Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 11, 2020 | Jun. 28, 2019 | |
[DocumentAndEntityInformationAbstract] | |||
Entity Registrant Name | NextCure, Inc. | ||
Entity Central Index Key | 0001661059 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 236.4 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 27,509,510 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 34,091 | $ 135,173 |
Marketable securities | 300,514 | |
Restricted cash | 1,706 | 460 |
Prepaid expenses and other current assets | 3,684 | 152 |
Total current assets | 339,995 | 135,785 |
Property and equipment, net | 12,090 | 11,407 |
Other assets | 4,083 | 436 |
Total assets | 356,168 | 147,628 |
Current liabilities: | ||
Accounts payable | 1,861 | 2,483 |
Accrued liabilities | 4,871 | 2,411 |
Deferred rent, current portion | 215 | 28 |
Term loan, current portion | 1,667 | 387 |
Deferred revenue, current portion | 6,428 | 4,989 |
Total current liabilities | 15,042 | 10,298 |
Deferred rent, net of current portion | 359 | 242 |
Term loan, net of current portion | 3,333 | 73 |
Deferred revenue, net of current portion | 15,950 | 21,736 |
Total liabilities | 34,684 | 32,349 |
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 December 31, 2019 and 2018. No shares issued and outstanding at December 31, 2019 and 2018, respectively | ||
Common stock, par value of $0.001 per share; 100,000,000 and 158,745,671 shares authorized at December 31, 2019 and 2018, respectively, 27,499,260 and 1,374,812 shares issued and outstanding at December 31, 2019 and 2018, respectively | 27 | 1 |
Additional paid-in capital | 402,529 | 352 |
Accumulated other comprehensive loss | (38) | |
Accumulated deficit | (81,034) | (47,297) |
Total stockholders’ equity (deficit) | 321,484 | (46,944) |
Total liabilities, preferred stock and stockholders’ equity (deficit) | $ 356,168 | 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 |
BALANCE SHEETS - (Parenthetical
BALANCE SHEETS - (Parenthetical) - $ / shares | Dec. 31, 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 | 27,499,260 | 1,374,812 |
Common stock, shares outstanding | 27,499,260 | 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 |
STATEMENTS OF OPERATIONS AND CO
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue: | ||
Revenue | $ 6,347 | |
Operating expenses: | ||
Research and development | 34,216 | $ 19,787 |
General and administrative | 9,613 | 3,409 |
Total operating expenses | 43,829 | 23,196 |
Loss from operations | (37,482) | (23,196) |
Other income, net | 3,745 | 397 |
Net loss | $ (33,737) | $ (22,799) |
Net loss per common share—basic and diluted (in dollars per share) | $ (2.15) | $ (16.64) |
Weighted average number of common shares —basic and diluted (in shares) | 15,695,461 | 1,369,846 |
Comprehensive loss: | ||
Net loss | $ (33,737) | $ (22,799) |
Unrealized loss on marketable securities | (38) | |
Total comprehensive loss | $ (33,775) | $ (22,799) |
STATEMENTS OF PREFERRED STOCK A
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 | $ 85 | $ 0 | $ (24,498) | $ (24,412) | |||||
Balance at the beginning (in shares) at Dec. 31, 2017 | 1,369,212 | |||||||||
Balance at the beginning at Dec. 31, 2017 | $ 40,000 | $ 0 | ||||||||
Balance at the beginning (in shares) at Dec. 31, 2017 | 40,000,000 | 0 | ||||||||
Increase (Decrease) in Stockholders' Deficit | ||||||||||
Stock based compensation | 263 | 263 | ||||||||
Issuance of stock | $ 31,000 | $ 91,223 | 4 | 4 | ||||||
Issuance of stock (in shares) | 28,181,819 | 56,828,851 | 5,600 | |||||||
Net loss | (22,799) | (22,799) | ||||||||
Balance at the end at Dec. 31, 2018 | $ 1 | 352 | (47,297) | $ (46,944) | ||||||
Balance at the end (in shares) at Dec. 31, 2018 | 1,374,812 | 1,374,812 | ||||||||
Balance at the end at Dec. 31, 2018 | $ 71,000 | $ 91,223 | $ 71,000 | $ 91,223 | $ 162,223 | |||||
Balance at the end (in shares) at Dec. 31, 2018 | 68,181,819 | 56,828,851 | ||||||||
Increase (Decrease) in Stockholders' Deficit | ||||||||||
Stock based compensation | 1,886 | 1,886 | ||||||||
Issuance of stock | 119 | 119 | ||||||||
Issuance of stock (in shares) | 125,109 | |||||||||
Public offerings of common stock, net of issuance costs of $20.7 million | $ 10 | 237,965 | 237,975 | |||||||
Public offerings of common stock, net of issuance costs of $20.7 million (in shares) | 10,438,770 | |||||||||
Conversion of preferred stock to common stock | $ (71,000) | $ (91,223) | $ 16 | 162,207 | 162,223 | |||||
Conversion of preferred stock to common stock (in shares) | (68,181,819) | (56,828,851) | 15,560,569 | |||||||
Unrealized loss on marketable securities | (38) | (38) | ||||||||
Net loss | (33,737) | (33,737) | ||||||||
Balance at the end at Dec. 31, 2019 | $ 27 | $ 402,529 | $ (38) | $ (81,034) | $ 321,484 | |||||
Balance at the end (in shares) at Dec. 31, 2019 | 27,499,260 | 27,499,260 | ||||||||
Balance at the end at Dec. 31, 2019 | $ 0 | $ 0 | ||||||||
Balance at the end (in shares) at Dec. 31, 2019 | 0 | 0 |
STATEMENTS OF PREFERRED STOCK_2
STATEMENTS OF PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Series A-3 preferred stock | ||
Initial public offering issuance costs | $ 0 | |
Series B Preferred Stock | ||
Initial public offering issuance costs | $ 485,000 | |
Common Stock | ||
Initial public offering issuance costs | $ 20,700,000 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (33,737) | $ (22,799) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 2,688 | 1,677 |
Stock-based compensation | 1,886 | 263 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | (4,255) | (19) |
Accounts payable | (622) | 1,342 |
Accrued liabilities | 2,460 | 847 |
Deferred rent | 304 | (44) |
Deferred revenue | (4,347) | 26,725 |
Net cash (used in) provided by operating activities | (35,623) | 7,992 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (3,371) | (3,063) |
Purchase of marketable securities | (300,552) | |
Net cash used in investing activities | (303,923) | (3,063) |
Cash flows from financing activities: | ||
Proceeds from public offering, net of issuance costs | 238,384 | |
Proceeds from issuance of preferred stock, net of issuance costs | 122,223 | |
Proceeds from other issuance of common stock | 119 | 4 |
Proceeds from the term loan | 4,540 | |
Deferred financing costs | (410) | |
Payments of the term loan | (400) | |
Net cash provided by financing activities | 243,043 | 121,417 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (96,503) | 126,346 |
Cash, cash equivalents and restricted cash—beginning of year | 135,633 | 9,287 |
Cash, cash equivalents and restricted cash—end of year | 39,130 | 135,633 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 191 | 25 |
Supplemental disclosures of noncash investing and financing activities: | ||
Purchase of property and equipment included in accrued liabilities | 73 | |
Deferred financing costs included in accrued liabilities | 1 | $ 284 |
Conversion of convertible preferred stock into common stock | $ 162,223 |
Nature of the Business and Basi
Nature of the Business and Basis Presentation | 12 Months Ended |
Dec. 31, 2019 | |
Nature of the Business and Basis of Presentation | |
Nature of the Business and Basis of Presentation | NEXTCURE, INC. NOTES TO FINANCIAL STATEMENTS 1. Nature of the Business and Basis of Presentation 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. Public Offerings of Common Stock 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 $76.9 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. On November 19, 2019, the Company completed an underwritten public offering, in which the Company issued and sold 4,077,192 shares of common stock at a public offering price of $36.75 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 December 2019, the Company has funded its operations primarily with proceeds from public offerings of its common stock, private placements of its preferred stock and upfront fees received under the Company’s former agreement with Eli Lilly and Company (Note 7). The Company expects to incur additional operating losses and negative operating cash flows for the foreseeable future. The Company expects that its operating losses and negative cash flows will continue for the foreseeable future. As of the issuance date of the financial statements for the year ended December 31, 2019, the Company expects that its cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements through at least two years from the issuance date of the financial statements. The future viability of the Company beyond that date may depend on its ability to raise additional capital to finance its operations. The Company plans to seek additional funding through public or private equity offerings, debt financings, marketing and distribution arrangements, other collaborations, strategic alliances, licensing arrangements or other methods. The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into strategic alliances or other arrangements on favorable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. If the Company is unable to obtain funding, the Company could be required to delay, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, which could adversely affect its business prospects. Although management continues to pursue these funding plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company, if at all, to fund continuing operations past two years from the issuance date of these financial statements. Risks and Uncertainties The Company is subject to risks common to early‑stage companies in the biotechnology industry including, but not limited to: having a limited operating history and no products approved for commercial sale; having a history of significant losses; its need to obtain additional financing; dependence on its ability to advance its current and future product candidates through clinical trials, marketing approval and commercialization; the unproven approach to the discovery and development of product candidates based on the Company’s FIND‑IO platform; the lengthy and expensive nature and uncertain outcomes of the clinical development process; the lengthy, time‑consuming and unpredictable nature of the regulatory approval process; the results of preclinical studies and early‑stage clinical trials that may not be predictive of future results; dependence on its key personnel; its limited manufacturing experience as an organization and with its manufacturing facility; risks related to patent protection and the Company’s pending patent applications; dependence on third‑party collaborators for the discovery, development and commercialization of current and future product candidates; and significant competition from other biotechnology and pharmaceutical companies. Pursuit of the Company’s business efforts will require significant amounts of additional capital, adequate personnel, infrastructure and extensive compliance‑reporting capabilities. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. Segment and Geographic Information Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker, or decision‑making group, in deciding how to allocate resources and in assessing performance. The chief operating decision makers view the operations and manage the business in one operating segment that operates exclusively in the United States. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements include the accounts of the Company. The Company’s financial statements have been prepared in accordance with United States generally accepted accounting principles (‘‘GAAP’’). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (‘‘ASC’’) and Accounting Standards Update (‘‘ASU’’) of the Financial Accounting Standards Board (‘‘FASB’’). 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. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the period presented. A lthough actual results could differ from those estimates, management does not believe that such differences would be material. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. The Company deposits its cash primarily in checking, sweep account and money market accounts. Cash equivalents are stated at amortized cost plus accrued interest, which approximates fair value. Restricted Cash At December 31, 2019 and 2018, the Company had restricted cash of $5.0 million and $460,000, respectively. The Company is required The following table reconciles cash and cash equivalents and restricted cash per the balance sheet to the statement of cash flows: December 31, (in thousands) 2019 2018 Cash and cash equivalents $ 34,091 $ 135,173 Restricted cash (including $3,333 in other assets as of December 31, 2019) 5,039 460 Total $ 39,130 $ 135,633 Marketable Securities Marketable securities primarily consist of government debt securities, corporate bonds and agency bonds. These marketable securities are classified as available-for-sale, and as such, are carried at fair value as determined by prices for identical or similar securities at the balance sheet date. Marketable securities consist of Level 2 financial instruments in the fair-value hierarchy. The Company’s policy is to classify all investments with contractual maturities within one year as current. Investment income is recognized when earned and reported net of investment expenses. 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 and interest on securities are included in other income, net, on the Company’s statements of operations. At each balance sheet date, the Company assesses available-for-sale securities in an unrealized loss position to determine whether the unrealized loss is other-than-temporary. If a decline in the fair value of a marketable security below the Company’s 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 Company considers factors including the significance of the decline in value compared to the cost basis, underlying factors contributing to a decline in the prices of securities in a single asset class, the length of time the market value of the security has been less than its cost basis, the security's relative performance versus its peers, sector or asset class, expected market volatility and the market and economy in general. The Company also evaluates whether it is more likely than not that it will be required to sell a security prior to recovery of its fair value. The cost of securities sold is based on the specific identification method. Concentration of Credit Risk Financial instruments that potentially expose the Company to concentrations of credit risk primarily consist of cash and cash equivalents. The Company maintains its cash and cash equivalents at one accredited financial institution that is federally insured. While balances deposited often exceed federally insured limits, the Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company's investment policy limits investments to certain types of debt securities issued by the U.S. government, its agencies and institutions with investment-grade credit ratings and places restrictions on maturities and concentration by type and issuer. The counterparties are various corporations, financial institutions and government agencies of high credit standing. Financial instruments that potentially expose the Company to concentrations of credit risk primarily consist of cash and cash equivalents. The Company maintains its cash and cash equivalents at one accredited financial institution in amounts that exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three‑tier value hierarchy that distinguishes between the following: 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. Use of these inputs involves significant and subjective judgments to be made by a reporting entity – e.g., determining an appropriate adjustment to a discount factor for illiquidity associated with a given security. 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. Property and Equipment, Net Property and equipment are valued at cost less accumulated depreciation. Depreciation is recognized on a straight‑line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized on a straight‑line basis over the shorter of the useful life or term of the lease. Upon retirement or disposal, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is recorded to general and administrative expenses in the accompanying statement of operations and comprehensive loss. Routine expenditures for maintenance and repairs are expensed as incurred. Estimated useful lives for Estimated Useful Life Computers and peripherals 3 years Equipment 5 years Furniture and fixtures 7 years Leasehold improvements Lesser of estimated useful life or remaining lease term The Company reviews long‑lived assets, which primarily consist of property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable based on the criteria for accounting for the impairment or disposal of long‑lived assets under ASC Topic 360, Property, Plant and Equipment. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans, or changes in anticipated future cash flows. If an impairment indicator is present, the Company evaluates recoverability by comparing the carrying amount of the assets group to future undiscounted net cash flows expected to be generated by the assets group. Assets are grouped at the lowest level for which there is identifiable cash flows that are largely independent of the cash flows generated by other asset groups. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, an impairment loss is recognized for the difference between the fair value and carrying value of assets within the group. Fair value is generally determined by estimates of discounted cash flows. The discount rate used in any estimate of discounted cash flows would be the rate required for a similar investment of like risk. No impairment losses were recognized during the years ended December 31, 2019 or 2018. Construction in progress (Note 5) is carried at cost and consists of specifically identifiable direct and indirect development and construction costs. While under construction, costs of the property are included in construction in progress until the property is placed in service, at which time costs are transferred to the appropriate property and equipment account including, but not limited to, leasehold improvements or other such accounts. Leases The Company enters into lease agreements for its office and laboratory facilities and accounts for them in accordance with ASC Topic 840, Leases. These leases are classified as operating leases. Rent expense is recognized on a straight-line basis over the term of the lease and, accordingly, the Company records the difference between cash rent payments and the recognition of rent expense as a deferred rent liability. Incentives granted under the Company’s facilities leases, including allowances to fund leasehold improvements, are deferred and are recognized as adjustments to rental expense on a straight-line basis over the term of the lease. Preferred Stock The Company’s preferred stock is classified outside of stockholders’ deficit for the period during which it was outstanding because the shares carried deemed liquidation rights that were a contingent redemption feature not solely within the control of the Company. Research and Development Costs, Including Clinical Trial Accruals Research costs consist of employee-related costs, contractor expenses, laboratory supplies and facility costs, for research and development of product candidates are expensed as incurred. Development costs, including clinical trial-related expenses, incurred by third parties, such as clinical research organizations (CROs), are expensed as the contracted work is performed. Where contingent milestone payments are due to third parties under research and development arrangements, the milestone payment obligations are expensed when the milestone results are probable of being achieved. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies, including the phase or completion of events, invoices received and contracted costs. Clinical trial expenses are a significant component of research and development expenses, and the Company outsources a significant portion of these costs to third parties. Third-party clinical trial expenses include investigator fees, site and patient costs, CRO costs, and costs for central laboratory testing and data management. The accrual for site and patient costs includes inputs such as estimates of patient enrollment, patient cycles incurred, clinical site activations, and other pass-through costs. These inputs are required to be estimated due to a lag in receiving the actual clinical information from third parties. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected on the balance sheets as a prepaid asset or accrued expenses. These third-party agreements are generally cancelable, and related costs are recorded as research and development expenses as incurred. Non-refundable advance clinical payments for goods or services that will be used or rendered for future research and development activities are recorded as a prepaid asset and recognized as expense as the related goods are delivered or the related services are performed. When evaluating the adequacy of the accrued expenses, the Company analyzes progress of the studies, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates may be made in determining the accrued balances at the end of any reporting period. Actual results could differ from the estimates made. The historical clinical accrual estimates have not been materially different from the actual costs. Patent Costs All patent‑related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses in the accompanying statement of operations and comprehensive loss. Stock‑Based Compensation The Company accounts for its stock‑based compensation in accordance with ASC Topic 718, Compensation‑Stock Compensation (“ASC 718”). ASC 718 requires all share‑based payments to employees, consultants and directors, including grants of incentive stock options, nonqualified stock options, restricted stock awards, unrestricted stock awards or restricted stock units to employees, consultants and directors of the Company, to be recognized as expense in the statement of operations and comprehensive loss based on their grant date fair values. The Company estimates the fair value of options granted using the Black‑Scholes option pricing model (“Black‑Scholes”) for stock option grants to both employees and non‑employees and the fair value of common stock to determine the fair value of restricted stock. The Black‑Scholes option pricing model requires inputs based on certain subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term of the award, (iii) the risk‑free interest rate and (iv) expected dividends. Due to the lack of a public market for the Company’s common stock and lack of company‑specific historical and implied volatility data, the Company has based its computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to the Company, including stage of product development and life science industry focus. The historical volatility is calculated based on a period of time commensurate with expected term assumption. The Company uses the simplified method as prescribed by the SEC Staff Accounting Bulletin No. 107, Share‑Based Payment, to calculate the expected term for options granted to employees as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The expected term is applied to the stock option grant group as a whole, as the Company does not expect substantially different exercise or post‑vesting termination behavior among its employee population. For options granted to non‑employees, the Company utilizes the simplified method also as the basis for the expected term assumption. The risk‑free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options. The expected dividend yield is assumed to be zero because the Company has never paid dividends and has no current plans to pay any dividends on its common stock. The Company recognizes forfeitures as they occur as allowed by ASU No. 2016‑09, Improvements to Employee Share‑Based Payment Accounting (“ASU 2016‑09”). There are significant judgments and estimates inherent in the determination of the fair value of the Company’s common stock. These estimates and assumptions include a number of objective and subjective factors, including external market conditions, the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to its common stock at the time of a liquidity event, such as the IPO or a sale, and the likelihood of such an event. The Company expenses the fair value of its share‑based compensation awards on a straight‑line basis over the requisite service period, which is generally the vesting period. Income Taxes The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax base. Deferred tax assets and liabilities, which relate primarily to the carrying amount of the Company’s deferred revenue and its net operating loss carryforwards, are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax expense or benefit is the result of changes in the deferred tax assets and liabilities. Valuation allowances are established when necessary to reduce deferred tax assets where, based upon the available evidence, the Company concludes that it is more‑likely‑than‑not that the deferred tax assets will not be realized. In evaluating its ability to recover deferred tax assets, the Company considers all available positive and negative evidence, including its operating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction‑by‑jurisdiction basis. Because of the uncertainty of the realization of deferred tax assets, the Company has recorded a full valuation allowance against its deferred tax assets. Reserves are provided for tax benefits for which realization is uncertain. Such benefits are only recognized when the underlying tax position is considered more‑likely‑than‑not to be sustained on examination by a taxing authority, assuming they possess full knowledge of the position and facts. Interest and penalties related to uncertain tax positions are recognized in the provision of income taxes; however, the Company currently has no interest or penalties related to uncertain income tax benefits. Revenue Recognition The Company accounts for revenue in accordance with ASC 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 goods or services promised 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 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. Comprehensive Loss Comprehensive loss is the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Comprehensive loss includes net loss and the change in accumulated other comprehensive loss for the period. Accumulated other comprehensive loss consisted entirely of unrealized gains and losses on available-for-sale marketable securities at December 31, 2019. Net Loss per Share Basic loss per common share is determined by dividing loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted loss per share is computed by dividing the loss attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of the Company's stock option grants. During the year ended December 31, 2018, the Company calculated basic and diluted net loss per share attributable to common stockholders in conformity with the two‑class method required for participating securities. The Company considered its Series A Preferred Stock and Series B Preferred Stock to be participating securities because in the event a dividend was paid on common stock, the holders of Series A Preferred Stock and Series B Preferred Stock were entitled to receive dividends on a basis consistent with the common stockholders. Under the two‑class method, the net loss attributable to common stockholders is not allocated to the preferred stock as the holders of the preferred stock do not have a contractual obligation to share in losses. Under the two‑class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock. 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, 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 Topic 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. |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 2019 | |
Marketable Securities | |
Marketable Securities | 3. Marketable Securities Marketable securities consist of the following: December 31, 2019 Gross Gross Amortized Unrealized Unrealized Estimated (in thousands) Cost Gain Loss Fair Value U.S. treasury securities $ 4,991 $ — $ — $ 4,991 Agency bonds 24,437 15 (1) 24,451 Corporate bonds 271,124 103 (155) 271,072 Total $ 300,552 $ 118 $ (156) $ 300,514 As of December 31, 2019, none of the Company's fixed maturity investments were in continuous unrealized loss positions for more than 12 consecutive months. Unrealized losses on all fixed maturity investments in a continuous loss position for less than 12 consecutive months were approximately $156,000 as of December 31, 2019. All of the Company’s investments at each year end are classified as available for sale and are carried at fair value. As of December 31, 2019, no investments are considered to be other-than-temporarily impaired. The Company uses the specific identification method when calculating realized gains and losses. The Company did not have any realized gains or losses on available-for-sale securities during the years ended December 31, 2019. The Company did not have any marketable securities as of or during the year ended December 31, 2018. The Company recorded interest income of $2.0 million and $0 during the years ended December 31, 2019 and 2018, respectively, which is included in other income on the statement of operations and comprehensive loss. The following table summarizes maturities of the Company’s investments available-for-sale as of December 31, 2019: December 31, 2019 Fair (in thousands) Cost Value Maturities: Within 1 year $ 168,186 $ 168,204 From more than 1 to 5 years 132,366 132,310 Total investments available for sale $ 300,552 $ 300,514 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Measurements | |
Fair Value Measurements | 4. Fair Value Measurements The following tables set forth the fair value of the Company’s financial assets by level within the fair value hierarchy as of December 31, 2019 and 2018: December 31, 2019 Significant Quoted Prices in Other Active Markets or Observable Significant Identical Assets Inputs Unobservable (in thousands) Total (Level 1) (Level 2) (Level 3) Cash equivalents: Money market (Note 2) $ 19,341 $ 19,341 $ — $ — Marketable securities: U.S. treasury securities 4,991 — 4,991 — Agency bonds 24,451 — 24,451 — Corporate bonds 271,072 — 271,072 — Total $ 319,855 $ 19,341 $ 300,514 $ — December 31, 2018 Significant Quoted Prices in Other Active Markets or Observable Significant Identical Assets Inputs Unobservable (in thousands) Total (Level 1) (Level 2) (Level 3) Cash equivalents: Money market (Note 2) $ 5,000 $ 5,000 — — The Company did not transfer any assets measured at fair value on a recurring basis between fair value levels during the years ended December 31, 2019 and 2018. The carrying value of financial instruments, including trade receivables, accounts payable and accrued liabilities approximate fair value because of the short-term maturity of these items. The estimated fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2019 | |
Property and Equipment, Net | |
Property and Equipment, Net | 5. Property and Equipment, Net Property and equipment consist of the following: December 31, (in thousands) 2019 2018 Research equipment $ 10,703 $ 7,787 Leasehold improvements 5,368 4,825 Computer equipment 463 167 Furniture and fixtures 93 70 Construction in progress 609 1,027 Property and equipment, gross 17,236 13,876 Less: accumulated depreciation and amortization (5,146) (2,469) Property and equipment, net $ 12,090 $ 11,407 Construction in progress at December 31, 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 $2.7 million and $1.7 million for the years ended December 31, 2019 and 2018, respectively. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Liabilities | |
Accrued Liabilities | 6. Accrued Liabilities Accrued liabilities consist of the following: December 31, (in thousands) 2019 2018 Construction in progress $ 73 $ — Payroll and related benefits 1,173 1,008 Clinical trial costs 1,702 271 Operating expenses 1,769 719 Financing costs 1 284 Office lease 135 127 Interest 18 2 Total accrued liabilities $ 4,871 $ 2,411 |
Agreement with Eli Lilly and Co
Agreement with Eli Lilly and Company | 12 Months Ended |
Dec. 31, 2019 | |
Agreement with Eli Lilly and Company | |
Agreement with Eli Lilly and Company | 7. 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 agreed to 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 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. During the research term under the Lilly Agreement, as a part of target discovery, the Company was responsible for providing Lilly with oncology targets identified using the Company’s FIND-IO platform. From the targets provided by the Company, Lilly could 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 could propose to advance that target to compound discovery. For each target advanced to compound discovery, Lilly had the option to obtain an exclusive license with respect to the compounds and products directed to the target. If Lilly did not exercise its option with respect to a given target or has previously exercised all of its options, the Company had the option to obtain licenses with respect to compounds and products directed to that target. 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 (Note 10). In addition, Lilly agreed to make quarterly research and development support payments during a portion of the research term as well as to pay option exercise fees upon option exercises by Lilly. Pursuant to the Lilly Agreement, Lilly agreed to pay an aggregate of up to $1.4 billion in development and regulatory milestones and sales milestones. Additionally, Lilly agreed to pay mid to high single-digit royalties on net sales for all products directed to each target optioned by Lilly. The Company agreed that upon the Company’s exercise of an option with respect to a given target, the Company would pay Lilly option exercise payments and also agreed to pay an aggregate of up to $710.0 million in development and regulatory milestones and sales milestones, as well as royalties. The Company evaluated the Lilly Agreement under the provisions of ASC 606 and concluded that Lilly was 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 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 a 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 was recognized as the research and development services were provided using an input method calculated by comparing research and development costs incurred to date to estimated total research and development costs as a measure of progress towards satisfying the performance obligation. Revenue allocated to Lilly’s right related to an optional term extension was deferred until the right was exercised or lapsed, and will subsequently be recognized accordingly. While the Lilly Agreement was executed in November 2018, the performance initiated in January 2019. Under the Lilly Agreement, the Company recognized revenue of $6.3 million and $0 for the years ended December 31, 2019 and 2018, respectively. Deferred revenue consists of the following: December 31, (in thousands) 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 2,000 — Revenue from research and development arrangement recognized (6,347) — Total deferred revenue, end of period 22,378 26,725 Less: Deferred revenue, current portion (6,428) (4,989) Deferred revenue, non-current portion $ 15,950 $ 21,736 On January 10, 2020, Lilly notified the Company of termination of the Lilly Agreement. Refer to Note 16 for additional information on this termination. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 8. 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. At December 31, 2019, the Company’s minimum obligations under non-cancelable operating leases are as follows: (in thousands) Year Ending December 31, 2020 602 2021 915 2022 972 2023 970 Thereafter 7,736 Total future minimum payments $ 11,195 Rent expense incurred under operating leases was approximately $679,000 and $420,000 for the years ended December 31, 2019 and 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. As of December 31, 2019, and 2018, the Company was not involved in any material legal proceedings. |
Term Loan
Term Loan | 12 Months Ended |
Dec. 31, 2019 | |
Term Loan | |
Term Loan | 9. Term Loan In April 2016, the Company entered into a $1.0 million term loan (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 4.40% and 3.95% for the years ended December 31, 2019 and 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. The Term Loan is secured by all certificates of deposit, money market accounts, cash, securities, investment property and deposit or investment accounts. Interest expense under the Term Loan was approximately $209,000 and $25,000 for the years ended December 31, 2019 and 2018, respectively. The outstanding balance on the Term Loan totaled $5.0 million and $460,000 as of December 31, 2019 and 2018, respectively. Future maturities of the Term Loan as of December 31, 2019 are as follows: (in thousands) 2020 1,528 2021 1,667 2022 1,667 2023 138 Total 5,000 Less: current portion of term loan (1,667) Term loan, net of current portion $ 3,333 |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2019 | |
Preferred Stock. | |
Preferred Stock | 10 . Preferred Stock Upon the closing of the IPO, on May 13, 2019, all of the outstanding shares of the Company’s preferred stock automatically converted into 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. The Company’s preferred stock that was outstanding as of December 31, 2018 is classified outside of stockholders’ equity (deficit) because the shares contained deemed liquidation rights that were a contingent redemption feature not solely within the control of the Company. As of December 31, 2019, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2019 | |
Common Stock. | |
Common Stock | 11. Common Stock As of December 31, 2019, the Company’s Certificate of Incorporation, as amended and restated, authorized the Company to issue 100,000,000 shares of $0.001 par value common stock, of which 27,499,260 were issued and outstanding. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any, subject to the preferential dividend rights of In the event of any liquidation or dissolution of the Company, the holders of common stock are entitled to the remaining assets of the Company legally available for distribution after the payment of the full liquidation preference for |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Stock-Based Compensation | |
Stock-Based Compensation | 12. Stock‑Based Compensation Employee Equity Plans The NextCure, Inc. 2015 Omnibus Incentive Plan (the “2015 Plan”) provides for the grant of awards of stock options, restricted stock awards, unrestricted stock awards and 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. 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 Company’s Registration Statement on Form S-1 (Reg. No. 333-230837) was declared effective (the “Effective Date”). 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 stock 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 December 31, 2019, 2,661,566 shares were reserved for future issuance 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 10 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 January 1, 2018 506,586 $ 0.94 9.0 $ 137 Granted 1,570,136 $ 5.92 9.9 — Exercised (5,599) $ 0.84 — — Forfeitures (14,232) $ 1.11 — — Outstanding as of December 31, 2018 2,056,891 $ 4.74 9.4 $ 5,946 Granted 258,897 $ 18.88 9.5 — Exercised (125,108) $ 0.96 7.4 — Forfeitures (20,468) $ 19.66 9.5 — Outstanding as of December 31, 2019 2,170,212 $ 6.51 8.6 $ — Vested and expected to vest as of December 31, 2019 2,170,212 $ 6.51 — $ 113,295 Exercisable as of December 31, 2019 716,393 $ 3.75 — $ 39,370 (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 December 31, 2019 and 2018. The weighted average grant date fair value per share of stock options granted during the years ended December 31, 2019 and 2018 was $11.92 and $3.80, respectively. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2019 and 2018 was $7,225,000 and $38,000, respectively. The aggregate grant date fair value of stock options and restricted stock vested during the year ended December 31, 2019 and 2018 was approximately $7,637,000 and $157,000, respectively. The Company’s potential dilutive securities, which as of December 31, 2019 include common stock options, have been excluded from the computation of diluted net loss per share because 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 2,170,212 and 2,056,891 potential shares of common stock, presented based on amounts outstanding as of December 31, 2019 and 2018, respectively, from the computation of diluted net loss per common share for the periods 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. As of December 31, 2019, no shares of common stock had been issued pursuant to the ESPP and 240,000 shares were reserved for future issuance thereunder. Stock‑Based Compensation The Company recorded stock‑based compensation expense of $1.9 million and $0.3 million during the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, there was $6.9 million of unrecognized compensation cost related to unvested stock‑based compensation arrangements granted under the Plans. This remaining compensation expense is expected to be recognized over a weighted-average period of three years as of December 31, 2019. Stock‑based compensation expense recorded as research and development and general and administrative expenses is as follows: Year Ended December 31, 2019 2018 Research and development $ 691 $ 85 General and administrative 1,195 178 Total stock-based compensation expense $ 1,886 $ 263 The assumptions used in the Black‑Scholes option‑pricing model for stock options granted were as follows: Year Ended December 31, 2019 2018 Expected term 6.1 years 6.1 years Expected volatility 69.7 % 69.7 % Risk free interest rate 1.90 % 2.77 % Expected dividend yield — % — % Restricted Common Stock In May 2016, the Company issued 62,237 shares of restricted common stock, which are restricted as to sale or transferability, under the 2015 Plan. These restrictions lapse over a four‑year period. |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 12 Months Ended |
Dec. 31, 2019 | |
Net Loss Per Share Attributable to Common Stockholders | |
Net Loss Per Share Attributable to Common Stockholders | 13. Net Loss Per Share Attributable to Common Stockholders The Company’s potential dilutive securities, which include common stock options and for the year ended December 31, 2018 included preferred stock, 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 outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at period end, from the computation of diluted net loss per share attributable to common stockholders for the period indicated because including them would have had an anti‑dilutive effect: December 31, 2019 2018 Preferred stock convertible into common stock — 15,560,569 Outstanding options to purchase common stock 2,170,212 2,056,891 Total 2,170,212 17,617,460 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Income Taxes | 14. Income Taxes The reconciliation of federal statutory income tax rate to the Company’s effective income tax rate is as follows: December 31, 2019 2018 Expected income tax benefit at the federal statutory rate 21.0 % 21.0 % State taxes, net of federal benefit 7.0 6.5 Research and development credit, net 4.9 7.2 Non-deductible items (0.5) (2.2) Prior year provision to return adjustments (2.5) (7.7) Other — 0.3 Change in valuation allowance (29.9) (25.1) Total — % — % Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The principal components of the Company’s December 31, (in thousands) 2019 2018 Deferred tax assets: Federal and state net operating loss carryforwards $ 15,080 $ 11,946 Research and development tax credits 4,197 Deferred revenue 5,928 — Charitable contribution carryforwards 306 Accruals and other 826 Gross deferred tax assets 26,337 Less: valuation allowance (25,633) (15,525) Total deferred tax assets $ 704 $ 292 Deferred tax liabilities: Depreciation and amortization $ (704) $ (292) Gross deferred tax liabilities $ (704) $ (292) Net deferred tax assets $ — $ — Based on the Company’s history of losses, the Company recorded a full valuation allowance against its deferred tax assets as of December 31, 2019. The Company increased its valuation allowance by approximately $10.1 million for the year ended December 31, 2019. The Company intends to maintain a valuation allowance until sufficient positive evidence exists to support a reversal of the allowance. As of December 31, 2019, the Company had federal and state net operating loss carryforwards of $55.0 million and $54.0 million, respectively, some of which begin to expire in the year ending December 31, 2036. Approximately $32.3 million of the federal and state net operating loss carryforwards do not expire. The Company had federal and state research and development tax credit carryforwards of approximately $4.1 million and $0.1 million, respectively, as of December 31, 2019. The federal credits begin to expire in the year ending December 31, 2036 and the state credits begin to expire in the year ending December 31, 2024. Under the provisions of Sections 382 and 383 of the Internal Revenue Code (the “IRC”), certain substantial changes in the Company’s ownership may have limited, or may limit in the future, the amount of net operating loss and credit carryforwards that can be used to reduce future income taxes if there has been a significant change in ownership of the Company, as defined by the IRC. Future owner or equity shifts could result in limitations on net operating loss and credit carryforwards. The Company files income tax returns in the U.S. federal jurisdiction as well as in Maryland. The tax years 2016 to 2018 remain open to examination by the major jurisdictions in which the Company is subject to tax. Fiscal years outside the normal statute of limitation remain open to audit by tax authorities due to tax attributes generated in those early years, which have been carried forward and may be audited in subsequent years when utilized. The Company evaluates tax positions for recognition using a more‑likely‑than‑not recognition threshold, and those tax positions eligible for recognition are measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon the effective settlement with a taxing authority that has full knowledge of all relevant information. As of December 31, 2019, the Company had no unrecognized income tax benefits that would affect the Company’s effective tax rate if recognized. On December 22, 2017, the U.S. government signed into law the Tax Cuts and Jobs Act (the “Tax Act”) that significantly reforms the Internal Revenue Code of 1986, as amended. In 2018, the Company finished its analysis of the impact of the Tax Act. Where the Company made reasonable estimates in 2017 of the effects related to the Tax Act, the Company recorded provisional amounts. After the completed analysis, the resulting impact to the Company’s financial statements did not differ from the recorded provisional amounts. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2019 | |
Employee Benefit Plan | |
Employee Benefit Plan | 15. Employee Benefit Plan The Company sponsors a 401(k) plan that stipulates that eligible employees can elect to contribute to the 401(k) plan, subject to certain limitations, up to the lesser of the statutory maximum or 100% of eligible compensation on a pre‑tax basis. Through December 31, 2019, the Company has not provided any contributions to this plan. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events | |
Subsequent Events | 16. Subsequent Events On January 10, 2020, Lilly notified the Company of its termination of the Lilly Agreement (Note 7), effective as of March 3, 2020 (the "Lilly Termination Date"). Effective as of the Lilly Termination Date, both parties have been relieved of all obligations under the agreement, including future quarterly research and development support payments to be paid by Lilly to the Company. As of December 31, 2019, the Company had deferred revenue related to the Lilly Agreement of $22.4 million, which is composed of a non-refundable up-front payment and a premium on the proceeds from Lilly's investment in the Company. The Company will recognize all of the deferred revenue as of the Lilly Termination Date in the statement of operations in the first quarter of 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying financial statements include the accounts of the Company. The Company’s financial statements have been prepared in accordance with United States generally accepted accounting principles (‘‘GAAP’’). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (‘‘ASC’’) and Accounting Standards Update (‘‘ASU’’) of the Financial Accounting Standards Board (‘‘FASB’’). |
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. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the period presented. A lthough actual results could differ from those estimates, management does not believe that such differences would be material. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. The Company deposits its cash primarily in checking, sweep account and money market accounts. Cash equivalents are stated at amortized cost plus accrued interest, which approximates fair value. |
Restricted Cash | Restricted Cash At December 31, 2019 and 2018, the Company had restricted cash of $5.0 million and $460,000, respectively. The Company is required The following table reconciles cash and cash equivalents and restricted cash per the balance sheet to the statement of cash flows: December 31, (in thousands) 2019 2018 Cash and cash equivalents $ 34,091 $ 135,173 Restricted cash (including $3,333 in other assets as of December 31, 2019) 5,039 460 Total $ 39,130 $ 135,633 |
Marketable Securities | Marketable Securities Marketable securities primarily consist of government debt securities, corporate bonds and agency bonds. These marketable securities are classified as available-for-sale, and as such, are carried at fair value as determined by prices for identical or similar securities at the balance sheet date. Marketable securities consist of Level 2 financial instruments in the fair-value hierarchy. The Company’s policy is to classify all investments with contractual maturities within one year as current. Investment income is recognized when earned and reported net of investment expenses. 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 and interest on securities are included in other income, net, on the Company’s statements of operations. At each balance sheet date, the Company assesses available-for-sale securities in an unrealized loss position to determine whether the unrealized loss is other-than-temporary. If a decline in the fair value of a marketable security below the Company’s 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 Company considers factors including the significance of the decline in value compared to the cost basis, underlying factors contributing to a decline in the prices of securities in a single asset class, the length of time the market value of the security has been less than its cost basis, the security's relative performance versus its peers, sector or asset class, expected market volatility and the market and economy in general. The Company also evaluates whether it is more likely than not that it will be required to sell a security prior to recovery of its fair value. The cost of securities sold is based on the specific identification method. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially expose the Company to concentrations of credit risk primarily consist of cash and cash equivalents. The Company maintains its cash and cash equivalents at one accredited financial institution that is federally insured. While balances deposited often exceed federally insured limits, the Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company's investment policy limits investments to certain types of debt securities issued by the U.S. government, its agencies and institutions with investment-grade credit ratings and places restrictions on maturities and concentration by type and issuer. The counterparties are various corporations, financial institutions and government agencies of high credit standing. Financial instruments that potentially expose the Company to concentrations of credit risk primarily consist of cash and cash equivalents. The Company maintains its cash and cash equivalents at one accredited financial institution in amounts that exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three‑tier value hierarchy that distinguishes between the following: 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. Use of these inputs involves significant and subjective judgments to be made by a reporting entity – e.g., determining an appropriate adjustment to a discount factor for illiquidity associated with a given security. 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. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are valued at cost less accumulated depreciation. Depreciation is recognized on a straight‑line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized on a straight‑line basis over the shorter of the useful life or term of the lease. Upon retirement or disposal, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is recorded to general and administrative expenses in the accompanying statement of operations and comprehensive loss. Routine expenditures for maintenance and repairs are expensed as incurred. Estimated useful lives for Estimated Useful Life Computers and peripherals 3 years Equipment 5 years Furniture and fixtures 7 years Leasehold improvements Lesser of estimated useful life or remaining lease term The Company reviews long‑lived assets, which primarily consist of property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable based on the criteria for accounting for the impairment or disposal of long‑lived assets under ASC Topic 360, Property, Plant and Equipment. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans, or changes in anticipated future cash flows. If an impairment indicator is present, the Company evaluates recoverability by comparing the carrying amount of the assets group to future undiscounted net cash flows expected to be generated by the assets group. Assets are grouped at the lowest level for which there is identifiable cash flows that are largely independent of the cash flows generated by other asset groups. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, an impairment loss is recognized for the difference between the fair value and carrying value of assets within the group. Fair value is generally determined by estimates of discounted cash flows. The discount rate used in any estimate of discounted cash flows would be the rate required for a similar investment of like risk. No impairment losses were recognized during the years ended December 31, 2019 or 2018. Construction in progress (Note 5) is carried at cost and consists of specifically identifiable direct and indirect development and construction costs. While under construction, costs of the property are included in construction in progress until the property is placed in service, at which time costs are transferred to the appropriate property and equipment account including, but not limited to, leasehold improvements or other such accounts. |
Leases | Leases The Company enters into lease agreements for its office and laboratory facilities and accounts for them in accordance with ASC Topic 840, Leases. These leases are classified as operating leases. Rent expense is recognized on a straight-line basis over the term of the lease and, accordingly, the Company records the difference between cash rent payments and the recognition of rent expense as a deferred rent liability. Incentives granted under the Company’s facilities leases, including allowances to fund leasehold improvements, are deferred and are recognized as adjustments to rental expense on a straight-line basis over the term of the lease. |
Preferred Stock | Preferred Stock The Company’s preferred stock is classified outside of stockholders’ deficit for the period during which it was outstanding because the shares carried deemed liquidation rights that were a contingent redemption feature not solely within the control of the Company. |
Research and Development Costs, Including Clinical Trial Accruals | Research and Development Costs, Including Clinical Trial Accruals Research costs consist of employee-related costs, contractor expenses, laboratory supplies and facility costs, for research and development of product candidates are expensed as incurred. Development costs, including clinical trial-related expenses, incurred by third parties, such as clinical research organizations (CROs), are expensed as the contracted work is performed. Where contingent milestone payments are due to third parties under research and development arrangements, the milestone payment obligations are expensed when the milestone results are probable of being achieved. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies, including the phase or completion of events, invoices received and contracted costs. Clinical trial expenses are a significant component of research and development expenses, and the Company outsources a significant portion of these costs to third parties. Third-party clinical trial expenses include investigator fees, site and patient costs, CRO costs, and costs for central laboratory testing and data management. The accrual for site and patient costs includes inputs such as estimates of patient enrollment, patient cycles incurred, clinical site activations, and other pass-through costs. These inputs are required to be estimated due to a lag in receiving the actual clinical information from third parties. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected on the balance sheets as a prepaid asset or accrued expenses. These third-party agreements are generally cancelable, and related costs are recorded as research and development expenses as incurred. Non-refundable advance clinical payments for goods or services that will be used or rendered for future research and development activities are recorded as a prepaid asset and recognized as expense as the related goods are delivered or the related services are performed. When evaluating the adequacy of the accrued expenses, the Company analyzes progress of the studies, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates may be made in determining the accrued balances at the end of any reporting period. Actual results could differ from the estimates made. The historical clinical accrual estimates have not been materially different from the actual costs. |
Patent Costs | Patent Costs All patent‑related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses in the accompanying statement of operations and comprehensive loss. |
Stock Based Compensation | Stock‑Based Compensation The Company accounts for its stock‑based compensation in accordance with ASC Topic 718, Compensation‑Stock Compensation (“ASC 718”). ASC 718 requires all share‑based payments to employees, consultants and directors, including grants of incentive stock options, nonqualified stock options, restricted stock awards, unrestricted stock awards or restricted stock units to employees, consultants and directors of the Company, to be recognized as expense in the statement of operations and comprehensive loss based on their grant date fair values. The Company estimates the fair value of options granted using the Black‑Scholes option pricing model (“Black‑Scholes”) for stock option grants to both employees and non‑employees and the fair value of common stock to determine the fair value of restricted stock. The Black‑Scholes option pricing model requires inputs based on certain subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term of the award, (iii) the risk‑free interest rate and (iv) expected dividends. Due to the lack of a public market for the Company’s common stock and lack of company‑specific historical and implied volatility data, the Company has based its computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to the Company, including stage of product development and life science industry focus. The historical volatility is calculated based on a period of time commensurate with expected term assumption. The Company uses the simplified method as prescribed by the SEC Staff Accounting Bulletin No. 107, Share‑Based Payment, to calculate the expected term for options granted to employees as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The expected term is applied to the stock option grant group as a whole, as the Company does not expect substantially different exercise or post‑vesting termination behavior among its employee population. For options granted to non‑employees, the Company utilizes the simplified method also as the basis for the expected term assumption. The risk‑free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options. The expected dividend yield is assumed to be zero because the Company has never paid dividends and has no current plans to pay any dividends on its common stock. The Company recognizes forfeitures as they occur as allowed by ASU No. 2016‑09, Improvements to Employee Share‑Based Payment Accounting (“ASU 2016‑09”). There are significant judgments and estimates inherent in the determination of the fair value of the Company’s common stock. These estimates and assumptions include a number of objective and subjective factors, including external market conditions, the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to its common stock at the time of a liquidity event, such as the IPO or a sale, and the likelihood of such an event. The Company expenses the fair value of its share‑based compensation awards on a straight‑line basis over the requisite service period, which is generally the vesting period. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax base. Deferred tax assets and liabilities, which relate primarily to the carrying amount of the Company’s deferred revenue and its net operating loss carryforwards, are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax expense or benefit is the result of changes in the deferred tax assets and liabilities. Valuation allowances are established when necessary to reduce deferred tax assets where, based upon the available evidence, the Company concludes that it is more‑likely‑than‑not that the deferred tax assets will not be realized. In evaluating its ability to recover deferred tax assets, the Company considers all available positive and negative evidence, including its operating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction‑by‑jurisdiction basis. Because of the uncertainty of the realization of deferred tax assets, the Company has recorded a full valuation allowance against its deferred tax assets. Reserves are provided for tax benefits for which realization is uncertain. Such benefits are only recognized when the underlying tax position is considered more‑likely‑than‑not to be sustained on examination by a taxing authority, assuming they possess full knowledge of the position and facts. Interest and penalties related to uncertain tax positions are recognized in the provision of income taxes; however, the Company currently has no interest or penalties related to uncertain income tax benefits. |
Revenue Recognition | Revenue Recognition The Company accounts for revenue in accordance with ASC 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 goods or services promised 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 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. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Comprehensive loss includes net loss and the change in accumulated other comprehensive loss for the period. Accumulated other comprehensive loss consisted entirely of unrealized gains and losses on available-for-sale marketable securities at December 31, 2019. |
Net Loss per Share | Net Loss per Share Basic loss per common share is determined by dividing loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted loss per share is computed by dividing the loss attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of the Company's stock option grants. During the year ended December 31, 2018, the Company calculated basic and diluted net loss per share attributable to common stockholders in conformity with the two‑class method required for participating securities. The Company considered its Series A Preferred Stock and Series B Preferred Stock to be participating securities because in the event a dividend was paid on common stock, the holders of Series A Preferred Stock and Series B Preferred Stock were entitled to receive dividends on a basis consistent with the common stockholders. Under the two‑class method, the net loss attributable to common stockholders is not allocated to the preferred stock as the holders of the preferred stock do not have a contractual obligation to share in losses. Under the two‑class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock. |
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, 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 Topic 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 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 | December 31, (in thousands) 2019 2018 Cash and cash equivalents $ 34,091 $ 135,173 Restricted cash (including $3,333 in other assets as of December 31, 2019) 5,039 460 Total $ 39,130 $ 135,633 |
Summary of estimated useful lives for property and equipment | Estimated Useful Life Computers and peripherals 3 years Equipment 5 years Furniture and fixtures 7 years Leasehold improvements Lesser of estimated useful life or remaining lease term |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Marketable Securities | |
Schedule of available-for-sale securities | December 31, 2019 Gross Gross Amortized Unrealized Unrealized Estimated (in thousands) Cost Gain Loss Fair Value U.S. treasury securities $ 4,991 $ — $ — $ 4,991 Agency bonds 24,437 15 (1) 24,451 Corporate bonds 271,124 103 (155) 271,072 Total $ 300,552 $ 118 $ (156) $ 300,514 |
Schedule of available-for-sale maturities | December 31, 2019 Fair (in thousands) Cost Value Maturities: Within 1 year $ 168,186 $ 168,204 From more than 1 to 5 years 132,366 132,310 Total investments available for sale $ 300,552 $ 300,514 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Measurements | |
Summary of fair value of the Company’s financial assets | December 31, 2019 Significant Quoted Prices in Other Active Markets or Observable Significant Identical Assets Inputs Unobservable (in thousands) Total (Level 1) (Level 2) (Level 3) Cash equivalents: Money market (Note 2) $ 19,341 $ 19,341 $ — $ — Marketable securities: U.S. treasury securities 4,991 — 4,991 — Agency bonds 24,451 — 24,451 — Corporate bonds 271,072 — 271,072 — Total $ 319,855 $ 19,341 $ 300,514 $ — December 31, 2018 Significant Quoted Prices in Other Active Markets or Observable Significant Identical Assets Inputs Unobservable (in thousands) Total (Level 1) (Level 2) (Level 3) Cash equivalents: Money market (Note 2) $ 5,000 $ 5,000 — — |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property and Equipment, Net | |
Summary of property and equipment | December 31, (in thousands) 2019 2018 Research equipment $ 10,703 $ 7,787 Leasehold improvements 5,368 4,825 Computer equipment 463 167 Furniture and fixtures 93 70 Construction in progress 609 1,027 Property and equipment, gross 17,236 13,876 Less: accumulated depreciation and amortization (5,146) (2,469) Property and equipment, net $ 12,090 $ 11,407 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Liabilities | |
Summary of accrued liabilities | December 31, (in thousands) 2019 2018 Construction in progress $ 73 $ — Payroll and related benefits 1,173 1,008 Clinical trial costs 1,702 271 Operating expenses 1,769 719 Financing costs 1 284 Office lease 135 127 Interest 18 2 Total accrued liabilities $ 4,871 $ 2,411 |
Agreement with Eli Lilly and _2
Agreement with Eli Lilly and Company (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Agreement with Eli Lilly and Company | |
Summary of deferred revenue included in the Company’s balance sheets | December 31, (in thousands) 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 2,000 — Revenue from research and development arrangement recognized (6,347) — Total deferred revenue, end of period 22,378 26,725 Less: Deferred revenue, current portion (6,428) (4,989) Deferred revenue, non-current portion $ 15,950 $ 21,736 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Schedule of future minimum payments | At December 31, 2019, the Company’s minimum obligations under non-cancelable operating leases are as follows: (in thousands) Year Ending December 31, 2020 602 2021 915 2022 972 2023 970 Thereafter 7,736 Total future minimum payments $ 11,195 |
Term Loan (Tables)
Term Loan (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Term Loan | |
Schedule of future maturities | Future maturities of the Term Loan as of December 31, 2019 are as follows: (in thousands) 2020 1,528 2021 1,667 2022 1,667 2023 138 Total 5,000 Less: current portion of term loan (1,667) Term loan, net of current portion $ 3,333 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 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 January 1, 2018 506,586 $ 0.94 9.0 $ 137 Granted 1,570,136 $ 5.92 9.9 — Exercised (5,599) $ 0.84 — — Forfeitures (14,232) $ 1.11 — — Outstanding as of December 31, 2018 2,056,891 $ 4.74 9.4 $ 5,946 Granted 258,897 $ 18.88 9.5 — Exercised (125,108) $ 0.96 7.4 — Forfeitures (20,468) $ 19.66 9.5 — Outstanding as of December 31, 2019 2,170,212 $ 6.51 8.6 $ — Vested and expected to vest as of December 31, 2019 2,170,212 $ 6.51 — $ 113,295 Exercisable as of December 31, 2019 716,393 $ 3.75 — $ 39,370 (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 December 31, 2019 and 2018. |
Summary of stock based compensation expense recorded | Year Ended December 31, 2019 2018 Research and development $ 691 $ 85 General and administrative 1,195 178 Total stock-based compensation expense $ 1,886 $ 263 |
Summary of assumptions used in the Black Scholes option pricing model for stock options granted | Year Ended December 31, 2019 2018 Expected term 6.1 years 6.1 years Expected volatility 69.7 % 69.7 % Risk free interest rate 1.90 % 2.77 % Expected dividend yield — % — % |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Net Loss Per Share Attributable to Common Stockholders | |
Summary of shares excluded from the computation of diluted net loss per share | December 31, 2019 2018 Preferred stock convertible into common stock — 15,560,569 Outstanding options to purchase common stock 2,170,212 2,056,891 Total 2,170,212 17,617,460 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Summary of reconciliation of federal statutory income tax rate to the Company’s effective income tax rate | December 31, 2019 2018 Expected income tax benefit at the federal statutory rate 21.0 % 21.0 % State taxes, net of federal benefit 7.0 6.5 Research and development credit, net 4.9 7.2 Non-deductible items (0.5) (2.2) Prior year provision to return adjustments (2.5) (7.7) Other — 0.3 Change in valuation allowance (29.9) (25.1) Total — % — % |
Summary of components of deferred tax assets | December 31, (in thousands) 2019 2018 Deferred tax assets: Federal and state net operating loss carryforwards $ 15,080 $ 11,946 Research and development tax credits 4,197 Deferred revenue 5,928 — Charitable contribution carryforwards 306 Accruals and other 826 Gross deferred tax assets 26,337 Less: valuation allowance (25,633) (15,525) Total deferred tax assets $ 704 $ 292 Deferred tax liabilities: Depreciation and amortization $ (704) $ (292) Gross deferred tax liabilities $ (704) $ (292) Net deferred tax assets $ — $ — |
Nature of the Business and Ba_2
Nature of the Business and Basis of Presentation - (Details) $ / shares in Units, $ in Thousands | Dec. 02, 2019USD ($)$ / sharesshares | Nov. 19, 2019$ / sharesshares | May 13, 2019USD ($)$ / sharesshares | May 03, 2019 | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | May 14, 2019shares |
Nature of the Business | |||||||
Reverse stock split ratio | 0.1245 | ||||||
Issuance of stock (in shares) | shares | 611,578 | 4,077,192 | |||||
Share price | $ / shares | $ 36.75 | $ 36.75 | |||||
Proceeds from issuance of preferred stock, net of issuance costs | $ | $ 160,900 | $ 122,223 | |||||
Proceeds from issuance of shares, net | $ | $ 238,384 | ||||||
Underwriting discounts and commissions | $ | 10,300 | ||||||
Offering expenses | $ | $ 1,000 | ||||||
Common stock, shares outstanding | shares | 15,560,569 | 27,499,260 | 1,374,812 | ||||
Preferred stock, shares issued | shares | 0 | 0 | |||||
Preferred stock, shares outstanding | shares | 0 | 0 | 0 | 0 | |||
Common stock, number of shares authorized | shares | 100,000,000 | 100,000,000 | 158,745,671 | ||||
Common stock, par value per share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Preferred stock, number of shares authorized | shares | 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) | shares | 5,750,000 | ||||||
Share price | $ / shares | $ 15 | ||||||
Proceeds from issuance of shares, net | $ | $ 76,900 | ||||||
Underwriting discounts and commissions | $ | 6,000 | ||||||
Offering expenses | $ | $ 3,400 |
Nature of the Business and Ba_3
Nature of the Business and Basis of Presentation - Liquidity (Details) | 12 Months Ended |
Dec. 31, 2019segment | |
Nature of the Business and Basis of Presentation | |
Number of operating segment | 1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Restricted Cash | |||
Restricted cash required reserve | $ 5,000,000 | $ 480,000 | |
Reconciliation of cash and cash equivalents and restricted cash per the balance sheet to the statement of cash flows | |||
Cash and cash equivalents | 34,091,000 | 135,173,000 | |
Restricted cash (including $3,333 in other assets as of December 31, 2019) | 5,039,000 | 460,000 | |
Total | 39,130,000 | $ 135,633,000 | $ 9,287,000 |
Other assets, restricted cash | $ 3,333,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Computer equipment | |
Property, plant and equipment | |
Property, Plant and Equipment, Estimated Useful Lives | P3Y |
Equipment | |
Property, plant and equipment | |
Property, Plant and Equipment, Estimated Useful Lives | P5Y |
Furniture and fixtures | |
Property, plant and equipment | |
Property, Plant and Equipment, Estimated Useful Lives | P7Y |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Impairment of Long Lived Assets | ||
Impairment loss recognized | $ 0 | $ 0 |
Income Taxes | ||
Uncertain income tax benefits, interest or penalties | $ 0 |
Marketable Securities - (Detail
Marketable Securities - (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Investments | ||
Amortized Cost | $ 300,552,000 | |
Gross Unrealized Gain | 118,000 | |
Gross Unrealized Loss | (156,000) | |
Estimated Fair Value | 300,514,000 | $ 0 |
Unrealized losses in a continuous loss position for more than twelve consecutive months | 0 | |
Unrealized losses in a continuous loss position for less than twelve consecutive months | 156,000 | |
Gross realized gains | 0 | |
Gross realized losses | 0 | |
Interest income | 2,000,000 | $ 0 |
Cost Maturities: | ||
Within 1 year | 168,186,000 | |
After 1 through 5 | 132,366,000 | |
Total investments available for sale | 300,552,000 | |
Fair Value Maturities: | ||
Within 1 year | 168,204,000 | |
After 1 through 5 | 132,310,000 | |
Total investments available for sale | 300,514,000 | |
U.S. treasury securities | ||
Investments | ||
Amortized Cost | 4,991,000 | |
Estimated Fair Value | 4,991,000 | |
Agency bonds | ||
Investments | ||
Amortized Cost | 24,437,000 | |
Gross Unrealized Gain | 15,000 | |
Gross Unrealized Loss | (1,000) | |
Estimated Fair Value | 24,451,000 | |
Corporate bonds | ||
Investments | ||
Amortized Cost | 271,124,000 | |
Gross Unrealized Gain | 103,000 | |
Gross Unrealized Loss | (155,000) | |
Estimated Fair Value | $ 271,072,000 |
Fair Value Measurements - (Deta
Fair Value Measurements - (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Fair value of the Company’s financial assets | ||
Marketable securities | $ 300,514,000 | $ 0 |
Assets transferred from level 1 to level 2 | 0 | 0 |
Assets transferred from level 2 to level 1 | 0 | 0 |
Fair Value | ||
Fair value of the Company’s financial assets | ||
Total financial assets | 319,855,000 | |
Fair Value | Quoted Prices in Active Markets (Level 1) | ||
Fair value of the Company’s financial assets | ||
Total financial assets | 19,341,000 | |
Fair Value | Significant Other Observable Inputs (Level 2) | ||
Fair value of the Company’s financial assets | ||
Total financial assets | 300,514,000 | |
Money market funds (cash equivalents) | Fair Value | ||
Fair value of the Company’s financial assets | ||
Money market funds (cash equivalents) | 19,341,000 | 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) | 19,341,000 | $ 5,000 |
U.S. treasury securities | Fair Value | ||
Fair value of the Company’s financial assets | ||
Marketable securities | 4,991,000 | |
U.S. treasury securities | Fair Value | Significant Other Observable Inputs (Level 2) | ||
Fair value of the Company’s financial assets | ||
Marketable securities | 4,991,000 | |
Agency bonds | Fair Value | ||
Fair value of the Company’s financial assets | ||
Marketable securities | 24,451,000 | |
Agency bonds | Fair Value | Significant Other Observable Inputs (Level 2) | ||
Fair value of the Company’s financial assets | ||
Marketable securities | 24,451,000 | |
Corporate bonds | Fair Value | ||
Fair value of the Company’s financial assets | ||
Marketable securities | 271,072,000 | |
Corporate bonds | Fair Value | Significant Other Observable Inputs (Level 2) | ||
Fair value of the Company’s financial assets | ||
Marketable securities | $ 271,072,000 |
Property and Equipment, Net - (
Property and Equipment, Net - (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property and Equipment, Net | ||
Property and equipment, gross | $ 17,236 | $ 13,876 |
Less: accumulated depreciation and amortization | (5,146) | (2,469) |
Property and equipment, net | 12,090 | 11,407 |
Depreciation and amortization expense | 2,688 | 1,677 |
Research equipment | ||
Property and Equipment, Net | ||
Property and equipment, gross | 10,703 | 7,787 |
Leasehold improvements | ||
Property and Equipment, Net | ||
Property and equipment, gross | 5,368 | 4,825 |
Computer equipment | ||
Property and Equipment, Net | ||
Property and equipment, gross | 463 | 167 |
Furniture and fixtures | ||
Property and Equipment, Net | ||
Property and equipment, gross | 93 | 70 |
Construction in progress | ||
Property and Equipment, Net | ||
Property and equipment, gross | $ 609 | $ 1,027 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accrued Liabilities | ||
Construction in progress | $ 73 | |
Payroll and related benefits | 1,173 | $ 1,008 |
Clinical trial costs | 1,702 | 271 |
Operating expenses | 1,769 | 719 |
Financing costs | 1 | 284 |
Office lease | 135 | 127 |
Interest | 18 | 2 |
Total accrued liabilities | $ 4,871 | $ 2,411 |
Agreement with Eli Lilly and _3
Agreement with Eli Lilly and Company - Other (Details) | Dec. 02, 2019USD ($) | Nov. 02, 2018USD ($) | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) |
Collaborative Arrangements | ||||
Equity investment | $ 160,900,000 | $ 122,223,000 | ||
Revenue | $ 6,347,000 | |||
Lilly Agreement | ||||
Collaborative Arrangements | ||||
Upfront non-refundable payment received | $ 25,000,000 | |||
Equity investment | 15,000,000 | |||
The number of performance obligations. | item | 2 | |||
Revenue | $ 6,300,000 | $ 0 | ||
Lilly Agreement | Lilly | ||||
Collaborative Arrangements | ||||
Maximum development and regulatory milestones and sales milestone receivable | 1,400,000,000 | |||
Maximum development and regulatory milestones and sales milestone payable upon option exercise | 710,000,000 | |||
Transaction price | $ 32,700,000 |
Agreement with Eli Lilly and _4
Agreement with Eli Lilly and Company - Deferred revenue included in balance sheets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 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 | 2,000 | |
Revenue from research and development arrangement recognized | (6,347) | |
Total deferred revenue, end of period | 22,378 | 26,725 |
Less: Deferred revenue, current portion | (6,428) | (4,989) |
Deferred revenue, non-current portion | $ 15,950 | $ 21,736 |
Commitments and Contingencies -
Commitments and Contingencies - Other (Details) - USD ($) | Aug. 02, 2019 | Jan. 30, 2019 | Feb. 09, 2016 | Dec. 31, 2019 | Dec. 31, 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 | $ 679,000 | $ 420,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Payments (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Future minimum payments: | |
2020 | $ 602 |
2021 | 915 |
2022 | 972 |
2023 | 970 |
Thereafter | 7,736 |
Total future minimum payments | $ 11,195 |
Term Loan - Other (Details)
Term Loan - Other (Details) | Jan. 25, 2019USD ($)item | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Apr. 30, 2016USD ($) |
Face amount | $ 5,000,000 | $ 1,000,000 | ||
Interest rate (as a percent) | 4.25% | 4.40% | 3.95% | |
Number of equal monthly payments of principal plus accrued interest | item | 36 | |||
Interest expense | $ 209,000 | $ 25,000 | ||
Outstanding balance | $ 5,000,000 | $ 460,000 | ||
Prime rate | Maximum | ||||
Spread (as a percent) | 1.00% |
Term Loan - Maturities (Details
Term Loan - Maturities (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Future maturities: | ||
2020 | $ 1,528,000 | |
2021 | 1,667,000 | |
2022 | 1,667,000 | |
2023 | 138,000 | |
Total | 5,000,000 | $ 460,000 |
Less: current portion of term loan | (1,667,000) | (387,000) |
Term loan, net of current portion | $ 3,333,000 | $ 73,000 |
Preferred Stock (Details)
Preferred Stock (Details) - $ / shares | Dec. 31, 2019 | May 14, 2019 | May 13, 2019 | Dec. 31, 2018 |
Preferred Stock. | ||||
Preferred stock, number of shares authorized | 10,000,000 | 10,000,000 | 0 | |
Preferred stock, par value per share | $ 0.001 | $ 0.001 | $ 0.001 | |
Preferred stock, shares issued | 0 | 0 | ||
Preferred stock, shares outstanding | 0 | 0 | 0 | 0 |
Common Stock (Details)
Common Stock (Details) | 12 Months Ended | ||
Dec. 31, 2019Vote$ / sharesshares | May 13, 2019$ / sharesshares | Dec. 31, 2018$ / sharesshares | |
Common Stock. | |||
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 |
Common stock, shares issued | 27,499,260 | 1,374,812 | |
Common stock, shares outstanding | 27,499,260 | 15,560,569 | 1,374,812 |
Number of votes per share | Vote | 1 | ||
Dividends declared | $ / shares | $ 0 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock options (Details) - USD ($) | May 03, 2019 | May 31, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Stock Based Compensation | |||||
Antidilutive securities excluded from computation of diluted net loss per share | 2,170,212 | 17,617,460 | |||
2015 Plan | |||||
Number of Shares | |||||
Outstanding at the beginning (in shares) | 2,056,891 | 506,586 | |||
Granted (in shares) | 258,897 | 1,570,136 | |||
Exercised | (125,108) | (5,599) | |||
Forfeitures | (20,468) | (14,232) | |||
Outstanding at the end (in shares) | 2,170,212 | 2,056,891 | 506,586 | ||
Vested and expected to vest at the end (in shares) | 2,170,212 | ||||
Exercisable at the end (in shares) | 716,393 | ||||
Weighted Average Exercise Price | |||||
Outstanding at the beginning (in dollars per share) | $ 4.74 | $ 0.94 | |||
Granted (in dollars per share) | 18.88 | 5.92 | |||
Exercised (in dollars per share) | 0.96 | 0.84 | |||
Forfeitures (in dollars per share) | 19.66 | 1.11 | |||
Outstanding at the end (in dollars per share) | 6.51 | $ 4.74 | $ 0.94 | ||
Vested and expected to vest at the end (in dollars per share) | 6.51 | ||||
Exercisable at the end (in dollars per share) | $ 3.75 | ||||
Weighted Average Remaining Contractual Life (Years) And Aggregate Intrinsic Value | |||||
Outstanding (in years) | 8 years 7 months 6 days | 9 years 4 months 24 days | 9 years | ||
Granted (in years) | 9 years 6 months | 9 years 10 months 24 days | |||
Exercised (in years) | 7 years 4 months 24 days | ||||
Forfeitures (in years) | 9 years 6 months | ||||
Outstanding at the beginning (in dollars) | $ 5,946,000 | $ 137,000 | |||
Outstanding at the end (in dollars) | $ 5,946,000 | $ 137,000 | |||
Vested and expected to vest at the end (in dollars) | 113,295,000 | ||||
Exercisable at the end (in dollars) | $ 39,370,000 | ||||
Weighted average grant date fair value per share of stock options granted | $ 11.92 | $ 3.80 | |||
Aggregate intrinsic value of stock options exercised | $ 7,225,000 | $ 38,000 | |||
Aggregate grant date fair value | $ 7,637,000 | $ 157,000 | |||
2015 Plan | Restricted Common Stock | |||||
Stock Based Compensation | |||||
Number of shares issued | 62,237 | ||||
Vesting period | 4 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 | ||||
Number of shares reserved for issuance under the plan | 2,661,566 | ||||
2019 Employee Stock Purchase Plan | |||||
Stock Based Compensation | |||||
Number of shares issued | 0 | ||||
Number of shares reserved for issuance under the plan | 240,000 | 240,000 | |||
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 | 2,170,212 | 2,056,891 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock based compensation expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Stock based compensation expense | ||
Unrecognized compensation cost | $ 6,900 | |
Compensation expense recognition period | 3 years | |
Total stock-based compensation expense | $ 1,886 | $ 263 |
Research and development | ||
Stock based compensation expense | ||
Total stock-based compensation expense | 691 | 85 |
General and administrative | ||
Stock based compensation expense | ||
Total stock-based compensation expense | $ 1,195 | $ 178 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair value assumptions | ||
Expected term | 6 years 1 month 6 days | 6 years 1 month 6 days |
Expected volatility | 69.70% | 69.70% |
Risk free interest rate | 1.90% | 2.77% |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Common Stock (Details) - 2015 Plan - Restricted Common Stock | 1 Months Ended |
May 31, 2016shares | |
Restricted Common Stock | |
Number of shares issued | 62,237 |
Vesting period | 4 years |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Common Stockholders - Anti-dilutive effect (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Antidilutive Securities | ||
Antidilutive securities excluded from computation of diluted net loss per share | 2,170,212 | 17,617,460 |
Preferred Stock | ||
Antidilutive Securities | ||
Antidilutive securities excluded from computation of diluted net loss per share | 15,560,569 | |
Option to purchase common stock | ||
Antidilutive Securities | ||
Antidilutive securities excluded from computation of diluted net loss per share | 2,170,212 | 2,056,891 |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of federal statutory income tax rate to the Company’s effective income tax rate | ||
Expected income tax benefit at the federal statutory rate (as a percent) | 21.00% | 21.00% |
State taxes, net of federal benefit (as a percent) | 7.00% | 6.50% |
Research and development credit, net (as a percent) | 4.90% | 7.20% |
Non-deductible items (as a percent) | (0.50%) | (2.20%) |
Prior year provision to return adjustments (as a percent) | (2.50%) | (7.70%) |
Other (as a percent) | 0.30% | |
Change in valuation allowance (as a percent) | (29.90%) | (25.10%) |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred tax assets: | ||
Federal and state net operating loss carryforwards | $ 15,080,000 | $ 11,946,000 |
Research and development tax credits | 4,197,000 | 3,393,000 |
Deferred revenue | 5,928,000 | |
Charitable contribution carryforwards | 306,000 | 165,000 |
Accruals and other | 826,000 | 313,000 |
Gross deferred tax assets | 26,337,000 | 15,817,000 |
Less: valuation allowance | (25,633,000) | (15,525,000) |
Total deferred tax assets | 704,000 | 292,000 |
Deferred tax liabilities: | ||
Depreciation and amortization | (704,000) | (292,000) |
Gross deferred tax liabilities | (704,000) | $ (292,000) |
Increase in valuation allowance | 10,100,000 | |
Federal net operating loss carryforwards | 55,000,000 | |
State net operating loss carryforwards | 54,000,000 | |
Federal and state net operating loss carryforwards that do not expire | 32,300,000 | |
Federal research and development tax credit carryforwards | 4,100,000 | |
State research and development tax credit carryforwards | 100,000 | |
Unrecognized income tax benefits | $ 0 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Employee Benefit Plan | |
Percentage of eligible compensation on a pre tax basis | 100.00% |
Subsequent Events - (Details)
Subsequent Events - (Details) $ in Millions | Dec. 31, 2019USD ($) |
Lilly Agreement | |
Subsequent Event | |
Deferred revenue | $ 22.4 |