been no claims to date and the Company has a directors and officers insurance policy that may enable it to recover a portion of any amounts paid for future claims. Legal Proceedings The Company is not a party to any material legal proceedings. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s functional and reporting currency is the U.S. dollar. |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The accompanying interim condensed financial statements and related disclosures are unaudited, have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The condensed results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period. The accompanying condensed financial statements should be read in conjunction with the audited financial statements and the related notes for the year ended December 31, 2015 included in the Company’s Prospectus dated March 22, 2016 filed pursuant to Rule 424(b)(4) with the SEC. |
Use of Estimates | Use of Estimates The preparation of the Company’s financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from such estimates. |
Concentrations of Credit Risk and Other Risks and Uncertainties | Concentrations of Credit Risk and Other Risks and Uncertainties Substantially all of the Company’s cash and cash equivalents are deposited in accounts with two financial institutions that management believes are of high credit quality. Such deposits may, at times, exceed federally insured limits. The Company maintains its cash with an accredited financial institution and accordingly, such funds are subject to minimal credit risk. The Company’s marketable securities are direct obligations of the United States government. The Company has not experienced any losses on its deposits of cash, cash equivalents or marketable securities. Since inception, the Company has incurred recurring net losses and negative cash flows from operations. At September 30, 2016, the Company had an accumulated deficit of $56.8 million and does not expect to experience positive cash flows from operations in the near future. The Company has financed its operations to date primarily through private placements of convertible preferred stock and proceeds from its IPO. As of September 30, 2016, the Company had cash, cash equivalents and marketable securities of $145.1 million. The Company is subject to a number of risks similar to other early stage biopharmaceutical companies, including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical testing or clinical trials, its reliance on third parties to conduct its clinical trials, the need to obtain marketing approval for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of the Company’s product candidates, its right to develop and commercialize its product candidates pursuant to the terms and conditions of the licenses granted to the Company, and protection of proprietary technology. If the Company does not successfully commercialize or partner any of its product candidates, it will be unable to generate product revenue or achieve profitability. |
Segments | Segments Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment, that of the development of and commercialization of novel immuno-oncology therapies that are designed to harness the immune system to attack cancer cells. |
Cash and Cash Equivalents and Marketable Securities | Cash and Cash Equivalents and Marketable Securities The Company considers all highly liquid investment securities with remaining maturities at the date of purchase of three months or less to be cash equivalents. Investments with remaining maturities, at the date of purchase, greater than three months, but less than one year are considered short-term. The Company determines the appropriate classification of marketable securities at the time of purchase and evaluates such designation as of each balance sheet date. To date, all marketable securities have been classified as available-for-sale and are carried at fair value with unrealized gains and losses, if any, included as a component of accumulated other comprehensive income (loss) in stockholders’ equity (deficit). Interest and realized gains and losses are included in interest income. Realized gains and losses are recognized based on the specific identification method. |
Fair Value Measurements | Fair Value Measurements Fair value accounting is applied for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The carrying amount of the Company’s financial instruments, including cash equivalents, accounts payable and accrued liabilities, approximate fair value due to their short-term maturities. |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs consist primarily of direct incremental costs related to the Company’s initial public offering of its common stock. Upon completion of the initial public offering in March 2016, these amounts were offset against the proceeds of the offering. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the respective assets: Laboratory equipment 5 years Computer equipment and purchased software 3 years Leasehold improvements Shorter of asset’s useful life or remaining term of lease Maintenance and repairs that do not extend the life or improve the asset are expensed when incurred. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in operations. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company regularly reviews the carrying value and estimated lives of all of its long-lived assets, including property and equipment, to determine whether indicators of impairment may exist which warrant adjustments to carrying values or estimated useful lives. The determinants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flow in future periods as well as the strategic significance of the assets to the Company’s business objectives. Should impairment exist, the impairment loss to be recognized is measured by the amount by which the carrying amount of the asset exceeds the projected discounted future net cash flows arising from the asset. All long-lived assets are maintained in the United States of America. |
Convertible Preferred Stock Liability | Convertible Preferred Stock Liability The Company determined that the Company’s obligation to issue additional shares of the Company’s convertible preferred stock represented a freestanding financial instrument, which was accounted for as a liability. The freestanding convertible preferred stock liability was initially recorded at fair value, with fair value changes recognized in the statements of operations and comprehensive loss. The Company estimated the fair value of this liability using an option-pricing model that included assumptions for future financings, expected volatility, expected life and risk-free interest rate. At the time of the exercise of the option (June 2015), the remaining value of the convertible preferred stock liability was reclassified to convertible preferred stock with no further remeasurement required. |
Research and Development Expense | Research and Development Expense The Company records research and development expenses as incurred. The Company accounts for nonrefundable advance payments for goods and services that will be used in future research and development activities as expenses when the goods have been received or when the service has been performed rather than when the payment is made. Research and development expenses consist of costs incurred by the Company for the discovery and development of the Company’s product candidates and include: · employee-related expenses, including salaries, benefits, travel and non-cash stock-based compensation expense; · external research and development expenses incurred under arrangements with third parties, such as contract research organizations, contract manufacturing organizations, academic and non-profit institutions and consultants; · costs to acquire technologies to be used in research and development that have not reached technological feasibility and have no alternative future use; · license fees; and · other expenses, which include direct and allocated expenses for laboratory, facilities and other costs. |
Clinical Trial Accruals | Clinical Trial Accruals Costs for preclinical studies and clinical trial activities are recognized based on an evaluation of the vendors’ progress towards completion of specific tasks, using data such as clinical site activations, patient enrollment or information provided to the Company by its vendors regarding their actual costs incurred. Payments for these activities are based on the terms of individual contracts and payment timing may differ significantly from the period in which the services are performed. The Company determines accrual estimates through reports from and discussions with applicable personnel and outside service providers as to the progress or state of completion, or the services completed. The Company’s estimates of accrued expenses as of each balance sheet date are based on the facts and circumstances known at the time. |
Stock-Based Compensation | Stock-Based Compensation The Company maintains incentive plans under which incentive stock options and nonqualified stock options may be granted to employees and non-employee service providers. The Company accounts for stock-based employee compensation arrangements in accordance with the provisions of ASC 718, “ Compensation — Stock Compensation .” For stock options granted to employees, the Company recognizes compensation expense for all stock-based awards based on the grant-date estimated fair values. The value of the award is recognized as an expense ratably over the requisite service period. The fair value of stock options is determined using the Black-Scholes option pricing model. Forfeitures are accounted for when they occur. Stock-based compensation expense related to stock options granted to non-employees is recognized based on the fair value of the stock options, determined using the Black-Scholes option pricing model. The expense for options granted to non-employees is periodically re-measured as the underlying options vest. The awards generally vest over the time period the Company expects to receive service from the non-employee. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. The Company estimates actual current tax exposure together with assessing temporary differences resulting from differences in accounting for reporting purposes and tax purposes for certain items, such as accruals and allowances not currently deductible for tax purposes. These temporary differences result in deferred tax assets and liabilities, which are included in the Company’s balance sheets. In general, deferred tax assets represent future tax benefits to be received when certain expenses previously recognized in the Company’s statements of operations and comprehensive loss become deductible expenses, under applicable income tax laws or when net operating loss or credit carryforwards are utilized. Accordingly, realization of the Company’s deferred tax assets is dependent on future taxable income against which these deductions, losses and credits can be utilized. The Company must assess the likelihood that the Company’s deferred tax assets will be recovered from future taxable income and a valuation allowance is recorded when it is more likely than not that the deferred tax asset will not be recovered. The Company applies judgment in the determination of the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Based on the available evidence, the Company is unable, at this time, to support the determination that it is more likely than not that its deferred tax assets will be utilized in the future. Accordingly, the Company recorded a full valuation allowance for all periods presented. The Company intends to maintain valuation allowances until sufficient evidence exists to support its reversal. The Company recognizes any material interest and penalties related to unrecognized tax benefits in income tax expense. The Company recognizes benefits of uncertain tax positions if it is more likely than not such positions will be sustained upon examination based solely on their technical merits as the largest amount of benefit that is more likely than not to be realized upon the ultimate settlement. The Company is required to file income tax returns in the U.S. federal jurisdiction. The Company currently is not under examination by the Internal Revenue Service or other jurisdictions for any tax years. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders. The Company’s only element of other comprehensive loss in any period presented was unrealized gains on available for sale marketable securities. |
Net Loss per Share | Net Loss per Share Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, the convertible preferred stock, common stock subject to repurchase, and stock options are considered to be potentially dilutive securities. Because the Company has reported a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share for those periods. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, which required an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU No. 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective January 1, 2018 for public companies. Early application is permitted as of January 1, 2017. The standard permits the use of either the retrospective or cumulative effect transition method. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which clarifies the implementation guidance on principal versus agent considerations in ASU No. 2014-09. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarifies certain aspects of identifying performance obligations and licensing implementation guidance. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients , which relates to disclosures of remaining performance obligations, as well as other amendments to guidance on collectability, non-cash consideration and the presentation of sales and other similar taxes collected from customers. These standards have the same effective date and transition date of January 1, 2018. The Company does not believe adopting this guidance will have a material impact on its financial statements as the Company is not yet generating revenues. In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern . This standard update provides guidance around management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The new guidance is effective for all annual and interim periods ending after December 15, 2016. The Company does not believe that adopting ASU 2014-15 will have a material impact on its financial statements. In November 2015, the FASB issued ASU No 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes . This standard amends the accounting for income taxes and requires all deferred tax assets and liabilities to be classified as non-current on the balance sheet. The new standard is effective for reporting periods beginning after December 15, 2016, with early adoption permitted. The standard may be adopted either prospectively or retrospectively. We are currently evaluating the impact of ASU 2015-17. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) that replaces existing lease guidance. The new standard requires lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet. The new guidance will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income. The standard is effective for the Company beginning June 1, 2019, with early application permitted. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. The Company is currently assessing the impact of this guidance on its financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The updated guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The update to the standard is effective for the Company beginning June 1, 2017, with early application permitted. The Company has adopted the provisions of this standard early, the impact of which on its financial statements was not significant. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Summary of Significant Accounting Policies | |
Schedule of estimated useful lives of property and equipment, net | Laboratory equipment 5 years Computer equipment and purchased software 3 years Leasehold improvements Shorter of asset’s useful life or remaining term of lease |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Net Loss per Share | |
Schedule of net loss per share, basic and diluted | The following table shows the calculation of net loss per share (in thousands, except share and per share data): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Numerator: Net loss - basic and diluted $ ) $ ) $ ) $ ) Denominator: Weighted average common shares outstanding Less: weighted average common shares subject to repurchase ) ) ) ) Weighted average common shares outstanding used to compute basic and diluted net loss per share Net loss per share, basic and diluted $ ) $ ) $ ) $ ) |
Schedule of antidilutive securities excluded from calculation of diluted net loss per share | Three and Nine Months Ended September 30, 2016 2015 Convertible preferred stock — Common stock subject to repurchase Outstanding options Total shares of common stock equivalents |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Measurements | |
Schedule of fair value of assets and liabilities recorded at fair value on a recurring basis, by level within fair value hierarchy | The following tables present information as of September 30, 2016 and December 31, 2015 about the Company’s assets that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy the Company utilized to determine such fair values (in thousands): September 30, 2016 Fair Value Measured Using Total (Level 1) (Level 2) (Level 3) Balance Assets Cash equivalents $ $ — $ — $ Marketable securities — — $ $ — $ — $ December 31, 2015 Fair Value Measured Using Total (Level 1) (Level 2) (Level 3) Balance Assets Cash equivalents $ $ — $ — $ Marketable securities — — $ $ — $ — $ |
Summary of changes in fair value of the Level 3 financial instruments measured on a recurring basis | The following table presents the issuances, changes in fair value, exercise and reclassification of the Company’s Level 3 financial instrument which is measured at fair value on a recurring basis (in thousands): Convertible Balance as of December 31, 2014 $ Change in fair value of convertible preferred stock liability through March 31, 2015 ) Balance as of March 31, 2015 Change in fair value of convertible preferred stock liability through date of Series A second tranche issuance Recognition of fair value upon issuance of second tranche Series A convertible preferred stock ) Balance as of September 30, 2015 $ — |
Schedule of fair value of available for sale marketable securities | As of September 30, 2016 and December 31, 2015, the fair value of available for sale marketable securities by type of security were as follows (in thousands): September 30, 2016 Amortized Gross Gross Fair Value U.S. Treasury securities $ $ $ ) $ December 31, 2015 Amortized Gross Gross Fair Value U.S. Treasury securities $ $ — $ ) $ |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Balance Sheet Components | |
Schedule of prepaid and other current assets | September 30, December 31, 2016 2015 Prepaid and Other Current Assets Interest receivable $ $ — Prepaid insurance Prepaid research and development manufacturing expenses Tenant improvement allowance receivable — Other $ $ |
Schedule of property and equipment, net | Property and Equipment, net Leasehold improvements $ $ Laboratory equipment Computer equipment and purchased software Construction in progress Less: accumulated depreciation and amortization ) ) $ $ |
Schedule of accrued and other liabilities | Accrued and Other Liabilities Accrued clinical trial related $ $ Accrued manufacturing expense Personnel related Deferred rent Accrued legal and accounting Accrued contruction in progress costs Other accrued expenses $ $ |
Schedule of other liabilities | Other Liabilities Deferred rent $ $ Shares subject to vesting $ $ |
Convertible Preferred Stock (Ta
Convertible Preferred Stock (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Convertible Preferred Stock | |
Schedule of convertible preferred stock | Convertible preferred stock as of December 31, 2015 consisted of the following (in thousands, except share data): Shares Net Shares Issued Carrying Liquidation Authorized & Outstanding Value Value Series A $ $ Series B Total $ $ |
Common Stock (Tables)
Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Common Stock. | |
Schedule of shares of common stock reserved for issuance, on an as-converted basis | September 30, December 31, 2016 2015 Convertible preferred stock — Shares available for future option grants Outstanding options Unvested restricted common stock (founders and early exercise of stock options) Shares reserved for employee stock purchase plan — Total |
Stock Option Plans (Tables)
Stock Option Plans (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Stock Option Plans | |
Summary of stock option activity | Options Outstanding Weighted- Shares Average Available Number Exercise for Grant of Options Price Balance at December 31, 2015 $ Additional shares authorized — Options granted ) Options exercised — ) Options forfeited ) Balance at September 30, 2016 $ |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Stock-Based Compensation | |
Schedule of expenses relating to employee and non-employee stock-based awards | The Company’s results of operations include expenses relating to employee and non-employee stock-based awards as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Research and development $ $ $ $ General and administrative Total $ $ $ $ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies. | |
Schedule of future minimum lease payments under the facility lease | As of September 30, 2016, future minimum lease payments under the facility lease were as follows (in thousands): Operating Leases 2016 * $ 2017 2018 2019 2020 Thereafter Total $ *Remainder of the year |
Organization (Details)
Organization (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 26, 2016 | Mar. 29, 2016 |
IPO | ||
Initial Public Offering | ||
Share price for IPO (in dollars per share) | $ 15 | |
Issuance of stock (in shares) | 4,700,000 | |
Net proceeds from IPO | $ 70.6 | |
Over-Allotment Option | ||
Initial Public Offering | ||
Share price for IPO (in dollars per share) | $ 15 | |
Issuance of stock (in shares) | 502,618 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Basis of presentation and credit risk (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016USD ($)segmentitem | Dec. 31, 2015USD ($) | |
Summary of Significant Accounting Policies | ||
Accumulated deficit | $ (56,785) | $ (31,496) |
Cash, cash equivalents and marketable securities | $ 145,100 | |
Concentrations of Credit Risk and Other Risks and Uncertainties | ||
Number of highly credit qualified financial institutions | item | 2 | |
Segments | ||
Number of operating segments | segment | 1 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Property and Equipment, Net (Details) | 9 Months Ended |
Sep. 30, 2016 | |
Laboratory equipment | |
Property and Equipment, Net | |
Estimated Useful lives | 5 years |
Computer equipment and purchased software | |
Property and Equipment, Net | |
Estimated Useful lives | 3 years |
Net Loss per Share - Net Loss P
Net Loss per Share - Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Numerator: | ||||
Net loss-basic and diluted | $ (10,297) | $ (3,151) | $ (25,289) | $ (25,296) |
Denominator: | ||||
Weighted average common shares outstanding | 20,909,501 | 1,325,637 | 14,602,467 | 1,214,621 |
Less: weighted average common shares subject to repurchase | (726,004) | (930,317) | (804,540) | (868,000) |
Weighted average common shares used to compute basic and diluted net loss per share | 20,183,497 | 395,320 | 13,797,927 | 346,621 |
Net loss per share, basic and diluted (in dollars per share) | $ (0.51) | $ (7.97) | $ (1.83) | $ (72.98) |
Previously Reported | ||||
Denominator: | ||||
Weighted average common shares used to compute basic and diluted net loss per share | 425,242 | |||
Net loss per share, basic and diluted (in dollars per share) | $ (59.49) |
Net Loss per Share - Anti-Dilut
Net Loss per Share - Anti-Dilutive Securities (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Excluded from the calculation of diluted net loss per share, due to anti-dilutive effect | ||||
Shares of common stock equivalents | 2,741,760 | 15,767,251 | 2,741,760 | 15,767,251 |
Convertible Preferred Stock | ||||
Excluded from the calculation of diluted net loss per share, due to anti-dilutive effect | ||||
Shares of common stock equivalents | 14,274,741 | 14,274,741 | ||
Common stock subject to repurchase | ||||
Excluded from the calculation of diluted net loss per share, due to anti-dilutive effect | ||||
Shares of common stock equivalents | 684,833 | 1,006,374 | 684,833 | 1,006,374 |
Outstanding options | ||||
Excluded from the calculation of diluted net loss per share, due to anti-dilutive effect | ||||
Shares of common stock equivalents | 2,056,927 | 486,136 | 2,056,927 | 486,136 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Nov. 26, 2014 | |
Transfer between levels | |||||||
Transfer of assets from level 1 to 2 | $ 0 | ||||||
Transfer of assets from level 2 to 1 | 0 | ||||||
Transfer of liabilities from level 1 to 2 | 0 | ||||||
Transfer of liabilities from level 2 to 1 | 0 | ||||||
Assets | |||||||
Marketable securities | 139,547 | $ 90,281 | |||||
Issuances, changes in fair value, exercise and reclassification of the Level 3 financial instrument | |||||||
Change in Fair Value of Convertible Preferred Stock Liability | $ 17,600 | ||||||
U.S. Treasury securities | |||||||
Assets | |||||||
Marketable securities | $ 139,547 | 90,281 | |||||
Maximum remaining maturity of marketable securities | 5 months | ||||||
Recurring | |||||||
Assets | |||||||
Cash equivalents | $ 2,752 | 3,245 | |||||
Marketable securities | 139,547 | 90,281 | |||||
Total Assets | 142,299 | 93,526 | |||||
Recurring | Level 1 | |||||||
Assets | |||||||
Cash equivalents | 2,752 | 3,245 | |||||
Marketable securities | 139,547 | 90,281 | |||||
Total Assets | $ 142,299 | $ 93,526 | |||||
Recurring | Level 3 | |||||||
Issuances, changes in fair value, exercise and reclassification of the Level 3 financial instrument | |||||||
Balance as of the beginning of the period | $ 2,300 | $ 2,600 | $ 2,600 | ||||
Change in Fair Value of Convertible Preferred Stock Liability | (300) | ||||||
Balance as of the end of the period | $ 2,300 | ||||||
Series A convertible preferred stock | |||||||
Liabilities | |||||||
Convertible preferred stock liability | $ 2,600 | ||||||
Issuances, changes in fair value, exercise and reclassification of the Level 3 financial instrument | |||||||
Change in Fair Value of Convertible Preferred Stock Liability | $ 17,900 | ||||||
Series A convertible preferred stock | Recurring | Level 3 | |||||||
Issuances, changes in fair value, exercise and reclassification of the Level 3 financial instrument | |||||||
Change in Fair Value of Convertible Preferred Stock Liability | $ 17,900 | ||||||
Fair value of convertible preferred stock liability recognized upon issuance | $ (20,200) |
Fair Value Measurements - Avail
Fair Value Measurements - Available For Sale (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair value of available for sale marketable securities | ||
Fair Value | $ 139,547 | $ 90,281 |
U.S. Treasury securities | ||
Fair value of available for sale marketable securities | ||
Amortized Cost | 139,506 | 90,326 |
Gross Unrealized Gains | 42 | |
Gross Unrealized Losses | (1) | (45) |
Fair Value | $ 139,547 | $ 90,281 |
License and Collaboration Agr36
License and Collaboration Agreements (Details) - Licensing Agreement - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Scripps Research Institute | ||
License and Collaboration Agreements | ||
Minimum annual fee | $ 25,000 | |
Aggregate potential milestone payments | $ 2,600,000 | |
Milestone payments made | $ 0 | |
Period of written notice to terminate | 90 days | |
Scripps Research Institute | Research and development | ||
License and Collaboration Agreements | ||
One-time cash payment | $ 10,000 | |
Vernalis (R&D) Limited | ||
License and Collaboration Agreements | ||
Milestone payments made | $ 0 | |
Period of written notice to terminate | 90 days | |
Vernalis (R&D) Limited | Minimum | ||
License and Collaboration Agreements | ||
Aggregate potential milestone payments | $ 200,000,000 | |
Vernalis (R&D) Limited | Research and development | ||
License and Collaboration Agreements | ||
One-time cash payment | $ 1,000,000 |
Balance Sheet Components - Prep
Balance Sheet Components - Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Prepaid and Other Current Assets | ||
Interest Receivable | $ 328 | |
Prepaid Insurance | 199 | $ 15 |
Prepaid research and development manufacturing expenses | 10 | 722 |
Tenant improvement allowance receivable | 347 | |
Other | 376 | 193 |
Total of prepaid and other current assets | $ 913 | $ 1,277 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Property and Equipment, net | ||
Property and equipment, gross | $ 3,402 | $ 1,980 |
Less: accumulated depreciation and amortization | (544) | (135) |
Property and equipment, net | 2,858 | 1,845 |
Leasehold improvements | ||
Property and Equipment, net | ||
Property and equipment, gross | 1,688 | 74 |
Laboratory equipment | ||
Property and Equipment, net | ||
Property and equipment, gross | 1,541 | 829 |
Computer equipment and purchased software | ||
Property and Equipment, net | ||
Property and equipment, gross | 53 | 18 |
Construction in progress | ||
Property and Equipment, net | ||
Property and equipment, gross | $ 120 | $ 1,059 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued and Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Accrued and Other Liabilities | ||
Accrued clinical trial related | $ 1,079 | $ 376 |
Accrued Manufacturing Expense | 407 | 12 |
Personnel related | 550 | 305 |
Deferred rent | 311 | 223 |
Accrued legal and accounting | 413 | 314 |
Accrued construction in progress costs | 5 | 101 |
Other accrued expenses | 415 | 164 |
Accrued Liabilities and Other Liabilities, Total | $ 3,180 | $ 1,495 |
Balance Sheet Components - Othe
Balance Sheet Components - Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Other Liabilities | ||
Deferred rent | $ 1,214 | $ 642 |
Shares subject to vesting | 43 | 68 |
Total of other liabilities | $ 1,257 | $ 710 |
Convertible Preferred Stock (De
Convertible Preferred Stock (Details) $ in Thousands | Mar. 29, 2016shares | Sep. 30, 2016USD ($)itemshares | Dec. 31, 2015USD ($)shares | Nov. 26, 2014shares |
Convertible Preferred Stock | ||||
Number of classes of stock authorized | item | 2 | |||
Convertible preferred stock | ||||
Shares Authorized | 0 | 14,274,741 | ||
Shares Issued | 0 | 14,274,741 | ||
Shares Outstanding | 0 | 14,274,741 | ||
Net Carrying Value | $ | $ 125,780 | |||
Liquidation Value | $ | $ 0 | $ 108,500 | ||
Conversion | ||||
Number of common stock issued with the conversion of the preferred stock | 14,274,741 | |||
Preferred stock conversion ratio | 1 | |||
Series A convertible preferred stock | ||||
Convertible preferred stock | ||||
Shares Authorized | 8,921,429 | 8,921,438 | ||
Shares Issued | 8,921,429 | |||
Net Carrying Value | $ | $ 50,941 | |||
Liquidation Value | $ | $ 33,500 | |||
Series B convertible preferred stock | ||||
Convertible preferred stock | ||||
Shares Authorized | 5,353,312 | |||
Shares Issued | 5,353,312 | |||
Net Carrying Value | $ | $ 74,839 | |||
Liquidation Value | $ | $ 75,000 |
Convertible Preferred Stock L42
Convertible Preferred Stock Liability (Details) $ / shares in Units, $ in Thousands | Jun. 10, 2015 | Nov. 26, 2014USD ($)itemshares | Jun. 30, 2015USD ($)$ / sharesshares | Jan. 31, 2015USD ($)shares | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2014 | Sep. 30, 2016shares | Dec. 31, 2015shares |
Convertible preferred stock | ||||||||||
Shares Authorized | shares | 0 | 14,274,741 | ||||||||
Net proceeds | $ 95,569 | |||||||||
Change in fair value of convertible preferred stock liability | $ 17,600 | |||||||||
Series A convertible preferred stock | ||||||||||
Convertible preferred stock | ||||||||||
Shares Authorized | shares | 8,921,438 | 8,921,429 | ||||||||
Issuance of stock (in shares) | shares | 3,395,468 | 4,460,715 | 1,065,246 | |||||||
Net proceeds | $ 12,600 | $ 16,700 | $ 4,000 | |||||||
Number of defined triggers for issuance of additional shares to first tranche investors on the same terms | item | 3 | |||||||||
Convertible preferred stock liability | $ 2,600 | |||||||||
Gain from change in estimated fair value | $ 300 | |||||||||
Change in fair value of convertible preferred stock liability | $ 17,900 | |||||||||
Reclassification of liability to convertible preferred stock | $ 20,200 | |||||||||
Series A convertible preferred stock | Obligation to issue second tranche | ||||||||||
Convertible preferred stock | ||||||||||
Fixed price for second tranche obligation (in dollars per share) | $ / shares | $ 3.755 | |||||||||
Assumed term | 2 years | 9 months | 1 year | |||||||
Interest rate (as a percent) | 0.75% | 0.20% | 0.13% | |||||||
Volatility (as a percent) | 75.00% | 85.00% | 85.00% |
Common Stock (Details)
Common Stock (Details) | 9 Months Ended | |
Sep. 30, 2016USD ($)Voteshares | Dec. 31, 2015shares | |
Common Stock. | ||
Common stock, shares authorized for issuance | 290,000,000 | 20,000,000 |
Preferred stock, shares authorized for issuance | 10,000,000 | 0 |
Number of votes per share of common stock | Vote | 1 | |
Dividends on common stock | $ | $ 0 | |
Shares of common stock reserved for issuance, on an as-converted basis | ||
Convertible preferred stock, shares authorized | 0 | 14,274,741 |
Shares available for future option grants | 2,779,750 | 2,559,499 |
Outstanding options | 2,056,927 | 784,136 |
Unvested restricted common stock (founders and early exercise of stock options) | 684,833 | 924,535 |
Shares reserved for employee stock purchase plan | 200,000 | |
Total | 5,721,510 | 18,542,911 |
Stock Option Plans - Stock Opti
Stock Option Plans - Stock Option Activity (Details) - $ / shares | 1 Months Ended | 9 Months Ended | |
Mar. 31, 2016 | Feb. 28, 2014 | Sep. 30, 2016 | |
Shares Available for Grant | |||
Beginning balance | 2,559,499 | ||
Ending balance | 2,779,750 | ||
Number of Options | |||
Beginning balance | 784,136 | ||
Ending balance | 2,056,927 | ||
2016 Plan | |||
Stock Option Plans | |||
Vesting period | 4 years | ||
Maximum exercise term | 10 years | ||
Exercise price of common stock of its fair value (as a percent) | 100.00% | ||
Shares Available for Grant | |||
Beginning balance | 2,559,499 | ||
Shares authorized for plan | 1,496,001 | ||
Granted | (1,347,250) | ||
Forfeited | 71,500 | ||
Ending balance | 2,779,750 | ||
Number of Options | |||
Beginning balance | 784,136 | ||
Granted | 1,347,250 | ||
Exercised | (2,959) | ||
Forfeited | (71,500) | ||
Ending balance | 2,056,927 | ||
Weighted Average Exercise Price | |||
Beginning balance (in dollars per share) | $ 4.09 | ||
Granted (in dollars per share) | 14.65 | ||
Exercised (in dollars per share) | 0.28 | ||
Forfeited (in dollars per share) | 4.62 | ||
Ending balance (in dollars per share) | $ 10.99 | ||
2014 Plan | |||
Stock Option Plans | |||
Vesting period | 4 years | ||
Maximum exercise term | 10 years | ||
Exercise price of common stock of its fair value (as a percent) | 100.00% | ||
Maximum number of options that may be re-issued under the 2016 plan | 1,136,229 |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expense Allocation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Stock-based compensation | ||||
Stock-based compensation expense | $ 1,264 | $ 123 | $ 2,781 | $ 142 |
Research and development | ||||
Stock-based compensation | ||||
Stock-based compensation expense | 578 | 94 | 1,365 | 114 |
General and administrative | ||||
Stock-based compensation | ||||
Stock-based compensation expense | $ 686 | $ 29 | $ 1,416 | $ 28 |
Commitments and Contingencies46
Commitments and Contingencies (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Aug. 31, 2016ft² | Jun. 30, 2016USD ($)ft² | Aug. 31, 2015USD ($)ft² | Mar. 31, 2015ft² | Jan. 31, 2015ft² | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | |
Facility Lease | |||||||||
Leasehold improvements associated with the tenant improvement allowance | $ 1,600,000 | $ 1,600,000 | |||||||
Rent expense | 122,000 | $ 101,000 | 378,000 | $ 221,000 | |||||
Future minimum lease payments under operating leases | |||||||||
2,016 | 226,000 | 226,000 | |||||||
2,017 | 1,034,000 | 1,034,000 | |||||||
2,018 | 1,068,000 | 1,068,000 | |||||||
2,019 | 1,100,000 | 1,100,000 | |||||||
2,020 | 1,133,000 | 1,133,000 | |||||||
Thereafter | 95,000 | 95,000 | |||||||
Total | $ 4,656,000 | $ 4,656,000 | |||||||
Facilities lease | Office and laboratory space in Burlingame, California | |||||||||
Facility Lease | |||||||||
Area of leased facility | ft² | 8,138 | ||||||||
Additional area of lease | ft² | 1,973 | 4,523 | 10,834 | 3,163 | |||||
Lease term | 1 year | ||||||||
Tenant improvements to be funded by landlord | $ 250,000 | $ 1,600,000 | |||||||
Lease agreement, right to extend the term | 3 years |