Deciphera Pharmaceuticals (DCPH) 10-Q 5 May 20 2020 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	Apr. 30, 2020
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Trading Symbol	DCPH
Entity Registrant Name	Deciphera Pharmaceuticals, Inc.
Entity Central Index Key	0001654151
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Address, State or Province	MA
Entity Interactive Data Current	Yes
Title of 12(b) Security	Common Stock
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding		55,859,274
Document Transition Report	false
Document Quarterly Report	true

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 229,652	$ 120,320
Marketable securities	461,848	459,256
Prepaid expenses and other current assets	11,979	13,832
Total current assets	703,479	593,408
Long-term investment—restricted	2,125	1,510
Property and equipment, net	6,693	6,333
Operating lease assets	20,630	21,158
Total assets	732,927	622,409
Current liabilities:
Accounts payable	11,337	19,575
Accrued expenses and other current liabilities	32,234	38,716
Operating lease liabilities	1,501	1,747
Total current liabilities	45,072	60,038
Operating lease liabilities, net of current portion	15,595	15,904
Total liabilities	60,667	75,942
Commitments and contingencies (Note 6)
Stockholders' equity:
Preferred stock, $0.01 par value per share; 5,000,000 shares authorized; no shares issued or outstanding	0	0
Common stock, $0.01 par value per share; 125,000,000 shares authorized; 55,681,027 shares and 51,617,639 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively	557	516
Additional paid-in capital	1,231,726	1,033,819
Accumulated other comprehensive income (loss)	763	111
Accumulated deficit	(560,786)	(487,979)
Total stockholders' equity	672,260	546,467
Total liabilities and stockholders' equity	$ 732,927	$ 622,409

Consolidated Balance Sheets (_2

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	125,000,000	125,000,000
Common stock, shares issued (in shares)	55,681,027	51,617,639
Common stock, shares outstanding (in shares)	55,681,027	51,617,639

Consolidated Statements of Oper

Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Income Statement [Abstract]
Revenues	$ 62	$ 0
Operating expenses:
Research and development	51,388	35,789
Selling, general, and administrative	23,936	13,236
Total operating expenses	75,324	49,025
Loss from operations	(75,262)	(49,025)
Other income (expense):
Interest and other income, net	2,455	1,654
Interest expense	0	(13)
Total other income (expense), net	2,455	1,641
Net loss	$ (72,807)	$ (47,384)
Net loss per share—basic and diluted (in dollars per share)	$ (1.36)	$ (1.25)
Weighted average common shares outstanding—basic and diluted (in shares)	53,567,434	38,057,018
Comprehensive loss:
Net loss	$ (72,807)	$ (47,384)
Other comprehensive income (loss):
Unrealized gains (losses) on marketable securities	652	21
Total other comprehensive income (loss)	652	21
Total comprehensive loss	$ (72,155)	$ (47,363)

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Beginning balance at Dec. 31, 2018	$ 279,981	$ 0	$ 377	$ 575,327	$ 0	$ (295,723)
Beginning balance (in shares) at Dec. 31, 2018		0	37,676,760
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options	1,149		$ 5	1,144
Issuance of common stock upon exercise of stock options (in shares)			512,292
Stock-based compensation expense	6,229			6,229
Unrealized gains (losses) on marketable securities	21				21
Net loss	(47,384)					(47,384)
Ending balance at Mar. 31, 2019	239,996	$ 0	$ 382	582,700	21	(343,107)
Ending balance (in shares) at Mar. 31, 2019		0	38,189,052
Beginning balance at Dec. 31, 2018	279,981	$ 0	$ 377	575,327	0	(295,723)
Beginning balance (in shares) at Dec. 31, 2018		0	37,676,760
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(192,300)
Ending balance at Dec. 31, 2019	546,467	$ 0	$ 516	1,033,819	111	(487,979)
Ending balance (in shares) at Dec. 31, 2019		0	51,617,639
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock sold in public offering, net of underwriting discounts, commissions and offering costs	188,385		$ 37	188,348
Issuance of common stock sold in public offering, net of underwriting discounts, commissions and offering costs (in shares)			3,659,090
Issuance of common stock upon exercise of stock options	2,569		$ 4	2,565
Issuance of common stock upon exercise of stock options (in shares)			404,298
Stock-based compensation expense	6,994			6,994
Unrealized gains (losses) on marketable securities	652				652
Net loss	(72,807)					(72,807)
Ending balance at Mar. 31, 2020	$ 672,260	$ 0	$ 557	$ 1,231,726	$ 763	$ (560,786)
Ending balance (in shares) at Mar. 31, 2020		0	55,681,027

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Cash flows from operating activities:
Net loss	$ (72,807)	$ (47,384)	$ (192,300)
Adjustments to reconcile net loss to net cash flows used in operating activities:
Stock-based compensation expense	6,994	6,229
Depreciation expense	460	104
Net accretion of discounts on marketable securities	(1,532)	(486)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	1,853	3,170
Operating lease assets	528	143
Accounts payable	(8,511)	2,629
Accrued expenses and other current liabilities	(6,800)	2,637
Operating lease liabilities	(555)	(148)
Other long-term liabilities	0	100
Net cash flows used in operating activities	(80,370)	(33,006)
Cash flows from investing activities:
Purchases of marketable securities	(203,527)	(179,607)
Maturities of marketable securities	203,120	0
Purchases of property and equipment	(669)	(41)
Increase in restricted investments	(614)	0
Net cash flows used in investing activities	(1,690)	(179,648)
Cash flows from financing activities:
Proceeds from public offerings, net of underwriting discounts and commissions	189,175	0
Repayment of notes payable to related party	0	(31)
Payments of public offering costs	(352)	0
Proceeds from exercise of stock options	2,569	1,149
Net cash flows provided by financing activities	191,392	1,118
Net increase (decrease) in cash and cash equivalents	109,332	(211,536)
Cash and cash equivalents at beginning of period	120,320	293,764	293,764
Cash and cash equivalents at end of period	229,652	82,228	$ 120,320
Supplemental disclosure of cash flow information:
Cash paid for interest	0	13
Property and equipment purchases included in accounts payable and accrued expenses and other current liabilities	152	0
Offering costs included in accounts payable and accrued expenses and other current liabilities	$ 438	$ 0

Nature of the Business and Summ

Nature of the Business and Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of the Business and Summary of Significant Accounting Policies	Nature of the Business and Summary of Significant Accounting Policies Nature of the Business Deciphera Pharmaceuticals, Inc. (the Company) is a clinical-stage biopharmaceutical company focused on improving the lives of cancer patients by tackling key mechanisms of drug resistance that limit the rate and/or durability of response to existing cancer therapies. The Company's small molecule drug candidates are directed against an important family of enzymes called kinases, known to be directly involved in the growth and spread of many cancers. The Company uses its understanding of kinase biology together with a proprietary chemistry library to purposefully design compounds that maintain kinases in a "switched off" or inactivated conformation. These investigational therapies comprise tumor-targeted agents designed to address therapeutic-resistance-causing mutations and immuno-targeted agents designed to control the activation of immunokinases that suppress critical immune system regulators, such as macrophages. The Company has used its platform to develop a pipeline of tumor-targeted and immuno-targeted drug candidates designed to improve outcomes for patients with cancer by improving the quality, rate, and/or durability of their responses to treatment that includes three clinical-stage, one preclinical-stage, and one research-stage program. The Company wholly owns all of its drug candidates with the exception of a development and commercialization out-license agreement for the Company's lead drug candidate, ripretinib, in Mainland China, Hong Kong, Macau, and Taiwan, also referred to as Greater China or the Greater China region. The Company is subject to risks and uncertainties common to companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, ability to complete late-stage clinical trials, ability to obtain and maintain regulatory approvals, ability to prepare for and successfully launch drug candidates that are approved for marketing, compliance with government regulations, the impact of the novel coronavirus (COVID-19) pandemic on its operations, and the ability to secure additional capital to fund operations. Drug candidates currently under development will require significant additional research and development efforts, including extensive preclinical and/or clinical testing and regulatory approval, as well as further development of the Company's commercial capabilities and infrastructure, prior to commercialization for the Company's drug candidates, including ripretinib, if approved. These efforts require significant amounts of additional capital, adequate personnel and infrastructure, and extensive compliance-reporting capabilities. Even if the Company's drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. The extent to which the COVID-19 pandemic, or the future outbreak of any other highly infectious or contagious diseases, may impact the Company's business, including its preclinical studies, clinical trial operations, or future commercialization efforts, will depend on future developments, which are highly uncertain and cannot be predicted at this time, including the scope, severity, and duration of such pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. The Company is monitoring the potential impact of COVID-19, if any, on its financial condition and results of operations. The rapid development and fluidity of this situation precludes any prediction as to the full impact of the COVID-19 pandemic but it could have a material adverse effect on the Company's business, financial condition, and results of operations. The COVID-19 pandemic may also have the effect of heightening the risks to which the Company is subject, including various aspects of the Company's preclinical studies and ongoing clinical trials, the reliance on third parties in the Company's supply chain for materials and manufacturing of the Company's drug candidates for its clinical trials and potential commercial launch, disruptions in health regulatory agencies' operations globally, the volatility of the Company's common stock, and its ability to access capital markets, and the Company's ability to successfully launch, commercialize, and generate revenue from a potential product launch. In June 2018, the Company issued and sold 4,945,000 shares of its common stock in a follow-on public offering at a public offering price of $40.00 per share, resulting in net proceeds of $185.3 million after deducting underwriting discounts and commissions and other offering expenses. In the third quarter of 2019, the Company issued and sold 12,432,431 shares of its common stock in a follow-on public offering at a public offering price of $37.00 per share, resulting in net proceeds of $431.8 million after deducting underwriting discounts and commissions and other offering expenses. In February 2020, the Company issued and sold 3,659,090 shares of its common stock in a follow-on public offering at a public offering price of $55.00 per share, resulting in net proceeds of $188.4 million after deducting underwriting discounts and commissions and other offering expenses. Basis of Presentation The accompanying consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities and commitments in the ordinary course of business. Since inception, the Company has incurred recurring losses including net losses of $72.8 million and $192.3 million for the three months ended March 31, 2020 and the year ended December 31, 2019, respectively. As of March 31, 2020, the Company had an accumulated deficit of $560.8 million. The Company expects to continue to generate operating losses in the foreseeable future. The Company expects that its cash, cash equivalents, and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements through at least 12 months from the issuance date of these consolidated financial statements. The future viability of the Company is dependent on its ability to raise additional capital to fund its operations. The Company expects its expenses to increase in connection with ongoing activities, particularly as the Company advances its clinical trials for its drug candidates in development and engages in efforts to support commercialization should ripretinib receive regulatory approval. Accordingly, the Company will need to obtain substantial additional funding in connection with continuing operations. If the Company is unable to raise capital when needed, or on attractive terms, it could be forced to delay, reduce, or eliminate its research or drug development programs or any future commercialization efforts. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all. These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. Unaudited Interim Financial Information These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S.) (GAAP). The consolidated balance sheet at December 31, 2019 was derived from audited financial statements, but does not include all disclosures required by GAAP. The accompanying unaudited consolidated financial statements as of March 31, 2020 and for the three months ended March 31, 2020 and 2019 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the Company's audited financial statements and the notes thereto for the year ended December 31, 2019 included in the Company's Annual Report on Form 10-K (Form 10-K) on file with the SEC. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company's consolidated financial position as of March 31, 2020 and consolidated results of operations and comprehensive loss for the three months ended March 31, 2020 and 2019 and consolidated cash flows for the three months ended March 31, 2020 and 2019 have been made. The consolidated results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2020. Other than those discussed within the section "Recently Issued Accounting Pronouncements", the significant accounting policies used in preparation of these consolidated financial statements for the three months ended March 31, 2020 are consistent with those discussed in Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements in the Company's Form 10-K for the year ended December 31, 2019. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, revenue recognition, the accrual for research and development expenses, and the valuation of stock-based awards. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates. Net Loss per Share Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding for the period. Diluted net income (loss) per share is computed by dividing the diluted net income (loss) by the weighted average number of common shares, including potential dilutive common shares assuming the dilutive effect as determined using the treasury stock method. For periods in which the Company has reported net losses, diluted net loss per common share is the same as basic net loss per common share, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss for the three months ended March 31, 2020 and 2019. The following potential dilutive securities, presented based on amounts outstanding at the end of each reporting period, have been excluded from the calculation of diluted net loss per share because including them would have had an anti-dilutive impact: As of March 31, 2020 2019 Options to purchase common stock 7,339,747 6,713,029 Unvested time-based restricted common stock units 283,690 77,000 Unvested performance-based restricted common stock units 57,000 — Total 7,680,437 6,790,029 Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed below, the Company does not believe that the adoption of recently issued standards have or may have a material impact on its consolidated financial statements or disclosures. Credit Losses In June 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13). The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2020. This standard requires entities to estimate an expected lifetime credit loss on financial assets and report credit losses using an expected losses model rather than the incurred losses model that was previously used, and establishes additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, the standard now requires allowances to be recorded instead of reducing the amortized cost of the investment. This standard limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. This standard became effective for the Company on January 1, 2020, and adoption of this standard did not have a material impact on the consolidated financial statements and related disclosures.

License Agreement

License Agreement	3 Months Ended
	Mar. 31, 2020
License Agreement [Abstract]
License Agreement	License Agreement Zai License Agreement In June 2019, the Company entered into a License Agreement (the Zai License Agreement) with Zai Lab (Shanghai) Co., Ltd. (Zai), pursuant to which the Company granted Zai exclusive rights to develop and commercialize ripretinib, including certain follow-on compounds (the Licensed Products), in Greater China (the Territory). The Company retains exclusive rights to, among other things, develop, manufacture, and commercialize the Licensed Products outside the Territory. Pursuant to the terms of the Zai License Agreement, the Company received an upfront cash payment of $20.0 million and became eligible to receive up to $185.0 million in potential development and commercial milestone payments, consisting of up to $50.0 million of development milestones and up to $135.0 million of commercial milestones. In addition, during the term of the Zai License Agreement, Zai will be obligated to pay the Company tiered percentage royalties ranging from low to high teens on potential annual net sales of the Licensed Products in the Territory, subject to adjustments in specified circumstances. Under the Zai License Agreement, the Company recognized revenue of $25.0 million during the second quarter of 2019, which consisted of the $20.0 million upfront payment and a $5.0 million INTRIGUE study-related development milestone payment, which the Company believed to be probable of achievement in the second quarter of 2019 and was achieved in July 2019. No revenues were recognized under the Zai License Agreement during the three months ended March 31, 2020 or 2019. Subject to the terms and conditions of the Zai License Agreement, Zai will be responsible for conducting the development and commercialization activities in the Territory related to the Licensed Products. Please read Note 3, License Agreement , to the consolidated financial statements in the Company's Form 10-K for the year ended December 31, 2019 for further details on the Zai License Agreement. In February 2020, the Company entered into a Supply Agreement (the Zai Supply Agreement) with Zai, as required by terms in the Zai License Agreement, pursuant to which the Company will supply the Licensed Products to Zai for use in the Territory for clinical trials as well as commercial inventory, if ripretinib obtains regulatory approval in the Territory. Subject to the Zai Supply Agreement, costs incurred by the Company for external manufacturing services are reimbursed by Zai. Under the Zai Supply Agreement, the Company recognized revenues of $0.1 million associated with external manufacturing services provided during the three months ended March 31, 2020. As of March 31, 2020, receivables of $0.1 million related to external manufacturing services were included within prepaid expenses and other current assets in the consolidated balance sheets.

Marketable Securities and Fair

Marketable Securities and Fair Value Measurements	3 Months Ended
	Mar. 31, 2020
Investments, All Other Investments [Abstract]
Marketable Securities and Fair Value Measurements	Marketable Securities and Fair Value Measurements The following tables present marketable securities by security type: As of March 31, 2020 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Commercial paper (due within one year) $ 270,577 $ 174 $ (115) $ 270,636 U.S. Government securities (due within one year) 134,685 608 — 135,293 Certificates of deposit (due within one year) 45,836 84 — 45,920 Other debt securities (due within one year) 9,987 12 — 9,999 Total $ 461,085 $ 878 $ (115) $ 461,848 As of December 31, 2019 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Commercial paper (due within one year) $ 314,292 $ 74 $ (23) $ 314,343 U.S. Government securities (due within one year) 78,612 48 (3) 78,657 Certificates of deposit (due within one year) 66,241 17 (2) 66,256 Total $ 459,145 $ 139 $ (28) $ 459,256 The following tables present information about the Company's financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values: As of March 31, 2020 (in thousands) Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ — $ 93,156 $ — $ 93,156 U.S. Government Securities — 21,900 — 21,900 Certificates of deposit — 17,508 — 17,508 Commercial paper — 16,495 — 16,495 Marketable securities: Commercial paper — 270,636 — 270,636 U.S. Government securities — 135,293 — 135,293 Certificates of deposit — 45,920 — 45,920 Other debt securities — 9,999 — 9,999 Total $ — $ 610,907 $ — $ 610,907 As of December 31, 2019 (in thousands) Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ — $ 28,192 $ — $ 28,192 Certificates of deposit — 20,500 — 20,500 Marketable securities: Commercial paper — 314,343 — 314,343 U.S. Government securities — 78,657 — 78,657 Certificates of deposit — 66,256 — 66,256 Total $ — $ 507,948 $ — $ 507,948 The table above excludes certificates of deposit totaling $2.1 million and $1.5 million as of March 31, 2020 and December 31, 2019, respectively, that the Company held to secure a letter of credit associated with a lease and to secure a credit card account. The Company increased its credit card limit and corresponding certificate of deposit in the first quarter of 2020. The certificates of deposit are Level 2 instruments and are measured at carrying value in the consolidated balance sheets in long-term investment—restricted and approximate fair value. For additional information on the letter of credit associated with a lease, please read Note 6, Leases, to the consolidated financial statements in the Company's Form 10-K for the year ended December 31, 2019. The fair value of Level 2 instruments classified as cash equivalents and marketable securities were determined through third-party pricing services. The pricing services use many observable market inputs to determine value, including reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates, and other industry and economic events.

Accrued Expenses and Other Curr

Accrued Expenses and Other Current Liabilities	3 Months Ended
	Mar. 31, 2020
Payables and Accruals [Abstract]
Accrued Expenses and Other Current Liabilities	Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: (in thousands) As of March 31, 2020 As of December 31, 2019 External research and development expenses $ 22,979 $ 20,462 Payroll and related expenses 5,331 12,902 Professional fees 3,153 3,810 Other 771 1,542 Total accrued expenses and other current liabilities $ 32,234 $ 38,716

Stock-Based Awards

Stock-Based Awards	3 Months Ended
	Mar. 31, 2020
Share-based Payment Arrangement [Abstract]
Stock-Based Awards	Stock-Based Awards The Company grants stock-based awards under its 2017 Stock Option and Incentive Plan (the 2017 Plan) and is authorized to issue common stock under its 2017 Employee Stock Purchase Plan (ESPP). The Company also has outstanding stock options under its 2015 Equity Incentive Plan but is no longer granting awards under this plan. As of March 31, 2020, 1,878,252 shares of common stock were available for issuance under the 2017 Plan. As of March 31, 2020, 1,409,433 shares of common stock were available for issuance to participating employees under the ESPP. Stock-based compensation expense was classified in the statements of operations and comprehensive loss as follows: Three Months Ended March 31, (in thousands) 2020 2019 Research and development expenses $ 3,271 $ 1,692 Selling, general, and administrative expenses 3,723 4,537 Total stock-based compensation $ 6,994 $ 6,229 As of March 31, 2020, total unrecognized compensation cost related to the unvested share-based awards was $102.4 million, which is expected to be recognized over a weighted average of 2.9 years. During the three months ended March 31, 2019, the Company recorded $2.4 million of stock-based compensation expense related to the modification of stock options pursuant to the transition agreement with its former President and Chief Executive Officer.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies KBA Grants Prior to 2014, the Company received funding from two research and development grants from the Kansas Bioscience Authority (KBA), totaling $2.0 million and no further amounts will be received under these grants. Pursuant to Kansas law, the Company may be required to repay some or all of the financial assistance received from the KBA, subject to the discretion of the KBA, if the Company relocates the operations in which the KBA invested outside of the State of Kansas, if the Company initiates procedures to dissolve and wind up or cease operations within ten years after receiving such financial assistance or upon certain significant changes to ownership of the Company. The Company will only account for the repayment of the grants if it becomes probable that the Company will be required to repay any funds previously received. Lease and Associated Letter of Credit In April 2019, the Company amended its lease for office space at 200 Smith Street in Waltham, Massachusetts (the Premises), to add an additional 38,003 square feet of space. In addition to paying its share of operating expenses, taxes, and other expenses related to the additional leased premises, the Company will also be required to increase the amount of cash to secure its letter of credit associated with its lease at the Premises upon substantial completion. As of March 31, 2020, the Company had not been required to record an operating lease asset or any lease liabilities associated with this lease within its consolidated balance sheets or increase the amount of cash related to the letter of credit. For additional information, please read Note 6, Leases, to the consolidated financial statements in the Company's Form 10-K for the year ended December 31, 2019. Purchase Commitments Associated with Commercial Supply Agreements The Company has entered into commercial supply agreements related to the supply of ripretinib that require the Company to make binding forecasts for a certain amount of purchases. The related cancellation clauses would as a general matter require the Company to pay the full amount of these binding forecasts. As of March 31, 2020, the Company's contractual commitments for such obligations were $4.6 million, which are expected to be paid within one year. Legal Proceedings The Company is not currently a party to any material legal proceedings. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses the costs related to its legal proceedings as they are incurred. Indemnification Agreements In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and senior management that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations in its consolidated financial statements as of March 31, 2020 or December 31, 2019.

Nature of the Business and Su_2

Nature of the Business and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities and commitments in the ordinary course of business. Since inception, the Company has incurred recurring losses including net losses of $72.8 million and $192.3 million for the three months ended March 31, 2020 and the year ended December 31, 2019, respectively. As of March 31, 2020, the Company had an accumulated deficit of $560.8 million. The Company expects to continue to generate operating losses in the foreseeable future. The Company expects that its cash, cash equivalents, and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements through at least 12 months from the issuance date of these consolidated financial statements. The future viability of the Company is dependent on its ability to raise additional capital to fund its operations. The Company expects its expenses to increase in connection with ongoing activities, particularly as the Company advances its clinical trials for its drug candidates in development and engages in efforts to support commercialization should ripretinib receive regulatory approval. Accordingly, the Company will need to obtain substantial additional funding in connection with continuing operations. If the Company is unable to raise capital when needed, or on attractive terms, it could be forced to delay, reduce, or eliminate its research or drug development programs or any future commercialization efforts. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all. These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.
Unaudited Interim Financial Information	Unaudited Interim Financial Information These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S.) (GAAP). The consolidated balance sheet at December 31, 2019 was derived from audited financial statements, but does not include all disclosures required by GAAP. The accompanying unaudited consolidated financial statements as of March 31, 2020 and for the three months ended March 31, 2020 and 2019 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the Company's audited financial statements and the notes thereto for the year ended December 31, 2019 included in the Company's Annual Report on Form 10-K (Form 10-K) on file with the SEC. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company's consolidated financial position as of March 31, 2020 and consolidated results of operations and comprehensive loss for the three months ended March 31, 2020 and 2019 and consolidated cash flows for the three months ended March 31, 2020 and 2019 have been made. The consolidated results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2020. Other than those discussed within the section "Recently Issued Accounting Pronouncements", the significant accounting policies used in preparation of these consolidated financial statements for the three months ended March 31, 2020 are consistent with those discussed in Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements in the Company's Form 10-K for the year ended December 31, 2019.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, revenue recognition, the accrual for research and development expenses, and the valuation of stock-based awards. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.
Net Loss per Share	Net Loss per Share Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding for the period. Diluted net income (loss) per share is computed by dividing the diluted net income (loss) by the weighted average number of common shares, including potential dilutive common shares assuming the dilutive effect as determined using the treasury stock method. For periods in which the Company has reported net losses, diluted net loss per common share is the same as basic net loss per common share, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss for the three months ended March 31, 2020 and 2019. The following potential dilutive securities, presented based on amounts outstanding at the end of each reporting period, have been excluded from the calculation of diluted net loss per share because including them would have had an anti-dilutive impact: As of March 31, 2020 2019 Options to purchase common stock 7,339,747 6,713,029 Unvested time-based restricted common stock units 283,690 77,000 Unvested performance-based restricted common stock units 57,000 — Total 7,680,437 6,790,029
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed below, the Company does not believe that the adoption of recently issued standards have or may have a material impact on its consolidated financial statements or disclosures. Credit Losses In June 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13). The FASB subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2020. This standard requires entities to estimate an expected lifetime credit loss on financial assets and report credit losses using an expected losses model rather than the incurred losses model that was previously used, and establishes additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, the standard now requires allowances to be recorded instead of reducing the amortized cost of the investment. This standard limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. This standard became effective for the Company on January 1, 2020, and adoption of this standard did not have a material impact on the consolidated financial statements and related disclosures.

Nature of the Business and Su_3

Nature of the Business and Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Summary of Potential Dilutive Securities	The following potential dilutive securities, presented based on amounts outstanding at the end of each reporting period, have been excluded from the calculation of diluted net loss per share because including them would have had an anti-dilutive impact: As of March 31, 2020 2019 Options to purchase common stock 7,339,747 6,713,029 Unvested time-based restricted common stock units 283,690 77,000 Unvested performance-based restricted common stock units 57,000 — Total 7,680,437 6,790,029

Marketable Securities and Fai_2

Marketable Securities and Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2020
Investments, All Other Investments [Abstract]
Schedule of Marketable Securities	The following tables present marketable securities by security type: As of March 31, 2020 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Commercial paper (due within one year) $ 270,577 $ 174 $ (115) $ 270,636 U.S. Government securities (due within one year) 134,685 608 — 135,293 Certificates of deposit (due within one year) 45,836 84 — 45,920 Other debt securities (due within one year) 9,987 12 — 9,999 Total $ 461,085 $ 878 $ (115) $ 461,848 As of December 31, 2019 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Commercial paper (due within one year) $ 314,292 $ 74 $ (23) $ 314,343 U.S. Government securities (due within one year) 78,612 48 (3) 78,657 Certificates of deposit (due within one year) 66,241 17 (2) 66,256 Total $ 459,145 $ 139 $ (28) $ 459,256
Schedule of Financial Assets Measured at Fair Value on a Recurring Basis	The following tables present information about the Company's financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values: As of March 31, 2020 (in thousands) Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ — $ 93,156 $ — $ 93,156 U.S. Government Securities — 21,900 — 21,900 Certificates of deposit — 17,508 — 17,508 Commercial paper — 16,495 — 16,495 Marketable securities: Commercial paper — 270,636 — 270,636 U.S. Government securities — 135,293 — 135,293 Certificates of deposit — 45,920 — 45,920 Other debt securities — 9,999 — 9,999 Total $ — $ 610,907 $ — $ 610,907 As of December 31, 2019 (in thousands) Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ — $ 28,192 $ — $ 28,192 Certificates of deposit — 20,500 — 20,500 Marketable securities: Commercial paper — 314,343 — 314,343 U.S. Government securities — 78,657 — 78,657 Certificates of deposit — 66,256 — 66,256 Total $ — $ 507,948 $ — $ 507,948

Accrued Expenses and Other Cu_2

Accrued Expenses and Other Current Liabilities (Tables)	3 Months Ended
	Mar. 31, 2020
Payables and Accruals [Abstract]
Schedule of Accrued Expenses and Other Current Liabilities	Accrued expenses and other current liabilities consisted of the following: (in thousands) As of March 31, 2020 As of December 31, 2019 External research and development expenses $ 22,979 $ 20,462 Payroll and related expenses 5,331 12,902 Professional fees 3,153 3,810 Other 771 1,542 Total accrued expenses and other current liabilities $ 32,234 $ 38,716

Stock-Based Awards (Tables)

Stock-Based Awards (Tables)	3 Months Ended
	Mar. 31, 2020
Share-based Payment Arrangement [Abstract]
Classification of Stock-Based Compensation Expense	Stock-based compensation expense was classified in the statements of operations and comprehensive loss as follows: Three Months Ended March 31, (in thousands) 2020 2019 Research and development expenses $ 3,271 $ 1,692 Selling, general, and administrative expenses 3,723 4,537 Total stock-based compensation $ 6,994 $ 6,229

Nature of the Business and Su_4

Nature of the Business and Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended			12 Months Ended
	Feb. 29, 2020	Jun. 30, 2018	Mar. 31, 2020	Sep. 30, 2019	Mar. 31, 2019	Dec. 31, 2019
Nature Of Business And Basis Of Presentation [Line Items]
Issuance of common stock sold in public offering, net of underwriting discounts, commissions and offering costs			$ 188,385
Net loss			(72,807)		$ (47,384)	$ (192,300)
Accumulated deficit			$ (560,786)			$ (487,979)
Common Stock
Nature Of Business And Basis Of Presentation [Line Items]
Number of shares issued and sold (in shares)			3,659,090
Issuance of common stock sold in public offering, net of underwriting discounts, commissions and offering costs			$ 37
Follow on Offering | Common Stock
Nature Of Business And Basis Of Presentation [Line Items]
Number of shares issued and sold (in shares)	3,659,090	4,945,000		12,432,431
Additional offering price of common stock (in dollars per share)	$ 55	$ 40		$ 37
Issuance of common stock sold in public offering, net of underwriting discounts, commissions and offering costs	$ 188,400	$ 185,300		$ 431,800

Nature of the Business and Su_5

Nature of the Business and Summary of Significant Accounting Policies - Summary of Potential Dilutive Securities (Details) - shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential dilutive securities excluded from computation of diluted net loss per common share (in shares)	7,680,437	6,790,029
Unvested time-based restricted common stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential dilutive securities excluded from computation of diluted net loss per common share (in shares)	283,690	77,000
Unvested performance-based restricted common stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential dilutive securities excluded from computation of diluted net loss per common share (in shares)	57,000	0
Options to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential dilutive securities excluded from computation of diluted net loss per common share (in shares)	7,339,747	6,713,029

License Agreement - Additional

License Agreement - Additional Information (Details) - USD ($)	1 Months Ended	3 Months Ended
	Jun. 30, 2019	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2019
Zai License Agreement
Upfront cash payment receivable					$ 20,000,000
Upfront payment recognized revenue			$ 20,000,000
Zai License Agreement | License
Revenues		$ 0	25,000,000	$ 0
Zai License Agreement | Development And Commercial Milestone | Maximum
License agreement milestone	$ 185,000,000
Zai License Agreement | Development Milestone | INTRIGUE Study Related Milestone
License agreement milestone			$ 5,000,000
Zai License Agreement | Development Milestone | Maximum
License agreement milestone	50,000,000
Zai License Agreement | Commercial Milestone | Maximum
License agreement milestone	$ 135,000,000
Zai Supply Agreement | License
Revenues		100,000
Accounts receivable		$ 100,000

Marketable Securities and Fai_3

Marketable Securities and Fair Value Measurements - Schedule of Marketable Securities (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Marketable Securities [Line Items]
Amortized Cost	$ 461,085	$ 459,145
Gross Unrealized Gains	878	139
Gross Unrealized Losses	(115)	(28)
Estimated Fair Value	461,848	459,256
Commercial paper
Marketable Securities [Line Items]
Amortized Cost	270,577	314,292
Gross Unrealized Gains	174	74
Gross Unrealized Losses	(115)	(23)
Estimated Fair Value	270,636	314,343
U.S. Government securities
Marketable Securities [Line Items]
Amortized Cost	134,685	78,612
Gross Unrealized Gains	608	48
Gross Unrealized Losses	0	(3)
Estimated Fair Value	135,293	78,657
Certificates of deposit
Marketable Securities [Line Items]
Amortized Cost	45,836	66,241
Gross Unrealized Gains	84	17
Gross Unrealized Losses	0	(2)
Estimated Fair Value	45,920	$ 66,256
Other debt securities
Marketable Securities [Line Items]
Amortized Cost	9,987
Gross Unrealized Gains	12
Gross Unrealized Losses	0
Estimated Fair Value	$ 9,999

Marketable Securities and Fai_4

Marketable Securities and Fair Value Measurements - Schedule of Financial Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Marketable securities:
Total Marketable securities	$ 461,848	$ 459,256
Total	610,907	507,948
U.S. Government securities
Cash equivalents:
Total Cash equivalents	21,900
Marketable securities:
Total Marketable securities	135,293	78,657
Other debt securities
Marketable securities:
Total Marketable securities	9,999
Commercial paper
Cash equivalents:
Total Cash equivalents	16,495
Marketable securities:
Total Marketable securities	270,636	314,343
Money market funds
Cash equivalents:
Total Cash equivalents	93,156	28,192
Certificates of deposit
Cash equivalents:
Total Cash equivalents	17,508	20,500
Marketable securities:
Total Marketable securities	45,920	66,256
Level 1
Marketable securities:
Total	0	0
Level 1 | U.S. Government securities
Cash equivalents:
Total Cash equivalents	0
Marketable securities:
Total Marketable securities	0	0
Level 1 | Other debt securities
Marketable securities:
Total Marketable securities	0
Level 1 | Commercial paper
Cash equivalents:
Total Cash equivalents	0
Marketable securities:
Total Marketable securities	0	0
Level 1 | Money market funds
Cash equivalents:
Total Cash equivalents	0	0
Level 1 | Certificates of deposit
Cash equivalents:
Total Cash equivalents	0	0
Marketable securities:
Total Marketable securities	0	0
Level 2
Marketable securities:
Total	610,907	507,948
Level 2 | U.S. Government securities
Cash equivalents:
Total Cash equivalents	21,900
Marketable securities:
Total Marketable securities	135,293	78,657
Level 2 | Other debt securities
Marketable securities:
Total Marketable securities	9,999
Level 2 | Commercial paper
Cash equivalents:
Total Cash equivalents	16,495
Marketable securities:
Total Marketable securities	270,636	314,343
Level 2 | Money market funds
Cash equivalents:
Total Cash equivalents	93,156	28,192
Level 2 | Certificates of deposit
Cash equivalents:
Total Cash equivalents	17,508	20,500
Marketable securities:
Total Marketable securities	45,920	66,256
Level 3
Marketable securities:
Total	0	0
Level 3 | U.S. Government securities
Cash equivalents:
Total Cash equivalents	0
Marketable securities:
Total Marketable securities	0	0
Level 3 | Other debt securities
Marketable securities:
Total Marketable securities	0
Level 3 | Commercial paper
Cash equivalents:
Total Cash equivalents	0
Marketable securities:
Total Marketable securities	0	0
Level 3 | Money market funds
Cash equivalents:
Total Cash equivalents	0	0
Level 3 | Certificates of deposit
Cash equivalents:
Total Cash equivalents	0	0
Marketable securities:
Total Marketable securities	$ 0	$ 0

Marketable Securities and Fai_5

Marketable Securities and Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Marketable securities	$ 461,848	$ 459,256
Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Marketable securities	45,920	66,256
Certificates of deposit | Letter of Credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash balance held to secure letter of credit associated with lease and credit card	$ 2,100	$ 1,500

Accrued Expenses and Other Cu_3

Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
External research and development expenses	$ 22,979	$ 20,462
Payroll and related expenses	5,331	12,902
Professional fees	3,153	3,810
Other	771	1,542
Total accrued expenses and other current liabilities	$ 32,234	$ 38,716

Stock-Based Awards - Classifica

Stock-Based Awards - Classification of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 6,994	$ 6,229
Research and development expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	3,271	1,692
Selling, general, and administrative expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 3,723	$ 4,537

Stock-Based Awards - Additional

Stock-Based Awards - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to unvested share-based awards	$ 102.4
Unrecognized compensation cost related to unvested share-based awards, period for recognition	2 years 10 months 24 days
President And Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense related to modification		$ 2.4
2017 Stock Option and Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	1,878,252
Employee Stock Purchase Plan (ESPP)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	1,409,433

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Details) $ in Millions	Dec. 31, 2013USD ($)award	Apr. 30, 2019ft²	Mar. 31, 2020USD ($)
Other Commitments [Line Items]
Supply commitment amount			$ 4.6
Additional area of lease space | ft²		38,003
KBA Grants
Other Commitments [Line Items]
Number of awards grants | award	2
Amount of grants awarded	$ 2