Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 08, 2019 | |
[DocumentAndEntityInformationAbstract] | ||
Entity Registrant Name | NextCure, Inc. | |
Entity Central Index Key | 0001661059 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 22,753,960 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 9,935 | $ 135,173 |
Marketable securities | 174,147 | |
Restricted cash | 1,289 | 460 |
Prepaid expenses and other current assets | 3,777 | 152 |
Total current assets | 189,148 | 135,785 |
Property and equipment, net | 12,031 | 11,407 |
Other assets | 3,945 | 436 |
Total assets | 205,124 | 147,628 |
Current liabilities: | ||
Accounts payable | 2,576 | 2,483 |
Accrued liabilities | 2,582 | 2,411 |
Deferred rent, current portion | 28 | |
Term loan, current portion | 1,250 | 387 |
Deferred revenue, current portion | 6,199 | 4,989 |
Total current liabilities | 12,607 | 10,298 |
Deferred rent, net of current portion | 434 | 242 |
Term loan, net of current portion | 3,750 | 73 |
Deferred revenue, net of current portion | 17,684 | 21,736 |
Total liabilities | 34,475 | 32,349 |
Commitments and contingencies (Note 7) | ||
Redeemable preferred stock: | ||
Total redeemable preferred stock | 162,223 | |
Stockholders’ equity (deficit): | ||
Preferred stock; par value of $0.001 per share, 10,000,000 and 0 shares authorized at September 30, 2019 and December 31, 2018. No shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively | ||
Common stock, par value of $0.001 per share; 100,000,000 and 158,745,671 shares authorized at September 30, 2019 and December 31, 2018, respectively, 22,739,345 and 1,374,812 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 23 | 1 |
Additional paid-in capital | 240,791 | 352 |
Accumulated other comprehensive loss | (58) | |
Accumulated deficit | (70,107) | (47,297) |
Total stockholders’ equity (deficit) | 170,649 | (46,944) |
Total liabilities, preferred stock and stockholders’ equity (deficit) | $ 205,124 | 147,628 |
Series A Preferred Stock | ||
Redeemable preferred stock: | ||
Total redeemable preferred stock | 71,000 | |
Series B Preferred Stock | ||
Redeemable preferred stock: | ||
Total redeemable preferred stock | $ 91,223 |
CONDENSED BALANCE SHEETS - (Par
CONDENSED BALANCE SHEETS - (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, number of shares authorized | 10,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, number of shares authorized | 100,000,000 | 158,745,671 |
Common stock, shares issued | 22,739,345 | 1,374,812 |
Common stock, shares outstanding | 22,739,345 | 1,374,812 |
Series A Preferred Stock | ||
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, number of shares authorized | 0 | 68,181,819 |
Preferred stock, shares issued | 0 | 68,181,819 |
Preferred stock, shares outstanding | 0 | 68,181,819 |
Series B Preferred Stock | ||
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, number of shares authorized | 0 | 56,828,852 |
Preferred stock, shares issued | 0 | 56,828,851 |
Preferred stock, shares outstanding | 0 | 56,828,851 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue: | ||||
Revenue | $ 1,583 | $ 4,342 | ||
Type of Revenue [Extensible List] | nxtc:RelatedPartyMember | |||
Operating expenses: | ||||
Research and development | 8,663 | $ 4,895 | $ 22,819 | $ 13,539 |
General and administrative | 2,622 | 925 | 6,995 | 2,590 |
Total operating expenses | 11,285 | 5,820 | 29,814 | 16,129 |
Loss from operations | (9,702) | (5,820) | (25,472) | (16,129) |
Other income, net | 1,268 | 110 | 2,662 | 192 |
Net loss | $ (8,434) | $ (5,710) | $ (22,810) | $ (15,937) |
Net loss per common share—basic and diluted (in dollars per share) | $ (0.37) | $ (4.17) | $ (1.81) | $ (11.64) |
Weighted average number of common shares —basic and diluted (in shares) | 22,715,567 | 1,369,212 | 12,609,219 | 1,369,212 |
Comprehensive loss: | ||||
Unrealized loss on marketable securities | $ (58) | $ (58) | ||
Total comprehensive loss | $ (8,492) | $ (5,710) | $ (22,868) | $ (15,937) |
CONDENSED STATEMENTS OF PREFERR
CONDENSED STATEMENTS OF PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands | Preferred StockSeries A Preferred Stock | Preferred StockSeries A-3 preferred stock | Preferred StockSeries B Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Series A Preferred Stock | Series B Preferred Stock | Total |
Balance at the beginning at Dec. 31, 2017 | $ 1 | $ 84 | $ (24,498) | $ (24,413) | ||||||
Balance at the beginning (in shares) at Dec. 31, 2017 | 1,369,212 | |||||||||
Balance at the beginning at Dec. 31, 2017 | $ 40,000 | |||||||||
Balance at the beginning (in shares) at Dec. 31, 2017 | 40,000,000 | |||||||||
Increase (Decrease) in Stockholders' Deficit | ||||||||||
Stock based compensation | 24 | 24 | ||||||||
Net loss | (4,996) | (4,996) | ||||||||
Balance at the end at Mar. 31, 2018 | $ 1 | 108 | (29,494) | (29,385) | ||||||
Balance at the end (in shares) at Mar. 31, 2018 | 1,369,212 | |||||||||
Balance at the end at Mar. 31, 2018 | $ 40,000 | |||||||||
Balance at the end (in shares) at Mar. 31, 2018 | 40,000,000 | |||||||||
Balance at the beginning at Dec. 31, 2017 | $ 1 | 84 | (24,498) | (24,413) | ||||||
Balance at the beginning (in shares) at Dec. 31, 2017 | 1,369,212 | |||||||||
Balance at the beginning at Dec. 31, 2017 | $ 40,000 | |||||||||
Balance at the beginning (in shares) at Dec. 31, 2017 | 40,000,000 | |||||||||
Increase (Decrease) in Stockholders' Deficit | ||||||||||
Net loss | (15,937) | |||||||||
Balance at the end at Sep. 30, 2018 | $ 1 | 222 | (40,435) | (40,212) | ||||||
Balance at the end (in shares) at Sep. 30, 2018 | 1,369,212 | |||||||||
Balance at the end at Sep. 30, 2018 | $ 71,000 | |||||||||
Balance at the end (in shares) at Sep. 30, 2018 | 68,181,819 | |||||||||
Balance at the beginning at Mar. 31, 2018 | $ 1 | 108 | (29,494) | (29,385) | ||||||
Balance at the beginning (in shares) at Mar. 31, 2018 | 1,369,212 | |||||||||
Balance at the beginning at Mar. 31, 2018 | $ 40,000 | |||||||||
Balance at the beginning (in shares) at Mar. 31, 2018 | 40,000,000 | |||||||||
Increase (Decrease) in Stockholders' Deficit | ||||||||||
Initial public offering, net of issuance costs of $9.4 million | $ 31,000 | |||||||||
Initial public offering, net of issuance costs of $9.4 million (in shares) | 28,181,819 | |||||||||
Stock based compensation | 24 | 24 | ||||||||
Net loss | (5,231) | (5,231) | ||||||||
Balance at the end at Jun. 30, 2018 | $ 1 | 132 | (34,725) | (34,592) | ||||||
Balance at the end (in shares) at Jun. 30, 2018 | 1,369,212 | |||||||||
Balance at the end at Jun. 30, 2018 | $ 71,000 | |||||||||
Balance at the end (in shares) at Jun. 30, 2018 | 68,181,819 | |||||||||
Increase (Decrease) in Stockholders' Deficit | ||||||||||
Stock based compensation | 90 | 90 | ||||||||
Net loss | (5,710) | (5,710) | ||||||||
Balance at the end at Sep. 30, 2018 | $ 1 | 222 | (40,435) | (40,212) | ||||||
Balance at the end (in shares) at Sep. 30, 2018 | 1,369,212 | |||||||||
Balance at the end at Sep. 30, 2018 | $ 71,000 | |||||||||
Balance at the end (in shares) at Sep. 30, 2018 | 68,181,819 | |||||||||
Balance at the beginning at Dec. 31, 2018 | $ 1 | 352 | (47,297) | $ (46,944) | ||||||
Balance at the beginning (in shares) at Dec. 31, 2018 | 1,374,812 | 1,374,812 | ||||||||
Balance at the beginning at Dec. 31, 2018 | $ 71,000 | $ 91,223 | $ 71,000 | $ 91,223 | $ 162,223 | |||||
Balance at the beginning (in shares) at Dec. 31, 2018 | 68,181,819 | 56,828,851 | ||||||||
Increase (Decrease) in Stockholders' Deficit | ||||||||||
Stock based compensation | 383 | 383 | ||||||||
Issuance of stock | 4 | 4 | ||||||||
Issuance of stock (in shares) | 4,697 | |||||||||
Net loss | (6,155) | (6,155) | ||||||||
Balance at the end at Mar. 31, 2019 | $ 1 | 739 | (53,452) | (52,712) | ||||||
Balance at the end (in shares) at Mar. 31, 2019 | 1,379,509 | |||||||||
Balance at the end at Mar. 31, 2019 | $ 71,000 | $ 91,223 | ||||||||
Balance at the end (in shares) at Mar. 31, 2019 | 68,181,819 | 56,828,851 | ||||||||
Balance at the beginning at Dec. 31, 2018 | $ 1 | 352 | (47,297) | $ (46,944) | ||||||
Balance at the beginning (in shares) at Dec. 31, 2018 | 1,374,812 | 1,374,812 | ||||||||
Balance at the beginning at Dec. 31, 2018 | $ 71,000 | $ 91,223 | $ 71,000 | $ 91,223 | $ 162,223 | |||||
Balance at the beginning (in shares) at Dec. 31, 2018 | 68,181,819 | 56,828,851 | ||||||||
Increase (Decrease) in Stockholders' Deficit | ||||||||||
Unrealized loss on marketable securities | (58) | |||||||||
Net loss | (22,810) | |||||||||
Balance at the end at Sep. 30, 2019 | $ 23 | 240,791 | $ (58) | (70,107) | $ 170,649 | |||||
Balance at the end (in shares) at Sep. 30, 2019 | 22,739,345 | 22,739,345 | ||||||||
Balance at the beginning at Mar. 31, 2019 | $ 1 | 739 | (53,452) | $ (52,712) | ||||||
Balance at the beginning (in shares) at Mar. 31, 2019 | 1,379,509 | |||||||||
Balance at the beginning at Mar. 31, 2019 | $ 71,000 | $ 91,223 | ||||||||
Balance at the beginning (in shares) at Mar. 31, 2019 | 68,181,819 | 56,828,851 | ||||||||
Increase (Decrease) in Stockholders' Deficit | ||||||||||
Initial public offering, net of issuance costs of $9.4 million | $ 6 | 76,848 | 76,854 | |||||||
Initial public offering, net of issuance costs of $9.4 million (in shares) | 5,750,000 | |||||||||
Conversion of preferred stock to common stock | $ (71,000) | $ (91,223) | $ 15 | 162,208 | 162,223 | |||||
Conversion of preferred stock to common stock (in shares) | (68,181,819) | (56,828,851) | 15,560,569 | |||||||
Stock based compensation | 412 | 412 | ||||||||
Issuance of stock | $ 1 | 38 | 39 | |||||||
Issuance of stock (in shares) | 24,687 | |||||||||
Net loss | (8,221) | (8,221) | ||||||||
Balance at the end at Jun. 30, 2019 | $ 23 | 240,245 | (61,673) | 178,595 | ||||||
Balance at the end (in shares) at Jun. 30, 2019 | 22,714,765 | |||||||||
Increase (Decrease) in Stockholders' Deficit | ||||||||||
Stock based compensation | 524 | 524 | ||||||||
Issuance of stock | 22 | 22 | ||||||||
Issuance of stock (in shares) | 24,580 | |||||||||
Unrealized loss on marketable securities | (58) | (58) | ||||||||
Net loss | (8,434) | (8,434) | ||||||||
Balance at the end at Sep. 30, 2019 | $ 23 | $ 240,791 | $ (58) | $ (70,107) | $ 170,649 | |||||
Balance at the end (in shares) at Sep. 30, 2019 | 22,739,345 | 22,739,345 |
CONDENSED STATEMENTS OF PREFE_2
CONDENSED STATEMENTS OF PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Initial public offering issuance costs | $ 9,400 | |
Common stock, par value per share | $ 0.001 | |
Series A-3 preferred stock | ||
Initial public offering issuance costs | $ 0 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (22,810,000) | $ (15,937,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,933,000 | 1,159,000 |
Stock-based compensation | 1,319,000 | 138,000 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | (3,660,000) | (89,000) |
Accounts payable | 93,000 | 776,000 |
Accrued liabilities and other current liabilities | 335,000 | (526,000) |
Deferred revenue | (2,842,000) | |
Net cash used in operating activities | (25,632,000) | (14,479,000) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (2,557,000) | (1,159,000) |
Purchase of marketable securities | (174,205,000) | |
Net cash used in investing activities | (176,762,000) | (1,159,000) |
Cash flows from financing activities: | ||
Proceeds from initial public offering, net of issuance costs | 77,264,000 | |
Proceeds from issuance of preferred stock, net of issuance costs | 31,000,000 | |
Proceeds from issuance of common stock | 65,000 | |
Proceeds from the term loan | 4,540,000 | |
Deferred financing costs | (134,000) | (14,000) |
Payments of the term loan | (300,000) | |
Net cash provided by financing activities | 81,735,000 | 30,686,000 |
Net (decrease) increase in cash, cash equivalents and restricted cash (includes $3,750 of restricted cash in other assets) | (120,659,000) | 15,048,000 |
Cash, cash equivalents and restricted cash—beginning of year | 135,633,000 | 9,287,000 |
Cash, cash equivalents and restricted cash—end of period (includes $3,750 of restricted cash in other assets) | 14,974,000 | 24,335,000 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 137,000 | 18,000 |
Supplemental disclosures of noncash investing and financing activities: | ||
Purchase of property and equipment included in accrued liabilities | 73,000 | $ 76,000 |
Deferred financing costs included in accrued liabilities | 134,000 | |
Conversion of convertible preferred stock into common stock | $ 162,223,000 |
Nature of the Business
Nature of the Business | 9 Months Ended |
Sep. 30, 2019 | |
Nature of the Business | |
Nature of the Business | 1. Nature of the Business Organization NextCure, Inc. (“NextCure” or the “Company”) was incorporated in Delaware in September 2015 and is headquartered in Beltsville, Maryland. The Company is a clinical-stage biopharmaceutical company committed to discovering and developing novel, first‑in‑class immunomedicines to treat cancer and other immune‑related diseases by restoring normal immune function. Through its proprietary Functional, Integrated, NextCure Discovery in Immuno‑Oncology (“FIND‑IO”) platform, the Company studies various immune cells in order to discover and understand targets and structural components of immune cells and their functional impact in order to develop immunomedicines. Since inception, the Company has devoted substantially all of its efforts and financial resources to organizing and staffing the Company, identifying business development opportunities, raising capital, securing intellectual property rights related to the Company’s product candidates, building and optimizing the Company’s manufacturing capabilities and conducting discovery, research and development activities for the Company’s product candidates, discovery programs and its FIND‑IO platform. Initial Public Offering On May 13, 2019, the Company closed its initial public offering (“IPO”), in which the Company issued and sold 5,750,000 shares of common stock at a public offering price of $15.00 per share, for net proceeds to the Company of approximately $77.0 million after deducting underwriting discounts and commissions of $6.0 million and offering expenses of approximately $3.4 million. In preparation for the IPO, on May 3, 2019, the Company effected a one-for-8.0338 reverse stock split of its issued and outstanding common stock. The par value and authorized shares of common stock were not adjusted as a result of the reverse stock split. All of the share and per share information presented in the accompanying financial statements has been adjusted to reflect the reverse common stock split on a retroactive basis for all periods and as of all dates presented. Upon the closing of the IPO, on May 13, 2019, all of the outstanding shares of the Company’s convertible preferred stock automatically converted into 15,560,569 shares of common stock at the applicable conversion ratio then in effect. Subsequent to the closing of the IPO, there were no shares of preferred stock outstanding. Upon the closing of the IPO, on May 13, 2019, the Company’s certificate of incorporation was amended and restated to provide for 100,000,000 authorized shares of common stock with a par value of $0.001 per share and 10,000,000 authorized shares of preferred stock with a par value of $0.001 per share. Liquidity The Company has not generated any revenue to date from product sales and does not expect to generate any revenues from product sales in the foreseeable future. Through September 2019, the Company has funded its operations primarily with proceeds from the sale of preferred stock and proceeds from the Company’s agreement with Eli Lilly and Company (Note 6) and proceeds from the IPO. The Company expects to incur additional operating losses and negative operating cash flows for the foreseeable future. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed financial statements as of September 30, 2019 and for the three and nine months ended September 30, 2019 and 2018 have been prepared by the Company in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and 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 condensed or omitted pursuant to such rules and regulations. Accordingly, these condensed financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto as of and for the year ended December 31, 2018, which are included in the Company’s final prospectus that forms a part of the Company’s Registration Statement on Form S-1 (Reg. No. 333-230837) (the “Registration Statement”), as filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, on May 9, 2019. The unaudited interim condensed financial statements have been prepared on the same basis as the audited financial statements. In the opinion of management, the accompanying unaudited interim condensed financial statements contain all adjustments necessary for a fair statement of the Company’s financial position as of September 30, 2019 and condensed results of operations and cash flows for the three and nine months ended September 30, 2019 and 2018. Such adjustments are of a normal and recurring nature. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2019. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates, including those related to accrued expenses, revenue recognition, the valuation of equity‑based compensation, including incentive stock options, common stock and restricted common stock, as well as income taxes. The Company bases its estimates on various assumptions that the Company believes to be reasonable under the circumstances. A lthough actual results could differ from those estimates, management does not believe that such differences would be material. Restricted Cash The Company is required, as a condition of its Term Loan (Note 8), to maintain cash collateral on deposit in a segregated money market bank account equal to the principal portion of the Term Loan, as determined on a quarterly basis. The bank may restrict withdrawals or transfers by or on behalf of the Company that would violate this requirement. The required reserve totaled $5.0 million as of September 30, 2019. This amount is presented in part as restricted cash and in part as other assets on the accompanying balance sheet. The following table reconciles cash and cash equivalents and restricted cash per the balance sheet to the statement of cash flows (in thousands): September 30, December 31, 2019 2018 Cash and cash equivalents $ 9,935 $ 135,173 Restricted cash (including $3,750 in other assets) 5,039 460 Total $ 14,974 $ 135,633 Marketable Securities Our investments primarily consist of government debt securities, corporate bonds and agency bonds. These marketable securities are classified as available-for-sale, and as such, are reported at fair value on our condensed balance sheets. Unrealized holding gains and losses are reported within accumulated other comprehensive income (loss) as a separate component of stockholders’ equity. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization, together with interest on securities, are included in other income, net, on our condensed statements of operations. If a decline in the fair value of a marketable security below our cost basis is determined to be other than temporary, such marketable security is written down to its estimated fair value as a new cost basis and the amount of the write-down is included in earnings as an impairment charge. The cost of securities sold is based on the specific identification method. Revenue Recognition The Company has adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine the appropriate amount of revenue to be recognized for arrangements determined to be within the scope of ASC 606, the Company performs the following five steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect consideration to which it is entitled in exchange for the goods or services it transfers to the customer. The Company evaluates customer options for material rights or options to acquire additional goods or services for free or at a discount. If the customer options are determined to represent a material right, the material right is recognized as a separate performance obligation at the outset of the arrangement. Performance obligations are promised goods or services in a contract to transfer a distinct good or service to the customer and are considered distinct when (i) the customer can benefit from the good or service on its own or together with other readily available resources and (ii) the promised good or service is separately identifiable from other promises in the contract. In assessing whether promised goods or services are distinct, the Company considers factors such as the stage of development of the underlying intellectual property, the capabilities of the customer to develop the intellectual property on its own or whether the required expertise is readily available and whether the goods or services are integral to or dependent on other goods or services in the contract. The Company estimates the transaction price based on the amount expected to be received for transferring the promised goods or services in the contract. Consideration generally may include fixed consideration or variable consideration. Should an arrangement include variable consideration, the Company will evaluate the amount of potential payments and the likelihood that the payments will be received. The Company will utilize either the most likely amount method or expected amount method to estimate the amount expected to be received based on which method best predicts the amount expected to be received. The amount of variable consideration that is included in the transaction price may be constrained and will be included in the transaction price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. The Company’s contracts may include development and regulatory milestone payments which would be assessed under the most likely amount method and constrained if it is probable that a significant revenue reversal would occur. Milestone payments that are not within the Company’s control or the licensee’s control, such as regulatory approvals, will not be considered probable of being achieved until those approvals are received. At the end of each reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments would be recorded on a cumulative catch-up basis, which would affect collaboration revenues in the period of adjustment. For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (i) when the related sales occur and (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). The Company allocates the transaction price based on the estimated stand-alone selling price of each of the performance obligations. The Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company utilizes key assumptions to determine the stand-alone selling price for service obligations, which may include other comparable transactions, pricing considered in negotiating the transaction and the estimated costs. Additionally, in determining the standalone selling price for material rights, the Company may reference comparable transactions, clinical trial success probabilities and estimates of option exercise likelihood. Variable consideration will be allocated specifically to one or more performance obligations in a contract when the terms of the variable consideration relate to the satisfaction of the performance obligation and the resulting amounts allocated are consistent with the amounts the Company would expect to receive for the satisfaction of each performance obligation. The consideration allocated to each performance obligation is recognized as revenue when control is transferred for the related goods or services. For performance obligations which consist of licenses and other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Upfront payments and fees are recorded as deferred revenue upon receipt or when due until the Company performs its obligations under these arrangements. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue in the accompanying condensed balance sheets. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. Recently Issued Accounting Pronouncements The Company qualifies as an emerging growth company (“EGC”) as defined under the Jumpstart Our Business Startups Act (the “JOBS Act”). Using exemptions provided under the JOBS Act provided to EGCs, the Company has elected to defer compliance with new or revised financial accounting standards until it is required to comply with such standards. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). The new guidance will require lessees to record most leases on their balance sheets and recognize the related expenses on their income statements in a manner similar to current practice. ASU 2016-02 states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The standard is effective for the Company January 1, 2020.The Company continues to determine if it will elect to use the practical expedients permitted by the guidance and continues to gather data required to comply with the guidance. Based on the work completed to date, the Company is considering the implications of adopting the new standard, including the discount rate to be used in valuing new and existing leases and all applicable financial statement disclosures required by the new guidance. The Company is continuing to evaluate the effect of adoption and anticipates that it will result in the recognition of additional assets and corresponding liabilities related to the existing leases on its balance sheet. The Company is assessing any potential impacts on its internal controls, business processes, and accounting policies related to both the implementation of, and ongoing compliance with, the new guidance. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 will require credit losses to be reported using an expected losses model rather than the incurred losses model that is currently used, and will require additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, this standard will require allowances to be recorded instead of reducing the amortized cost of the investment. ASU 2016-13 will be effective for non-emerging growth companies for fiscal years beginning December 15, 2019 and interim periods within those fiscal years, and will be effective for the Company for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021, assuming the Company remains an emerging growth company. Early adoption is permitted. The Company is currently evaluating the effects the adoption of ASU 2016-13 will have on its financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement—Disclosure Framework-Changes to the Disclosure Requirement for Fair Value Measurement (“ASU 2018-13”). The amendments in ASU 2018-13 modify the disclosure requirements on fair value measurements in ASC 820, Fair Value Measurement, based on the concepts in the FASB Concepts Statement, including the consideration of costs and benefits. ASU 2018-13 will be effective for all companies for fiscal periods beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effects the adoption of ASU 2018-13 will have on its financial statements. In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 (“ASU 2018-18”). ASU 2018-18 clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer in the context of a unit of account. In those situations, all the guidance in Topic 606 should be applied, including recognition, measurement, presentation and disclosure requirements. The amendment also adds unit of account guidance in Topic 808 to align with the guidance in Topic 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of Topic 606. Lastly, ASU 2018-18 provides that in a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, presenting the transaction together with revenue recognized under Topic 606 will be precluded if the collaborative arrangement participant is not a customer. ASU 2018-18 will be effective for non-emerging growth companies for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, and will be effective for the Company for fiscal years beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021, assuming the Company remains an emerging growth company. Early adoption is permitted. The Company is currently evaluating these clarifications for the accounting and presentation for its collaborative arrangements within the scope of Topic 808, but does not expect that the adoption of ASU 2018-18 will have any impact. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2019 | |
Investments | |
Investments | 3. Investments Investments consist of the following (in thousands): September 30, 2019 Gross Gross Amortized Unrealized Unrealized Estimated Cost Gain Loss Fair Value U.S. treasury securities $ 19,982 $ 1 $ — $ 19,983 Agency bonds 47,178 — (17) 47,161 Corporate bonds 107,045 20 (62) 107,003 Total $ 174,205 $ 21 $ (79) $ 174,147 As of September 30, 2019, no investments are considered to be other-than-temporarily impaired. The Company uses the specific identification method when calculating realized gains and losses. For the three and nine months ended September 30, 2019, the Company recorded no realized gains and losses on available-for-sale securities. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 4. Fair Value of Financial Instruments The Company has certain financial assets recorded at fair value, which have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements. Level 1—Quoted market prices in active markets for identical assets or liabilities. Level 2—Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves. Level 3—Unobservable inputs developed using estimates of assumptions developed by the Company, which reflect those that a market participant would use. To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following tables set forth the fair value of the Company’s financial assets by level within the fair value hierarchy (in thousands): September 30, 2019 Carrying Amount Fair Value Level 1 Level 2 Level 3 Cash equivalents: Money market $ 5,465 $ 5,465 $ 5,465 $ — $ — Marketable securities: U.S. treasury securities 19,982 19,983 — 19,983 — Agency bonds 47,178 47,161 — 47,161 — Corporate bonds 107,045 107,003 — 107,003 — Total $ 179,670 $ 179,612 $ 5,465 $ 174,147 $ — December 31, 2018 Carrying Amount Fair Value Level 1 Level 2 Level 3 Cash equivalents: Money market $ 5,000 $ 5,000 $ 5,000 — — The Company did not transfer any assets measured at fair value on a recurring basis between levels during the three and nine months ended September 30, 2019. |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2019 | |
Property and Equipment, Net | |
Property and Equipment, Net | 5. Property and Equipment, Net Property and equipment consist of the following (in thousands): September 30, December 31, 2019 2018 Research equipment $ 9,746 $ 7,787 Leasehold improvements 5,365 4,825 Computer equipment 441 167 Furniture and fixtures 94 70 Construction in progress 787 1,027 Property and equipment, gross 16,433 13,876 Less: accumulated depreciation and amortization (4,402) (2,469) Property and equipment, net $ 12,031 $ 11,407 Construction in progress at September 30, 2019 consists of the costs incurred for research equipment and for the build-out of additional lab and office space and at December 31, 2018 consists of the costs incurred for the build-out of a manufacturing suite at the Company’s headquarters in Beltsville, Maryland. Depreciation and amortization expense was $788,000 and $1,933,000 for the three and nine months ended September 30, 2019, respectively, and $396,000 and $1,159,000 for the three and nine months ended September 30, 2018, respectively. |
Agreement with Eli Lilly and Co
Agreement with Eli Lilly and Company | 9 Months Ended |
Sep. 30, 2019 | |
Agreement with Eli Lilly and Company | |
Agreement with Eli Lilly and Company | 6. Agreement with Eli Lilly and Company On November 2, 2018, the Company entered into a multi-year research and development collaboration agreement (the “Lilly Agreement”) with Eli Lilly and Company (“Lilly”), pursuant to which the Company will use its proprietary FIND-IO platform to identify novel oncology targets for additional collaborative research and drug discovery by the Company and Lilly. Under the Lilly Agreement, Lilly and the Company have granted one another an equal number of exclusive options to research, develop, manufacture and commercialize compounds and products directed to oncology targets identified through the Lilly Agreement. Both Lilly and the Company have all options remaining eligible for exercise. The research collaboration with Lilly will be managed by a joint steering committee formed by an equal number of members from the Company and Lilly and will expire upon the earlier of the exercise of all options granted to Lilly or four years from the date of the agreement, subject to certain extensions. The Company considers Lilly to be a related party based on Lilly’s equity investment in the Company as discussed below. During the research term under the Lilly Agreement, as a part of target discovery, the Company will be responsible for providing Lilly with oncology targets identified using the Company’s FIND-IO platform. From the targets provided by the Company, Lilly may select targets to advance to target validation using criteria developed by both parties. Following completion of the agreed upon target validation plan with respect to a given target, either party may propose to advance that target to compound discovery. For each target that has been advanced to compound discovery, Lilly will have the option to obtain an exclusive license with respect to the compounds and products directed to the target. If Lilly does not exercise its option with respect to a given target or has previously exercised all of its options, the Company will have the option to obtain licenses with respect to compounds and products directed to that target. Following option exercise by a party, the development and commercialization of any products directed to the target will be conducted by the exercising party. The exercising party must use commercially reasonable efforts to develop, seek regulatory approval for and commercialize any such products under mutually agreed upon work plans. In November 2018, the Company received an upfront, non-refundable payment of $25.0 million under the Lilly Agreement and a concurrent $15.0 million equity investment. In addition, the Company will receive quarterly research and development support payments during a portion of the research term as well as option exercise fees upon option exercises by Lilly. Pursuant to the Lilly Agreement, Lilly may owe an aggregate of up to $1.4 billion in development and regulatory milestones and sales milestones. Additionally, Lilly will pay mid to high single-digit royalties on net sales for all products directed to each target optioned by Lilly. Upon the Company’s exercise of an option with respect to a given target, the Company will pay Lilly an option exercise payment and may become obligated to milestone and royalty payments. The company may owe an aggregate of up to $710.0 million in development and regulatory milestones and sales milestones. Upon the adoption of ASC 606, the Company evaluated the Lilly Agreement under the provisions of ASC 606 and concluded that Lilly is a customer prior to the exercise of its option to obtain an exclusive license with respect to the compounds and products directed to a target that has been advanced to compound discovery. The Company identified the following material promises under the Lilly Agreement: (i) a limited research license to conduct activities under the research collaboration; (ii) research and development services together with the provision of a data package in connection with Lilly’s option; (iii) various governance obligations, most notably participation on the joint steering committee; and (iv) rights related to an optional term extension by Lilly. The Company evaluated Lilly’s option to obtain an exclusive license with respect to the compounds and products directed to a target that has been advanced to compound discovery and concluded that the option was not issued at a significant and incremental discount, and therefore does not provide material rights. As such, they are excluded as performance obligations at the outset of the arrangement. The Company determined that the research license was not capable of being distinct and the related research and development services and governance activities are not distinct in the context of the contract and, as such, the Company determined that these promises should be combined into a single performance obligation, resulting in a total of two performance obligations under the Lilly Agreement; one for research and development services and one for the right related to an optional term extension by Lilly. The transaction price at the outset of the arrangement was determined to be $32.7 million, comprised of the upfront fee received from Lilly, quarterly research and development support payments to be received from Lilly during a portion of the research term and an equity investment premium as determined by the Company with reference to a valuation of the Company’s preferred stock prepared by an unrelated third-party valuation firm in accordance with the guidance provided by the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. The transaction price was allocated to the two performance obligations based on their relative standalone selling price determined with reference to the Company’s estimated costs attendant to the obligations. Revenue allocated to the research and development performance obligation is being recognized as the research and development services are provided using an input method according to research and development costs incurred to date compared to estimated total research and development costs. The transfer of control occurs over this time period and, in management’s judgment, is the best measure of progress towards satisfying the performance obligation. Revenue allocated to Lilly’s right related to an optional term extension is deferred until the right is exercised or lapses, and will subsequently be recognized accordingly. While the Lilly Agreement was executed in November 2018, the Company’s performance initiated in January 2019. Under the Lilly Agreement, the Company recognized revenue of $1.6 million and $4.3 million for the three and nine months ended September 30, 2019, respectively. As of September 30, 2019, deferred revenue included in the Company’s balance sheets comprised the following (in thousands): September 30, December 31, 2019 2018 Deferred revenue, beginning of period $ 26,725 $ — Up-front payment — 25,000 Attributed premium on the proceeds from Lilly’s investment in the Company — 1,725 Research and development support billing 1,500 — Revenue from research and development arrangement recognized (4,342) — Total deferred revenue, end of period 23,883 26,725 Less: Deferred revenue, current portion (6,199) (4,989) Deferred revenue, non-current portion $ 17,684 $ 21,736 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 7. Commitments and Contingencies Operating Leases On February 9, 2016, the Company entered into a non-cancelable facilities operating sublease (the “2016 Sublease”). On March 15, 2019, the Company amended and restated the 2016 Sublease (as amended, the “Amended 2016 Sublease”) to include additional square footage to be used for office space, which the Company took possession of upon entering into the Amended 2016 Sublease. The Amended 2016 Sublease expires in August 2025. The base rent under the Amended 2016 Sublease is currently $32,254 per month plus the Company’s prorated share of the sublandlord’s operating expense and is subject to annual rent increases of 3%. On January 30, 2019, the Company entered into a new lease to be used for office and laboratory space (the “New Premises”), which the Company took possession of on June 1, 2019 (the “2019 Lease”). On August 2, 2019, the Company amended the 2019 Lease (as, the “Amended 2019 Lease”) to include additional space to be used for office and laboratory space (the “Expansion Premises”), which the Company expects to take possession of on April 1, 2020. The Amended 2019 Lease expires in March 2030. Upon expiration of the Amended 2016 Sublease, the Amended 2019 Lease will also cover the space the Company is currently subleasing under the Amended 2016 Sublease. Base rent is abated until April 1, 2020 for the New Premises and until seven months after delivery of the Expansion Premises for the Expansion Premises, after which the base rent will be $19,646 per month for the New Premises and $18,178 per month for the Expansion Premises, each subject to annual rent increases of 3%. In connection with this lease, the Company executed a $39,000 letter of credit, which has not been drawn down on. Additionally, there is a base rate adjustment of 8.5% per annum multiplied by the outstanding balance of amounts paid for tenant improvements. The budgeted amounts of tenant improvements are approximately $1,477,000 for the New Premises and $1,517,000 for the Expansion Premises, which are to be fully reimbursed by the landlord. The future minimum payments for the operating leases are as follows (in thousands): Remainder of the year $ 97 2020 566 2021 692 2022 742 2023 733 Thereafter 6,088 Total future minimum payments $ 8,918 Rent expense incurred under operating leases was approximately $252,000 and $442,000 for the three and nine months ended September 30, 2019, respectively, and $107,000 and $308,000 for the three and nine months ended September 30, 2018, respectively. Legal Proceedings The Company, from time to time, may be party to litigation arising in the ordinary course of business. The Company is not a party to any litigation or legal proceedings, nor is management aware of any pending or threatened litigation that, in the opinion of the Company’s management, are likely to have a material adverse effect on the Company’s business. At each reporting date, the Company evaluates whether 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 incurred. |
Term Loan
Term Loan | 9 Months Ended |
Sep. 30, 2019 | |
Term Loan | |
Term Loan | 8. Term Loan In April 2016, the Company entered into a $1.0 million term loan with a commercial bank (the “Term Loan”). On January 25, 2019, the Company amended the Term Loan to increase the Company’s borrowing capacity to $5.0 million, which amount remains secured by the Company’s certificates of deposit, money market account, investment property and deposit or investment accounts. As amended, the Term Loan bears interest at the greater of the prime rate less 1% and 4.25%. The effective interest rate was 4.33% and 4.44% for the three and nine months ended September 30, 2019, respectively. The effective interest rate was 4.18% and 3.84% for the three and nine months ended September 30, 2018, respectively. Under the Term Loan, the Company is required to make monthly interest-only payments through January 2020 and is required to make 36 equal monthly payments of principal plus accrued interest thereafter through January 2023. Future maturities of the Term Loan as of September 30, 2019 are as follows (in thousands): Remainder of the year $ — 2020 1,528 2021 1,667 2022 1,667 2023 138 Total 5,000 Less: current portion of term loan (1,250) Term loan, net of current portion $ 3,750 Interest expense under the Term Loan was approximately $56,000 and $155,000 for the three and nine months ended September 30, 2019, respectively, and $7,000 and $20,000 for the three and nine months ended September 30, 2018, respectively. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Stock-Based Compensation | |
Stock-Based Compensation | 9. Stock‑Based Compensation Employee Equity Plans The NextCure, Inc. 2015 Omnibus Incentive Plan (the "2015 Plan") provides for the Company to grant incentive stock options or nonqualified stock options, restricted stock awards, unrestricted stock awards or restricted stock units to employees, consultants and directors of the Company. The 2015 Plan is administered by the board of directors, or at the discretion of the board of directors, by a committee of the board of directors. The exercise prices, vesting and other restrictions are determined at the discretion of the board of directors or its committee if so delegated, except that the exercise price per share of the stock options may not be less than 100% of the fair market value of a share of the Company's common stock on the date of grant and the term of the stock options may not be greater than 10 years. On May 3, 2019, the Company’s stockholders approved the NextCure, Inc. 2019 Omnibus Incentive Plan (the ‘‘2019 Plan’’), which became effective on May 8, 2019, the date on which the Registration Statement was declared effective (the “Effective Date”). The 2019 Plan replaces the 2015 Plan as the Company’s board of directors (the “Board”) determined not to make additional awards under the 2015 Plan following the effectiveness of the 2019 Plan. The 2019 Plan provides for the grant of awards of options, stock appreciation rights, restricted stock, restricted stock units, deferred stock units, unrestricted stock, dividend equivalent rights, other equity-based awards and cash bonus awards to the Company’s officers, employees, non-employee directors and other key persons (including consultants). The number of shares of common stock reserved for issuance under the 2019 Plan is 2,900,000 plus the number of shares of stock related to awards outstanding under the 2015 Plan that subsequently terminate by expiration or forfeiture, cancellation or otherwise without the issuance of such shares. The number of shares reserved for issuance under the 2019 Plan will automatically increase on January 1, 2020 and each January 1st thereafter during the term of the 2019 Plan by 4% of the number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year or such lesser number of shares determined by the Board. As of September 30, 2019, 2,653,969 shares were reserved for future grant under the 2019 Plan. Stock options granted under the 2015 Plan and 2019 Plan (together, the “Plans”) to employees generally vest over four years and expire after ten years. A summary of stock option activity for awards under the Plans is presented below: Options Outstanding and Exercisable Weighted Weighted Average Aggregate Average Remaining Intrinsic Number of Exercise Contractual Value (1) Shares Price Life (Years) (in thousands) Outstanding as of December 31, 2018 2,056,891 $ 4.74 9.4 $ 5,946 Granted 247,275 $ 18.18 10.0 Exercised (53,963) $ 1.20 8.1 Forfeitures (1,250) $ 7.63 9.5 Outstanding as of September 30, 2019 2,248,953 $ 6.30 9.1 $ 55,305 Vested and expected to vest as of September 30, 2019 2,248,953 $ 6.30 $ 55,305 Exercisable as of September 30, 2019 450,866 $ 1.15 $ 12,335 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the common stock for the options that were in the money at September 30, 2019 and December 31, 2018. The weighted-average grant date fair value of stock options granted to employees for the nine months ended September 30, 2019 was $11.48. The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2019 was $1,600,000. The Company’s potential dilutive securities, which as of September 30, 2019 include common stock options, have been excluded from the computation of diluted net loss per share as the effect would be anti‑dilutive. Therefore, the weighted average number of common shares used to calculate both basic and diluted net loss per common share is the same. The Company excluded 2,248,953 potential shares of common stock, presented based on amounts outstanding at three and nine periods ended September 30, 2019, from the computation of diluted net loss per common share for the period indicated because including them would have had an anti‑dilutive effect. On May 3, 2019, the Company’s stockholders approved the NextCure, Inc. 2019 Employee Stock Purchase Plan (the “ESPP”), which became effective on the Effective Date. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423(b) of the Internal Revenue Code. A total of 240,000 shares of common stock were reserved for issuance under this plan. In addition, the number of shares of common stock that may be issued under the ESPP will automatically increase on January 1, 2020 and each January 1st thereafter until expiration of the ESPP, in an amount equal to the lesser of (i) 1% of the number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year, (ii) 480,000 shares of common stock and (iii) a number of shares of common stock determined by the administrator of the ESPP. Stock‑Based Compensation The Company recorded stock-based compensation expense of $524,000 and $1,319,000 for the three and nine months ended September 30, 2019, respectively, and $90,000 and $138,000 for the three and nine months ended September 30, 2018, respectively. Stock‑based compensation expense recorded as research and development and general and administrative expenses is as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Research and development $ 182 $ 41 $ 482 $ 62 General and administrative 342 49 837 76 Total stock-based compensation expense $ 524 $ 90 $ 1,319 $ 138 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes | |
Income Taxes | 10. Income Taxes The Company did not record a provision or benefit for income taxes during the nine months ended September 30, 2019. The Company continues to maintain a full valuation allowance against its deferred tax assets. The Company has evaluated the positive and negative evidence involving its ability to realize its deferred tax assets. Management has considered the Company’s history of cumulative net losses incurred since inception and its lack of any commercially ready products. It has concluded that it is more likely than not that the Company will not realize the benefits of the deferred tax assets. Management reevaluates the positive and negative evidence at each reporting period. Under the provisions of Sections 382 and 383 of the Internal Revenue Code, certain substantial changes in the Company’s ownership may have limited, or may limit in the future, the amount of net operating loss and research and development credit carryforwards that can be used to reduce future income taxes. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events | |
Subsequent Events | 11. Subsequent Events The Company has evaluated subsequent events through the issuance date of these interim condensed financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed financial statements as of September 30, 2019 and for the three and nine months ended September 30, 2019 and 2018 have been prepared by the Company in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and 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 condensed or omitted pursuant to such rules and regulations. Accordingly, these condensed financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto as of and for the year ended December 31, 2018, which are included in the Company’s final prospectus that forms a part of the Company’s Registration Statement on Form S-1 (Reg. No. 333-230837) (the “Registration Statement”), as filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, on May 9, 2019. The unaudited interim condensed financial statements have been prepared on the same basis as the audited financial statements. In the opinion of management, the accompanying unaudited interim condensed financial statements contain all adjustments necessary for a fair statement of the Company’s financial position as of September 30, 2019 and condensed results of operations and cash flows for the three and nine months ended September 30, 2019 and 2018. Such adjustments are of a normal and recurring nature. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2019. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates, including those related to accrued expenses, revenue recognition, the valuation of equity‑based compensation, including incentive stock options, common stock and restricted common stock, as well as income taxes. The Company bases its estimates on various assumptions that the Company believes to be reasonable under the circumstances. A lthough actual results could differ from those estimates, management does not believe that such differences would be material. |
Restricted Cash | Restricted Cash The Company is required, as a condition of its Term Loan (Note 8), to maintain cash collateral on deposit in a segregated money market bank account equal to the principal portion of the Term Loan, as determined on a quarterly basis. The bank may restrict withdrawals or transfers by or on behalf of the Company that would violate this requirement. The required reserve totaled $5.0 million as of September 30, 2019. This amount is presented in part as restricted cash and in part as other assets on the accompanying balance sheet. The following table reconciles cash and cash equivalents and restricted cash per the balance sheet to the statement of cash flows (in thousands): September 30, December 31, 2019 2018 Cash and cash equivalents $ 9,935 $ 135,173 Restricted cash (including $3,750 in other assets) 5,039 460 Total $ 14,974 $ 135,633 |
Marketable Securities | Marketable Securities Our investments primarily consist of government debt securities, corporate bonds and agency bonds. These marketable securities are classified as available-for-sale, and as such, are reported at fair value on our condensed balance sheets. Unrealized holding gains and losses are reported within accumulated other comprehensive income (loss) as a separate component of stockholders’ equity. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization, together with interest on securities, are included in other income, net, on our condensed statements of operations. If a decline in the fair value of a marketable security below our cost basis is determined to be other than temporary, such marketable security is written down to its estimated fair value as a new cost basis and the amount of the write-down is included in earnings as an impairment charge. The cost of securities sold is based on the specific identification method. |
Revenue Recognition | Revenue Recognition The Company has adopted Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine the appropriate amount of revenue to be recognized for arrangements determined to be within the scope of ASC 606, the Company performs the following five steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect consideration to which it is entitled in exchange for the goods or services it transfers to the customer. The Company evaluates customer options for material rights or options to acquire additional goods or services for free or at a discount. If the customer options are determined to represent a material right, the material right is recognized as a separate performance obligation at the outset of the arrangement. Performance obligations are promised goods or services in a contract to transfer a distinct good or service to the customer and are considered distinct when (i) the customer can benefit from the good or service on its own or together with other readily available resources and (ii) the promised good or service is separately identifiable from other promises in the contract. In assessing whether promised goods or services are distinct, the Company considers factors such as the stage of development of the underlying intellectual property, the capabilities of the customer to develop the intellectual property on its own or whether the required expertise is readily available and whether the goods or services are integral to or dependent on other goods or services in the contract. The Company estimates the transaction price based on the amount expected to be received for transferring the promised goods or services in the contract. Consideration generally may include fixed consideration or variable consideration. Should an arrangement include variable consideration, the Company will evaluate the amount of potential payments and the likelihood that the payments will be received. The Company will utilize either the most likely amount method or expected amount method to estimate the amount expected to be received based on which method best predicts the amount expected to be received. The amount of variable consideration that is included in the transaction price may be constrained and will be included in the transaction price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. The Company’s contracts may include development and regulatory milestone payments which would be assessed under the most likely amount method and constrained if it is probable that a significant revenue reversal would occur. Milestone payments that are not within the Company’s control or the licensee’s control, such as regulatory approvals, will not be considered probable of being achieved until those approvals are received. At the end of each reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments would be recorded on a cumulative catch-up basis, which would affect collaboration revenues in the period of adjustment. For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (i) when the related sales occur and (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). The Company allocates the transaction price based on the estimated stand-alone selling price of each of the performance obligations. The Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company utilizes key assumptions to determine the stand-alone selling price for service obligations, which may include other comparable transactions, pricing considered in negotiating the transaction and the estimated costs. Additionally, in determining the standalone selling price for material rights, the Company may reference comparable transactions, clinical trial success probabilities and estimates of option exercise likelihood. Variable consideration will be allocated specifically to one or more performance obligations in a contract when the terms of the variable consideration relate to the satisfaction of the performance obligation and the resulting amounts allocated are consistent with the amounts the Company would expect to receive for the satisfaction of each performance obligation. The consideration allocated to each performance obligation is recognized as revenue when control is transferred for the related goods or services. For performance obligations which consist of licenses and other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Upfront payments and fees are recorded as deferred revenue upon receipt or when due until the Company performs its obligations under these arrangements. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue in the accompanying condensed balance sheets. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements The Company qualifies as an emerging growth company (“EGC”) as defined under the Jumpstart Our Business Startups Act (the “JOBS Act”). Using exemptions provided under the JOBS Act provided to EGCs, the Company has elected to defer compliance with new or revised financial accounting standards until it is required to comply with such standards. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). The new guidance will require lessees to record most leases on their balance sheets and recognize the related expenses on their income statements in a manner similar to current practice. ASU 2016-02 states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The standard is effective for the Company January 1, 2020.The Company continues to determine if it will elect to use the practical expedients permitted by the guidance and continues to gather data required to comply with the guidance. Based on the work completed to date, the Company is considering the implications of adopting the new standard, including the discount rate to be used in valuing new and existing leases and all applicable financial statement disclosures required by the new guidance. The Company is continuing to evaluate the effect of adoption and anticipates that it will result in the recognition of additional assets and corresponding liabilities related to the existing leases on its balance sheet. The Company is assessing any potential impacts on its internal controls, business processes, and accounting policies related to both the implementation of, and ongoing compliance with, the new guidance. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 will require credit losses to be reported using an expected losses model rather than the incurred losses model that is currently used, and will require additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, this standard will require allowances to be recorded instead of reducing the amortized cost of the investment. ASU 2016-13 will be effective for non-emerging growth companies for fiscal years beginning December 15, 2019 and interim periods within those fiscal years, and will be effective for the Company for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021, assuming the Company remains an emerging growth company. Early adoption is permitted. The Company is currently evaluating the effects the adoption of ASU 2016-13 will have on its financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement—Disclosure Framework-Changes to the Disclosure Requirement for Fair Value Measurement (“ASU 2018-13”). The amendments in ASU 2018-13 modify the disclosure requirements on fair value measurements in ASC 820, Fair Value Measurement, based on the concepts in the FASB Concepts Statement, including the consideration of costs and benefits. ASU 2018-13 will be effective for all companies for fiscal periods beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effects the adoption of ASU 2018-13 will have on its financial statements. In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 (“ASU 2018-18”). ASU 2018-18 clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer in the context of a unit of account. In those situations, all the guidance in Topic 606 should be applied, including recognition, measurement, presentation and disclosure requirements. The amendment also adds unit of account guidance in Topic 808 to align with the guidance in Topic 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of Topic 606. Lastly, ASU 2018-18 provides that in a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, presenting the transaction together with revenue recognized under Topic 606 will be precluded if the collaborative arrangement participant is not a customer. ASU 2018-18 will be effective for non-emerging growth companies for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, and will be effective for the Company for fiscal years beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021, assuming the Company remains an emerging growth company. Early adoption is permitted. The Company is currently evaluating these clarifications for the accounting and presentation for its collaborative arrangements within the scope of Topic 808, but does not expect that the adoption of ASU 2018-18 will have any impact. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies | |
Summary of reconciliation cash and cash equivalents and restricted cash per the balance sheet to the statement of cash flows | The following table reconciles cash and cash equivalents and restricted cash per the balance sheet to the statement of cash flows (in thousands): September 30, December 31, 2019 2018 Cash and cash equivalents $ 9,935 $ 135,173 Restricted cash (including $3,750 in other assets) 5,039 460 Total $ 14,974 $ 135,633 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments | |
Schedule of available-for-sale securities | September 30, 2019 Gross Gross Amortized Unrealized Unrealized Estimated Cost Gain Loss Fair Value U.S. treasury securities $ 19,982 $ 1 $ — $ 19,983 Agency bonds 47,178 — (17) 47,161 Corporate bonds 107,045 20 (62) 107,003 Total $ 174,205 $ 21 $ (79) $ 174,147 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value of Financial Instruments | |
Summary of fair value of the Company’s financial assets | The following tables set forth the fair value of the Company’s financial assets by level within the fair value hierarchy (in thousands): September 30, 2019 Carrying Amount Fair Value Level 1 Level 2 Level 3 Cash equivalents: Money market $ 5,465 $ 5,465 $ 5,465 $ — $ — Marketable securities: U.S. treasury securities 19,982 19,983 — 19,983 — Agency bonds 47,178 47,161 — 47,161 — Corporate bonds 107,045 107,003 — 107,003 — Total $ 179,670 $ 179,612 $ 5,465 $ 174,147 $ — December 31, 2018 Carrying Amount Fair Value Level 1 Level 2 Level 3 Cash equivalents: Money market $ 5,000 $ 5,000 $ 5,000 — — |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property and Equipment, Net | |
Summary of property and equipment | Property and equipment consist of the following (in thousands): September 30, December 31, 2019 2018 Research equipment $ 9,746 $ 7,787 Leasehold improvements 5,365 4,825 Computer equipment 441 167 Furniture and fixtures 94 70 Construction in progress 787 1,027 Property and equipment, gross 16,433 13,876 Less: accumulated depreciation and amortization (4,402) (2,469) Property and equipment, net $ 12,031 $ 11,407 |
Agreement with Eli Lilly and _2
Agreement with Eli Lilly and Company (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Agreement with Eli Lilly and Company | |
Summary of deferred revenue included in the Company’s balance sheets | As of September 30, 2019, deferred revenue included in the Company’s balance sheets comprised the following (in thousands): September 30, December 31, 2019 2018 Deferred revenue, beginning of period $ 26,725 $ — Up-front payment — 25,000 Attributed premium on the proceeds from Lilly’s investment in the Company — 1,725 Research and development support billing 1,500 — Revenue from research and development arrangement recognized (4,342) — Total deferred revenue, end of period 23,883 26,725 Less: Deferred revenue, current portion (6,199) (4,989) Deferred revenue, non-current portion $ 17,684 $ 21,736 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies | |
Schedule of future minimum payments | The future minimum payments for the operating leases are as follows (in thousands): Remainder of the year $ 97 2020 566 2021 692 2022 742 2023 733 Thereafter 6,088 Total future minimum payments $ 8,918 |
Term Loan (Tables)
Term Loan (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Term Loan | |
Schedule of future maturities | Future maturities of the Term Loan as of September 30, 2019 are as follows (in thousands): Remainder of the year $ — 2020 1,528 2021 1,667 2022 1,667 2023 138 Total 5,000 Less: current portion of term loan (1,250) Term loan, net of current portion $ 3,750 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Stock-Based Compensation | |
Summary of stock option activity | Options Outstanding and Exercisable Weighted Weighted Average Aggregate Average Remaining Intrinsic Number of Exercise Contractual Value (1) Shares Price Life (Years) (in thousands) Outstanding as of December 31, 2018 2,056,891 $ 4.74 9.4 $ 5,946 Granted 247,275 $ 18.18 10.0 Exercised (53,963) $ 1.20 8.1 Forfeitures (1,250) $ 7.63 9.5 Outstanding as of September 30, 2019 2,248,953 $ 6.30 9.1 $ 55,305 Vested and expected to vest as of September 30, 2019 2,248,953 $ 6.30 $ 55,305 Exercisable as of September 30, 2019 450,866 $ 1.15 $ 12,335 The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the common stock for the options that were in the money at September 30, 2019 and December 31, 2018. |
Summary of stock based compensation expense recorded | Stock‑based compensation expense recorded as research and development and general and administrative expenses is as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Research and development $ 182 $ 41 $ 482 $ 62 General and administrative 342 49 837 76 Total stock-based compensation expense $ 524 $ 90 $ 1,319 $ 138 |
Nature of the Business - (Detai
Nature of the Business - (Details) $ / shares in Units, $ in Thousands | May 13, 2019USD ($)$ / sharesshares | May 03, 2019 | Sep. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2019$ / shares | Dec. 31, 2018$ / sharesshares |
Nature of the Business | |||||
Reverse stock split ratio | 0.1245 | ||||
Proceeds from issuance of shares, net | $ | $ 77,264 | ||||
Common stock, shares outstanding | 15,560,569 | 22,739,345 | 1,374,812 | ||
Preferred stock, shares outstanding | 0 | 0 | 0 | ||
Common stock, number of shares authorized | 100,000,000 | 100,000,000 | 158,745,671 | ||
Common stock, par value per share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |
Preferred stock, number of shares authorized | 10,000,000 | 10,000,000 | 0 | ||
Preferred stock, par value per share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||
IPO | |||||
Nature of the Business | |||||
Issuance of stock (in shares) | 5,750,000 | ||||
Share price | $ / shares | $ 15 | ||||
Proceeds from issuance of shares, net | $ | $ 77,000 | ||||
Underwriting discounts and commissions | $ | 6,000 | ||||
Offering expenses | $ | $ 3,400 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Restricted Cash | ||||
Restricted cash required reserve | $ 5,000 | |||
Reconciliation of cash and cash equivalents and restricted cash per the balance sheet to the statement of cash flows | ||||
Cash and cash equivalents | 9,935 | $ 135,173 | ||
Restricted cash (including $3,750 in other assets) | 5,039 | 460 | ||
Total | 14,974 | $ 135,633 | $ 24,335 | $ 9,287 |
Other assets, restricted cash | $ 3,750 |
Investments - (Details)
Investments - (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Investments | |
Amortized Cost | $ 174,205 |
Gross Unrealized Gain | 21 |
Gross Unrealized Loss | (79) |
Estimated Fair Value | 174,147 |
U.S. treasury securities | |
Investments | |
Amortized Cost | 19,982 |
Gross Unrealized Gain | 1 |
Estimated Fair Value | 19,983 |
Agency bonds | |
Investments | |
Amortized Cost | 47,178 |
Gross Unrealized Loss | (17) |
Estimated Fair Value | 47,161 |
Corporate bonds | |
Investments | |
Amortized Cost | 107,045 |
Gross Unrealized Gain | 20 |
Gross Unrealized Loss | (62) |
Estimated Fair Value | $ 107,003 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair value of the Company’s financial assets | ||
Marketable securities | $ 174,147 | |
Assets transferred from level 1 to level 2 | 0 | |
Assets transferred from level 2 to level 1 | 0 | |
Carrying Amount | ||
Fair value of the Company’s financial assets | ||
Total financial assets | 179,670 | |
Fair Value | ||
Fair value of the Company’s financial assets | ||
Total financial assets | 179,612 | |
Fair Value | Quoted Prices in Active Markets (Level 1) | ||
Fair value of the Company’s financial assets | ||
Total financial assets | 5,465 | |
Fair Value | Significant Other Observable Inputs (Level 2) | ||
Fair value of the Company’s financial assets | ||
Total financial assets | 174,147 | |
Money market funds (cash equivalents) | Carrying Amount | ||
Fair value of the Company’s financial assets | ||
Money market funds (cash equivalents) | 5,465 | $ 5,000 |
Money market funds (cash equivalents) | Fair Value | ||
Fair value of the Company’s financial assets | ||
Money market funds (cash equivalents) | 5,465 | 5,000 |
Money market funds (cash equivalents) | Fair Value | Quoted Prices in Active Markets (Level 1) | ||
Fair value of the Company’s financial assets | ||
Money market funds (cash equivalents) | 5,465 | $ 5,000 |
U.S. treasury securities | Carrying Amount | ||
Fair value of the Company’s financial assets | ||
Marketable securities | 19,982 | |
U.S. treasury securities | Fair Value | ||
Fair value of the Company’s financial assets | ||
Marketable securities | 19,983 | |
U.S. treasury securities | Fair Value | Significant Other Observable Inputs (Level 2) | ||
Fair value of the Company’s financial assets | ||
Marketable securities | 19,983 | |
Agency bonds | Carrying Amount | ||
Fair value of the Company’s financial assets | ||
Marketable securities | 47,178 | |
Agency bonds | Fair Value | ||
Fair value of the Company’s financial assets | ||
Marketable securities | 47,161 | |
Agency bonds | Fair Value | Significant Other Observable Inputs (Level 2) | ||
Fair value of the Company’s financial assets | ||
Marketable securities | 47,161 | |
Corporate bonds | Carrying Amount | ||
Fair value of the Company’s financial assets | ||
Marketable securities | 107,045 | |
Corporate bonds | Fair Value | ||
Fair value of the Company’s financial assets | ||
Marketable securities | 107,003 | |
Corporate bonds | Fair Value | Significant Other Observable Inputs (Level 2) | ||
Fair value of the Company’s financial assets | ||
Marketable securities | $ 107,003 |
Property and Equipment, Net - (
Property and Equipment, Net - (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Property and Equipment, Net | |||||
Property and equipment, gross | $ 16,433,000 | $ 16,433,000 | $ 13,876,000 | ||
Less: accumulated depreciation and amortization | (4,402,000) | (4,402,000) | (2,469,000) | ||
Property and equipment, net | 12,031,000 | 12,031,000 | 11,407,000 | ||
Depreciation and amortization expense | 788,000 | $ 396,000 | 1,933,000 | $ 1,159,000 | |
Research equipment | |||||
Property and Equipment, Net | |||||
Property and equipment, gross | 9,746,000 | 9,746,000 | 7,787,000 | ||
Leasehold improvements | |||||
Property and Equipment, Net | |||||
Property and equipment, gross | 5,365,000 | 5,365,000 | 4,825,000 | ||
Computer equipment | |||||
Property and Equipment, Net | |||||
Property and equipment, gross | 441,000 | 441,000 | 167,000 | ||
Furniture and fixtures | |||||
Property and Equipment, Net | |||||
Property and equipment, gross | 94,000 | 94,000 | 70,000 | ||
Construction in progress | |||||
Property and Equipment, Net | |||||
Property and equipment, gross | $ 787,000 | $ 787,000 | $ 1,027,000 |
Agreement with Eli Lilly and _3
Agreement with Eli Lilly and Company - Other (Details) $ in Thousands | Nov. 02, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($)item | Sep. 30, 2018USD ($) |
Collaborative Arrangements | ||||
Equity investment | $ 31,000 | |||
Revenue | $ 1,583 | $ 4,342 | ||
Lilly Agreement | ||||
Collaborative Arrangements | ||||
Period of expiry from date of agreement | 4 years | |||
Upfront non-refundable payment received | $ 25,000 | |||
Equity investment | 15,000 | |||
The number of performance obligations. | item | 2 | |||
Revenue | $ 1,600 | $ 4,300 | ||
Lilly Agreement | Lilly | ||||
Collaborative Arrangements | ||||
Maximum development and regulatory milestones and sales milestone receivable | 1,400,000 | |||
Maximum development and regulatory milestones and sales milestone payable upon option exercise | 710,000 | |||
Transaction price | $ 32,700 |
Agreement with Eli Lilly and _4
Agreement with Eli Lilly and Company - Deferred revenue included in balance sheets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Deferred revenue | ||
Deferred revenue, beginning of period | $ 26,725 | |
Up-front payment | $ 25,000 | |
Attributed premium on the proceeds from Lilly’s investment in the Company | 1,725 | |
Research and development support billing | 1,500 | |
Revenue from research and development arrangement recognized | (4,342) | |
Total deferred revenue, end of period | 23,883 | 26,725 |
Less: Deferred revenue, current portion | (6,199) | (4,989) |
Deferred revenue, non-current portion | $ 17,684 | $ 21,736 |
Commitments and Contingencies -
Commitments and Contingencies - Other (Details) - USD ($) | Aug. 02, 2019 | Jan. 30, 2019 | Feb. 09, 2016 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Commitments and Contingencies | |||||||
Annual base rent per month | $ 32,254 | ||||||
Period for which base rent is abated | 7 months | 7 months | |||||
Annual base rent per month after abatement | $ 18,178 | $ 19,646 | |||||
Percentage of annual increase in lease rent | 3.00% | 3.00% | 3.00% | ||||
Executed letter of credit | $ 39,000 | ||||||
Base rate adjustment percentage per annum (as a percent) | 8.50% | 8.50% | |||||
Tenant improvements fully reimbursed by the landlord | $ 1,517,000 | $ 1,477,000 | |||||
Rent expenses operating leases | $ 252,000 | $ 107,000 | $ 442,000 | $ 308,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Payments (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Future minimum payments: | |
Remainder of the year | $ 97 |
2020 | 566 |
2021 | 692 |
2022 | 742 |
2023 | 733 |
Thereafter | 6,088 |
Total future minimum payments | $ 8,918 |
Term Loan - Other (Details)
Term Loan - Other (Details) | Jan. 25, 2019USD ($)item | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Apr. 30, 2016USD ($) |
Face amount | $ 5,000,000 | $ 1,000,000 | ||||
Interest rate (as a percent) | 4.25% | 4.33% | 4.18% | 4.44% | 3.84% | |
Number of equal monthly payments of principal plus accrued interest | item | 36 | |||||
Interest expense | $ 56,000 | $ 7,000 | $ 155,000 | $ 20,000 | ||
Prime rate | Maximum | ||||||
Spread (as a percent) | 1.00% |
Term Loan - Maturities (Details
Term Loan - Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Future maturities: | ||
2020 | $ 1,528 | |
2021 | 1,667 | |
2022 | 1,667 | |
2023 | 138 | |
Total | 5,000 | |
Less: current portion of term loan | (1,250) | $ (387) |
Term loan, net of current portion | $ 3,750 | $ 73 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock options (Details) - USD ($) | May 03, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2019 |
2015 Plan | ||||
Number of Shares | ||||
Outstanding at the beginning | 2,056,891 | |||
Granted | 247,275 | |||
Exercised | (53,963) | |||
Forfeitures | (1,250) | |||
Outstanding at the end | 2,056,891 | 2,248,953 | 2,248,953 | |
Vested and expected to vest at the end | 2,248,953 | 2,248,953 | ||
Exercisable at the end | 450,866 | 450,866 | ||
Weighted Average Exercise Price | ||||
Outstanding at the beginning (in dollars per share) | $ 4.74 | |||
Granted (in dollars per share) | 18.18 | |||
Exercised (in dollars per share) | 1.20 | |||
Forfeitures (in dollars per share) | 7.63 | |||
Outstanding at the end (in dollars per share) | $ 4.74 | $ 6.30 | 6.30 | |
Vested and expected to vest at the end (in dollars per share) | 6.30 | 6.30 | ||
Exercisable at the end (in dollars per share) | $ 1.15 | $ 1.15 | ||
Weighted Average Remaining Contractual Life (Years) And Aggregate Intrinsic Value | ||||
Outstanding (in years) | 9 years 4 months 24 days | 9 years 1 month 6 days | ||
Granted (in years) | 10 years | |||
Exercised (in years) | 8 years 1 month 6 days | |||
Forfeitures (in years) | 9 years 6 months | |||
Outstanding at the beginning (in dollars) | $ 5,946,000 | |||
Outstanding at the end (in dollars) | $ 5,946,000 | $ 55,305,000 | 55,305,000 | |
Vested and expected to vest at the end (in dollars) | 55,305,000 | 55,305,000 | ||
Exercisable at the end (in dollars) | $ 12,335,000 | $ 12,335,000 | ||
Weighted average grant date fair value per share of stock options granted | $ 11.48 | |||
Aggregate intrinsic value of stock options exercised | $ 1,600,000 | |||
2015 Plan | Minimum | ||||
Stock Based Compensation | ||||
Share price of common stock on date of grant as a percent of fair market value of company stock (as a percent) | 100.00% | 100.00% | ||
2015 Plan | Maximum | ||||
Stock Based Compensation | ||||
Term of awards | 10 years | |||
Omnibus Incentive Plan | ||||
Stock Based Compensation | ||||
Number of shares reserved for issuance under the plan | 2,900,000 | |||
Annual increase in number of share reserved for issuance (as percent) | 4.00% | |||
2015 Plan and 2019 Employee Stock Purchase Plan | ||||
Stock Based Compensation | ||||
Vesting period | 4 years | |||
Expiration period | 10 years | |||
2019 Employee Stock Purchase Plan | ||||
Stock Based Compensation | ||||
Number of shares reserved for issuance under the plan | 240,000 | 2,653,969 | 2,653,969 | |
Annual increase in number of share reserved for issuance (as percent) | 1.00% | |||
Maximum annual increase in shares available for issuance under the plan | 480,000 | |||
Option to purchase common stock | ||||
Stock Based Compensation | ||||
Antidilutive securities excluded from computation of diluted net loss per share | 2,248,953 | 2,248,953 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock based compensation expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Stock based compensation expense | ||||
Total stock-based compensation expense | $ 524,000 | $ 90,000 | $ 1,319,000 | $ 138,000 |
Research and development | ||||
Stock based compensation expense | ||||
Total stock-based compensation expense | 182,000 | 41,000 | 482,000 | 62,000 |
General and administrative | ||||
Stock based compensation expense | ||||
Total stock-based compensation expense | $ 342,000 | $ 49,000 | $ 837,000 | $ 76,000 |
Income Taxes - (Details)
Income Taxes - (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Income Taxes | |
Provision or benefit from income taxes | $ 0 |
Subsequent Events - (Details)
Subsequent Events - (Details) - USD ($) | Aug. 02, 2019 | Jan. 30, 2019 | Feb. 09, 2016 |
Subsequent Events | |||
Period for which base rent is abated | 7 months | 7 months | |
Annual base rent per month after abatement | $ 18,178 | $ 19,646 | |
Percentage of annual increase in lease rent | 3.00% | 3.00% | 3.00% |