Forty Seven (FTSV) 10-Q 13 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 06, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Trading Symbol	FTSV
Entity Registrant Name	Forty Seven, Inc.
Entity Central Index Key	0001667633
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Common Stock, Shares Outstanding		31,358,848

Condensed Balance Sheets

Condensed Balance Sheets - USD ($) $ in Thousands		Mar. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents		$ 15,544	$ 10,837	[1]
Short-term investments		98,045	128,186	[1]
Prepaid expenses and other current assets		11,275	6,835	[1]
Total current assets		124,864	145,858	[1]
Property and equipment, net		1,244	1,360	[1]
Operating lease right-of-use asset		2,131
Other assets		2,072	2,219	[1]
Total assets		130,311	149,437	[1]
Current liabilities:
Accounts payable		3,813	4,621	[1]
Accrued liabilities		7,299	9,044	[1]
Lease liability, current		993
Deferred grant funding, current		3,351	1,744	[1]
Total current liabilities		15,456	15,409	[1]
Lease liability, noncurrent		1,588
Deferred rent, noncurrent	[1]		331
Other long-term liabilities		368	476	[1]
Total liabilities		17,412	16,216	[1]
Commitments and Contingencies				[1]
Stockholders’ equity:
Common stock		3	3	[1]
Additional paid-in capital		275,663	273,069	[1]
Accumulated other comprehensive income (loss)		18	(82)	[1]
Accumulated deficit		(162,785)	(139,769)	[1]
Total stockholders’ equity		112,899	133,221	[1]
Total liabilities and stockholders’ equity		$ 130,311	$ 149,437	[1]
[1]	The balance sheet as of December 31, 2018 is derived from the audited financial statements as of that date.

Condensed Statements of Operati

Condensed Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Operating expenses:
Research and development	$ 19,126	$ 11,153
General and administrative	4,584	3,843
Total operating expenses	23,710	14,996
Loss from operations	(23,710)	(14,996)
Interest and other income, net	694	221
Net loss	(23,016)	(14,775)
Unrealized gain (loss) on available-for-sale securities	100	(27)
Comprehensive loss	$ (22,916)	$ (14,802)
Net loss per share, basic and diluted	$ (0.74)	$ (2.24)
Shares used in computing net loss per share, basic and diluted	31,166,184	6,600,407

Condensed Statements of Stockho

Condensed Statements of Stockholders' Equity - USD ($) $ in Thousands	Total		Convertible Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit
Beginning balance at Dec. 31, 2017	$ 83,462		$ 149,397	$ 1	$ 3,507	$ (44)	$ (69,399)
Beginning balance, shares at Dec. 31, 2017			16,215,896	6,751,157
Settlement of fractional shares from reverse stock split, shares				(15)
Vesting of early exercised stock options	13				13
Stock-based compensation	431				431
Repurchase of common stock, shares				(41,935)
Net loss	(14,775)						(14,775)
Other comprehensive income (loss)	(27)					(27)
Ending balance at Mar. 31, 2018	69,104		$ 149,397	$ 1	3,951	(71)	(84,174)
Ending balance, shares at Mar. 31, 2018			16,215,896	6,709,207
Beginning balance at Dec. 31, 2018	133,221	[1]		$ 3	273,069	(82)	(139,769)
Beginning balance, shares at Dec. 31, 2018				31,079,150
Issuance of common stock for exercise of stock options	789				789
Issuance of common stock for exercise of stock options, shares				174,793
Issuance of common stock pursuant to the ESPP	588				588
Issuance of common stock pursuant to the ESPP, shares				44,656
Vesting of early exercised stock options	113				113
Stock-based compensation	1,104				1,104
Net loss	(23,016)						(23,016)
Other comprehensive income (loss)	100					100
Ending balance at Mar. 31, 2019	$ 112,899			$ 3	$ 275,663	$ 18	$ (162,785)
Ending balance, shares at Mar. 31, 2019				31,298,599
[1]	The balance sheet as of December 31, 2018 is derived from the audited financial statements as of that date.

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities:
Net loss	$ (23,016)	$ (14,775)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	1,104	431
Depreciation and amortization	116	96
Amortization of right-of-use asset	197	0
Accretion of discounts on marketable securities	(388)	(84)
Realized gain on sale of available-for-sale securities	(2)	0
Change in fair value of embedded derivative	6	0
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(4,443)	1,002
Other assets	146	(630)
Accounts payable	(808)	965
Accrued liabilities	(1,744)	801
Deferred grant funding	1,607	3,006
Lease related liabilities	(78)	(28)
Net cash used in operating activities	(27,303)	(9,216)
Cash flows from investing activities:
Purchases of available-for-sale securities	(33,646)	(14,378)
Proceeds from sales of available-for-sale securities	3,996	0
Proceeds from maturities of available-for-sale securities	60,283	20,925
Net cash provided by investing activities	30,633	6,547
Cash flows from financing activities:
Payments of deferred offering costs	0	(520)
Proceeds from issuance of common stock upon ESPP purchase	588	0
Proceeds from issuance of common stock upon exercise of stock options	789	0
Net cash provided by (used in) financing activities	1,377	(520)
Net increase (decrease) in cash and cash equivalents	4,707	(3,189)
Cash and cash equivalents — beginning of period	10,837	24,417
Cash and cash equivalents — end of period	15,544	21,228
Noncash investing and financing activities:
Deferred offering costs included in accrued liabilities	$ 0	$ 813

Description of Business

Description of Business	3 Months Ended
	Mar. 31, 2019
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Basis of Presentation	1. Description of Business The Company is a clinical-stage immuno-oncology company focused on developing novel checkpoint therapies to activate macrophages in the fight against cancer. Forty Seven was founded based on the insight that blocking CD47, a key signaling molecule that is over-expressed on cancer cells, renders tumors susceptible to macrophages and the innate immune system. By harnessing macrophages, the Company believes that its lead product candidate, 5F9, dosed as a monotherapy and in combination with marketed cancer therapies, can transform the treatment of cancer. Liquidity In the course of its development activities, the Company has sustained operating losses and expects to continue to generate operating losses for the foreseeable future. The Company’s ultimate success depends on the outcome of its research and development activities. The Company had cash, cash equivalents and short-term investments of $113.6 million as of March 31, 2019. Since inception through March 31, 2019, the Company has incurred cumulative net losses of $162.8 million. Management expects to incur additional losses in the future to conduct product research and development and recognizes the need to raise additional capital to fully implement its business plan. The Company intends to raise such capital through the issuance of additional equity financing and/or third-party collaboration funding. However, if such financing is not available at adequate levels, the Company will need to reevaluate its operating plan and may be required to delay the development of its products. The Company expects that its cash, cash equivalents and short-term investments will be sufficient to fund operating expenses and capital expenditure requirements for a period of at least one year from the date these interim condensed financial statements are filed with the Securities and Exchange Commission (“SEC”).

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary Basis of Presentation The interim condensed balance sheet as of March 31, 2019, the condensed statements of operations and comprehensive loss for the three months ended March 31, 2019 and 2018, the condensed statements of stockholders’ equity for the three months ended March 31, 2019 and 2018, and the statements of cash flows for the three months ended March 31, 2019 and 2018 are unaudited. The unaudited interim condensed financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods presented. The financial data and the other financial information contained in the notes to the condensed financial statements related to the three month periods are also unaudited. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any other future annual or interim period. The condensed balance sheet as of December 31, 2018 included herein was derived from the audited financial statements as of that date. These condensed financial statements should be read in conjunction with the Company's audited financial statements and related notes as set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as filed with the SEC on March 28, 2019. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates and assumptions made in the accompanying financial statements include but are not limited to the fair value of common stock, the fair value of stock options, the fair value of investments, income tax uncertainties, lease liability, and certain accruals. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates. Fair Value Measurement Assets and liabilities recorded at fair value on a recurring basis in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; Level 3— Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Leases The Company adopted Accounting Standards Update (ASU) No. 2016-02, Leases Rent expense for the operating lease is recognized on a straight-line basis over the lease term and is included in operating expenses on the statements of operations and comprehensive loss. Variable lease payments include lease operating expenses. The accompanying condensed financial statements as of and for the three months ended March 31, 2019 are presented under Topic 842. The prior periods continue to be reported in accordance with previous lease guidance, ASC Topic 840, Leases. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows the Company to carry forward the historical lease classification of the leases in place as of January 1, 2019. As allowed under Topic 842, the Company has elected to not separate lease and nonlease components. The Company has also elected to not apply the recognition requirement of Topic 842 to leases with a term of 12 months or less. The impact of the adoption of Topic 842 on the accompanying condensed balance sheet as of January 1, 2019 was as follows: December 31, 2018 Adjustments due to the adoption of Topic 842 January 1, 2019 (In thousands) Assets Operating lease right-of-use asset $ — $ 2,328 $ 2,328 Liabilities and stockholders' equity Deferred rent classified as accrued liabilities $ 155 $ (155 ) $ — Lease liability, current $ — $ 968 $ 968 Lease liability, noncurrent $ — $ 1,847 $ 1,847 Deferred rent, noncurrent $ 331 $ (331 ) $ — The adjustments due to the adoption of Topic 842 related to the recognition of an operating lease right-of-use asset and lease liability for the Company's existing property operating lease and the derecognition of the deferred rent recognized under Topic 840. There was no impact on the Company’s statement of operations and comprehensive loss from the adoption and no cumulative-effect adjustment to the beginning accumulated deficit.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2019
Fair Value Disclosures [Abstract]
Fair Value Measurements	3. Fair Value Measurements The Company measures and records its cash equivalents and short-term investments at fair value. Money market funds are measured at fair value on a recurring basis using quoted prices and are classified as a Level 1 input. Short-term investments are measured at fair value based on inputs other than quoted prices that are derived from observable market data and are classified as Level 2 inputs. There were no transfers between Levels 1, 2 or 3 for any of the periods presented. All of the investments held as of March 31, 2019 and December 31, 2018 had maturities of less than one year. There were no significant realized gains or losses on investments for the three ended March 31, 2019 and 2018. The fair value and amortized cost of cash equivalents and available-for-sale securities by major security type as of March 31, 2019 and December 31, 2018 are presented in the following tables: As of March 31, 2019 Fair Value Hierarchy Amortized Cost Unrealized Gains Unrealized Losses Market Value (In thousands) Money market funds Level 1 $ 9,017 $ — $ — $ 9,017 Commercial paper Level 2 34,221 — — 34,221 Corporate debt securities Level 2 31,682 8 — 31,690 Asset-backed securities Level 2 16,301 3 — 16,304 US government debt securities Level 2 19,815 7 — 19,822 Total cash equivalents and available-for-sale securities $ 111,036 $ 18 $ — $ 111,054 As of December 31, 2018 Fair Value Hierarchy Amortized Cost Unrealized Gains Unrealized Losses Market Value (In thousands) Money market funds Level 1 $ 7,959 $ — $ — $ 7,959 Commercial paper Level 2 43,277 — — 43,277 Corporate debt securities Level 2 46,186 — (54 ) 46,132 Asset-backed securities Level 2 22,842 — (27 ) 22,815 US government debt securities Level 2 15,963 — (1 ) 15,962 Total cash equivalents and available-for-sale securities $ 136,227 $ — $ (82 ) $ 136,145 The Company’s contingent milestone payments in its agreement with the Leukemia & Lymphoma Society, Inc. (“LLS”) were concluded to be an embedded derivative. The embedded derivative contains unobservable inputs that are supported by little or no market activity at the measurement date. Accordingly, the Company’s embedded derivative is measured at fair value on a recurring basis using unobservable inputs that are classified as Level 3 inputs. The Company recorded a liability for the derivative of approximately $0.3 million, as part of other long-term liabilities as of March 31, 2019 and December 31, 2018. Refer to Note 5 for the valuation techniques and assumptions used in estimating the fair value of the embedded derivative. The change in fair value of the embedded derivative is presented in the following table: Three Months Ended March 31, 2019 (In thousands) Beginning balance $ 331 Change in fair value of embedded derivative 6 Ending balance $ 337

Balance Sheet Components

Balance Sheet Components	3 Months Ended
	Mar. 31, 2019
Balance Sheet Related Disclosures [Abstract]
Balance Sheet Components	4. Balance Sheet Components Accrued Liabilities Accrued liabilities consist of the following: March 31, 2019 December 31, 2018 (In thousands) Accrued research and development expenses $ 5,454 $ 5,870 Accrued bonuses 669 1,602 Deferred rent, current — 155 Other 1,176 1,417 Total accrued liabilities $ 7,299 $ 9,044

Research and License Agreements

Research and License Agreements	3 Months Ended
	Mar. 31, 2019
Research And License Agreements [Abstract]
Research and License Agreements	5. Research and License Agreements California Institute of Regenerative Medicine Grants In J u r 1 t m n a w d a research grant I T R s t u t v m l s e - b s a y m n w t h t a w 0 ov r f y rs As of March 31, 2019 and December 31, 2018, the Company had received $7.2 million under the award In November 2017, the Company was awarded a second research grant from CIRM for a separate clinical trial study. The total amount of the research grant awarded was $5.0 million in various milestone-based payments over a period of five years. During 2018, the award was amended to $3.2 million in various-milestone payments over a period of five years, as was provided for under the terms of the original award because the Company opted not to expand the patient population participating in the study. During the three months ended March 31, 2019, the Company did not receive any payments related to this grant. As of March 31, 2019 and December 31, 2018, the Company had received $2.4 million under the award t C m a n is obligated t a o y a l i n li c e s i f e a s o e s a l RM - f n e product candidates I M - f n e e c n l g y Leukemia & Lymphoma Society Grant In The Company recognizes research grants as a reduction of research and development expense when the eligible costs are incurred. For the three months ended March 31, 2019 and 2018, the Company recognized $1.1 million and $1.5 million as a reduction to research and development expenses for research grants. Merck Collaboration Agreement In

Leases

Leases	3 Months Ended
	Mar. 31, 2019
Leases [Abstract]
Lessee	6. Leases The Company leases office property and laboratory space at its headquarters in Menlo Park (the “Menlo Park lease”) through April 2021. The lease requires monthly lease payments subject to annual increases throughout the lease term and includes a renewal option at the election of the Company to extend the lease for an additional five years. The landlord provided the Company with a tenant improvement allowance of $646,000. On January 1, 2019, the Company adopted Topic 842. As of March 31, 2019, the remaining lease term was 2.4 years and the incremental borrowing rate used to determine the operating lease liability was 7.0%. The undiscounted future non-cancellable lease payments under the Company's operating lease are as follows: March 31, 2019 (In thousands) Years Remaining 2019 $ 854 2020 1,168 2021 794 Thereafter — Total undiscounted lease payments $ 2,816 Present value adjustment for minimum lease commitments $ (235 ) Lease liabilities $ 2,581 As of March 31, 2019, the current portion of the lease liability related to the Menlo Park lease was $1.0 million and the non-current portion of the lease liability related to the lease was $1.6 million, as disclosed in the accompanying condensed balance sheets. Rent expense for the Menlo Park lease was $0.2 million for the three months ended March 31, 2019 and 2018. Variable lease payments for operating expenses were $0.1 million for the three months ended March 31, 2019 and 2018.

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2019
Equity [Abstract]
Stockholders' Equity	7 . Stockholders’ Equity 2015 and 2018 Equity Incentive Plans The following summarizes option activity for the three months ended March 31, 2019: Shares Issuable Under Options Weighted- Average Exercise Price Weighted- Average Remaining Contract Term Aggregate Intrinsic Value (In years) (In thousands) Balance, December 31, 2018 3,404,847 $ 6.55 8.82 $ 31,388 Options granted 29,720 15.58 Options exercised (174,793 ) 4.52 Options forfeited (36,596 ) 8.49 Balance outstanding March 31, 2019 3,223,178 $ 6.72 8.61 $ 30,568 Exercisable, March 31, 2019 2,089,225 $ 6.30 8.54 $ 20,668 Vested and expected to vest, March 31, 2019 3,223,178 $ 6.72 8.61 $ 30,568 Total stock-based compensation was as follows: Three Months Ended March 31, 2019 2018 (In thousands) Research and development $ 455 $ 135 General and administrative 649 296 Total $ 1,104 $ 431 Restricted Stock As of March 31, 2019 and December 31, 2018, there was $31,000 and $144,000 recorded in other long-term liabilities related to shares held by employees and directors that were subject to repurchase. A summary of restricted stock activity follows: Number of Restricted Shares Outstanding Unvested shares—December 31, 2018 49,052 Restricted shares vested (22,708 ) Unvested shares—March 31, 2019 26,344 Employee Share Purchase Plan (ESPP) In June 2018, the Company adopted the 2018 Employee Stock Purchase Plan (“ESPP”), which became effective upon the execution of the underwriting agreement related to the IPO. The initial offering period began June 27, 2018 and will end on August 15, 2020 with purchase dates of February 15, 2019, August 15, 2019, February 15, 2020, and August 15, 2020. Each subsequent offering will be approximately 24 months long and will consist of four purchase periods with purchase dates occurring on February 15 and August 15 of each year. On each purchase date, ESPP participants will purchase shares of common stock at a price per share equal to 85% of the lesser of (1) the fair market value per share of the common stock on the offering date or (2) the fair market value of the common stock on the purchase date. Total stock-based compensation related to the ESPP for the three months ended March 31, 2019 was $228,000. A total of 44,656 shares of common stock were purchased pursuant to the ESPP during the three months ended March 31, 2019 for total proceeds of $588,000. The liability related to cash received from payroll deductions pursuant to the ESPP was $135,000 as of March 31, 2019. Convertible preferred stock The convertible preferred stock was temporarily reclassified to mezzanine equity as of March 31, 2018 before converting into common stock and permanent equity upon the closing of Company’s initial public offering in July 2018.

Net Loss Per Share

Net Loss Per Share	3 Months Ended
	Mar. 31, 2019
Earnings Per Share [Abstract]
Net Loss Per Share	8. Net Loss Per Share The following outstanding potentially dilutive shares have been excluded from the calculation of diluted net loss per share for the periods presented due to their anti-dilutive effect: As of March 31, 2019 2018 Convertible preferred stock — 16,215,896 Stock options to purchase common stock 3,223,178 2,206,642 Restricted stock subject to future vesting 26,344 103,763 Shares committed under ESPP 10,525 — Total 3,260,047 18,526,301

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2019
Subsequent Events [Abstract]
Subsequent Events	9 . Subsequent Events On April 24, 2019, the Company entered into a sublease to obtain 6,230 rentable square feet to expand its current headquarters through February 28, 2021. The base rent for the additional space for the first year will be $0.4 million and will increase annually by 3%. On April 28, 2019, the Company also entered into an amendment of its current headquarter lease to add the additional space under the sublease to its headquarter lease upon the expiration of the sublease on February 28, 2021. Under the terms of the Lease Amendment, the lease for the additional space will commence on March 1, 2021 and be co-terminus with the lease agreement, and the base rent for the additional space will be $36,000 per month.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The interim condensed balance sheet as of March 31, 2019, the condensed statements of operations and comprehensive loss for the three months ended March 31, 2019 and 2018, the condensed statements of stockholders’ equity for the three months ended March 31, 2019 and 2018, and the statements of cash flows for the three months ended March 31, 2019 and 2018 are unaudited. The unaudited interim condensed financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods presented. The financial data and the other financial information contained in the notes to the condensed financial statements related to the three month periods are also unaudited. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any other future annual or interim period. The condensed balance sheet as of December 31, 2018 included herein was derived from the audited financial statements as of that date. These condensed financial statements should be read in conjunction with the Company's audited financial statements and related notes as set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as filed with the SEC on March 28, 2019.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates and assumptions made in the accompanying financial statements include but are not limited to the fair value of common stock, the fair value of stock options, the fair value of investments, income tax uncertainties, lease liability, and certain accruals. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates.
Fair Value Measurement	Fair Value Measurement Assets and liabilities recorded at fair value on a recurring basis in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; Level 3— Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Leases	Leases The Company adopted Accounting Standards Update (ASU) No. 2016-02, Leases Rent expense for the operating lease is recognized on a straight-line basis over the lease term and is included in operating expenses on the statements of operations and comprehensive loss. Variable lease payments include lease operating expenses. The accompanying condensed financial statements as of and for the three months ended March 31, 2019 are presented under Topic 842. The prior periods continue to be reported in accordance with previous lease guidance, ASC Topic 840, Leases. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows the Company to carry forward the historical lease classification of the leases in place as of January 1, 2019. As allowed under Topic 842, the Company has elected to not separate lease and nonlease components. The Company has also elected to not apply the recognition requirement of Topic 842 to leases with a term of 12 months or less. The impact of the adoption of Topic 842 on the accompanying condensed balance sheet as of January 1, 2019 was as follows: December 31, 2018 Adjustments due to the adoption of Topic 842 January 1, 2019 (In thousands) Assets Operating lease right-of-use asset $ — $ 2,328 $ 2,328 Liabilities and stockholders' equity Deferred rent classified as accrued liabilities $ 155 $ (155 ) $ — Lease liability, current $ — $ 968 $ 968 Lease liability, noncurrent $ — $ 1,847 $ 1,847 Deferred rent, noncurrent $ 331 $ (331 ) $ — The adjustments due to the adoption of Topic 842 related to the recognition of an operating lease right-of-use asset and lease liability for the Company's existing property operating lease and the derecognition of the deferred rent recognized under Topic 840. There was no impact on the Company’s statement of operations and comprehensive loss from the adoption and no cumulative-effect adjustment to the beginning accumulated deficit.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2019
Accounting Policies [Abstract]
Schedule of Impact of Adoption of Topic 842 on Accompanying Condensed Balance Sheet	The impact of the adoption of Topic 842 on the accompanying condensed balance sheet as of January 1, 2019 was as follows: December 31, 2018 Adjustments due to the adoption of Topic 842 January 1, 2019 (In thousands) Assets Operating lease right-of-use asset $ — $ 2,328 $ 2,328 Liabilities and stockholders' equity Deferred rent classified as accrued liabilities $ 155 $ (155 ) $ — Lease liability, current $ — $ 968 $ 968 Lease liability, noncurrent $ — $ 1,847 $ 1,847 Deferred rent, noncurrent $ 331 $ (331 ) $ —

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2019
Fair Value Disclosures [Abstract]
Fair Value, Assets Measured on Recurring and Nonrecurring Basis	The fair value and amortized cost of cash equivalents and available-for-sale securities by major security type as of March 31, 2019 and December 31, 2018 are presented in the following tables: As of March 31, 2019 Fair Value Hierarchy Amortized Cost Unrealized Gains Unrealized Losses Market Value (In thousands) Money market funds Level 1 $ 9,017 $ — $ — $ 9,017 Commercial paper Level 2 34,221 — — 34,221 Corporate debt securities Level 2 31,682 8 — 31,690 Asset-backed securities Level 2 16,301 3 — 16,304 US government debt securities Level 2 19,815 7 — 19,822 Total cash equivalents and available-for-sale securities $ 111,036 $ 18 $ — $ 111,054 As of December 31, 2018 Fair Value Hierarchy Amortized Cost Unrealized Gains Unrealized Losses Market Value (In thousands) Money market funds Level 1 $ 7,959 $ — $ — $ 7,959 Commercial paper Level 2 43,277 — — 43,277 Corporate debt securities Level 2 46,186 — (54 ) 46,132 Asset-backed securities Level 2 22,842 — (27 ) 22,815 US government debt securities Level 2 15,963 — (1 ) 15,962 Total cash equivalents and available-for-sale securities $ 136,227 $ — $ (82 ) $ 136,145
Schedule of Change in Fair Value of Embedded Derivative	The change in fair value of the embedded derivative is presented in the following table: Three Months Ended March 31, 2019 (In thousands) Beginning balance $ 331 Change in fair value of embedded derivative 6 Ending balance $ 337

Balance Sheet Components (Table

Balance Sheet Components (Tables)	3 Months Ended
	Mar. 31, 2019
Balance Sheet Related Disclosures [Abstract]
Schedule of Accrued Liabilities	Accrued liabilities consist of the following: March 31, 2019 December 31, 2018 (In thousands) Accrued research and development expenses $ 5,454 $ 5,870 Accrued bonuses 669 1,602 Deferred rent, current — 155 Other 1,176 1,417 Total accrued liabilities $ 7,299 $ 9,044

Leases (Tables)

Leases (Tables)	3 Months Ended
	Mar. 31, 2019
Leases [Abstract]
Schedule of Undiscounted Future Non-Cancellable Lease Payments under Company's Operating Lease	The undiscounted future non-cancellable lease payments under the Company's operating lease are as follows: March 31, 2019 (In thousands) Years Remaining 2019 $ 854 2020 1,168 2021 794 Thereafter — Total undiscounted lease payments $ 2,816 Present value adjustment for minimum lease commitments $ (235 ) Lease liabilities $ 2,581

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	3 Months Ended
	Mar. 31, 2019
Equity [Abstract]
Summary of Option Activity	The following summarizes option activity for the three months ended March 31, 2019: Shares Issuable Under Options Weighted- Average Exercise Price Weighted- Average Remaining Contract Term Aggregate Intrinsic Value (In years) (In thousands) Balance, December 31, 2018 3,404,847 $ 6.55 8.82 $ 31,388 Options granted 29,720 15.58 Options exercised (174,793 ) 4.52 Options forfeited (36,596 ) 8.49 Balance outstanding March 31, 2019 3,223,178 $ 6.72 8.61 $ 30,568 Exercisable, March 31, 2019 2,089,225 $ 6.30 8.54 $ 20,668 Vested and expected to vest, March 31, 2019 3,223,178 $ 6.72 8.61 $ 30,568
Schedule of Total Stock-Based Compensation	Total stock-based compensation was as follows: Three Months Ended March 31, 2019 2018 (In thousands) Research and development $ 455 $ 135 General and administrative 649 296 Total $ 1,104 $ 431
Summary of Restricted Stock Activity	A summary of restricted stock activity follows: Number of Restricted Shares Outstanding Unvested shares—December 31, 2018 49,052 Restricted shares vested (22,708 ) Unvested shares—March 31, 2019 26,344

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	3 Months Ended
	Mar. 31, 2019
Earnings Per Share [Abstract]
Summary of Outstanding Potentially Dilutive Shares Excluded from Calculation of Diluted Net Loss Per Share	The following outstanding potentially dilutive shares have been excluded from the calculation of diluted net loss per share for the periods presented due to their anti-dilutive effect: As of March 31, 2019 2018 Convertible preferred stock — 16,215,896 Stock options to purchase common stock 3,223,178 2,206,642 Restricted stock subject to future vesting 26,344 103,763 Shares committed under ESPP 10,525 — Total 3,260,047 18,526,301

Description of Business - Addit

Description of Business - Additional Information (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	[1]
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Cash, cash equivalents and short-term investments	$ 113,600
Cumulative net losses	$ 162,785	$ 139,769
[1]	The balance sheet as of December 31, 2018 is derived from the audited financial statements as of that date.

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Schedule of Impact of Adoption of Topic 842 on Accompanying Condensed Balance Sheet (Details) - USD ($) $ in Thousands		Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Assets
Operating lease right-of-use asset		$ 2,131
Liabilities and stockholders' equity
Deferred rent classified as accrued liabilities				$ 155
Lease liability, current		993
Lease liability, noncurrent		$ 1,588
Deferred rent, noncurrent	[1]			$ 331
Accounting Standards Update 2016-02
Assets
Operating lease right-of-use asset			$ 2,328
Liabilities and stockholders' equity
Lease liability, current			968
Lease liability, noncurrent			1,847
Accounting Standards Update 2016-02 | Adjustments due to the adoption of Topic 842
Assets
Operating lease right-of-use asset			2,328
Liabilities and stockholders' equity
Deferred rent classified as accrued liabilities			(155)
Lease liability, current			968
Lease liability, noncurrent			1,847
Deferred rent, noncurrent			$ (331)
[1]	The balance sheet as of December 31, 2018 is derived from the audited financial statements as of that date.

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Transfers between level 1 to Level 2 and Level 3 amount	$ 0
Realized gains (losses) on investments	0	$ 0
Other Long-Term Liabilities | Leukemia & Lymphoma Society, Inc.
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability	$ 300,000		$ 300,000
Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Maturity of investments	1 year		1 year

Fair Value Measurements - Fair

Fair Value Measurements - Fair Value and Amortized Cost of Cash Equivalents and Available for Sale Securities by Major Security Type (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	$ 111,036	$ 136,227
Unrealized Gains	18
Unrealized Losses		(82)
Market Value	111,054	136,145
Level 1
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	9,017	7,959
Market Value	9,017	7,959
Commercial Paper | Level 2
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	34,221	43,277
Market Value	34,221	43,277
Corporate Debt Securities | Level 2
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	31,682	46,186
Unrealized Gains	8
Unrealized Losses		(54)
Market Value	31,690	46,132
Asset-backed Securities | Level 2
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	16,301	22,842
Unrealized Gains	3
Unrealized Losses		(27)
Market Value	16,304	22,815
US Government Debt Securities | Level 2
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	19,815	15,963
Unrealized Gains	7
Unrealized Losses		(1)
Market Value	$ 19,822	$ 15,962

Fair Value Measurements - Sched

Fair Value Measurements - Schedule of Change in Fair Value of Embedded Derivative (Details) - Embedded Derivative $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Fair value of embedded derivative, Beginning balance	$ 331
Change in fair value of embedded derivative	6
Fair value of embedded derivative, Ending balance	$ 337

Balance Sheet Components - Sche

Balance Sheet Components - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accrued Liabilities Current [Abstract]
Accrued research and development expenses	$ 5,454	$ 5,870
Accrued bonuses	669	1,602
Deferred rent, current		155
Other	1,176	1,417
Total accrued liabilities	$ 7,299	$ 9,044	[1]
[1]	The balance sheet as of December 31, 2018 is derived from the audited financial statements as of that date.

Research and License Agreemen_2

Research and License Agreements - Additional Information (Details) - USD ($)	1 Months Ended		3 Months Ended		12 Months Ended
	Nov. 30, 2017	Jan. 31, 2017	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Mar. 31, 2017
Leukemia & Lymphoma Society, Inc. ("LLS") | Other Long-Term Liabilities
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Derivative Liability			$ 300,000		$ 300,000
Research Grant | California Institute of Regenerative Medicine (CIRM)
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Collaborative arrangement research grant receivable		$ 10,200,000	0
Collaborative arrangement milestone payments receivable period		4 years
Proceeds from collaborators			7,200,000		7,200,000
Research Grant | Leukemia & Lymphoma Society, Inc. ("LLS")
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Collaborative arrangement research grant receivable			0			$ 4,200,000
Proceeds from collaborators			3,900,000		3,900,000
Reduction to research and development expenses for research grants			1,100,000	$ 1,500,000
Research Grant | Leukemia & Lymphoma Society, Inc. ("LLS") | Maximum
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Milestone payments to be paid upon achievement of development and regulatory approval milestones			15,000,000
Research Grant | Leukemia & Lymphoma Society, Inc. ("LLS") | Other Long-Term Liabilities
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Derivative Liability			300,000		300,000
Second Research Grant | California Institute of Regenerative Medicine (CIRM)
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Collaborative arrangement research grant receivable	$ 5,000,000		0
Collaborative arrangement milestone payments receivable period	5 years
Proceeds from collaborators			2,400,000		2,400,000
Collaborative arrangement, amended research grant receivable					$ 3,200,000
Collaborative arrangement, amended milestone payments receivable period					5 years
Merck Collaboration Agreement | Ares Trading S.A
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Reduction to research and development expenses for research grants			600,000	$ 200,000
Receivable for reimbursement of research and development costs incurred			$ 800,000

Leases - Additional Information

Leases - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Leases [Abstract]
Lease expiration date	Apr. 30, 2021
Renewal term	5 years
Tenant improvement allowance	$ 646,000
Remaining lease term	2 years 4 months 24 days
Operating lease liability, incremental borrowing rate	7.00%
Operating lease, liability, current	$ 993,000
Operating lease, liability, noncurrent	1,588,000
Rent expense	200,000	$ 200,000
Variable lease payments for operating expenses	$ 100,000	$ 100,000

Leases - Schedule of Undiscount

Leases - Schedule of Undiscounted Future Non-Cancellable Lease Payments under Company's Operating Lease (Details) $ in Thousands	Mar. 31, 2019USD ($)
Operating Leases
Remaining 2019	$ 854
2020	1,168
2021	794
Total undiscounted lease payments	2,816
Present value adjustment for minimum lease commitments	(235)
Lease liabilities	$ 2,581

Stockholders' Equity - Summary

Stockholders' Equity - Summary of Option Activity (Details) - 2015 and 2018 Stock Plan - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Issuable Under Options, Beginning balance	3,404,847
Shares Issuable Under Options, Options granted	29,720
Shares Issuable Under Options, Options exercised	(174,793)
Shares Issuable Under Options, Options forfeited	(36,596)
Shares Issuable Under Options, Ending balance	3,223,178	3,404,847
Shares Issuable Under Options, Exercisable	2,089,225
Shares Issuable Under Options, Vested and expected to vest	3,223,178
Weighted-Average Exercise Price, Beginning balance	$ 6.55
Weighted-Average Exercise Price, Options granted	15.58
Weighted-Average Exercise Price, Options exercised	4.52
Weighted-Average Exercise Price, Options forfeited	8.49
Weighted-Average Exercise Price, Ending balance	6.72	$ 6.55
Weighted-Average Exercise Price, Exercisable	6.30
Weighted-Average Exercise Price, Vested and expected to vest	$ 6.72
Weighted-Average Remaining Contract Term	8 years 7 months 9 days	8 years 9 months 25 days
Weighted-Average Remaining Contract Term Exercisable	8 years 6 months 14 days
Weighted-Average Remaining Contract Term Vested and expected to vest	8 years 7 months 9 days
Aggregate Intrinsic Value	$ 30,568	$ 31,388
Aggregate Intrinsic Value Exercisable	20,668
Aggregate Intrinsic Value Vested and expected to vest	$ 30,568

Stockholders' Equity - Schedule

Stockholders' Equity - Schedule of Total Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation	$ 1,104	$ 431
Research and Development
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation	455	135
General and Administrative
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total stock-based compensation	$ 649	$ 296

Stockholders' Equity - Addition

Stockholders' Equity - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	$ 1,104,000	$ 431,000
Total proceeds	$ 789,000	$ 0
Employee Share Purchase Plan (ESPP)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee share purchase plan description	The initial offering period began June 27, 2018 and will end on August 15, 2020 with purchase dates of February 15, 2019, August 15, 2019, February 15, 2020, and August 15, 2020. Each subsequent offering will be approximately 24 months long and will consist of four purchase periods with purchase dates occurring on February 15 and August 15 of each year. On each purchase date, ESPP participants will purchase shares of common stock at a price per share equal to 85% of the lesser of (1) the fair market value per share of the common stock on the offering date or (2) the fair market value of the common stock on the purchase date.
Employee share purchase plan purchase price percentage	85.00%
Total stock-based compensation	$ 228,000
Number of common stock purchase to ESPP	44,656
Total proceeds	$ 588,000
Proceeds from payroll deductions from employee stock purchase plan	135,000
Restricted Stock | Other Long-term Liabilities
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares held by employees and directors subject to repurchase	$ 31,000		$ 144,000

Stockholders' Equity - Summar_2

Stockholders' Equity - Summary of Restricted Stock Activity (Details)	3 Months Ended
	Mar. 31, 2019shares
Equity [Abstract]
Number of Restricted Shares Outstanding, Beginning balance	49,052
Number of Restricted Shares Outstanding, Restricted shares vested	(22,708)
Number of Restricted Shares Outstanding, Ending balance	26,344

Net Loss Per Share - Summary of

Net Loss Per Share - Summary of Outstanding Potentially Dilutive Shares Excluded from Calculation of Diluted Net Loss Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total	3,260,047	18,526,301
Convertible Preferred Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total		16,215,896
Stock Options to Purchase Common Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total	3,223,178	2,206,642
Restricted Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total	26,344	103,763
Shares Committed under ESPP
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Total	10,525

Subsequent Events - Additional

Subsequent Events - Additional Information (Details) - Subsequent Event - 1490 O’Brien Drive, Menlo Park, California 94025	Apr. 28, 2019USD ($)	Apr. 24, 2019USD ($)ft²
Subsequent Event [Line Items]
Sublease agreement date		Apr. 24, 2019
Additional area rentable | ft²		6,230
Sublease expiration date	Feb. 28, 2021	Feb. 28, 2021
Base rent for first year		$ 400,000
Annual increase percentage in base rent		3.00%
Sublease amendment agreement date	Apr. 28, 2019
Additional space sublease commencement date	Mar. 1, 2021
Base rent per month	$ 36,000