Morphic Holding (MORF) 10-Q 10 Aug 20 2020 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Aug. 06, 2020
Document and Entity Information
Document Type	10-Q
Document Period End Date	Jun. 30, 2020
Entity Registrant Name	MORPHIC HOLDING, INC.
Entity Current Reporting Status	Yes
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		30,658,006
Entity Central Index Key	0001679363
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 133,121	$ 101,559
Marketable securities	69,417	135,457
Accounts receivable	3,531	3,467
Prepaid expenses and other current assets	2,541	3,090
Total current assets	208,610	243,573
Property and equipment, net	3,024	3,446
Restricted cash	275	275
Other assets	90	141
Total assets	211,999	247,435
Current liabilities:
Accounts payable	3,878	5,167
Accrued expenses	8,289	6,639
Deferred revenue, current portion	32,996	23,450
Deferred rent, current portion	121	94
Total current liabilities	45,284	35,350
Long-term liabilities:
Deferred revenue, net of current portion	51,652	70,954
Deferred rent, net of current portion	146	213
Total liabilities	97,082	106,517
Stockholders’ Equity
Preferred shares, $0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of June 30, 2020 and December 31, 2019
Common shares, $0.0001 par value, 400,000,000 shares authorized, 30,421,775 shares issued and outstanding as of June 30, 2020 and 30,110,251 shares issued and outstanding as of December 31, 2019	3	3
Additional paid-in capital	244,807	238,384
Accumulated deficit	(130,117)	(97,513)
Accumulated other comprehensive income	224	44
Total stockholders’ equity	114,917	140,918
Total liabilities and stockholders’ equity	$ 211,999	$ 247,435

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
Preferred shares, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred shares, shares authorized	10,000,000	10,000,000
Preferred shares, shares issued	0	0
Preferred shares, shares outstanding	0	0
Common shares, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized	400,000,000	400,000,000
Common shares, shares issued	30,421,775	30,110,251
Common shares, shares outstanding	30,421,775	30,110,251

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Collaboration revenue	$ 7,693	$ 5,567	$ 13,287	$ 11,635
Operating expenses:
Research and development	19,918	13,907	38,878	24,278
General and administrative	4,195	2,077	8,618	3,908
Total operating expenses	24,113	15,984	47,496	28,186
Loss from operations	(16,420)	(10,417)	(34,209)	(16,551)
Other income:
Interest income, net	407	1,119	1,293	2,182
Total other income, net	407	1,119	1,293	2,182
Loss before benefit from (provision for) income taxes	(16,013)	(9,298)	(32,916)	(14,369)
Benefit from (provision for) income taxes	155	(135)	312	(264)
Net loss	$ (15,858)	$ (9,433)	$ (32,604)	$ (14,633)
Net loss per share, basic and diluted	$ (0.52)	$ (4.73)	$ (1.08)	$ (7.54)
Weighted average common shares outstanding, basic and diluted	30,360,851	1,992,410	30,274,713	1,940,923
Comprehensive loss:
Net loss	$ (15,858)	$ (9,433)	$ (32,604)	$ (14,633)
Other comprehensive (loss) income:
Unrealized holding (losses) gains on marketable securities	(391)	16	180	41
Total other comprehensive income (loss)	(391)	16	180	41
Comprehensive loss	$ (16,249)	$ (9,417)	$ (32,424)	$ (14,592)

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands	Series Seed Preferred Shares	Series A Preferred Shares	Series B Preferred Shares	Common shares	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income	Total
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]
Equity-based compensation expense					499			499
Vesting of restricted shares (in shares)				99,911
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]
Equity-based compensation expense					667			667
Vesting of restricted shares (in shares)				112,165
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
Balance at beginning of period at Dec. 31, 2019				$ 3	238,384	(97,513)	44	140,918
Balance at beginning of period ( in shares) at Dec. 31, 2019				30,110,251
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation expense					2,544			2,544
Vesting of restricted shares (in shares)				84,247
Issuance of common shares upon stock option exercises					167			167
Issuance of common shares upon stock option exercises (in shares)				35,822
Issuance of common stock under the Employee Stock Purchase Plan					681			681
Issuance of common stock under the Employee Stock Purchase Plan (in shares)				53,405
Unrealized holding gains on marketable securities							571	571
Net loss						(16,746)		(16,746)
Balance at end of period at Mar. 31, 2020				$ 3	241,776	(114,259)	615	128,135
Balance at end of period ( in shares) at Mar. 31, 2020				30,283,725
Balance at beginning of period at Dec. 31, 2019				$ 3	238,384	(97,513)	44	$ 140,918
Balance at beginning of period ( in shares) at Dec. 31, 2019				30,110,251
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common shares upon stock option exercises (in shares)								116,382
Net loss								$ (32,604)
Balance at end of period at Jun. 30, 2020				$ 3	244,807	(130,117)	224	114,917
Balance at end of period ( in shares) at Jun. 30, 2020				30,421,775
Balance at beginning of period at Mar. 31, 2020				$ 3	241,776	(114,259)	615	128,135
Balance at beginning of period ( in shares) at Mar. 31, 2020				30,283,725
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Equity-based compensation expense					2,489			2,489
Vesting of restricted shares (in shares)				57,490
Issuance of common shares upon stock option exercises					542			542
Issuance of common shares upon stock option exercises (in shares)				80,560
Unrealized holding gains on marketable securities							(391)	(391)
Net loss						(15,858)		(15,858)
Balance at end of period at Jun. 30, 2020				$ 3	$ 244,807	$ (130,117)	$ 224	$ 114,917
Balance at end of period ( in shares) at Jun. 30, 2020				30,421,775

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net loss	$ (32,604)	$ (14,633)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	569	365
Premium amortization and discount accretion on marketable securities	308	(1,232)
Equity‑based compensation	5,033	1,166
Change in operating assets and liabilities:
Accounts receivable	(64)	(945)
Prepaid expenses and other current assets	916	(214)
Other assets	51	(14)
Accounts payable	(1,051)	1,161
Accrued expenses	1,335	874
Deferred revenue	(9,756)	(364)
Deferred rent	(40)	(24)
Other long-term liabilities		(20)
Net cash used in operating activities	(35,303)	(13,880)
Cash flows from investing activities:
Purchases of marketable securities	(9,088)	(169,933)
Proceeds from maturities of marketable securities	75,000	45,000
Purchase of property and equipment	(385)	(1,056)
Net cash provided by (used in) investing activities	65,527	(125,989)
Cash flows from financing activities:
Deferred issuance costs	(52)	(1,833)
Proceeds from issuance of Common Stock pursuant to stock option exercise	709
Proceeds from issuance of Common Stock under Employee Stock Purchase Plan	681
Net cash provided by (used in) financing activities	1,338	(1,833)
Net increase (decrease) in cash and cash equivalents and restricted cash	31,562	(141,702)
Cash and cash equivalents and restricted cash, beginning of period	101,834	186,176
Cash and cash equivalents and restricted cash, end of period	133,396	44,474
Non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued expenses	31
Deferred issuance costs included in accrued expenses and prepaid expenses and other current assets	315	$ 1,104
Supplemental cash flow information:
Cash paid for taxes	$ 480

Nature of the Business and Basi

Nature of the Business and Basis of Presentation	6 Months Ended
	Jun. 30, 2020
Nature of the Business and Basis of Presentation
Nature of the Business and Basis of Presentation	1. Nature of the Business and Basis of Presentation Organization Morphic Holding, Inc. (the “Company”) was formed under the laws of the State of Delaware in August 2014. 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 its 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 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 its initial public offering (“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 $93.3 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 21,010,407 shares of common stock; the warrants to purchase 6,825 convertible preferred shares automatically converted into warrants to purchase 6,825 common shares. 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 completion of the IPO, as described above, impacts the comparability of certain amounts to the corresponding prior year period, including earnings per share.

Basis of Presentation and Signi

Basis of Presentation and Significant Accounting Policies	6 Months Ended
	Jun. 30, 2020
Basis of Presentation and Significant Accounting Policies
Basis of Presentation and Significant Accounting Policies	2. Basis of Presentation and Significant Accounting Policies Basis of Presentation The condensed 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. The accompanying condensed consolidated financial statements are unaudited and have been prepared by the Company in accordance with accounting principles generally accepted in the United States (“GAAP”) as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These unaudited interim condensed consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods ended June 30, 2020 and 2019. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2019, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 27, 2020. Use of Estimates and Summary of Significant Accounting Policies 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 research and development expenses, the valuation of equity‑based compensation, and income taxes. Actual results could differ from those estimates. Significant accounting policies The significant accounting policies used in preparation of these condensed consolidated financial statements for the three and six months ended June 30, 2020 are consistent with those discussed in Note 2 to the consolidated financial statements in the Company’s 2019 Annual Report on Form 10-K, except as described below. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Simplifying Accounting for Income Taxes, a new standard intended to simplify the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The Company adopted ASU 2019-12 effective January 1, 2020, using the prospective method. Adoption of the standard did not have a material impact on the condensed consolidated financial statements. Recently Issued Accounting Pronouncements not yet Adopted As an “emerging growth company,” (“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 November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates (“ASU 2019-10”), which finalizes effective date delays for private companies, not-for-profit organizations, and certain smaller reporting companies as follows: · January 1, 2023 as the effective date for adoption of the Topic 326 for annual and interim reporting periods; · January 1, 2021 and January 1, 2022 as the effective dates for adoption of the Topic 815 amendments for annual and interim periods, respectively; and · January 1, 2021 and January 1, 2022 as the effective dates for adoption of the Topic 842 for annual and interim periods, respectively. In June 2020, the FASB issued ASU 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842), which partially superseded the guidance of the ASU 2019-10 described above, and deferred the effective date for adoption of ASC 606 and ASC 842 for certain entities that had not previously adopted these standards. The Company had adopted ASC 606 in a prior period. Under provisions of ASU 2020-05, ASC 842 is effective for the Company for the fiscal years beginning after December 15, 2021, and interim periods within those fiscal years beginning after December 15, 2022. 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. 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. In November 2019, the FASB issued ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (“ASU 2019-11”), which clarifies certain areas of the guidance to ensure all companies and organizations can make a smoother transition to the standard. Following the issuance of ASU 2019-10 described above, the guidance is effective for the Company for the fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and will be adopted using the modified retrospective approach. The Company is currently evaluating the impact of ASU 2019-11 and the related ASU 2019-04 and ASU 2016-13 on the consolidated financial statements, including the impact of the available accounting policy elections. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), with guidance regarding the accounting for and disclosure of leases. In general, for lease arrangements exceeding a twelve-month term, these arrangements must now be recognized as assets and liabilities on the balance sheet of the lessee. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The balance sheet amount recorded for existing leases at the date of adoption of ASU 2016-02 must be calculated using the applicable incremental borrowing rate at the date of adoption. This update also requires lessees and lessors to disclose key information about their leasing transactions. In July 2018, the FASB issued ASU 2018-11, Leases - Targeted Improvements, intended to ease the implementation of the new lease standard for financial statement preparers by, among other things, allowing for an additional transition method. In lieu of presenting transition requirements to comparative periods, as previously required, an entity may now elect to show a cumulative effect adjustment on the date of adoption without the requirement to recast prior period financial statements or disclosures presented in accordance with ASU 2016-02. The Company currently expects to elect the available package of practical expedients which allows the Company to not reassess previous accounting conclusions around whether arrangements are or contain leases, the classification of leases, and the treatment of initial direct costs. The Company also expects it will make an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. The Company is in the process of assessing the impact of the standard and while not complete, it expects that it will record a material asset and liability related to its current operating lease; however, the full impact of adoption to the Company’s financial statements is yet to be determined. Based on the issuance of ASU 2020-05, described above, this standard is effective for the Company for the annual periods beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022.

Fair Value of Financial Assets

Fair Value of Financial Assets and Liabilities	6 Months Ended
	Jun. 30, 2020
Fair Value of Financial Assets and Liabilities
Fair Value of Financial Assets and Liabilities	3. Fair Value of Financial Assets and Liabilities The Company has certain financial assets and liabilities that are recorded at fair value which have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements: · Level 1 — Quoted market prices in active markets for identical assets or liabilities. · Level 2 — Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves. · Level 3 — Unobservable inputs developed using estimates of assumptions developed by the Company, which reflect those that a market participant would use. To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The tables below present information about the Company’s financial assets that are measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 (in thousands) and indicate the level within the fair value hierarchy where each measurement is classified. Fair Value Measurements at June 30, 2020 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 132,874 $ 132,874 $ — $ — U.S. Treasury obligations 69,417 — 69,417 — Total assets $ 202,291 $ 132,874 $ 69,417 $ — Fair Value Measurements at December 31, 2019 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 91,332 $ 91,332 $ — $ — U.S. Treasury obligations, included in cash and cash equivalents 9,995 — 9,995 — U.S. Treasury obligations 135,457 — 135,457 — Total assets $ 236,784 $ 91,332 $ 145,452 $ — 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, 2020 and December 31, 2019. Marketable securities included in the table above consist exclusively of U.S. Treasury securities that are valued using prices provided by third party pricing vendors, using observable market inputs such as interest rates, yield curves, and credit risk. Accordingly, these securities are categorized as Level 2 as of June 30, 2020 and December 31, 2019. During the six months ended June 30, 2020, no assets were transferred between the fair value hierarchy categories. The Company had no liabilities measured at fair value on recurring basis at June 30, 2020 or December 31, 2019. The Company believes that the carrying amounts of the Company’s consolidated financial instruments, including prepaid expenses and other current assets, accounts receivable, accounts payable, and accrued expenses approximate fair value due to the short-term nature of those instruments.

Marketable securities

Marketable securities	6 Months Ended
	Jun. 30, 2020
Marketable securities.
Marketable securities	4. Marketable securities The following tables summarize the Company’s investments in marketable securities classified as available for sale (in thousands): As of June 30, 2020 Gross Gross Aggregate Amortized unrealized unrealized estimated Maturity cost holding gains holding losses fair value U.S. Treasury securities less than 1 year $ 69,167 $ 250 $ — $ 69,417 As of December 31, 2019 Gross Gross Aggregate Amortized unrealized unrealized estimated Maturity cost holding gains holding losses fair value U.S. Treasury securities less than 1 year $ 135,389 $ 70 $ (2) $ 135,457 As of June 30, 2020, the Company held no marketable securities in an unrealized loss position. As of December 31, 2019, the aggregate fair value of three securities in an unrealized loss position was $30.2 million and the aggregate unrealized losses were $2,000. Th e value.

Cash, Cash Equivalents, and Res

Cash, Cash Equivalents, and Restricted Cash	6 Months Ended
	Jun. 30, 2020
Cash, Cash Equivalents, and Restricted Cash
Cash, Cash Equivalents, and Restricted Cash	5. Cash, Cash Equivalents, and Restricted Cash 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, 2020 2019 2019 2018 Cash and cash equivalents $ 133,121 $ 101,559 $ 44,199 $ 185,901 Restricted cash 275 275 275 275 Total cash, cash equivalents, and restricted cash $ 133,396 $ 101,834 $ 44,474 $ 186,176

Accrued Expenses

Accrued Expenses	6 Months Ended
	Jun. 30, 2020
Accrued Expenses
Accrued Expenses	6. Accrued Expenses At June 30, 2020 and December 31, 2019 accrued expenses consist of the following (in thousands): June 30, December 31, 2020 2019 Payroll and related expenses 2,946 3,159 Research and development activities 4,522 2,465 Other expenses 821 1,015 $ 8,289 $ 6,639

Equity Based Compensation

Equity Based Compensation	6 Months Ended
	Jun. 30, 2020
Equity Based Compensation
Equity Based Compensation	7. Equity Based Compensation In connection with the Company’s initial public offering in July 2019, the Company adopted the 2019 Equity Incentive Plan (the “2019 Plan”) in June 2019, which replaced the 2018 Stock Incentive Plan. 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 directors, officers and employees of the Company, as well as consultants and advisors of the Company. On January 1, 2020, the number of shares of common stock available for issuance under the 2019 Plan increased by 1,204,410 shares as a result of the automatic increase provision of the 2019 Plan. As of June 30, 2020, there were a total of 1,378,772 shares available for future award grants under the 2019 Plan. The Company recognized equity-based compensation expense in the condensed consolidated statements of operations and comprehensive loss, by award type, as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Stock option $ 2,190 $ 439 $ 4,061 $ 751 Restricted stock 192 228 755 415 ESPP 107 — 217 — Total $ 2,489 $ 667 $ 5,033 $ 1,166 The following table summarizes the allocation of equity-based compensation expense in the condensed consolidated statements of operations and comprehensive loss, by expense category: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Research and development expense $ 1,352 $ 403 $ 3,143 $ 684 General and administrative expense 1,137 264 1,890 482 Total $ 2,489 $ 667 $ 5,033 $ 1,166 Restricted Common Stock The following table summarizes the restricted stock awards activity during the six months ended June 30, 2020: Weighted Average Fair Value per Share Number of Shares at Issuance Unvested restricted common stock as of December 31, 2019 379,770 $ 4.32 Granted — — Vested (141,737) 4.32 Forfeited (13,802) 4.32 Unvested restricted common stock as of June 30, 2020 224,231 $ 4.32 As of June 30, 2020, the Company had unrecognized equity‑based compensation expense of $608,000 related to the restricted stock awards, which is expected to be recognized over a weighted average period of 0.4 years. Restricted Stock Units During the six months ended June 30, 2020, the Company granted restricted common stock units. The following table summarizes the restricted stock units activity during the six months ended June 30, 2020: Weighted Average Fair Value per Share Number of Shares at Issuance Unvested restricted common stock units as of December 31, 2019 — $ — Granted 66,216 10.84 Vested — — Forfeited — — Unvested restricted common stock units as of June 30, 2020 66,216 $ 10.84 As of June 30, 2020, the Company had unrecognized equity‑based compensation expense of $649,000 related to the restricted stock units, which is expected to be recognized over a weighted average period of 2.93 years. Stock Options The following table summarizes the Company’s stock option activity during the six months ended June 30, 2020: Weighted Weighted Average Number of Average Remaining Aggregate Shares Exercise Price Contractual Term Intrinsic Value (in years) (in thousands) Outstanding as of December 31, 2019 2,987,403 $ 8.67 9.22 $ 26,254 Granted 1,955,685 15.39 — — Exercised (116,382) 6.07 — — Forfeited (132,382) 8.44 — — Outstanding as of June 30, 2020 4,694,324 $ 11.54 9.13 $ 72,798 Options vested and expected to vest as of June 30, 2020 4,694,324 $ 11.54 9.13 $ 72,798 Options exercisable as of June 30, 2020 841,581 $ 6.84 8.66 $ 17,012 As of June 30, 2020, the Company had unrecognized equity‑based compensation expense of $30.6 million related to stock options issued to employees and non-employees, which is expected to be recognized over a weighted average period of 2.99 years. 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, 2020 was $10.50 per share. The following table summarizes assumptions used in determining the fair value of the options granted during the six months ended June 30, 2020: Six Months Ended June 30, Six Months Ended June 30, 2020 2019 Risk‑free interest rate 0.46% 2.08% Expected dividend yield - - Expected term (in years) 6.00 5.99 Expected Volatility 80.85% 75.48% The Company determined the volatility for options granted in 2020 based on 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 expected term of options granted by the Company has been determined based upon the simplified method, because the Company does not have sufficient historical information regarding its options to derive the expected term. Under this approach, the expected term is the mid-point between the weighted average of vesting period and the contractual term. 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. ESPP 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. On January 1, 2020, the number of shares of common stock available for issuance under the ESPP increased by 301,102 shares as a result of the automatic increase provision of the ESPP. The ESPP is a qualified, compensatory plan under Section 423 of the Internal Revenue Code and offers substantially all employees opportunity to purchase up to $25,000 of common stock per year at 15% discount to the lower of the beginning of the offering period price or the end of the offering period price. Compensation expense for discounted purchases under the ESPP is measured using the Black-Scholes model to compute the fair value of the lookback provision plus the purchase discount and is recognized as compensation expense over the course of the offering period. During the six months ended June 30, 2020, the Company granted awards with a weighted average grant date fair value of $6.37.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2020
Income Taxes
Income Taxes	8. Income Taxes Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using statutory rates. A valuation allowance is recorded against deferred tax assets if it is more likely than not that some or all of the deferred tax assets will not be realized. The Company’s ability to use its operating loss carryforwards and tax credits to offset future taxable income is subject to restrictions under Sections 382 and 383 of the United States Internal Revenue Code, or the Internal Revenue Code. Net operating loss and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50 percent, as defined under Sections 382 and 383 of the Internal Revenue Code. Such changes would limit the Company’s use of its operating loss carryforwards and tax credits. In such a situation, the Company may be required to pay income taxes, even though significant operating loss carryforwards and tax credits exist. On March 27, 2020, the President signed into law the Coronavirus Aid Relief and Economic Security (“CARES”) Act. The CARES Act included several income tax changes, included allowing for the carryback of net operating losses, expanding interest deductibility, and allowing for accelerated expensing of certain capital improvements. The Company records a provision or benefit for income taxes on ordinary pre-tax income or loss based on its estimated effective tax rate for the year. Based on the forecasted net operating loss for fiscal year 2020 and the carryback allowance under the CARES Act, the Company anticipates a full recovery of the federal income tax paid for the year ended December 31, 2019. Accordingly, the Company recognized an income tax benefit of $0.2 million and $0.3 million for the three and six months ended June 30, 2020, respectively. The Company recognized an income tax expense of $0.1 million and $0.3 million for the three and six months ended June 30, 2019, respectively, driven largely by the projected tax liability associated with the tax recognition of the upfront AbbVie collaboration payment received in 2018.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2020
Commitments and Contingencies
Commitments and Contingencies	9. Commitments and Contingencies Guarantees and Indemnifications The Company entered, and intends to continue to enter, into separate indemnification agreements with directors, officers, and certain of key employees, in addition to the indemnification provided for in the restated certificate of incorporation and restated bylaws. These agreements, among other things, require the Company to indemnify 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 the Company or any of its subsidiaries or any other company or enterprise to which these individuals provide services at the Company’s request. Subject to certain limitations, the indemnification agreements also require the Company to advance expenses incurred by 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, 2020, the Company had not experienced any losses related to these indemnification 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. During the three and six months ended June 30, 2020, there were no material changes to our contractual obligations and commitments previously disclosed in Note 10 to the consolidated financial statements appearing in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 . The Company recorded approximately $260,000 and $230,000 in rent expense for three months ended June 30, 2020 and 2019, respectively, and $517,000 and $447,000 for the six months ended June 30, 2020 and 2019, respectively. Legal Proceedings The Company is not currently a party to any material legal proceedings.

Option and License Agreements

Option and License Agreements	6 Months Ended
	Jun. 30, 2020
Option and License Agreements
Option and License Agreements	10. Option and License Agreements Detailed description of contractual terms and the Company’s accounting for agreements described below were included in the Company’s audited financial statements and notes in the Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2020. AbbVie Agreement During the three months ended June 30, 2020, the Company continued to perform under its agreement with AbbVie, pursuant to which the Company recognizes revenues in proportion to the costs incurred. As a result, the Company will recognize the $100 million up-front payment as research and development services are performed, which is expected to be completed through 2024. During the three months ended June 30, 2020, the Company incurred $3.2 million in research and development costs and recognized revenue of $5.3 million. Based on successful completion of preclinical studies related to MORF-720 during the three months ended June 30, 2020, the Company revised its estimates to satisfy its performance obligations, and as a result the Company recognized additional revenue of $2.4 million during the three months ended June 30, 2020. During the six months ended June 30, 2020, the Company incurred $7.7 million in research and development costs and recognized revenue of $8.7 million. As of June 30, 2020, the Company had $77.2 million of deferred revenue, which is classified as either current or long-term deferred revenue in the accompanying condensed 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, 2020. 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 materially impact revenue recognition. The Company regularly evaluates and, when necessary, updates the costs associated with the remaining effort pursuant to each performance obligation under the AbbVie agreement. Accordingly, revenue may fluctuate from period to period due to revisions to estimated costs, resulting in a change in the measure of progress for a performance obligation. Such changes can also impact the allocation of deferred revenue between current and long term based on changes in expected timing of the satisfaction of performance obligations. Janssen Agreement During the three months ended June 30, 2020, the Company continued to perform under its agreement with Janssen, pursuant to which the Company recognizes revenue in proportion to the costs incurred to date. The Company expects to provide research services and recognize revenue through 2024. During the three months ended June 30, 2020, the Company incurred $1.8 million in research and development costs and recognized revenue of $2.4 million related to research services. During the six months ended June 30, 2020, the Company incurred $3.5 million in research and development costs and recognized revenue of $4.6 million related to research services. The Company had $3.5 million due from Janssen included in accounts receivable on the condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019, respectively. As of June 30, 2020, $7.5 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, 2020.

Net Loss per Unit and Share

Net Loss per Unit and Share	6 Months Ended
	Jun. 30, 2020
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, 2020 and 2019: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net loss $ (15,858) $ (9,433) $ (32,604) $ (14,633) Weighted average common shares outstanding, basic and diluted 30,360,851 1,992,410 30,274,713 1,940,923 Net loss per share, basic and diluted $ (0.52) $ (4.73) $ (1.08) $ (7.54) The following table sets forth the outstanding common stock equivalents, presented based on amounts outstanding at each period end, that have been excluded from the calculation of diluted net loss per share for the periods indicated because their inclusion would have been anti‑dilutive (in common stock equivalent shares, as applicable): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Convertible preferred stock — 21,010,407 — 21,010,407 Restricted common stock 224,231 540,977 224,231 540,977 Restricted stock units 66,216 — 66,216 — Stock options 4,694,324 2,345,606 4,694,324 2,345,606 4,984,771 23,896,990 4,984,771 23,896,990 In addition to the securities listed in the table above, as of June 30, 2020 the Company had reserved 548,000 shares of common stock for sale under the ESPP, which, if issued, would be anti-dilutive if included in calculation of diluted net loss per share.

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2020
Subsequent Events
Subsequent Events	12. Subsequent Events On July 1, 2020, the Company entered into an Open Market Sale Agreement, or the Agreement, with Jefferies LLC, or Jefferies, with respect to an at-the-market offering program under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, having an aggregate offering price of up to $75,000,000, referred to as Placement Shares, through Jefferies as its sales agent. The Company will pay Jefferies a commission equal to 3.0 percent (3.0%) of the gross sales proceeds of any Placement Shares sold through Jefferies under the Agreement, and also has provided Jefferies with customary indemnification and contribution rights. As of June 30, 2020, the Company incurred approximately $0.4 million related to legal, accounting and other fees in connection with the Agreement. The Company has not issued or sold any securities under the Agreement.

Basis of Presentation and Sig_2

Basis of Presentation and Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2020
Basis of Presentation and Significant Accounting Policies
Use of Estimates and Summary of Significant Accounting Policies	Use of Estimates and Summary of Significant Accounting Policies 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 research and development expenses, the valuation of equity‑based compensation, and income taxes. Actual results could differ from those estimates.
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Simplifying Accounting for Income Taxes, a new standard intended to simplify the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The Company adopted ASU 2019-12 effective January 1, 2020, using the prospective method. Adoption of the standard did not have a material impact on the condensed consolidated financial statements.
Recently Issued Accounting Pronouncements not yet Adopted	Recently Issued Accounting Pronouncements not yet Adopted As an “emerging growth company,” (“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 November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates (“ASU 2019-10”), which finalizes effective date delays for private companies, not-for-profit organizations, and certain smaller reporting companies as follows: · January 1, 2023 as the effective date for adoption of the Topic 326 for annual and interim reporting periods; · January 1, 2021 and January 1, 2022 as the effective dates for adoption of the Topic 815 amendments for annual and interim periods, respectively; and · January 1, 2021 and January 1, 2022 as the effective dates for adoption of the Topic 842 for annual and interim periods, respectively. In June 2020, the FASB issued ASU 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842), which partially superseded the guidance of the ASU 2019-10 described above, and deferred the effective date for adoption of ASC 606 and ASC 842 for certain entities that had not previously adopted these standards. The Company had adopted ASC 606 in a prior period. Under provisions of ASU 2020-05, ASC 842 is effective for the Company for the fiscal years beginning after December 15, 2021, and interim periods within those fiscal years beginning after December 15, 2022. 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. 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. In November 2019, the FASB issued ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (“ASU 2019-11”), which clarifies certain areas of the guidance to ensure all companies and organizations can make a smoother transition to the standard. Following the issuance of ASU 2019-10 described above, the guidance is effective for the Company for the fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and will be adopted using the modified retrospective approach. The Company is currently evaluating the impact of ASU 2019-11 and the related ASU 2019-04 and ASU 2016-13 on the consolidated financial statements, including the impact of the available accounting policy elections. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), with guidance regarding the accounting for and disclosure of leases. In general, for lease arrangements exceeding a twelve-month term, these arrangements must now be recognized as assets and liabilities on the balance sheet of the lessee. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The balance sheet amount recorded for existing leases at the date of adoption of ASU 2016-02 must be calculated using the applicable incremental borrowing rate at the date of adoption. This update also requires lessees and lessors to disclose key information about their leasing transactions. In July 2018, the FASB issued ASU 2018-11, Leases - Targeted Improvements, intended to ease the implementation of the new lease standard for financial statement preparers by, among other things, allowing for an additional transition method. In lieu of presenting transition requirements to comparative periods, as previously required, an entity may now elect to show a cumulative effect adjustment on the date of adoption without the requirement to recast prior period financial statements or disclosures presented in accordance with ASU 2016-02. The Company currently expects to elect the available package of practical expedients which allows the Company to not reassess previous accounting conclusions around whether arrangements are or contain leases, the classification of leases, and the treatment of initial direct costs. The Company also expects it will make an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. The Company is in the process of assessing the impact of the standard and while not complete, it expects that it will record a material asset and liability related to its current operating lease; however, the full impact of adoption to the Company’s financial statements is yet to be determined. Based on the issuance of ASU 2020-05, described above, this standard is effective for the Company for the annual periods beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022.

Fair Value of Financial Asset_2

Fair Value of Financial Assets and Liabilities (Tables)	6 Months Ended
	Jun. 30, 2020
Fair Value of Financial Assets and Liabilities
Summary of financial assets measured at fair value on recurring basis	Fair Value Measurements at June 30, 2020 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 132,874 $ 132,874 $ — $ — U.S. Treasury obligations 69,417 — 69,417 — Total assets $ 202,291 $ 132,874 $ 69,417 $ — Fair Value Measurements at December 31, 2019 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 91,332 $ 91,332 $ — $ — U.S. Treasury obligations, included in cash and cash equivalents 9,995 — 9,995 — U.S. Treasury obligations 135,457 — 135,457 — Total assets $ 236,784 $ 91,332 $ 145,452 $ —

Marketable securities (Tables)

Marketable securities (Tables)	6 Months Ended
	Jun. 30, 2020
Marketable securities.
Schedule of investments in marketable securities classified as available for sale	The following tables summarize the Company’s investments in marketable securities classified as available for sale (in thousands): As of June 30, 2020 Gross Gross Aggregate Amortized unrealized unrealized estimated Maturity cost holding gains holding losses fair value U.S. Treasury securities less than 1 year $ 69,167 $ 250 $ — $ 69,417 As of December 31, 2019 Gross Gross Aggregate Amortized unrealized unrealized estimated Maturity cost holding gains holding losses fair value U.S. Treasury securities less than 1 year $ 135,389 $ 70 $ (2) $ 135,457

Cash, Cash Equivalents, and R_2

Cash, Cash Equivalents, and Restricted Cash (Tables)	6 Months Ended
	Jun. 30, 2020
Cash, Cash Equivalents, and Restricted Cash
Schedule of reconciled cash, cash equivalents, and restricted cash	June 30, December 31, June 30, December 31, 2020 2019 2019 2018 Cash and cash equivalents $ 133,121 $ 101,559 $ 44,199 $ 185,901 Restricted cash 275 275 275 275 Total cash, cash equivalents, and restricted cash $ 133,396 $ 101,834 $ 44,474 $ 186,176

Accrued Expenses (Tables)

Accrued Expenses (Tables)	6 Months Ended
	Jun. 30, 2020
Accrued Expenses
Schedule of accrued expenses	At June 30, 2020 and December 31, 2019 accrued expenses consist of the following (in thousands): June 30, December 31, 2020 2019 Payroll and related expenses 2,946 3,159 Research and development activities 4,522 2,465 Other expenses 821 1,015 $ 8,289 $ 6,639

Equity Based Compensation (Tabl

Equity Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2020
Equity Based Compensation
Summary of equity based compensation expense	The Company recognized equity-based compensation expense in the condensed consolidated statements of operations and comprehensive loss, by award type, as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Stock option $ 2,190 $ 439 $ 4,061 $ 751 Restricted stock 192 228 755 415 ESPP 107 — 217 — Total $ 2,489 $ 667 $ 5,033 $ 1,166 The following table summarizes the allocation of equity-based compensation expense in the condensed consolidated statements of operations and comprehensive loss, by expense category: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Research and development expense $ 1,352 $ 403 $ 3,143 $ 684 General and administrative expense 1,137 264 1,890 482 Total $ 2,489 $ 667 $ 5,033 $ 1,166
Summary of restricted stock units	Weighted Average Fair Value per Share Number of Shares at Issuance Unvested restricted common stock units as of December 31, 2019 — $ — Granted 66,216 10.84 Vested — — Forfeited — — Unvested restricted common stock units as of June 30, 2020 66,216 $ 10.84
2019 Equity Incentive Plan
Equity Based Compensation
Summary of restricted common stock	Weighted Average Fair Value per Share Number of Shares at Issuance Unvested restricted common stock as of December 31, 2019 379,770 $ 4.32 Granted — — Vested (141,737) 4.32 Forfeited (13,802) 4.32 Unvested restricted common stock as of June 30, 2020 224,231 $ 4.32
Summary of 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, 2019 2,987,403 $ 8.67 9.22 $ 26,254 Granted 1,955,685 15.39 — — Exercised (116,382) 6.07 — — Forfeited (132,382) 8.44 — — Outstanding as of June 30, 2020 4,694,324 $ 11.54 9.13 $ 72,798 Options vested and expected to vest as of June 30, 2020 4,694,324 $ 11.54 9.13 $ 72,798 Options exercisable as of June 30, 2020 841,581 $ 6.84 8.66 $ 17,012
Summary of assumptions used in determining the fair value of the options granted	Six Months Ended June 30, Six Months Ended June 30, 2020 2019 Risk‑free interest rate 0.46% 2.08% Expected dividend yield - - Expected term (in years) 6.00 5.99 Expected Volatility 80.85% 75.48%

Net Loss per Unit and Share (Ta

Net Loss per Unit and Share (Tables)	6 Months Ended
	Jun. 30, 2020
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, 2020 and 2019: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net loss $ (15,858) $ (9,433) $ (32,604) $ (14,633) Weighted average common shares outstanding, basic and diluted 30,360,851 1,992,410 30,274,713 1,940,923 Net loss per share, basic and diluted $ (0.52) $ (4.73) $ (1.08) $ (7.54)
Schedule of outstanding common stock equivalent shares	Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Convertible preferred stock — 21,010,407 — 21,010,407 Restricted common stock 224,231 540,977 224,231 540,977 Restricted stock units 66,216 — 66,216 — Stock options 4,694,324 2,345,606 4,694,324 2,345,606 4,984,771 23,896,990 4,984,771 23,896,990

Nature of the Business and Ba_2

Nature of the Business and Basis of Presentation (Details) - USD ($) $ / shares in Units, $ in Millions	Jul. 01, 2019	Sep. 30, 2019	Jun. 30, 2020	Dec. 31, 2019
Subsidiary or Equity Method Investee [Line Items]
Common stock issued (in shares)	6,900,000
Public offering price (in dollars per share)	$ 15
Gross proceeds	$ 103.5
Net proceeds	$ 93.3
Conversion of warrant to purchase shares of convertible preferred stock	6,825
Outstanding warrants	6,825
Series Preferred shares, shares outstanding	0
Common stock, authorized (in shares)			400,000,000	400,000,000
Series Preferred shares, shares authorized	10,000,000
Series Preferred shares, par value (in dollars per share)	$ 0.0001
Common shares
Subsidiary or Equity Method Investee [Line Items]
Conversion of convertible preferred stock into common stock (in shares)		21,010,407
Common stock, authorized (in shares)	400,000,000
Underwriters' exercise
Subsidiary or Equity Method Investee [Line Items]
Common stock issued (in shares)	900,000

Basis of Presentation and Sig_3

Basis of Presentation and Significant Accounting Policies - Marketable securities and interest income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Marketable securities
Marketable securities gains (losses)	$ (391)	$ 16	$ 180	$ 41

Fair Value of Financial Asset_3

Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Assets:
Aggregate estimated fair value	$ 69,417	$ 135,457
Level 1 to level 2	0
Level 2 to level 1	0
Transfers into level 3	0
Transfers out of level 3	0
U.S. Treasury obligations
Assets:
Aggregate estimated fair value	69,417	135,457
Fair value on a recurring basis
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial liabilities	0	0
Assets:
Total assets	202,291	236,784
Fair value on a recurring basis | Money market funds
Assets:
Assets included in cash and cash equivalents	132,874	91,332
Fair value on a recurring basis | U.S. Treasury obligations
Assets:
Assets included in cash and cash equivalents		9,995
Aggregate estimated fair value	69,417	135,457
Fair value on a recurring basis | Level 1
Assets:
Total assets	132,874	91,332
Fair value on a recurring basis | Level 1 | Money market funds
Assets:
Assets included in cash and cash equivalents	132,874	91,332
Fair value on a recurring basis | Level 2
Assets:
Total assets	69,417	145,452
Fair value on a recurring basis | Level 2 | U.S. Treasury obligations
Assets:
Assets included in cash and cash equivalents		9,995
Aggregate estimated fair value	$ 69,417	$ 135,457

Marketable securities (Details)

Marketable securities (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2020USD ($)	Jun. 30, 2019USD ($)	Jun. 30, 2020USD ($)	Jun. 30, 2019USD ($)	Dec. 31, 2019USD ($)security
Marketable securities
Aggregate estimated fair value	$ 69,417,000		$ 69,417,000		$ 135,457,000
Unrealized holding (losses) gains on marketable securities	(391,000)	$ 16,000	180,000	$ 41,000
Unrealized loss position	0		0		$ 30,200,000
Unrealized loss position (Number of securities) | security					3
U.S. Treasury obligations
Marketable securities
Amortized cost	69,167,000		69,167,000		$ 135,389,000
Gross unrealized holding gains	250,000		250,000		70,000
Gross unrealized holding losses					(2,000)
Aggregate estimated fair value	$ 69,417,000		$ 69,417,000		$ 135,457,000

Cash, Cash Equivalents, and R_3

Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($)	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Cash, Cash Equivalents, and Restricted Cash
Letter of credit	$ 275,000
Term of letter of credit (in years)	1 year
Cash and cash equivalents	$ 133,121,000	$ 101,559,000	$ 44,199,000	$ 185,901,000
Restricted cash	275,000	275,000	275,000	275,000
Total cash, cash equivalents, and restricted cash	$ 133,396,000	$ 101,834,000	$ 44,474,000	$ 186,176,000

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Accrued Expenses
Payroll and related expenses	$ 2,946	$ 3,159
Research and development activities	4,522	2,465
Other expenses	821	1,015
Total	$ 8,289	$ 6,639

Equity Based Compensation - 201

Equity Based Compensation - 2019 equity incentive plan (Details) - 2019 Equity Incentive Plan - shares	Jun. 30, 2020	Jan. 01, 2020
Equity Based Compensation
Number of shares available for issuance		1,204,410
Shares available for future issuance	1,378,772

Equity Based Compensation - Equ

Equity Based Compensation - Equity based compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Equity Based Compensation
Total equity-based compensation expense	$ 2,489	$ 667	$ 5,033	$ 1,166
Research and development expense
Equity Based Compensation
Total equity-based compensation expense	1,352	403	3,143	684
General and administrative expense
Equity Based Compensation
Total equity-based compensation expense	1,137	264	1,890	482
Stock option
Equity Based Compensation
Total equity-based compensation expense	2,190	439	4,061	751
Restricted stock
Equity Based Compensation
Total equity-based compensation expense	192	$ 228	755	$ 415
ESPP
Equity Based Compensation
Total equity-based compensation expense	$ 107		$ 217

Equity Based Compensation - Res

Equity Based Compensation - Restricted common stock activity (Details) - Restricted stock	6 Months Ended
	Jun. 30, 2020USD ($)$ / sharesshares
Weighted Average Grant Date Fair Value per Unit
Unrecognized equity based compensation expense | $	$ 608,000
Unrecognized equity based compensation expense expected period for recognition	4 months 24 days
2019 Equity Incentive Plan
Number of Shares
Outstanding at the beginning | shares	379,770
Vested | shares	(141,737)
Forfeited | shares	(13,802)
Outstanding at the end | shares	224,231
Weighted Average Grant Date Fair Value per Unit
Outstanding at the beginning (in dollars per share) | $ / shares	$ 4.32
Vested as of the Reorganization | $ / shares	4.32
Forfeited (in dollars per share) | $ / shares	4.32
Outstanding at the end (in dollars per share) | $ / shares	$ 4.32

Equity Based Compensation - R_2

Equity Based Compensation - Restricted stock units activity (Details) - Restricted stocks units	6 Months Ended
	Jun. 30, 2020USD ($)$ / sharesshares
Weighted Average Grant Date Fair Value per Unit
Unrecognized equity based compensation expense | $	$ 649,000
Unrecognized equity based compensation expense expected period for recognition	2 years 11 months 5 days
2019 Equity Incentive Plan
Number of Shares
Outstanding at the beginning | shares
Granted | shares	66,216
Outstanding at the end | shares	66,216
Weighted Average Grant Date Fair Value per Unit
Outstanding at the beginning (in dollars per share) | $ / shares
Granted (in dollars per share) | $ / shares	10.84
Outstanding at the end (in dollars per share) | $ / shares	$ 10.84

Equity Based Compensation - Sto

Equity Based Compensation - Stock option awards (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Number of Shares
Outstanding at the beginning	2,987,403
Granted	1,955,685
Exercised	(116,382)
Forfeited	(132,382)
Outstanding at the end	4,694,324		2,987,403
Options vested and expected to vest at the end	4,694,324
Options exercisable at the end	841,581
Weighted Average Exercise Price
Outstanding at the beginning (in dollars per share)	$ 8.67
Granted (in dollars per share)	15.39
Exercised (in dollars per share)	6.07
Forfeited (in dollars per share)	8.44
Outstanding at the end (in dollars per share)	11.54		$ 8.67
Options vested and expected to vest at the end (in dollars per share)	11.54
Options exercisable at the end (in dollars per share)	$ 6.84
Weighted Average Remaining Contractual Term and Aggregate Intrinsic Value
Expected term (in years)	9 years 1 month 17 days		9 years 2 months 19 days
Options vested and expected to vest at the end	9 years 1 month 17 days
Options exercisable at the end (in years)	8 years 7 months 28 days
Outstanding at the beginning (in dollars)	$ 26,254
Outstanding at the end (in dollars)	72,798		$ 26,254
Options vested and expected to vest at the end	72,798
Options exercisable at the end (in dollars)	$ 17,012
Weighted average grant date fair value per share of stock options granted to employees and non-employees for stock option awards	$ 6.37
Stock option
Weighted Average Remaining Contractual Term and Aggregate Intrinsic Value
Unrecognized equity based compensation expense	$ 30,600
Unrecognized equity based compensation expense expected period for recognition	2 years 11 months 27 days
Weighted average grant date fair value per share of stock options granted to employees and non-employees for stock option awards	$ 10.50
2019 Equity Incentive Plan | Stock option
Assumptions used in determining the fair value of the options granted
Risk-free interest rate	0.46%	2.08%
Expected term (in years)	6 years	5 years 11 months 27 days
Expected volatility	80.85%	75.48%

Equity Based Compensation - ESP

Equity Based Compensation - ESPP (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Jan. 01, 2020
Equity Based Compensation
Equity based compensation expense	$ 2,489,000	$ 667,000	$ 5,033,000	$ 1,166,000
ESPP
Equity Based Compensation
Shares authorized		300,000		300,000	301,102
Discount rate to purchase common stock			15.00%
ESPP | Maximum
Equity Based Compensation
Amount of common shares available for purchase per employee per year			$ 25,000

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Taxes
Income tax expense (benefit)	$ (155)	$ 135	$ (312)	$ 264

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Commitments and Contingencies
Rent expense	$ 260,000	$ 230,000	$ 517,000	$ 447,000

Option and License Agreements (

Option and License Agreements (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research and development	$ 19,918		$ 13,907		$ 38,878	$ 24,278
Net loss	(15,858)	$ (16,746)	$ (9,433)	$ (5,200)	(32,604)	$ (14,633)
Accounts receivable	3,531				3,531		$ 3,467
AbbVie
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Upfront fees received	100,000
Collaboration and option agreement with AbbVie
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Deferred revenue	77,200				77,200
Research and development	3,200				7,700
Revenue related to research services	5,300				8,700
Collaboration and option agreement with AbbVie | MORF-720
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revenue related to research services	2,400
Research collaboration and option agreement | Janssen
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research and development	1,800				3,500
Revenue related to research services	2,400				4,600
Accounts receivable	3,500				3,500
Deferred revenue	$ 7,500				$ 7,500

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, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Net Loss per Unit and Share
Net loss	$ (15,858)	$ (16,746)	$ (9,433)	$ (5,200)	$ (32,604)	$ (14,633)
Weighted average common shares outstanding, basic and diluted	30,360,851		1,992,410		30,274,713	1,940,923
Net loss per share, basic and diluted	$ (0.52)		$ (4.73)		$ (1.08)	$ (7.54)

Net Loss per Unit and Share - O

Net Loss per Unit and Share - Outstanding common stock equivalent shares (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti‑dilutive securities	4,984,771	23,896,990	4,984,771	23,896,990
Convertible preferred stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti‑dilutive securities		21,010,407		21,010,407
Restricted stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti‑dilutive securities	224,231	540,977	224,231	540,977
Restricted stocks units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti‑dilutive securities	66,216		66,216
Stock option
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti‑dilutive securities	4,694,324	2,345,606	4,694,324	2,345,606
ESPP
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti‑dilutive securities			548,000

Subsequent Events (Details)

Subsequent Events (Details) - USD ($)	Jul. 01, 2020	Jun. 30, 2020
Subsequent Event [Line Items]
Legal, accounting and other fees incurred in connection with Open Market Sales Agreement		$ 400,000
Subsequent event
Subsequent Event [Line Items]
Commission percentage	$ 3
Subsequent event | Maximum
Subsequent Event [Line Items]
Aggregate offering price of Placement Shares	$ 75,000,000