Morphic Holding (MORF) 10-Q 13 Aug 19 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 09, 2019
Document and Entity Information
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Entity Registrant Name	MORPHIC HOLDING, INC.
Entity Current Reporting Status	No
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		2,585,976
Entity Central Index Key	0001679363
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 44,199	$ 185,901
Marketable securities	126,206	0
Accounts receivable	945
Prepaid expenses and other current assets	1,436	1,222
Total current assets	172,786	187,123
Property and equipment, net	2,534	1,843
Restricted cash	275	275
Other assets	3,015	64
Total assets	178,610	189,305
Current liabilities:
Accounts payable	2,906	1,745
Accrued expenses	5,217	3,239
Deferred revenue, current portion	35,334	29,862
Deferred rent, current portion	73	57
Total current liabilities	43,530	34,903
Long-term liabilities:
Deferred revenue, net of current portion	60,945	66,781
Deferred rent, net of current portion	266	306
Other long-term liabilities	38	58
Total liabilities	104,779	102,048
Commitments and contingencies (Note 9)
Stockholders’ Deficit
Common shares, $0.0001 par value, 151,000,000 shares authorized and 2,044,999 shares issued and outstanding as of June 30, 2019 and 1,832,923 shares issued and outstanding as of December 31, 2018
Additional paid‑in capital	2,799	1,633
Accumulated deficit	(68,818)	(54,185)
Accumulated other comprehensive income	41
Total stockholders’ deficit	(65,978)	(52,552)
Total liabilities, preferred shares, and stockholders’ deficit	178,610	189,305
Series Seed Preferred Shares
Long-term liabilities:
Preferred shares	8,658	8,658
Series A Preferred Shares
Long-term liabilities:
Preferred shares	51,320	51,320
Series B Preferred Shares
Long-term liabilities:
Preferred shares	$ 79,831	$ 79,831

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Common shares, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized (in shares)	151,000,000	151,000,000
Common shares, shares issued	2,044,999	1,832,923
Common shares, shares outstanding	2,044,999	1,832,923
Series Seed Convertible Preferred Shares
Preferred shares, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred shares, shares authorized	11,967,689	11,967,689
Preferred shares, shares Issued	2,045,556	2,045,556
Preferred shares, shares outstanding	2,045,556	2,045,556
Preferred shares, liquidation preference	$ 8,980	$ 8,980
Series A Convertible Preferred Shares
Preferred shares, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred shares, shares authorized	49,047,619	49,047,619
Preferred shares, shares Issued	8,411,368	8,411,368
Preferred shares, shares outstanding	8,411,368	8,411,368
Preferred shares, liquidation preference	$ 51,500	$ 51,500
Series B Convertible Preferred Shares
Preferred shares, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred shares, shares authorized	61,538,454	61,538,454
Preferred shares, shares Issued	10,553,483	10,553,483
Preferred shares, shares outstanding	10,553,483	10,553,483
Preferred shares, liquidation preference	$ 80,000	$ 80,000

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Collaboration revenue	$ 5,567,000		$ 11,635,000
Operating expenses:
Research and development	13,907,000	$ 5,293,000	24,278,000	$ 9,577,000
General and administrative	2,077,000	972,000	3,908,000	1,906,000
Total operating expenses	15,984,000	6,265,000	28,186,000	11,483,000
Loss from operations	(10,417,000)	(6,265,000)	(16,551,000)	(11,483,000)
Other income:
Interest income, net	1,119,000	34,000	2,182,000	73,000
Total other income	1,119,000	34,000	2,182,000	73,000
Loss before provision for income taxes	(9,298,000)	(6,231,000)	(14,369,000)	(11,410,000)
Provision for income taxes	(135,000)	0	(264,000)	0
Net loss	$ (9,433,000)	$ (6,231,000)	$ (14,633,000)	$ (11,410,000)
Net loss per unit, basic and diluted
Net loss per share, basic and diluted	$ (4.73)		$ (7.54)
Net loss per unit, basic and diluted		$ (6.16)		$ (11.28)
Weighted average common units outstanding, basic and diluted
Weighted average common shares outstanding, basic and diluted	1,992,410		1,940,923
Weighted average common units outstanding, basic and diluted		1,011,227		1,011,227
Other comprehensive income (loss):
Unrealized holding gains on marketable securities	$ 16,000		$ 41,000
Comprehensive loss	(9,417,000)	$ (6,231,000)	(14,592,000)	$ (11,410,000)
Collaboration revenue - related party
Collaboration revenue	4,395,000		9,964,000
Collaboration revenue - other
Collaboration revenue	$ 1,172,000		$ 1,671,000

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT - USD ($) $ in Thousands	Series Seed Convertible Preferred Shares	Series A Convertible Preferred Shares	Series B Convertible Preferred Shares	Common units	Additional Paid‑in Capital	Accumulated Deficit	Accumulated Other Deficit	Total
Balance at beginning of period at Dec. 31, 2017					$ 661	$ (30,354)		$ (29,693)
Balance at beginning of period ( in shares) at Dec. 31, 2017				1,011,227
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity‑based compensation expense					123			123
Net loss						(5,179)		(5,179)
Balance at end of period at Mar. 31, 2018					784	(35,533)		(34,749)
Balance at end of period ( in shares) at Mar. 31, 2018				1,011,227
Balance at beginning of period at Dec. 31, 2017	$ 8,658	$ 41,029
Balance at beginning of period ( in shares) at Dec. 31, 2017	2,045,556	6,729,096
Balance at end of period at Mar. 31, 2018	$ 8,658	$ 41,029
Balance at end of period ( in shares) at Mar. 31, 2018	2,045,556	6,729,096
Balance at beginning of period at Dec. 31, 2017					661	(30,354)		(29,693)
Balance at beginning of period ( in shares) at Dec. 31, 2017				1,011,227
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss								(11,410)
Balance at end of period at Jun. 30, 2018					919	(41,764)		(40,845)
Balance at end of period ( in shares) at Jun. 30, 2018				1,011,227
Balance at beginning of period at Dec. 31, 2017	$ 8,658	$ 41,029
Balance at beginning of period ( in shares) at Dec. 31, 2017	2,045,556	6,729,096
Balance at end of period at Jun. 30, 2018	$ 8,658	$ 41,029
Balance at end of period ( in shares) at Jun. 30, 2018	2,045,556	6,729,096
Balance at beginning of period at Dec. 31, 2017					661	(30,354)		(29,693)
Balance at beginning of period ( in shares) at Dec. 31, 2017				1,011,227
Balance at end of period at Dec. 31, 2018					1,633	(54,185)		(52,552)
Balance at end of period ( in shares) at Dec. 31, 2018				1,832,923
Balance at beginning of period at Dec. 31, 2017	$ 8,658	$ 41,029
Balance at beginning of period ( in shares) at Dec. 31, 2017	2,045,556	6,729,096
Balance at end of period at Dec. 31, 2018	$ 8,658	$ 51,320	$ 79,831
Balance at end of period ( in shares) at Dec. 31, 2018	2,045,556	8,411,368	10,553,483
Balance at beginning of period at Mar. 31, 2018					784	(35,533)		(34,749)
Balance at beginning of period ( in shares) at Mar. 31, 2018				1,011,227
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity‑based compensation expense					135			135
Net loss						(6,231)		(6,231)
Balance at end of period at Jun. 30, 2018					919	(41,764)		(40,845)
Balance at end of period ( in shares) at Jun. 30, 2018				1,011,227
Balance at beginning of period at Mar. 31, 2018	$ 8,658	$ 41,029
Balance at beginning of period ( in shares) at Mar. 31, 2018	2,045,556	6,729,096
Balance at end of period at Jun. 30, 2018	$ 8,658	$ 41,029
Balance at end of period ( in shares) at Jun. 30, 2018	2,045,556	6,729,096
Balance at beginning of period at Dec. 31, 2018					1,633	(54,185)		(52,552)
Balance at beginning of period ( in shares) at Dec. 31, 2018				1,832,923
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Vesting of restricted shares (in shares)				99,911
Equity‑based compensation expense					499			499
Unrealized holding gains on marketable securities							$ 25	25
Net loss						(5,200)		(5,200)
Balance at end of period at Mar. 31, 2019					2,132	(59,385)	25	(57,228)
Balance at end of period ( in shares) at Mar. 31, 2019				1,932,834
Balance at beginning of period at Dec. 31, 2018	$ 8,658	$ 51,320	$ 79,831
Balance at beginning of period ( in shares) at Dec. 31, 2018	2,045,556	8,411,368	10,553,483
Balance at end of period at Mar. 31, 2019	$ 8,658	$ 51,320	$ 79,831
Balance at end of period ( in shares) at Mar. 31, 2019	2,045,556	8,411,368	10,553,483
Balance at beginning of period at Dec. 31, 2018					1,633	(54,185)		(52,552)
Balance at beginning of period ( in shares) at Dec. 31, 2018				1,832,923
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss								(14,633)
Balance at end of period at Jun. 30, 2019					2,799	(68,818)	41	(65,978)
Balance at end of period ( in shares) at Jun. 30, 2019				2,044,999
Balance at beginning of period at Dec. 31, 2018	$ 8,658	$ 51,320	$ 79,831
Balance at beginning of period ( in shares) at Dec. 31, 2018	2,045,556	8,411,368	10,553,483
Balance at end of period at Jun. 30, 2019	$ 8,658	$ 51,320	$ 79,831
Balance at end of period ( in shares) at Jun. 30, 2019	2,045,556	8,411,368	10,553,483
Balance at beginning of period at Mar. 31, 2019					2,132	(59,385)	25	(57,228)
Balance at beginning of period ( in shares) at Mar. 31, 2019				1,932,834
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Vesting of restricted shares (in shares)				112,165
Equity‑based compensation expense					667			667
Unrealized holding gains on marketable securities							16	16
Net loss						(9,433)		(9,433)
Balance at end of period at Jun. 30, 2019					$ 2,799	$ (68,818)	$ 41	$ (65,978)
Balance at end of period ( in shares) at Jun. 30, 2019				2,044,999
Balance at beginning of period at Mar. 31, 2019	$ 8,658	$ 51,320	$ 79,831
Balance at beginning of period ( in shares) at Mar. 31, 2019	2,045,556	8,411,368	10,553,483
Balance at end of period at Jun. 30, 2019	$ 8,658	$ 51,320	$ 79,831
Balance at end of period ( in shares) at Jun. 30, 2019	2,045,556	8,411,368	10,553,483

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities:
Net loss	$ (14,633)	$ (11,410)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	365	260
Premium amortization and discount accretion on marketable securities	(1,232)
Equity‑based compensation	1,166	258
Non-cash interest expense		18
Change in operating assets and liabilities:
Accounts receivable	(945)
Prepaid expenses and other current assets	(214)	157
Other assets	(14)	(17)
Accounts payable	1,161	113
Accrued expenses	874	(274)
Deferred revenue	(364)
Deferred rent	(24)	(8)
Other long-term liabilities	(20)
Net cash used in operating activities	(13,880)	(10,903)
Cash flows from investing activities:
Purchases of marketable securities	(169,933)
Proceeds from maturities of marketable securities	45,000
Purchase of property and equipment	(1,056)	(206)
Net cash used in investing activities	(125,989)	(206)
Cash flows from financing activities:
Repayment of debt		(169)
Deferred issuance costs	(1,833)
Net cash used in financing activities	(1,833)	(169)
Net decrease in cash and cash equivalents and restricted cash	(141,702)	(11,278)
Cash and cash equivalents and restricted cash, beginning of period	186,176	21,025
Cash and cash equivalents and restricted cash, end of period	44,474	9,747
Supplemental disclosure of non‑cash items:
Deferred issuance costs included in accrued expenses	$ 1,104
Supplemental cash flow information:
Cash paid for interest		$ 13

Nature of the Business and Basi

Nature of the Business and Basis of Presentation	6 Months Ended
	Jun. 30, 2016
Nature of the Business and Basis of Presentation
Nature of the Business and Basis of Presentation	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Nature of the Business and Basis of Presentation Organization Morphic Holding, Inc. was f ormed under the laws of the State of Delaware in August 2014 under the name Integrin Rock, LLC. The Company subsequently changed its name to Morphic Rock Holding, LLC in October 2014 and then to Morphic Holding, LLC in June 2016. As more fully described in Note 7 below, on December 5, 2018, the Company completed a series of transactions (the “Reorganization”) pursuant to which Morphic Holding, LLC was converted in a tax free reorganization into Morphic Holding, Inc. and three wholly-owned subsidiaries, namely Lazuli, Inc., Tourmaline, Inc, and Phyllite, Inc, were merged with and into another wholly-owned subsidiary, Morphic Therapeutic, Inc. As part of the Reorganization, all convertible preferred units and common units of Morphic Holding, LLC issued and outstanding immediately prior to the Reorganization were exchanged for shares of Morphic Holding Inc. capital stock of the same class or series on a one-for-one basis. Previously outstanding vested and unvested incentive units, irrespective of threshold amounts (defined as the fair value of common unit on the date the incentive unit award is granted) or voting rights, were exchanged for an equal number of shares of common stock or restricted common stock, respectively. The restricted common stock was issued with the same vesting terms as the unvested incentive units held immediately prior to the Reorganization. Upon consummation of the Reorganization, the historical consolidated financial statements of Morphic Holding, LLC became the historical consolidated financial statements of Morphic Holding Inc. Except as otherwise indicated or the context otherwise requires, all information included in this filing is presented giving effect to the Reorganization. At the time of the Reorganization, the Company created a Massachusetts Securities Corporation (the “Security Corporation”) to take advantage of the favorable tax treatment of income earned on securities held within such entity. As of June 30, 2019, all of the Company’s excess funds were temporarily invested through the Security Corporation. The Company is a biopharmaceutical company applying proprietary insights into integrin medicine to discover and develop first-in-class oral small molecule integrin therapeutics. Integrins are a validated target class with multiple approved drugs for the treatment of serious chronic diseases. Despite significant biopharmaceutical industry investment, no oral integrin therapies have been approved. The Company has created the Morphic integrin technology platform, or MInT Platform, by leveraging our unique understanding of integrin structure and biology, to develop a pipeline of novel product candidates designed to achieve potency, high selectivity, and the pharmaceutical properties required for oral administration. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. The Company expects to continue to incur losses from operations for the foreseeable future; the Company expects that its cash and cash equivalents and marketable securities and the funds received from the Company’s initial public offering (“IPO”) will be sufficient to fund its operating expenses and capital expenditure requirements through at least the next 12 months from the date these financial statements were issued. On July 1, 2019, the Company completed an IPO, in which the Company issued and sold 6,900,000 shares of its common stock at a public offering price of $15.00 per share, including 900,000 shares of common stock sold pursuant to the underwriters’ exercise of their option to purchase additional shares of common stock, for aggregate gross proceeds of $103.5 million. The Company raised approximately $93.4 million in net proceeds after deducting underwriting discounts and commissions and offering expenses payable by the Company . Upon the closing of the IPO, all of the outstanding shares of convertible preferred stock automatically converted into 21,017,232 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. In connection with the closing of the IPO, the Company amended and restated its Fourth Amended and Restated Certificate of Incorporation to change the authorized capital stock to 400,000,000 shares designated as common stock, and 10,000,000 shares designated as preferred stock, all with a par value of $0.0001 per share. The financial statements as of June 30, 2019, including share and per share amounts, do not give effect to the IPO, as it closed subsequent to June 30, 2019. Basis of Presentation The consolidated financial statements include the accounts of Morphic Holding, Inc. and its wholly owned subsidiaries described above. All intercompany balances have been eliminated in consolidation. These condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). The unaudited interim financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company's financial position as of June 30, 2019 and the results of its operations for the three and six months ended June 30, 2019 and 2018 and its cash flows for the six months ended June 30, 2019 and 2018. Financial statement disclosures for the six months ended June 30, 2019 and 2018 are condensed and do not include all disclosures required for an annual set of financial statements in accordance with GAAP and should be read in conjunction with the Company’s audited financial statements and notes in the prospectus filed with the Securities and Exchange Commission on June 27, 2019. The results for the three and six months ended June 30, 2019 are not necessarily indicative of results to be expected for the year ended December 31, 2019, any other interim periods, or any future year or period. On June 10, 2019, the Company’s board of directors and stockholders approved a 5.8311-to-one reverse stock split of the Company’s issued and outstanding shares of common stock and convertible preferred stock. All unit, per unit, share and per share amounts in the consolidated financial statements and notes thereto have been retrospectively adjusted for all periods presented to give effect to the reverse stock split.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2019
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Use of Estimates and Judgements The preparation of financial statements in accordance with GAAP requires management to make estimates and judgments that may affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the date of the financial statements and the related reporting of revenues and expenses during the reporting period. Significant estimates of accounting reflected in these consolidated financial statements include, but are not limited to, estimates related to revenue recognition, accrued expenses, the valuation of equity‑based compensation, including incentive units, restricted common stock, and stock options, and income taxes. Actual results could differ from those estimates. Concentration of Credit Risk and Off‑Balance Sheet Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and marketable securities. The Company has all 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. The primary objectives for the Company’s investment portfolio are the preservation of capital and maintenance of liquidity. In 2016, the Company adopted its investment policy which allows funds to be held outside bank accounts, but to be invested only in readily marketable fixed income instruments with readily ascertainable market values, denominated and payable in U.S. dollars including obligations of the U.S. government and its agencies and money market funds registered according to Rule 2a‑7 of the Investment Company Act of 1940. Investments in the money market fund shall be consistent with approved instruments and assets under management must be at least $1 billion. The Company has no off‑balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign‑hedging arrangements. Cash and Cash Equivalents and Restricted Cash The Company considers highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. At June 30, 2019, cash and cash equivalents include bank demand deposits and money market funds that invest primarily in U.S. government‑backed securities and treasuries. Cash equivalents are stated at fair value. Restricted cash consists of a letter of credit in the amount of $275,000 issued to the landlord of the Company’s facility lease. The terms of the letter of credit extend beyond one year. The following table reconciles cash and cash equivalents and restricted cash per the balance sheet to the statements of cash flows: June 30, December 31, June 30, December 31, 2019 2018 2018 2017 Cash and cash equivalents $ 44,199 $ 185,901 $ 9,472 $ 20,750 Restricted cash 275 275 275 275 $ 44,474 $ 186,176 $ 9,747 $ 21,025 Marketable securities The Company invests funds in the United States Treasury securities; those securities are classified as available-for-sale and are carried at fair value. Changes in fair value of marketable securities are recorded in other comprehensive income (loss) as net unrealized gains (losses) on marketable securities. The Company recognized $16,000 and $41,000 in unrealized gains, net for the three and six months ended June 30, 2019, respectively. The Company held no marketable securities prior to 2019. Interest income on investments The Company recognizes interest income from investments in money market funds and available-for-sale securities, including amortization of premium/accretion of discount, on an accrual basis. For the three and six months ended June 30, 2019, the Company recognized $1.1 million and $2.2 million in interest income, respectively. For the three and six months ended June 30, 2018, the Company recognized $48,000 and $103,000 in interest income, respectively. Interest income is included with other income on the statements of operations and comprehensive loss. Fair Value Measurements 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 fair 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. To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company believes that the carrying amounts of the Company’s consolidated financial instruments, including prepaid expenses and other current assets, accounts payable, and accrued expenses approximate fair value due to the short-term nature of those instruments. 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. For the three and six months ended June 30, 2019, comprehensive loss included $16,000 and $41,000, respectively, of unrealized gains on marketable securities; for the three and six months ended June 30, 2018, comprehensive loss equaled net loss. Deferred Offering Costs The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After the consummation of the IPO, these costs were recorded in stockholders' (deficit) equity as a reduction of additional paid-in capital or the associated preferred or common stock account, as applicable. Deferred offering costs as of June 30, 2019 and December 31, 2018 were $2.9 million and $0, respectively. Such costs are classified as other long-term assets in the accompanying consolidated balance sheets. Recently Adopted Accounting Pronouncements In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, ("ASU 2017- 09") which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. The new standard does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if the fair value, vesting conditions, or classification of the award changes as a result of the change in terms or conditions. The Company adopted ASU 2017-09 on January 1, 2018 using the prospective approach. Initial adoption of ASU 2017-09 did not have any impact on the Company's consolidated financial statements. In October 2018, in connection with the Reorganization described in Note 6, the Company modified certain equity-based awards and the effect of such modification has been reflected in the consolidated financial statements for the year ended December 31, 2018. In May 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which modifies how all entities recognize revenue, and consolidates into one ASC (ASC Topic 606, Revenue from Contracts with Customers) the current guidance found in ASC Topic 605, and various other revenue accounting standards for specialized transactions and industries. ASU 2014-09 outlines a comprehensive five-step revenue recognition model based on the principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On January 1, 2018, the Company elected to early adopt ASU 2014-09 using the full retrospective approach. As such, the statements of operations and comprehensive loss are presented in accordance with the provisions of ASC 606. Recently Issued Accounting Pronouncements not yet Adopted As an "emerging growth company," or EGC, under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, the Company has made an election under Section 107 of the JOBS Act to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. Thus, the Company follows requirements applicable to the private companies for adopting new and updated accounting standards. In April 2019, the FASB issued ASU 2019-04, Financial Instruments-Credit Losses , Topic 815, Derivatives and Hedging , and Topic 825, Financial Instruments (“ASU 2019-04”). Certain provisions of ASU 2019-04 amend the guidance of ASU 2016-13, are applicable to the Company’s investments portfolio, and allow the Company to make certain accounting policy elections regarding establishing allowance for credit losses for the accrued interest receivable and the corresponding disclosures. The guidance is effective for the fiscal year beginning January 1, 2021, and interim periods within the fiscal year beginning January 2022 and will be adopted using the modified retrospective approach. The Company is currently evaluating the impact of ASU 2019-04 on the consolidated financial statements, including the impact of the available accounting policy elections. In June 2016, the FASB issued ASU 2016-13, Financial Instruments Credit Losses (Topic 326) ("ASU 2016-13"), which requires consideration of a broader range of reasonable and supportable information in developing credit loss estimates. The guidance is effective for the fiscal year beginning January 1, 2021, and interim periods within the fiscal year beginning January 2022 and has to be adopted using modified-retrospective approach. The Company is currently evaluating the impact of ASU 2016-13, as amended by ASU 2019-04 described above, on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), with guidance regarding the accounting for and disclosure of leases. The update requires lessees to recognize all leases, including operating leases, with a term greater than 12 months on the consolidated balance sheet. This update also requires lessees and lessors to disclose key information about their leasing transactions. This standard is effective for public companies for annual and interim periods beginning after December 15, 2018. For all other entities, this standard is effective for annual reporting periods beginning after December 15, 2019, and interim periods within annual periods beginning after December 15, 2020. While the Company expects the implementation of ASU 2016-02 to result in the recognition of right-of-use assets and lease liabilities for leased facilities, the Company does not believe that the adoption of ASU 2016-2 will have a material effect on its consolidated financial statements. The Company has considered other recent accounting pronouncements and concluded that they are either not applicable to the business, or that the effect is not expected to be material to the consolidated financial statements as a result of future adoption .

Fair Value of Financial Assets

Fair Value of Financial Assets and Liabilities	6 Months Ended
	Jun. 30, 2019
Fair Value of Financial Assets and Liabilities
Fair Value of Financial Assets and Liabilities	3. Fair Value of Financial Assets and Liabilities The following tables summarize the assets and liabilities measured at fair value on a recurring basis at June 30, 2019 and December 31, 2018 (in thousands): Fair Value Measurements at June 30, 2019 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 43,959 $ 43,959 $ — $ — U.S. Treasury obligations 126,206 — 126,206 — Total assets $ 170,165 $ 43,959 $ 126,206 $ — Fair Value Measurements at December 31, 2018 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 185,676 $ 185,676 $ — $ — Total assets $ 185,676 $ 185,676 $ — $ — The money market funds included in the table above invest in U.S. government securities that are valued using quoted market prices. Accordingly, money market funds are categorized as Level 1 as of June 30, 2019 and December 31, 2018. Marketable securities, consisting exclusively of the US Treasury securities are categorized as Level 2 as of June 30, 2019; the Company held no marketable securities as of December 31, 2018 or earlier. Warrants to purchase convertible preferred shares are classified as a liability within Level 3 of the fair value hierarchy; the change in fair value was immaterial for the three and six months ended June 30, 2019 and the year ended December 31, 2018.

Marketable securities

Marketable securities	6 Months Ended
	Jun. 30, 2019
Marketable securities.
Marketable securities	4. Marketable securities As of June 30, 2019, the Company had the following investments in marketable securities classified as available for sale (in thousands): Gross Gross Aggregate Amortized unrealized unrealized estimated Maturity cost holding gains holding losses fair value U.S. Treasury securities less than 1 year $ 126,155 $ $ (3) $ 126,206 The Company did not have any investments in marketable securities at December 31, 2018 or in prior periods. All of the Company's investments are classified as available-for-sale and are carried at fair value with unrealized gains and losses recorded as a component of accumulated other comprehensive income (loss), net of related income taxes. The Company recognized net unrealized holding gains related to changes in the securities' fair values of $16,000 and $41,000 for the three and six months ended June 30, 2019, respectively, in accumulated other comprehensive income. As of June 30, 2019, the fair value of one security in an unrealized loss position was $9.0 million and the aggregate unrealized loss was $3,000. No securities have been in an unrealized loss position for more than one year. As of June 30, 2019, no securities are considered to be other than temporarily impaired because the impairments are not severe, have been for a short duration, and are due to normal market and interest rate fluctuations. Furthermore, the Company does not intend to sell the investment securities in an unrealized loss position and it is not more likely than not that the Company will be required to sell these securities before the recovery of the value.

Accrued Expenses

Accrued Expenses	6 Months Ended
	Jun. 30, 2019
Accrued Expenses
Accrued Expenses	5. Accrued Expenses At December 31, 2018 and June 30, 2019, accrued expenses consist of the following (in thousands): June 30, December 31, 2019 2018 Payroll and related expenses 1,240 2,012 Other expenses 1,675 715 Related to the research and development activities 2,302 512 $ 5,217 $ 3,239

Stockholder's Equity

Stockholder's Equity	6 Months Ended
	Jun. 30, 2019
Stockholder's Equity
Stockholder's Equity	6. Stockholders’ Equity Prior to the Reorganization, all interests of members in distributions and other amounts were represented by their units of membership in the Company as specified in its operating agreement. There were two classes of units, capital units and incentive units. Capital units were comprised of common units and convertible preferred units, which represent a capital interest in the Company, while incentive units represent profits interests within the meaning of IRS Revenue Procedures 93‑27 and 2001‑43. The various classes of capital units are described below. Convertible Preferred Units As of December 31, 2017, the total authorized capital units of the Company were 138,035,280 units, which consisted of 77,000,000 Common Units and 61,035,280 Preferred Units, of which 11,987,661 were designated Series Seed Preferred Units and 49,047,619 were designated Series A Preferred Units. During 2018, 61,538,454 units were designated Series B Preferred Units. Issuance of Series Seed Preferred Units, Series A Preferred Units, and Series B Preferred Units (collectively the "Preferred Units") is described below. The rights of each class of preferred and common units is presented below: Conversion The Preferred Units are convertible at any time, at the election of each holder thereof, into Common Units at a one-for-one ratio, which ratio may be adjusted for certain dilutive issuances of additional units. Liquidation Preference In the event of a liquidation, including deemed liquidation or dissolution of the Company, distributions shall be made in the following order and priority: · First, 100% to the members holding outstanding Series B Preferred Units, if any, in an amount equal to the aggregate original issue price less distributions previously paid to such holders; · Second, 100% to the members holding outstanding Series A Preferred Units, if any, in an amount equal to the aggregate original issue price less distributions previously paid to such holders; · Third, 100% to the members holding outstanding Series Seed Preferred Units, if any, in an amount equal to the aggregate original issue price less distributions previously paid to such holders; and · Fourth, after payment in full to the holders of outstanding Preferred Units, 100% to the members holding outstanding common units and preferred units, in proportion to the respective number of outstanding common units (determined on an as-converted basis) held by such member. No holder of an incentive unit shall participate in any distributions until the cumulative amount distributed to common unit holders exceeds the threshold amount with respect to such incentive unit. A deemed liquidation event is defined as a merger or consolidation (unless the units outstanding prior to the transaction represent a majority of the post transaction voting rights) or the sale or transfer of substantially all of the assets of the Company, unless the holders of a majority of the then outstanding preferred units, voting together, including at least (i) a majority of the Series A Preferred Units and (ii) 63% of the Series B Preferred Units elect otherwise. Voting Rights An affirmative vote of a majority of the outstanding Preferred Units and Common Units, voting together as a single class on an as converted basis, is required on all matters. Deemed Redemption The Company's Convertible Preferred Units have been classified as temporary equity on the accompanying consolidated balance sheets in accordance with authoritative guidance for the classification and measurement of redeemable securities as the Convertible Preferred Units are redeemable upon the occurrence of a deemed liquidation event. The carrying value of the Company's Convertible Preferred Units was not adjusted because a liquidation event was not probable and did not occur. Upon issuance, and amendment, of each class of Preferred Unit, the Company assessed the features of the Preferred Unit, including additional issuances, embedded conversion and liquidation features and determined that such features did not require the Company to separately account for these features. The Company also concluded that no beneficial conversion feature existed upon the issuance date of each class of Preferred Units. Common Units As of December 31, 2017, the Company had outstanding 1,011,227 common units. There were no additional common units issued during the years ended December 31, 2018 and six months ended March 31, 2019. An affirmative vote of a majority of the outstanding Preferred Units and Common Units, voting together as a single class on an as converted basis, is required on all matters. Reorganization and Convertible Preferred Stock On December 5, 2018, the Company completed a series of transactions, or the Reorganization, pursuant to which Morphic Holding, LLC was converted in a tax-free exchange into Morphic Holding Inc. and three subsidiaries, namely Lazuli, Inc., Tourmaline, Inc. and Phyllite, Inc. were merged with and into Morphic Therapeutic, Inc. In connection with the Reorganization: § Holders of Morphic Holding, LLC Series B convertible preferred units received one share of Morphic Holding, Inc. Series B convertible preferred stock for each outstanding Series B convertible preferred unit held immediately prior to the Reorganization, with an aggregate of 10,553,483 shares of Morphic Holding, Inc. Series B convertible preferred stock issued in the Reorganization; § Holders of Morphic Holding, LLC Series A convertible preferred units received one share of Morphic Holding, Inc. Series A convertible preferred stock for each outstanding Series A convertible preferred unit held immediately prior to the Reorganization, with an aggregate of 8,411,368 shares of Morphic Holding, Inc. Series A convertible preferred stock issued in the Reorganization; § Holders of Morphic Holding, LLC Series Seed convertible preferred units received one share of Morphic Holding, Inc. Series Seed convertible preferred stock for each outstanding Series Seed convertible preferred unit held immediately prior to the Reorganization, with an aggregate of 2,045,556 shares of Morphic Holding, Inc. Series Seed convertible preferred stock issued in the Reorganization; § Holders of Morphic Holding, LLC common units received one share of Morphic Holding, Inc. common stock for each outstanding common unit held immediately prior to the Reorganization, with an aggregate of 1,011,227 shares of common stock issued in the Reorganization; § Holders of Morphic Holding, LLC vested and unvested incentive units, exchanged one incentive unit for one share of common stock or restricted common stock, respectively. Threshold amounts on all vested and unvested incentive units were decreased to $0. The restricted common stock was issued with the same vesting terms as the unvested incentive units held immediately prior to the Reorganization. A total of 1,574,749 shares of common stock and restricted common stock were issued to the prior holders of incentive units; and § The outstanding warrant to purchase 6,825 Series Seed convertible preferred units at an exercise price of $4.39 per unit was converted to a warrant to purchase 6,825 shares of Series Seed convertible preferred stock at the same exercise price per share. Upon conversion, the warrant retained it’s original contractual term and expiration date of March 31, 2026. The Company's Series B convertible preferred stock, Series A convertible preferred stock, Series Seed convertible preferred stock are designated as convertible preferred stock under the amended and restated certificate of incorporation. All outstanding shares of convertible preferred stock are convertible into shares of common stock at a one-to-one conversion ratio. The purpose of the Reorganization was to reorganize the Company's corporate structure so that Morphic Holding, Inc. would continue as a corporation and so that the Company's existing investors would own capital stock rather than equity interests in a limited liability company. The Company evaluated the accounting for the Reorganization and specifically the exchange of (1) preferred and common units for preferred and common shares and (2) the modification to the terms of the incentive units. With respect to the exchange of preferred and common units for preferred and common shares, the Company considered that there were no changes to the ownership interest held by each unit/stockholder as a result of the Reorganization, there was no consideration exchanged to effect the exchange, and the significant terms of the preferred units and common units were substantially the same before and after the Reorganization. Based on these considerations, the Company determined that the exchange of shares occurring in the Reorganization should be accounted for as a modification of equity securities. The accounting for the modification to the terms of the incentive units is described in Note 8. Convertible Preferred Stock The terms of the Convertible Preferred Stock, and Common Stock after Reorganization, are as follows: Liquidation In the event of any liquidation, dissolution or winding up of affairs of the Company (or upon a deemed liquidation event), distributions are first made to holders of the Series B Convertible Preferred Stock equal to the greater of (i) their original issuance price, plus any declared but unpaid dividends or (ii) the amount that the holder would be entitled upon conversion into common stock. The original issue price of Series B Convertible Preferred Stock is $7.58 per share. After distribution to the Series B Convertible Preferred Stockholders, distributions are made to holders of the Series A Convertible Preferred Stock equal to the greater of (i) their original issue price plus any declared but unpaid dividends or (ii) the amount that the holder would be entitled upon conversion into common stock. The original issue price of the Series A Convertible Preferred Stock is $6.12. After distribution to the Series A Convertible Preferred Stockholders, the holders of the Series Seed Convertible Preferred Stock, as a class, will receive a distribution equal to the greater of (i) their original issue price plus any declared but unpaid dividends or (ii) the amount that the holder would be entitled upon conversion into common stock. The original issue price of the Series Seed Convertible Preferred Stock is $4.39. Upon completion of the preferential payments to holders of Convertible Preferred Stock, all of the remaining assets shall be distributed among the holders Common stock pro rata based on the number of shares of common stock held by each, assuming conversion of all outstanding shares of Convertible Preferred Stock. A deemed liquidation event is defined as a merger (unless the shares of capital stock prior to the transaction represent a majority of the post merger voting rights) or the sale, lease, transfer or license of substantially all of the assets of the Company unless the holders of a majority of the then outstanding shares of preferred stock, voting together, including at least (i) a majority of the Series A Convertible Preferred Stock and (ii) 63% of the Series B Convertible Preferred Stock elect otherwise. Dividends The Company shall not declare, pay or set aside any dividends on shares of common stock unless the holders of preferred stock then outstanding shall first receive a dividend on each outstanding share of preferred stock. Conversion Shares of Convertible Preferred Stock may be converted, at the option of the holder, at any time into a number of common shares as is determined by dividing the original issue price by the conversion price in effect at the time of conversion. The conversion price is equal to the original issue price for all Convertible Preferred Stock, subject to adjustments in the event of any stock dividend, stock split, combination or other similar recapitalization, and other adjustments as set forth in the Company’s certificate of incorporation. In addition, upon either the closing of a firm‑commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, or the occurrence of an event, specified by vote of a majority of the then outstanding shares of preferred stock, voting together, including at least (i) a majority of the Series A Convertible Preferred Stock and (ii) 63% of the Series B Convertible Preferred Stock, all outstanding Convertible Preferred Stock will be automatically converted into common shares. Voting On any matter to be approved by the stockholders, holders of Convertible Preferred Stock have the right to cast a number of votes equal to the number of shares of common stock into which the shares of Convertible Preferred Stock held by such holder convert. Redemption The Company’s Convertible Preferred Stock has been classified as temporary equity on the accompanying consolidated balance sheets in accordance with authoritative guidance for the classification and measurement of redeemable securities as the Convertible Preferred Stock is redeemable upon the occurrence of a deemed liquidation event. The carrying value of the Company’s Convertible Preferred Stock is not being adjusted because a deemed liquidation event is not probable. Upon issuance, and amendment, if any, of each class of Preferred Shares, the Company assessed the features of the Preferred Shares, including additional issuances, embedded conversion and liquidation features and determined that such features did not require the Company to separately account for these features. The Company also concluded that no beneficial conversion feature existed upon the issuance date of each class of Preferred Stock. Common Stock The voting, dividend and liquidation rights of the holders of common stock are subject to and qualified by the rights, powers and preferences of the holders of Convertible Preferred Stock. The common stock has the following characteristics: Voting The holders of common stock are entitled to one vote for each share of common stock held. Dividends The holders of shares of Common stock are entitled to receive dividends, if and when declared by the Company’s board of directors. Cash dividends may not be declared or paid to holders of shares of common stock until all unpaid dividends on Convertible Preferred Stock have been paid in accordance with their terms. No dividends have been declared or paid by the company to the holders of common stock since the issuance of the common stock. Liquidation Holders of the Common shares are entitled to receive distributions of cash, including in the event of a liquidation or dissolution of the Company, which preference is junior to the liquidation preference of the Series B Preferred stock holders, Series A Preferred stock holders, and the Series Seed Preferred stock holders. After all preferred stock holders have received their respective preferred distributions, any assets remaining for distribution shall be distributed to the holders of Preferred or Common shares determined on an as-converted basis. Shares Reserved For Future Issuance As of June 30, 2019, the Company had reserved common shares for the conversion of outstanding Convertible Preferred Stock and for future issuance under the 2019 Stock Option and Incentive Plan as follows: As of June 30, 2019 Common shares reserved for conversion of convertible preferred stock outstanding 21,010,407 Common shares reserved for conversion of convertible preferred shares issuable upon exercise of a warrant 6,825 Common shares reserved for exercise of outstanding stock options under the 2019 Plan 2,345,606 Common shares reserved for future issuance under the 2019 Plan 2,698,383 26,061,221 Upon the closing of the IPO, all of the outstanding shares of convertible preferred stock automatically converted into 21,010,407 shares of common stock at the applicable conversion ratio then in effect.

Equity Based Compensation

Equity Based Compensation	6 Months Ended
	Jun. 30, 2019
Equity Based Compensation
Equity Based Compensation	7. Equity Based Compensation 2019 Stock Incentive Plan The 2019 Stock Incentive Plan (the “2019 Plan”) was approved by the Board of Directors on June 10, 2019 and replaced the 2018 Stock Incentive Plan (the “2018 Plan”), previously instituted as part of the Reorganization. The 2018 Plan provided for the grant of incentive stock options, non-qualified stock options and restricted stock awards. As of December 31, 2018, there were 3,818,816 shares authorized under the 2018 Plan and 457,438 shares were reserved for future issuance. The 2019 Plan provides for the grant of stock options, restricted stock awards, stock bonus awards, cash awards, stock appreciation right, RSUs, and performance awards to purchase up to 2.8 million shares of common stock. The number of shares reserved for issuance under the Company’s 2019 Plan will increase automatically on January 1 of each of 2020 through 2029 by the number of shares equal to the lesser of 4% of the aggregate number of outstanding shares of the Company’s common stock as of the immediately preceding December 31, or a number as may be determined by the Company’s board of directors. The 2019 Plan is administered by the Board of Directors, or at the discretion of the Board of Directors, by a committee of the board. The exercise prices, vesting and other restrictions are determined at the discretion of the Board of Directors, or a committee if so delegated, except that the exercise price per share of stock options may not be less than 100% of the fair market value of the share of common stock on the date of grant and the term of stock option may not be greater than ten years. The shares of common stock underlying any awards that are forfeited, cancelled, repurchased, or are otherwise terminated by the Company under the 2019 Plan will be added back to the shares of common stock available for issuance under the 2019 Plan. Options generally vest over a four year period with the first 25% vesting following 12 months of employment or service and the remaining award vesting in equal quarterly installments over the following 36 months. All options have contractual term of 10 years. 2019 Employee Stock Purchase Plan In June 2019, the Company adopted the 2019 Employee Stock Purchase Plan (“ESPP”), which became effective on June 26, 2019. The Company initially reserved 300,000 shares of common stock for sale under the ESPP. The number of shares reserved for issuance under the ESPP will increase automatically on January 1st of each of the first ten calendar years following the first offering date by the number of shares equal to the lesser of 1% of the total outstanding shares of the Company’s common stock as of the immediately preceding December 31 or an amount determined by the Company’s board of directors. The aggregate number of shares issued over the term of the ESPP will not exceed 3,000,000 shares of the Company’s common stock. The following table summarizes the stock and restricted common stock activity under the 2019 Plan during the six months ended June 30, 2019: Weighted Average Fair Value per Share Number of Shares at Issuance Unvested restricted common stock as of December 31, 2018 753,053 $ 4.32 Granted — $ — Vested 212,076 $ 4.32 Forfeited — $ — Unvested restricted common stock as of June 30, 2019 540,977 $ 4.32 As of June 30, 2019, the Company had unrecognized equity‑based compensation expense of $1,360,000, which includes $460,000 related to the modification affected as part of the Reorganization for the restricted common shares issued to employees and non-employees, which is expected to be recognized over a weighted average period of 1.3 years. The Company recognized equity-based expense for the restricted common stock of $228,00 and $415,000 during the three and six months ended June 30, 2019, respectively. The Company recognized equity-based expense for the restricted incentive units of $135,000 and $258,000 during the three and six months ended June 30, 2018, respectively. Stock Options The Company granted stock option awards under the 2019 Plan. The following table summarizes the Company’s stock option activity under the 2019 Plan during the six months ended June 30, 2019: Weighted Weighted Average Number of Average Remaining Aggregate Shares Exercise Price Contractual Term Intrinsic Value (in years) (in thousands) Outstanding as of December 31, 2018 1,786,551 $ 4.32 9.96 $ — Granted 559,055 11.62 — — Exercised — — — — Forfeited — — — — Outstanding as of June 30, 2019 2,345,606 6.06 9.56 32,276 Options exercisable as of June 30, 2019 171,802 $ 4.32 9.46 $ 2,663 The weighted average grant‑date fair value per share of stock options granted to employees and non-employees for stock option awards with service‑based vesting conditions during the six months ended June 30, 2019 was $11.65 per share. The following table summarizes assumptions used in determining the fair value of the options granted in 2019: Risk‑free interest rate 2.08% Expected dividend yield — Expected term (in years) 5.99 Expected Volatility 75.48% The Company determined the volatility for options granted in 2019 based on a study of reported data for a guideline group of companies that issued options with substantially similar terms. The risk-free interest rate is based on a zero-coupon United States Treasury instrument with terms consistent with the expected life of the stock options. The Company has not paid and does not anticipate paying cash dividends on shares of common stock; therefore, the expected dividend yield is assumed to be zero. Compensation Expense related to Stock Options The Company recorded equity-based compensation expense for stock options granted to employees and non-employees of $439,000 and $751,000 for the three and six months ended June 30, 2019, respectively. As of June 30, 2019, the Company had unrecognized equity‑based compensation expense of $8.4 million related to stock options issued to employees and non-employees, which is expected to be recognized over a weighted average period of 3.4 years. Total Equity‑based Compensation Expense The Company recorded equity‑based compensation expense related to all equity‑based awards for employees and non‑employees, which was allocated as follows in the consolidated statements of operations (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Research and development expense $ 403 $ 80 $ 684 $ 149 General and administrative expense 264 55 482 109 $ 667 $ 135 $ 1,166 $ 258

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2019
Income Taxes
Income Taxes	8. Income Taxes The Company records income tax expense in any interim period based on the estimated effective tax rate for the fiscal year for those tax jurisdictions in which the Company can reliably estimate that rate. The calculation of the estimated effective tax rate requires an estimate of pre-tax income by tax jurisdiction as well as total tax expense for the fiscal year. Accordingly, annual estimated effective tax rate is subject to adjustment if there are changes to the initial estimates of total tax expense or pre-tax income. Provision for Income Taxes The Company recorded an income tax expense of $135,000 and zero for the three months ended June 30, 2019 and 2018, respectively. The Company recorded an income tax expense of $264,000 and zero for the six months ended June 30, 2019 and 2018, respectively. In the three and six months ended June 30, 2019, the income tax expense recorded was driven largely by the projected current tax liability associated with the tax recognition of the upfront AbbVie collaboration payment received in 2018. A significant portion of the taxable income related to the collaboration payments is projected to be offset by current year program spending and prior year accumulated losses. A current tax liability has been projected for any remaining taxable income. The Company reported no income tax provision in the three and six months ended June 30, 2018, as the Company generated a taxable loss, offset by an increase to the Company’s valuation allowance. Despite the collaboration revenue, the Company continues to maintain a valuation allowance against all deferred tax assets. The Company believes that it is more likely than not that the Company will not realize a future tax benefit of these attributes, as the research programs continue to require significant investment and future revenue is subject to uncertainties. Ultimate realization of any deferred tax asset is dependent on the Company’s ability to generate sufficient future taxable income in the appropriate tax jurisdiction before the expiration of carryforward periods, if any. The Company currently anticipates that there will be no change in its unrecognized tax benefits in the next twelve months. As of June 30, 2019, the Company had no unrecognized tax benefits. The Company has not yet conducted a study of its research and development credit carryforwards. Such a study may result in an adjustment to the Company’s research and development credit carryforwards; however, until a study is completed and any adjustment is known, no amount is being presented as an uncertain tax position. A full valuation allowance has been provided against the Company’s research and development credits, and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the balance sheet or statement of operations and comprehensive loss if an adjustment were required.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2019
Commitments and Contingencies
Commitments and Contingencies	9. Commitments and Contingencies Guarantees and Indemnifications We have entered, and intend to continue to enter, into separate indemnification agreements with our directors, officers and certain of our key employees, in addition to the indemnification provided for in our restated certificate of incorporation and restated bylaws. These agreements, among other things, require us to indemnify our directors, officers and key employees for certain expenses, including attorneys' fees, judgments, penalties, fines and settlement amounts actually incurred by these individuals in any action or proceeding arising out of their service to us or any of our subsidiaries or any other company or enterprise to which these individuals provide services at our request. Subject to certain limitations, our indemnification agreements also require us to advance expenses incurred by our directors, officers and key employees for the defense of any action for which indemnification is required or permitted. The Company has standard indemnification arrangements in its leases for laboratory and office space that require it to indemnify the landlord against any liability for injury, loss, accident, or damage from any claims, actions, proceedings, or costs resulting from certain acts, breaches, violations, or non-performance under the Company’s lease. Through June 30, 2019, the Company had not experienced any losses related to these indemnifications obligations, and no material claims were outstanding. The Company does not expect significant claims related to these indemnification obligations and, consequently, concluded that the fair value of these obligations is negligible, and no related reserves were established. Operating Leases Facility Lease The Company recognizes rent expense for the space it currently occupies and records a deferred rent obligation representing the cumulative difference between actual rent payments and rent expense recognized ratably over the lease period, which is included in the Company’s consolidated balance sheets as of December 31, 2018 and June 30, 2019. Minimum annual rent payments under this lease for the remaining term of the amended lease, excluding operating expenses and taxes, which are not fixed for future periods as of June 30, 2019, are as follows (in thousands): Total Minimum Sublease Net Minimum Year ending December 31, Lease Payments Income Lease Payments 2019 $ 547 $ (80) $ 467 2020 1,122 (110) 1,012 2021 1,175 — 1,175 2022 495 — 495 Total minimum lease payments $ 3,339 $ (190) $ 3,149 The Company recorded approximately $230,000 and $256,000 in rent expense for the three months ended June 30, 2019 and 2018, respectively, and $447,000 and $500,000 in rent expense for the six months ended June 30, 2019 and 2018, respectively. Legal Proceedings The Company is not currently a party to any material legal proceedings.

Option and License Agreement

Option and License Agreement	6 Months Ended
	Jun. 30, 2019
Option and License Agreement
Option and License Agreement	10. Option and License Agreements AbbVie Agreement During the three and six months ended June 30, 2019, the Company continued to perform under its agreement with AbbVie, a research-based global biopharmaceutical company and a related party holding Series A and Series B Convertible Preferred Shares of the Company. During the three months ended June 30, 2019, the Company incurred $5.4 million in research and development costs and recognized revenue of $4.4 million related to research services performed during the period. During the six months ended June 30, 2019, the Company incurred $10.8 million in research and development costs and recognized revenue of $10.0 million related to research services performed during the period. As of June 30, 2019, the Company has $86.6 million of deferred revenue, which is classified as either current or long-term deferred revenue in the accompanying consolidated balance sheets based on the period over which the revenue is expected to be recognized. This deferred revenue balance represents the aggregate amount of the transaction price allocated to the performance obligations that are partially unsatisfied as of June 30, 2019. The Company expects to recognize revenue related to these performance obligations through 2024. As the Company progresses towards satisfaction of performance obligations under the AbbVie agreement, the estimated costs associated with the remaining effort required to complete the performance obligations may change, which may impact revenue recognition. The Company regularly evaluates and, when necessary, updates the costs associated with the remaining effort associated with each performance obligation under the AbbVie agreement. Janssen Agreement During the three months ended June 30, 2019, the Company incurred $0.9 million in research and development costs and recognized revenue of $1.2 million related to research services. During the six months ended June 30, 2019, the Company incurred $1.3 million in research and development costs and recognized revenue of $1.7 million related to research services. The Company had $0.9 million and $0 due from Janssen included in accounts receivable on the consolidated balance sheets as of June 30, 2019 and December 31, 2018, respectively. As of June 30, 2019, $9.6 million of deferred revenue is classified as either current or long-term deferred revenue in the accompanying consolidated balance sheets based on the period over which the revenue is expected to be recognized. This deferred revenue balance represents the portion of the upfront payment received allocated to the performance obligations that are partially unsatisfied as of June 30, 2019. The Company expects to recognize revenue related to these performance obligations through 2024.

Net Loss per Unit and Share

Net Loss per Unit and Share	6 Months Ended
	Jun. 30, 2019
Net Loss per Unit and Share
Net Loss per Unit and Share	11. Net Loss per Unit and Share Basic and diluted net loss per share is calculated as follows (in thousands, except share and per share data) for the three and six months ended June 30, 2019: Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 Net loss $ (9,433) (14,633) Weighted average common shares outstanding, basic and diluted 1,992,410 1,940,923 Net loss per share, basic and diluted $ (4.73) $ (7.54) Following the Reorganization, the Company calculates net loss per share based on its outstanding shares of common stock. For the three and six months ended June 30, 2018, the weighted average number of common shares outstanding includes the weighted average number of common units outstanding prior to the Reorganization. Basic and diluted net loss per unit is calculated as follows (in thousands, except unit and per unit data) for the three and six months ended June 30, 2018: Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 Net loss $ (6,231) $ (11,410) Weighted average common units outstanding, basic and diluted 1,011,227 1,011,227 Net loss per unit, basic and diluted $ (6.16) $ (11.28) The following table sets forth the outstanding common unit or common stock equivalents, presented based on amounts outstanding at each period end, that have been excluded from the calculation of diluted net loss per unit or share for the periods indicated because their inclusion would have been anti‑dilutive (in common unit or common stock equivalent shares, as applicable): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Convertible preferred units — 8,774,652 — 8,774,652 Convertible preferred stock 21,010,407 — 21,010,407 — Incentive units — 622,974 — 622,974 Restricted common stock 540,977 — 540,977 — Warrant — 6,825 — 6,825 Stock options 2,345,606 — 2,345,606 — 23,896,990 9,404,451 23,896,990 9,404,451

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2019
Subsequent Events
Subsequent Events	12. Subsequent Events On July 1, 2019, the Company completed the sale of 6,000,000 shares of its common stock in the IPO at a price to the public of $15.00 per share. The underwriters fully exercised their over-allotment option and purchased an additional 900,000 shares of the Company’s common stock. The offer and sale of the shares in the IPO was registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-231837), which was filed with the SEC on May 30, 2019, as amended, and declared effective by the SEC on June 26, 2019, as supplemented by a registration statement on Form S-1 filed pursuant to Rule 462 (File No. 333-232373). Following the sale of the shares in connection with the closing of the IPO, the offering was terminated. The offering did not terminate before all the securities registered in the registration statements were sold. The Company raised approximately $93.4 million in net proceeds after deducting underwriting discounts and commissions and offering expenses payable by the Company.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2019
Summary of Significant Accounting Policies
Use of Estimates and Judgements	Use of Estimates and Judgements The preparation of financial statements in accordance with GAAP requires management to make estimates and judgments that may affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the date of the financial statements and the related reporting of revenues and expenses during the reporting period. Significant estimates of accounting reflected in these consolidated financial statements include, but are not limited to, estimates related to revenue recognition, accrued expenses, the valuation of equity‑based compensation, including incentive units, restricted common stock, and stock options, and income taxes. Actual results could differ from those estimates.
Concentration of Credit Risk and Off‑Balance Sheet Risk	Concentration of Credit Risk and Off‑Balance Sheet Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and marketable securities. The Company has all 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. The primary objectives for the Company’s investment portfolio are the preservation of capital and maintenance of liquidity. In 2016, the Company adopted its investment policy which allows funds to be held outside bank accounts, but to be invested only in readily marketable fixed income instruments with readily ascertainable market values, denominated and payable in U.S. dollars including obligations of the U.S. government and its agencies and money market funds registered according to Rule 2a‑7 of the Investment Company Act of 1940. Investments in the money market fund shall be consistent with approved instruments and assets under management must be at least $1 billion. The Company has no off‑balance sheet risk, such as foreign exchange contracts, option contracts, or other foreign‑hedging arrangements.
Cash and Cash Equivalents and Restricted Cash	Cash and Cash Equivalents and Restricted Cash The Company considers highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. At June 30, 2019, cash and cash equivalents include bank demand deposits and money market funds that invest primarily in U.S. government‑backed securities and treasuries. Cash equivalents are stated at fair value. Restricted cash consists of a letter of credit in the amount of $275,000 issued to the landlord of the Company’s facility lease. The terms of the letter of credit extend beyond one year. The following table reconciles cash and cash equivalents and restricted cash per the balance sheet to the statements of cash flows: June 30, December 31, June 30, December 31, 2019 2018 2018 2017 Cash and cash equivalents $ 44,199 $ 185,901 $ 9,472 $ 20,750 Restricted cash 275 275 275 275 $ 44,474 $ 186,176 $ 9,747 $ 21,025
Marketable securities	Marketable securities The Company invests funds in the United States Treasury securities; those securities are classified as available-for-sale and are carried at fair value. Changes in fair value of marketable securities are recorded in other comprehensive income (loss) as net unrealized gains (losses) on marketable securities. The Company recognized $16,000 and $41,000 in unrealized gains, net for the three and six months ended June 30, 2019, respectively. The Company held no marketable securities prior to 2019.
Interest income on investments	Interest income on investments The Company recognizes interest income from investments in money market funds and available-for-sale securities, including amortization of premium/accretion of discount, on an accrual basis. For the three and six months ended June 30, 2019, the Company recognized $1.1 million and $2.2 million in interest income, respectively. For the three and six months ended June 30, 2018, the Company recognized $48,000 and $103,000 in interest income, respectively. Interest income is included with other income on the statements of operations and comprehensive loss.
Fair Value Measurements	Fair Value Measurements 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 fair 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. To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company believes that the carrying amounts of the Company’s consolidated financial instruments, including prepaid expenses and other current assets, accounts payable, and accrued expenses approximate fair value due to the short-term nature of those instruments.
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. For the three and six months ended June 30, 2019, comprehensive loss included $16,000 and $41,000, respectively, of unrealized gains on marketable securities; for the three and six months ended June 30, 2018, comprehensive loss equaled net loss.
Deferred Offering Costs	Deferred Offering Costs The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After the consummation of the IPO, these costs were recorded in stockholders' (deficit) equity as a reduction of additional paid-in capital or the associated preferred or common stock account, as applicable. Deferred offering costs as of June 30, 2019 and December 31, 2018 were $2.9 million and $0, respectively. Such costs are classified as other long-term assets in the accompanying consolidated balance sheets.
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, ("ASU 2017- 09") which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. The new standard does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if the fair value, vesting conditions, or classification of the award changes as a result of the change in terms or conditions. The Company adopted ASU 2017-09 on January 1, 2018 using the prospective approach. Initial adoption of ASU 2017-09 did not have any impact on the Company's consolidated financial statements. In October 2018, in connection with the Reorganization described in Note 6, the Company modified certain equity-based awards and the effect of such modification has been reflected in the consolidated financial statements for the year ended December 31, 2018. In May 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which modifies how all entities recognize revenue, and consolidates into one ASC (ASC Topic 606, Revenue from Contracts with Customers) the current guidance found in ASC Topic 605, and various other revenue accounting standards for specialized transactions and industries. ASU 2014-09 outlines a comprehensive five-step revenue recognition model based on the principle that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On January 1, 2018, the Company elected to early adopt ASU 2014-09 using the full retrospective approach. As such, the statements of operations and comprehensive loss are presented in accordance with the provisions of ASC 606.
Recently Issued Accounting Pronouncements not yet Adopted	Recently Issued Accounting Pronouncements not yet Adopted As an "emerging growth company," or EGC, under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, the Company has made an election under Section 107 of the JOBS Act to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. Thus, the Company follows requirements applicable to the private companies for adopting new and updated accounting standards. In April 2019, the FASB issued ASU 2019-04, Financial Instruments-Credit Losses , Topic 815, Derivatives and Hedging , and Topic 825, Financial Instruments (“ASU 2019-04”). Certain provisions of ASU 2019-04 amend the guidance of ASU 2016-13, are applicable to the Company’s investments portfolio, and allow the Company to make certain accounting policy elections regarding establishing allowance for credit losses for the accrued interest receivable and the corresponding disclosures. The guidance is effective for the fiscal year beginning January 1, 2021, and interim periods within the fiscal year beginning January 2022 and will be adopted using the modified retrospective approach. The Company is currently evaluating the impact of ASU 2019-04 on the consolidated financial statements, including the impact of the available accounting policy elections. In June 2016, the FASB issued ASU 2016-13, Financial Instruments Credit Losses (Topic 326) ("ASU 2016-13"), which requires consideration of a broader range of reasonable and supportable information in developing credit loss estimates. The guidance is effective for the fiscal year beginning January 1, 2021, and interim periods within the fiscal year beginning January 2022 and has to be adopted using modified-retrospective approach. The Company is currently evaluating the impact of ASU 2016-13, as amended by ASU 2019-04 described above, on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), with guidance regarding the accounting for and disclosure of leases. The update requires lessees to recognize all leases, including operating leases, with a term greater than 12 months on the consolidated balance sheet. This update also requires lessees and lessors to disclose key information about their leasing transactions. This standard is effective for public companies for annual and interim periods beginning after December 15, 2018. For all other entities, this standard is effective for annual reporting periods beginning after December 15, 2019, and interim periods within annual periods beginning after December 15, 2020. While the Company expects the implementation of ASU 2016-02 to result in the recognition of right-of-use assets and lease liabilities for leased facilities, the Company does not believe that the adoption of ASU 2016-2 will have a material effect on its consolidated financial statements. The Company has considered other recent accounting pronouncements and concluded that they are either not applicable to the business, or that the effect is not expected to be material to the consolidated financial statements as a result of future adoption .

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2019
Summary of Significant Accounting Policies
Schedule of reconciliation of cash and cash equivalents and restricted cash	June 30, December 31, June 30, December 31, 2019 2018 2018 2017 Cash and cash equivalents $ 44,199 $ 185,901 $ 9,472 $ 20,750 Restricted cash 275 275 275 275 $ 44,474 $ 186,176 $ 9,747 $ 21,025

Fair Value of Financial Asset_2

Fair Value of Financial Assets and Liabilities (Tables)	6 Months Ended
	Jun. 30, 2019
Fair Value of Financial Assets and Liabilities
Summary of the assets and liabilities measured at fair value on a recurring basis	The following tables summarize the assets and liabilities measured at fair value on a recurring basis at June 30, 2019 and December 31, 2018 (in thousands): Fair Value Measurements at June 30, 2019 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 43,959 $ 43,959 $ — $ — U.S. Treasury obligations 126,206 — 126,206 — Total assets $ 170,165 $ 43,959 $ 126,206 $ — Fair Value Measurements at December 31, 2018 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 185,676 $ 185,676 $ — $ — Total assets $ 185,676 $ 185,676 $ — $ —

Marketable securities (Tables)

Marketable securities (Tables)	6 Months Ended
	Jun. 30, 2019
Marketable securities.
Schedule of investments in marketable securities classified as available for sale	As of June 30, 2019, the Company had the following investments in marketable securities classified as available for sale (in thousands): Gross Gross Aggregate Amortized unrealized unrealized estimated Maturity cost holding gains holding losses fair value U.S. Treasury securities less than 1 year $ 126,155 $ $ (3) $ 126,206

Accrued Expenses (Tables)

Accrued Expenses (Tables)	6 Months Ended
	Jun. 30, 2019
Accrued Expenses
Schedule of accrued expenses	At December 31, 2018 and June 30, 2019, accrued expenses consist of the following (in thousands): June 30, December 31, 2019 2018 Payroll and related expenses 1,240 2,012 Other expenses 1,675 715 Related to the research and development activities 2,302 512 $ 5,217 $ 3,239

Stockholder's Equity (Tables)

Stockholder's Equity (Tables)	6 Months Ended
	Jun. 30, 2019
Stockholder's Equity
Schedule of shares reserved for future issuance	As of June 30, 2019 Common shares reserved for conversion of convertible preferred stock outstanding 21,010,407 Common shares reserved for conversion of convertible preferred shares issuable upon exercise of a warrant 6,825 Common shares reserved for exercise of outstanding stock options under the 2019 Plan 2,345,606 Common shares reserved for future issuance under the 2019 Plan 2,698,383 26,061,221

Equity Based Compensation (Tabl

Equity Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2019
Equity Based Compensation
Summary of common stock and restricted common stock activity	Weighted Average Fair Value per Share Number of Shares at Issuance Unvested restricted common stock as of December 31, 2018 753,053 $ 4.32 Granted — $ — Vested 212,076 $ 4.32 Forfeited — $ — Unvested restricted common stock as of June 30, 2019 540,977 $ 4.32
Summary of Company’s stock option activity	Weighted Weighted Average Number of Average Remaining Aggregate Shares Exercise Price Contractual Term Intrinsic Value (in years) (in thousands) Outstanding as of December 31, 2018 1,786,551 $ 4.32 9.96 $ — Granted 559,055 11.62 — — Exercised — — — — Forfeited — — — — Outstanding as of June 30, 2019 2,345,606 6.06 9.56 32,276 Options exercisable as of June 30, 2019 171,802 $ 4.32 9.46 $ 2,663
Summary of assumptions used in determining the fair value of the options granted	The following table summarizes assumptions used in determining the fair value of the options granted in 2019: Risk‑free interest rate 2.08% Expected dividend yield — Expected term (in years) 5.99 Expected Volatility 75.48%
Summary of equity based compensation expense related to all equity based awards for employees and non employees	The Company recorded equity‑based compensation expense related to all equity‑based awards for employees and non‑employees, which was allocated as follows in the consolidated statements of operations (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Research and development expense $ 403 $ 80 $ 684 $ 149 General and administrative expense 264 55 482 109 $ 667 $ 135 $ 1,166 $ 258

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
	Jun. 30, 2019
Commitments and Contingencies
Summary of minimum annual rent payments under this lease	Minimum annual rent payments under this lease for the remaining term of the amended lease, excluding operating expenses and taxes, which are not fixed for future periods as of June 30, 2019, are as follows (in thousands): Total Minimum Sublease Net Minimum Year ending December 31, Lease Payments Income Lease Payments 2019 $ 547 $ (80) $ 467 2020 1,122 (110) 1,012 2021 1,175 — 1,175 2022 495 — 495 Total minimum lease payments $ 3,339 $ (190) $ 3,149

Net Loss per Unit and Share (Ta

Net Loss per Unit and Share (Tables)	6 Months Ended
	Jun. 30, 2019
Net Loss per Unit and Share
Schedule of Basic and diluted net loss per share	Basic and diluted net loss per share is calculated as follows (in thousands, except share and per share data) for the three and six months ended June 30, 2019: Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 Net loss $ (9,433) (14,633) Weighted average common shares outstanding, basic and diluted 1,992,410 1,940,923 Net loss per share, basic and diluted $ (4.73) $ (7.54) Following the Reorganization, the Company calculates net loss per share based on its outstanding shares of common stock. For the three and six months ended June 30, 2018, the weighted average number of common shares outstanding includes the weighted average number of common units outstanding prior to the Reorganization. Basic and diluted net loss per unit is calculated as follows (in thousands, except unit and per unit data) for the three and six months ended June 30, 2018: Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 Net loss $ (6,231) $ (11,410) Weighted average common units outstanding, basic and diluted 1,011,227 1,011,227 Net loss per unit, basic and diluted $ (6.16) $ (11.28)
Schedule of outstanding common unit or common stock equivalents that have been excluded from the calculation of diluted net loss per unit or share	The following table sets forth the outstanding common unit or common stock equivalents, presented based on amounts outstanding at each period end, that have been excluded from the calculation of diluted net loss per unit or share for the periods indicated because their inclusion would have been anti‑dilutive (in common unit or common stock equivalent shares, as applicable): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Convertible preferred units — 8,774,652 — 8,774,652 Convertible preferred stock 21,010,407 — 21,010,407 — Incentive units — 622,974 — 622,974 Restricted common stock 540,977 — 540,977 — Warrant — 6,825 — 6,825 Stock options 2,345,606 — 2,345,606 — 23,896,990 9,404,451 23,896,990 9,404,451

Nature of the Business and Ba_2

Nature of the Business and Basis of Presentation (Details) $ / shares in Units, $ in Millions	Jul. 01, 2019USD ($)$ / sharesshares	Jun. 10, 2019	Dec. 05, 2018	Jun. 30, 2019subsidiaryshares	Dec. 31, 2018shares	Dec. 31, 2017shares
Subsidiary or Equity Method Investee [Line Items]
Number of wholly-owned subsidiaries | subsidiary				3
Stock conversion ratio			1	1
Reverse stock split		0.1715
Common stock, authorized (in shares)				151,000,000	151,000,000
Preferred shares, shares authorized						138,035,280
Subsequent event
Subsidiary or Equity Method Investee [Line Items]
Common stock issued (in shares)	6,900,000
Public offering price (in dollars per share) | $ / shares	$ 15
Gross proceeds | $	$ 103.5
Net proceeds | $	$ 93.4
Convertible preferred stock converted into shares	21,017,232
Preferred shares, shares outstanding	0
Common stock, authorized (in shares)	400,000,000
Preferred shares, shares authorized	10,000,000
Preferred stock, par value (in dollars per share) | $ / shares	$ 0.0001
Underwriters' exercise | Subsequent event
Subsidiary or Equity Method Investee [Line Items]
Common stock issued (in shares)	900,000

Summary of Significant Accoun_4

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018	Jun. 30, 2018	Dec. 31, 2017
Cash and Cash Equivalents and Restricted Cash
Term of letter of credit (in years)	1 year
Cash and cash equivalents	$ 44,199	$ 185,901	$ 9,472	$ 20,750
Restricted cash	275	275	275	275
Cash and Cash Equivalents and Restricted Cash	44,474	$ 186,176	$ 9,747	$ 21,025
Minimum
Concentration of Credit Risk and Off Balance Sheet Risk
Assets under management	$ 1,000,000

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Marketable securities and interest income (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Marketable securities
Unrealized gains	$ 16,000		$ 41,000
Deferred Costs, Current	2,900,000		2,900,000		$ 0
Marketable securities	126,206,000		126,206,000		$ 0
Interest income on investments
Interest income	$ 1,100,000	$ 48,000	$ 2,200,000	$ 103,000

Fair Value of Financial Asset_3

Fair Value of Financial Assets and Liabilities (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Level 2 | U.S. Treasury obligations
Assets:
Marketable Securities		$ 0
Fair value on a recurring basis
Assets:
Total assets	$ 170,165,000	185,676,000
Fair value on a recurring basis | Money market funds
Assets:
Assets included in cash and cash equivalents	43,959,000	185,676,000
Fair value on a recurring basis | U.S. Treasury obligations
Assets:
Assets included in cash and cash equivalents	126,206,000
Fair value on a recurring basis | Level 1
Assets:
Total assets	43,959,000	185,676,000
Fair value on a recurring basis | Level 1 | Money market funds
Assets:
Assets included in cash and cash equivalents	43,959,000	$ 185,676,000
Fair value on a recurring basis | Level 2
Assets:
Total assets	126,206,000
Fair value on a recurring basis | Level 2 | U.S. Treasury obligations
Assets:
Assets included in cash and cash equivalents	$ 126,206,000

Marketable securities (Details)

Marketable securities (Details)	3 Months Ended	6 Months Ended
	Jun. 30, 2019USD ($)security	Jun. 30, 2019USD ($)security	Dec. 31, 2018USD ($)
Marketable securities
Aggregate estimated fair value	$ 126,206,000	$ 126,206,000	$ 0
Unrealized gains	$ 16,000	$ 41,000
Unrealized loss position (Number of securities) | security	1	1
Unrealized loss position	$ 9,000,000	$ 9,000,000
Unrealized loss position more than one year	$ 0	$ 0
Unrealized loss position more than one year (Number of securities) | security	0	0
U.S. Treasury obligations
Marketable securities
Amortized cost	$ 126,155,000	$ 126,155,000
Gross unrealized holding gains	54,000	54,000
Gross unrealized holding (losses)	(3,000)	(3,000)
Aggregate estimated fair value	$ 126,206,000	$ 126,206,000

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Accrued Expenses
Payroll and related expenses	$ 1,240	$ 2,012
Other expenses	1,675	715
Related to the research and development activities	2,302	512
Total	$ 5,217	$ 3,239

Stockholder's Equity (Details)

Stockholder's Equity (Details) - shares	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2017
Class of Stock [Line Items]
Shares Authorized		138,035,280
Common units
Class of Stock [Line Items]
Shares Authorized		77,000,000
Preferred units
Class of Stock [Line Items]
Shares Authorized		61,035,280
Fourth liquidation preference percentage	100.00%
Series Seed preferred units
Class of Stock [Line Items]
Shares Authorized		11,987,661
Third liquidation preference percentage	100.00%
Series A Preferred Units
Class of Stock [Line Items]
Shares Authorized		49,047,619
Second liquidation preference percentage	100.00%
Series B Preferred Units
Class of Stock [Line Items]
Shares Authorized		61,538,454
First liquidation preference percentage	100.00%
Condition for not deemed liquidation	63.00%

Stockholder's Equity - Common u

Stockholder's Equity - Common units (Details) - shares	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Common units
Class of Stock [Line Items]
Common stock issued (in shares)	0	0	1,011,227

Stockholder's Equity - Reorgani

Stockholder's Equity - Reorganization and convertible preferred stock (Details)	Dec. 05, 2018USD ($)$ / sharesshares	Jun. 30, 2019$ / shares
Class of Stock [Line Items]
Stock conversion ratio	1	1
Decrease in threshold amount of vested and unvested incentives | $	$ 0
Number of shares issued after reorganization	1,574,749
Dividend declared | $ / shares		$ 0
Dividend paid | $ / shares		0
Series B Preferred Shares
Class of Stock [Line Items]
Stock conversion ratio	1
Number of shares issued after reorganization	10,553,483
Issue price | $ / shares		7.58
Series A Convertible Preferred Shares
Class of Stock [Line Items]
Stock conversion ratio	1
Number of shares issued after reorganization	8,411,368
Issue price | $ / shares		6.12
Series Seed Preferred Shares
Class of Stock [Line Items]
Stock conversion ratio	1
Number of shares issued after reorganization	2,045,556
Outstanding warrants to purchase preferred units	6,825
Outstanding warrants	6,825
Exercise price | $ / shares	$ 4.39
Issue price | $ / shares		$ 4.39
Common shares
Class of Stock [Line Items]
Outstanding warrants to purchase preferred units	1,011,227
Common stock and restricted common stock
Class of Stock [Line Items]
Percentage of stock for voting rights		63.00%
Number of votes per share		63

Stockholder's Equity - Shares r

Stockholder's Equity - Shares reserved for future issuance (Details) - shares	Dec. 05, 2018	Jun. 30, 2019
Class of Stock [Line Items]
Shares available for future issuance		26,061,221
Conversion of convertible preferred stock into common stock	1,574,749
2019 stock option plan
Class of Stock [Line Items]
Shares available for future issuance		2,345,606
2019 stock option and incentive plan
Class of Stock [Line Items]
Shares available for future issuance		2,698,383
IPO
Class of Stock [Line Items]
Conversion of convertible preferred stock into common stock		21,010,407
Convertible preferred stock
Class of Stock [Line Items]
Shares available for future issuance		21,010,407
Warrants
Class of Stock [Line Items]
Shares available for future issuance		6,825

Equity Based Compensation (Deta

Equity Based Compensation (Details) - shares	1 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Dec. 31, 2018
Equity Based Compensation
Shares authorized	2,800,000	2,800,000
Percentage of increase in authorized shares		4.00%
Employee Stock Purchase Plan
Equity Based Compensation
Shares authorized	300,000	300,000
Percentage of increase in authorized shares	1.00%
Employee Stock Purchase Plan | Maximum
Equity Based Compensation
Shares authorized	3,000,000	3,000,000
2018 Stock Incentive Plan
Equity Based Compensation
Shares authorized			3,818,816
Shares available for future grants			457,438

Equity Based Compensation - Ves

Equity Based Compensation - Vested incentive units (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Weighted average assumptions were used in determining the fair value of incentive units granted to both employees and non employees
Equity based compensation expense	$ 667	$ 135	$ 1,166	$ 258

Equity Based Compensation - 201

Equity Based Compensation - 2019 stock incentive plan (Details)	6 Months Ended
	Jun. 30, 2019shares
Equity Based Compensation
Shares available for future issuance	26,061,221
Stock options
Equity Based Compensation
Percentage of exercise price of option over fair market value of shares	100.00%
Vesting period	4 years
Vesting percentage	25.00%
Stock options | Initial vesting following 12 months of employment or service
Equity Based Compensation
Vesting period	12 months
Stock options | Remaining vesting in equal quarterly installments over the following 36 months
Equity Based Compensation
Vesting period	36 months
Stock options | Maximum
Equity Based Compensation
Contractual term	10 years

Equity Based Compensation - Com

Equity Based Compensation - Common stock and restricted common stock activity (Details) - USD ($)	3 Months Ended		6 Months Ended		7 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019
Weighted Average Grant Date Fair Value per Unit
Equity based compensation expense	$ 667,000	$ 135,000	$ 1,166,000	$ 258,000
Restricted common stock
Number of Shares
Outstanding at the beginning					753,053
Vested					212,076
Outstanding at the end	540,977		540,977		540,977
Weighted Average Grant Date Fair Value per Unit
Outstanding at the beginning (in dollars per share)					$ 4.32
Vested as of the Reorganization					4.32
Outstanding at the end (in dollars per share)	$ 4.32		$ 4.32		$ 4.32
Unrecognized equity based compensation expense	$ 1,360,000		$ 1,360,000		$ 1,360,000
Unrecognized equity based compensation expense related to modification			$ 460,000
Unrecognized equity based compensation expense expected period for recognition			1 year 3 months 18 days
Equity based compensation expense	$ 22,800	$ 135,000	$ 415,000	$ 258,000

Equity Based Compensation - Sto

Equity Based Compensation - Stock option awards (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Assumptions used in determining the fair value of the options granted
Total Equity based Compensation Expense	$ 667,000	$ 135,000	$ 1,166,000	$ 258,000
Stock options
Number of Shares
Outstanding at the beginning			1,786,551
Granted			559,055
Outstanding at the end	2,345,606		2,345,606		1,786,551
Options exercisable at the end	171,802		171,802
Weighted Average Exercise Price
Outstanding at the beginning (in dollars per share)			$ 4.32
Granted (in dollars per share)			11.62
Outstanding at the end (in dollars per share)	$ 6.06		6.06		$ 4.32
Options exercisable at the end (in dollars per share)	$ 4.32		$ 4.32
Weighted Average Remaining Contractual Term and Aggregate Intrinsic Value
Expected term (in years)			9 years 6 months 22 days		9 years 11 months 16 days
Options exercisable at the end (in years)			9 years 5 months 16 days
Outstanding at the end (in dollars)	$ 32,276,000		$ 32,276,000
Options exercisable at the end (in dollars)	2,663,000		$ 2,663,000
Weighted average grant date fair value per share of stock options granted to employees and non-employees for stock option awards			$ 11.65
Assumptions used in determining the fair value of the options granted
Risk‑free interest rate			2.08%
Expected term (in years)			5 years 11 months 27 days
Expected volatility			75.48%
Total Equity based Compensation Expense	439,000		$ 751,000
Unrecognized equity based compensation expense	$ 8,400,000		$ 8,400,000
Unrecognized equity based compensation expense expected period for recognition			3 years 4 months 24 days

Equity Based Compensation - Equ

Equity Based Compensation - Equity based compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Equity Based Compensation
Total Equity based Compensation Expense	$ 667	$ 135	$ 1,166	$ 258
Research and development expense
Equity Based Compensation
Total Equity based Compensation Expense	403	80	684	149
General and administrative expense
Equity Based Compensation
Total Equity based Compensation Expense	$ 264	$ 55	$ 482	$ 109

Income Taxes (Details)

Income Taxes (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Taxes
Provision for income taxes	$ 135,000	$ 0	$ 264,000	$ 0
Unrecognized tax benefits	$ 0		$ 0

Commitments and Contingencies_2

Commitments and Contingencies (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Total Minimum Lease Payments
2019	$ 547,000		$ 547,000
2020	1,122,000		1,122,000
2021	1,175,000		1,175,000
2022	495,000		495,000
Total minimum lease payments	3,339,000		3,339,000
Rent expense	230,000	$ 256,000	447,000	$ 500,000
Sublease Income
2019	(80,000)		(80,000)
2020	(110,000)		(110,000)
Total minimum lease payments	(190,000)		(190,000)
Net Minimum Lease Payments
2019	467,000		467,000
2020	1,012,000		1,012,000
2021	1,175,000		1,175,000
2022	495,000		495,000
Total minimum lease payments	$ 3,149,000		$ 3,149,000

Option and License Agreement (D

Option and License Agreement (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research and development	$ 13,907	$ 5,293	$ 24,278	$ 9,577
Deferred revenue	35,334		35,334		$ 29,862
Revenue recognized	5,567		11,635
Accounts receivable	945		945
Collaboration and option agreement with AbbVie
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research and development	5,400		10,800
Revenue related to research services	4,400		10,000
Deferred revenue	86,600		86,600
Research collaboration and option agreement | Janssen
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research and development	900		1,300
Revenue recognized	1,200		1,700
Accounts receivable	900		900		$ 0
Deferred revenue	$ 9,600		$ 9,600

Net Loss per Unit and Share - B

Net Loss per Unit and Share - Basic and diluted net loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Net Loss per Unit and Share
Net loss	$ (9,433)	$ (5,200)	$ (6,231)	$ (5,179)	$ (14,633)	$ (11,410)
Weighted average common shares outstanding, basic and diluted	1,992,410				1,940,923
Weighted average common units outstanding, basic and diluted			1,011,227			1,011,227
Net loss per share, basic and diluted	$ (4.73)				$ (7.54)
Net loss per unit, basic and diluted			$ (6.16)			$ (11.28)

Net Loss per Unit and Share - O

Net Loss per Unit and Share - Outstanding common unit or common stock equivalents (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti‑dilutive securities	23,896,990	9,404,451	23,896,990	9,404,451
Convertible preferred units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti‑dilutive securities		8,774,652		8,774,652
Convertible preferred stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti‑dilutive securities	21,010,407		21,010,407
Incentive units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti‑dilutive securities		622,974		622,974
Restricted common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti‑dilutive securities	540,977		540,977
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti‑dilutive securities		6,825		6,825
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti‑dilutive securities	2,345,606		2,345,606

Subsequent Events (Details)

Subsequent Events (Details) - Subsequent event $ / shares in Units, $ in Millions	Jul. 01, 2019USD ($)$ / sharesshares
Subsequent Event [Line Items]
Common stock issued (in shares)	6,900,000
Public offering price (in dollars per share) | $ / shares	$ 15
Net proceeds | $	$ 93.4
IPO
Subsequent Event [Line Items]
Common stock issued (in shares)	6,000,000
Underwriters' exercise
Subsequent Event [Line Items]
Common stock issued (in shares)	900,000