ARMO BioSciences (ARMO) 10-Q 15 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 10, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1
Trading Symbol	ARMO
Entity Registrant Name	ARMO BIOSCIENCES, INC.
Entity Central Index Key	1,693,664
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		30,405,109

Condensed Balance Sheets

Condensed Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 165,313	$ 49,475
Prepaid expenses and other current assets	3,872	2,574
Restricted cash	50	50
Receivable from lessor for tenant improvements	2,700
Total current assets	171,935	52,099
Property and equipment, net	327	250
Other long-term assets	2,808	3,843
Total assets	175,070	56,192
Current liabilities:
Accounts payable	6,605	5,764
Accrued liabilities	8,741	5,714
Deferred rent	525	136
Other current liabilities	23	32
Total current liabilities	15,894	11,646
Lease incentive obligation	2,314
Commitments and contingencies (Note 6)
Redeemable convertible preferred stock, $0.0001 par value Shares authorized: 95,180,211 at December 31, 2017 Shares issued and outstanding: none at March 31, 2018; 20,211,087 at December 31, 2017		177,077
Stockholders' equity (deficit):
Preferred stock, $0.0001 par value Shares authorized: 10,000,000 at March 31, 2018 Shares issued and outstanding: none at March 31, 2018 and December 31, 2017
Common stock, $0.0001 par value Shares authorized: 200,000,000 at March 31, 2018 and 118,000,000 at December 31, 2017 Shares issued and outstanding: 30,405,109 at March 31, 2018 and 1,535,199 at December 31, 2017	3	1
Additional paid-in capital	313,935	2,822
Accumulated deficit	(157,076)	(135,354)
Total stockholders' equity (deficit)	156,862	(132,531)
Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)	$ 175,070	$ 56,192

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Convertible preferred stock, par value	$ 0.0001	$ 0.0001
Convertible preferred stock, shares authorized		95,180,211
Convertible preferred stock, shares issued	0	20,211,087
Convertible preferred stock, shares outstanding	0	20,211,087
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	200,000,000	118,000,000
Common stock, shares issued	30,405,109	1,535,199
Common stock, shares outstanding	30,405,109	1,535,199

Condensed Statements of Operati

Condensed Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating expenses:
Research and development	$ 19,037	$ 7,727
General and administrative	3,078	1,687
Total operating expenses	22,115	9,414
Loss from operations	(22,115)	(9,414)
Interest income	393	18
Net loss and comprehensive loss	$ (21,722)	$ (9,396)
Net loss per share, basic and diluted	$ (0.97)	$ (6.42)
Weighted average number of shares used in basic and diluted net loss per share	22,369,774	1,462,565

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating activities
Net loss	$ (21,722)	$ (9,396)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	52	52
Stock-based compensation expense	894	187
Loss on disposal of property and equipment	8
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(3,998)	(30)
Other long-term assets	(2,706)	(1,002)
Accounts payable	821	(3,291)
Accrued liabilities	5,413	2,519
Deferred rent	389	60
Lease incentive Obligation	2,314
Net cash used in operating activities	(18,535)	(10,901)
Investing activities
Purchase of property and equipment	(137)
Net cash used in investing activities	(137)
Financing activities
Proceeds from issuance of common stock, net of issuance costs	136,896
Payment of initial public offering costs	(2,386)
Repurchase of common stock		(6)
Net cash provided by (used in) financing activities	134,510	(6)
Net increase (decrease) in cash, cash equivalents and restricted cash	115,838	(10,907)
Cash, cash equivalents and restricted cash at beginning of period	49,525	26,787
Cash, cash equivalents and restricted cash at end of period	165,363	15,880
Supplemental disclosures for non-cash investing and financing activities
Vesting of restricted stock	9	17
Deferred offering costs included in accounts payable and accrued expenses	20	$ 965
Conversion of redeemable convertible preferred stock to common stock	$ 177,077

Organization

Organization	3 Months Ended
	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	1. Organization Description of the business ARMO BioSciences, Inc., (ARMO or the Company), is a late-stage immuno-oncology company that is developing a pipeline of novel, proprietary products that activate the immune system of cancer patients to recognize and eradicate tumors. The Company was incorporated on June 23, 2010 in Delaware under the name Targenics, Inc., and later merged with Ante BioSciences, Inc. on December 11, 2012, subsequently changing its name to ARMO BioSciences, Inc. on December 20, 2012. On January 25, 2018, the Company completed its initial public offering (IPO) and issued 8,658,823 shares of its common stock for net proceeds of approximately $133 million. Upon the closing of the IPO, all shares of preferred stock then outstanding were automatically converted into 20,211,087 shares of common stock. The Company is located in Redwood City, California. Recent Developments On May 9, 2018, Eli Lilly and Company, an Indiana corporation (“Parent”), Bluegill Acquisition Corporation, a Delaware corporation (“Merger Sub”) and a wholly owned subsidiary of Parent, and the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”). The Merger Agreement provides that, subject to the terms of the Merger Agreement, Merger Sub will commence a cash tender offer to purchase all of the outstanding shares of the Company common stock, par value $0.0001 per share, at a price of $50.00 per share, net to the seller in cash, without interest, and subject to withholding taxes. For additional information regarding the Merger Agreement, please refer to Note 9—Subsequent Events. Liquidity Since inception, the Company has incurred recurring net operating losses. As of March 31, 2018 and December 31, 2017, the Company had an accumulated deficit of $157.1 million and $135.4 million, respectively, and expects to incur losses for the foreseeable future. To date, the Company has financed its operations primarily through sales of its common stock in conjunction with the Company’s initial public offering (“IPO”) in January 2018 and sales of its convertible preferred securities prior to its IPO. As of March 31, 2018 and December 31, 2017, the Company had cash and cash equivalents of $165.3 million and $49.5 million, respectively. Management believes that the Company’s current cash and investments, including the net proceeds of approximately $133 million from the closing of its IPO in January 2018, as described above, will provide sufficient funds to enable the Company to meet its obligations through at least May 2019, i.e. a period of at least twelve months from the date the financial statements are issued. However, if the anticipated operating results are not achieved in future periods, the Company’s planned expenditures may need to be reduced in order to extend the time period over which the then-available resources would be able to fund the Company’s operations. The cost and timing of developing the Company’s products are highly uncertain and are subject to substantial risks and many changes. As such, the Company may alter its expenditures as a result of contingencies such as the failure of one of these product candidates in clinical development, the acceleration of one or more of our product candidates in clinical development, the identification of a more promising product candidate in its research efforts or unexpected operating costs and expenditures. The Company will need to raise additional funds in the future. There can be no assurance, however, that such efforts will be successful or that, in the event they are successful, the terms and conditions of such financing will be favorable to the Company. Basis of presentation The accompanying unaudited condensed financial statements include the amounts of the Company and have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q 10-01 S-X. The December 31, 2017 condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. The condensed results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period. The accompanying condensed financial statements should be read in conjunction with the audited financial statements and notes thereto for the preceding fiscal year contained in the Company’s Annual Report on Form 10-K Reverse stock split In January 2018, the Company’s board of directors and its stockholders approved an amendment to the Company’s amended and restated certificate of incorporation to effect a reverse split of shares of the Company’s common stock and preferred stock on a 1-for-4.7093

Summary of significant accounti

Summary of significant accounting policies	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Summary of significant accounting policies	2. Summary of significant accounting policies Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that impact the amounts reported in the financial statements and accompanying notes. Management bases its estimates on historical experience and market specific or other relevant assumptions that it believes are reasonable under the circumstances. On an ongoing basis, management evaluates its estimates, including those related to accruals for research and development costs, fair value of equity instruments and accounting for stock-based compensation. Actual results could materially differ from those estimates or assumptions. Cash equivalents The Company considers all liquid marketable securities with remaining maturities of three months or less at the date of purchase to be cash equivalents. Cash equivalents consist of money market accounts and are recorded at fair value. Restricted cash Restricted cash consists of funds held as collateral for corporate credit cards and is classified as a current asset at March 31, 2018 and December 31, 2017. Concentration of credit risk Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents. The Company invests its excess cash in money market funds. Bank deposits are held by a single financial institution with a strong credit rating and these deposits may at times be in excess of insured limits. The Company is exposed to credit risk in the event of a default by the financial institution holding its cash and cash equivalents to the extent recorded on the balance sheet. The Company’s investment policy limits investments to certain types of money market instruments including direct obligations issued by the U.S. government, interest-bearing certificates of deposit and prime commercial paper. Deferred offering costs Deferred offering costs, consisting of legal, accounting, filing and other fees related to the IPO were capitalized during our IPO process. During the three months ended March 31, 2018, $3.7 million in deferred offering costs were reclassified to additional paid in capital upon the effectiveness of the IPO. As of December 31, 2017, $2.4 million of deferred offering costs were capitalized and included in other long-term assets on the balance sheet. Stock-based compensation The Company measures its stock-based awards made to employees based on the estimated fair values of the awards as of the grant dates using the Black-Scholes option-pricing model. Stock-based compensation expense is recognized over the requisite service period using the straight-line method. As permitted by ASU 2016-09, Net loss per share Basic net loss per share attributable to common stockholders is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential dilutive common shares would have been anti-dilutive. Potentially dilutive common shares include redeemable convertible preferred stock and option shares to purchase commone stock. Shares of common stock subject to repurchase are excluded from the calculation of weighted-average shares as the vesting of such shares is contingent upon continued services being rendered by such holders. Adopted Accounting Pronouncements In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments Overall (Subtopic 825-10): No. 2016-01 In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230: Classification of Certain Cash Receipts and Cash Payments zero-coupon No. 2016-15 In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, Statement of Cash Flows (Topic 230) 2016-18 beginning-of-period end-of-period In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718), Scope of Modification Accounting No. 2017-09 Recent accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (topic 740): The Company has reviewed other recent accounting pronouncements and concluded they are either not applicable to the business, or no material effect is expected on the financial statements as a result of future adoption.

Fair value measurements

Fair value measurements	3 Months Ended
	Mar. 31, 2018
Fair Value Disclosures [Abstract]
Fair value measurements	3. Fair value measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company primarily applies the market approach for recurring fair value measurements. The Company measures certain financial assets and liabilities at fair value on a recurring basis based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The carrying amount of the Company’s cash equivalents, prepaid expenses, accounts payable and accrued liabilities approximate fair value due to their short maturities. The fair value of these financial assets was determined based on a hierarchy of three levels of inputs, of which the first two are considered observable and the last unobservable, as follows: Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2—Inputs (other than quoted market prices included in Level 1) that are either directly or indirectly observable, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the instrument’s anticipated life. Level 3—Unobservable inputs that are supported by little or no market activity and reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. The Company did not have any non-financial Financial assets subject to fair value measurements on a recurring basis and the level of inputs used in such measurements are as follows (in thousands): March 31, 2018 LEVEL 1 LEVEL 2 LEVEL 3 TOTAL Assets Cash equivalents—money market funds $ 165,313 $ — $ — $ 165,313 December 31, 2017 LEVEL 1 LEVEL 2 LEVEL 3 TOTAL Assets Cash equivalents—money market funds $ 49,475 $ — $ — $ 49,475 The Company classifies money market funds as Level 1. The Company has no Level 2 or Level 3 assets or liabilities as of March 31, 2018 or December 31, 2017. There were no transfers between Level 1 and Level 2 during the periods. There were no unrealized or realized gains or losses during the quarter ended March 31, 2018 and 2017. The Company did not have any financial liabilities subject to fair value measurements on a recurring basis at March 31, 2018 and December 31, 2017.

Property and equipment, net

Property and equipment, net	3 Months Ended
	Mar. 31, 2018
Property, Plant and Equipment [Abstract]
Property and equipment, net	4. Property and equipment, net The following table is a summary of property and equipment, net (in thousands): MARCH 31, DECEMBER 31, Computer equipment $ 24 $ 24 Software 30 30 Lab equipment 964 969 Furniture and fixtures 26 10 Leasehold improvements 56 56 1,100 1,089 Less: Accumulated depreciation and amortization (773 ) (839 ) Property and equipment, net $ 327 $ 250 Depreciation and amortization expense was $52,000 and $52,000 for the three months ended March 31, 2018 and 2017, respectively.

Accrued liabilities

Accrued liabilities	3 Months Ended
	Mar. 31, 2018
Payables and Accruals [Abstract]
Accrued liabilities	5. Accrued liabilities Accrued liabilities consist of the following (in thousands): MARCH 31, DECEMBER 31, Accrued payroll and related expenses $ 728 $ 208 Accrued research and clinical trial expenses 7,714 4,443 Other accrued liabilities 299 1,063 $ 8,741 $ 5,714

Commitments and contingencies

Commitments and contingencies	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and contingencies	6. Commitments and contingencies Facility lease The Company leases its laboratory and office facilities in Redwood City, California under a noncancelable operating lease agreement. The original lease agreement, entered into in February 2013, was scheduled to terminate in May 2017. In October 2016, the Company amended the lease agreement to provide an extension to the original lease term. Under this amendment, the lease terminates in May 2022. The monthly rental payment increased as a result of the amendment, with such increases effective beginning in May 2017. The Company executed a lease and gained access to 25,956 square feet of additional office space in Redwood City, California under a noncancelable operating lease agreement with a 7-year 7-year Rent expense is recognized on a straight-line basis over the non-cancelable term of the operating leases. The Company records the difference between cash rent payments and the recognition of rent expense as a deferred rent liability on the balance sheets. The lease incentive obligation will be amortized on a straight-line basis as a reduction of rent expense. The Company’s current future minimum lease payments under all operating leases, are as follows (in thousands): Last Nine Months of 2018 $ 836 2019 1,885 2020 1,949 2021 2,014 2022 1,685 Thereafter 3,960 $ 12,329 Rent expense for the quarters ended March 31, 2018 and 2017 was $131,000 and $132,000, respectively. Contractual payments On March 31, 2018, the Company executed an agreement with a contract manufacturing organization (CMO) for process development and manufacturing services for the Company’s lead product, AM0010. Under the terms of that agreement, the Company is required to make an initial non-refundable Contingencies From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. The Company is not subject to any current pending legal matters or claims that would have a material adverse effect on its financial position, results of operations or cash flows.

Stock-Based Awards

Stock-Based Awards	3 Months Ended
	Mar. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Awards	7. Stock-Based Awards 2018 Equity Incentive Plan In January 2018, the Company adopted the 2018 Equity Incentive Plan (the 2018 Plan), which became effective upon the closing of the Company’s IPO. The 2018 Plan replaced the 2012 Stock Plan (the 2012 Plan) and provides for the granting of stock-based awards to employees, directors, and consultants under similar terms, conditions and provisions as the 2012 Plan. The 2018 Plan had 3,175,864 shares of common stock available for future issuance at the time of its inception. Shares available for issuance under the 2012 Plan did not transfer to the 2018 Plan upon adoption of the new plan. The 2018 Plan provides for automatic annual increases in shares available for grant, beginning on January 1, 2019 through January 1, 2028 by a number equal to the lesser of 1,905,518 shares, or 4% of the shares of common stock outstanding on the last business day of the prior fiscal year, or a number of shares determined by the Board of Directors. The following table sets forth the summary of activity under the 2012 Plan and the 2018 Stock Plan (in thousands, except share and per share amounts): OUTSTANDING OPTIONS SHARES SHARES WEIGHTED- WEIGHTED- AGGREGATE Balance at December 31, 2017 1,042,744 2,269,610 $ 4.79 8.58 $ 11,030 Retirement of shares available for grant under the 2012 Plan (1,042,744 ) — Increase in shares reserved for issuance under the 2018 Plan 3,175,864 — Options granted (301,190 ) 301,190 39.16 Balance at March 31, 2018 2,874,674 2,570,800 $ 8.82 8.68 $ 74,681 Vested at March 31, 2018 783,940 $ 2.75 7.28 $ 27,178 Exercisable at March 31, 2018 2,272,609 $ 4.84 8.51 $ 74,031 During the quarter ended March 31, 2018, the Company granted 301,190 stock options to purchase shares of common stock with a weighted-average grant date fair value of $30.78 per share and a weighted-average exercise price of $39.16 per share. The grant date fair value of those awards was $9.3 million. 2018 Employee Stock Purchase Plan In January 2018, the Company adopted the 2018 Employee Stock Purchase Plan (ESPP) and reserved a total of 317,586 shares of common stock for issuance under the ESPP. The ESPP provides for automatic annual increases in shares available for grant, beginning on January 1, 2019 through January 1, 2038 by a number equal to the lesser of 476,380 shares, or 1% of the shares of common stock outstanding on the last business day of the prior fiscal year, or a number of shares determined by the Board of Directors. Eligible employees may purchase common stock at 85% of the lesser of the fair market value of common stock on the offering date or the purchase date with a six-month Stock-Based Compensation Expense Total stock-based compensation expense was recorded as follows (in thousands): THREE MONTHS ENDED 2018 2017 Research and development $ 409 $ 84 General and administrative 485 103 Total $ 894 $ 187 There were no capitalized stock-based compensation costs or recognized stock-based compensation tax benefits during the quarters ended March 31, 2018 and 2017. As of March 31, 2018, there was total unrecognized compensation expense of $17.8 million, to be recognized over a period of approximately 3.3 years.

Net loss per share

Net loss per share	3 Months Ended
	Mar. 31, 2018
Earnings Per Share [Abstract]
Net loss per share	8. Net loss per share The following weighted-average outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share for the periods presented, because including them would have been anti-dilutive: As of March 31, 2018 2017 Convertible redeemable preferred stock, as converted to common stock — 14,733,837 Option shares to purchase common stock 2,570,800 1,277,006 Common stock subject to repurchase and unvested restricted shares issued under the 2012 Plan 14,053 70,983 Total 2,584,853 16,081,826

Subsequent events

Subsequent events	3 Months Ended
	Mar. 31, 2018
Subsequent Events [Abstract]
Subsequent events	9. Subsequent events On May 9, 2018, Eli Lilly and Company, an Indiana corporation (“Parent”), Bluegill Acquisition Corporation, a Delaware corporation (“Merger Sub”) and a wholly owned subsidiary of Parent and the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”). The Merger Agreement provides that, subject to the terms of the Merger Agreement, Merger Sub will commence a cash tender offer (the “Offer”) to purchase all of the outstanding shares of the Company common stock, par value $0.0001 per share, at a price of $50.00 per share, net to the seller in cash, without interest, and subject to withholding taxes. Consummation of the Offer is subject to various conditions set forth in the Merger Agreement, including, but not limited to (i) at least a majority of shares of the Company common stock then outstanding being tendered into the Offer, (ii) the receipt of certain antitrust approvals, waivers and consents, and (iii) the other conditions set forth in Exhibit A The Offer will expire at one minute after 11:59 p.m., New York City time, on the date that is 20 business days (calculated in accordance with the rules of the Securities Exchange Act of 1934, as amended) following the commencement date of the Offer unless extended in accordance with the terms of the Offer and the Merger Agreement and the applicable rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Following consummation of the Offer, Merger Sub will merge with and into the Company with the Company surviving as a wholly owned subsidiary of Parent (the “Merger”). In the Merger, each outstanding Share that is not tendered and accepted pursuant to the Offer (other than the Shares held in the treasury of the Company, Shares held by Parent or Merger Sub, and Shares as to which appraisal rights have been perfected in accordance with applicable law) will be cancelled and converted into the right to receive the Offer Price, on the terms and conditions set forth in the Merger Agreement.

Summary of significant accoun15

Summary of significant accounting policies (Policies)	3 Months Ended
	Mar. 31, 2018
Accounting Policies [Abstract]
Use of estimates	Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that impact the amounts reported in the financial statements and accompanying notes. Management bases its estimates on historical experience and market specific or other relevant assumptions that it believes are reasonable under the circumstances. On an ongoing basis, management evaluates its estimates, including those related to accruals for research and development costs, fair value of equity instruments and accounting for stock-based compensation. Actual results could materially differ from those estimates or assumptions.
Cash equivalents	Cash equivalents The Company considers all liquid marketable securities with remaining maturities of three months or less at the date of purchase to be cash equivalents. Cash equivalents consist of money market accounts and are recorded at fair value.
Restricted cash	Restricted cash Restricted cash consists of funds held as collateral for corporate credit cards and is classified as a current asset at March 31, 2018 and December 31, 2017.
Concentration of credit risk	Concentration of credit risk Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents. The Company invests its excess cash in money market funds. Bank deposits are held by a single financial institution with a strong credit rating and these deposits may at times be in excess of insured limits. The Company is exposed to credit risk in the event of a default by the financial institution holding its cash and cash equivalents to the extent recorded on the balance sheet. The Company’s investment policy limits investments to certain types of money market instruments including direct obligations issued by the U.S. government, interest-bearing certificates of deposit and prime commercial paper.
Deferred offering costs	Deferred offering costs Deferred offering costs, consisting of legal, accounting, filing and other fees related to the IPO were capitalized during our IPO process. During the three months ended March 31, 2018, $3.7 million in deferred offering costs were reclassified to additional paid in capital upon the effectiveness of the IPO. As of December 31, 2017, $2.4 million of deferred offering costs were capitalized and included in other long-term assets on the balance sheet.
Stock-based compensation	Stock-based compensation The Company measures its stock-based awards made to employees based on the estimated fair values of the awards as of the grant dates using the Black-Scholes option-pricing model. Stock-based compensation expense is recognized over the requisite service period using the straight-line method. As permitted by ASU 2016-09,
Net loss per share	Net loss per share Basic net loss per share attributable to common stockholders is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential dilutive common shares would have been anti-dilutive. Potentially dilutive common shares include redeemable convertible preferred stock and option shares to purchase commone stock. Shares of common stock subject to repurchase are excluded from the calculation of weighted-average shares as the vesting of such shares is contingent upon continued services being rendered by such holders.
Adopted Accounting Pronouncements	Adopted Accounting Pronouncements In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments Overall (Subtopic 825-10): No. 2016-01 In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230: Classification of Certain Cash Receipts and Cash Payments zero-coupon No. 2016-15 In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, Statement of Cash Flows (Topic 230) 2016-18 beginning-of-period end-of-period In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718), Scope of Modification Accounting No. 2017-09 Recent accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (topic 740): The Company has reviewed other recent accounting pronouncements and concluded they are either not applicable to the business, or no material effect is expected on the financial statements as a result of future adoption.

Fair value measurements (Tables

Fair value measurements (Tables)	3 Months Ended
	Mar. 31, 2018
Fair Value Disclosures [Abstract]
Schedule of Financial Assets Subject to Fair Value Measurements on a Recurring Basis	Financial assets subject to fair value measurements on a recurring basis and the level of inputs used in such measurements are as follows (in thousands): March 31, 2018 LEVEL 1 LEVEL 2 LEVEL 3 TOTAL Assets Cash equivalents—money market funds $ 165,313 $ — $ — $ 165,313 December 31, 2017 LEVEL 1 LEVEL 2 LEVEL 3 TOTAL Assets Cash equivalents—money market funds $ 49,475 $ — $ — $ 49,475

Property and equipment, net (Ta

Property and equipment, net (Tables)	3 Months Ended
	Mar. 31, 2018
Property, Plant and Equipment [Abstract]
Schedule of Property and Equipment, Net	The following table is a summary of property and equipment, net (in thousands): MARCH 31, DECEMBER 31, Computer equipment $ 24 $ 24 Software 30 30 Lab equipment 964 969 Furniture and fixtures 26 10 Leasehold improvements 56 56 1,100 1,089 Less: Accumulated depreciation and amortization (773 ) (839 ) Property and equipment, net $ 327 $ 250

Accrued liabilities (Tables)

Accrued liabilities (Tables)	3 Months Ended
	Mar. 31, 2018
Payables and Accruals [Abstract]
Schedule of Accrued Liabilities	Accrued liabilities consist of the following (in thousands): MARCH 31, DECEMBER 31, Accrued payroll and related expenses $ 728 $ 208 Accrued research and clinical trial expenses 7,714 4,443 Other accrued liabilities 299 1,063 $ 8,741 $ 5,714

Commitments and contingencies (

Commitments and contingencies (Tables)	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Schedule of Future Minimum Lease Payment Under Operating Leases	The Company’s current future minimum lease payments under all operating leases, are as follows (in thousands): Last Nine Months of 2018 $ 836 2019 1,885 2020 1,949 2021 2,014 2022 1,685 Thereafter 3,960 $ 12,329

Stock-Based Awards (Tables)

Stock-Based Awards (Tables)	3 Months Ended
	Mar. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of Activity Under Stock Plans	The following table sets forth the summary of activity under the 2012 Plan and the 2018 Stock Plan (in thousands, except share and per share amounts): OUTSTANDING OPTIONS SHARES SHARES WEIGHTED- WEIGHTED- AGGREGATE Balance at December 31, 2017 1,042,744 2,269,610 $ 4.79 8.58 $ 11,030 Retirement of shares available for grant under the 2012 Plan (1,042,744 ) — Increase in shares reserved for issuance under the 2018 Plan 3,175,864 — Options granted (301,190 ) 301,190 39.16 Balance at March 31, 2018 2,874,674 2,570,800 $ 8.82 8.68 $ 74,681 Vested at March 31, 2018 783,940 $ 2.75 7.28 $ 27,178 Exercisable at March 31, 2018 2,272,609 $ 4.84 8.51 $ 74,031
Schedule of Stock-based Compensation	Total stock-based compensation expense was recorded as follows (in thousands): THREE MONTHS ENDED 2018 2017 Research and development $ 409 $ 84 General and administrative 485 103 Total $ 894 $ 187

Net loss per share (Tables)

Net loss per share (Tables)	3 Months Ended
	Mar. 31, 2018
Earnings Per Share [Abstract]
Schedule of Potentially Dilutive Securities Excluded from Calculation	The following weighted-average outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share for the periods presented, because including them would have been anti-dilutive: As of March 31, 2018 2017 Convertible redeemable preferred stock, as converted to common stock — 14,733,837 Option shares to purchase common stock 2,570,800 1,277,006 Common stock subject to repurchase and unvested restricted shares issued under the 2012 Plan 14,053 70,983 Total 2,584,853 16,081,826

Organization - Additional Infor

Organization - Additional Information (Detail) $ / shares in Units, $ in Thousands	Jan. 25, 2018USD ($)shares	Jan. 12, 2018	Mar. 31, 2018USD ($)$ / shares	May 09, 2018$ / shares	Dec. 31, 2017USD ($)$ / shares
Organization Consolidation and Presentation of Financial Statements [Line Items]
Net proceeds from issue of shares			$ 136,896
Common stock par value | $ / shares			$ 0.0001		$ 0.0001
Accumulated deficit			$ (157,076)		$ (135,354)
Cash and cash equivalents			165,313		$ 49,475
Cash and investments, including the net proceeds			$ 133,000
Reverse stock split		4.7093
Subsequent Event [Member] | Merger Agreement [Member]
Organization Consolidation and Presentation of Financial Statements [Line Items]
Common stock par value | $ / shares				$ 0.0001
Common stock share price | $ / shares				$ 50
IPO [Member]
Organization Consolidation and Presentation of Financial Statements [Line Items]
Common stock, shares issued | shares	8,658,823
Net proceeds from issue of shares	$ 133,135
Outstanding preferred stock shares converted into common stock | shares	20,211,087

Summary of Significant Accoun23

Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Millions	Mar. 31, 2018	Dec. 31, 2017
Other Long-term Assets [Member]
Accounting Policies [Line Items]
Deferred offering costs		$ 2.4
Additional Paid-in Capital [Member]
Accounting Policies [Line Items]
Deferred offering costs	$ 3.7

Fair Value Measurements - Sched

Fair Value Measurements - Schedule of Financial Assets Subject to Fair Value Measurements on a Recurring Basis (Detail) - Money Market Funds [Member] - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial assets subject to fair value measurements on a recurring basis	$ 165,313	$ 49,475
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial assets subject to fair value measurements on a recurring basis	$ 165,313	$ 49,475

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Fair Value Disclosures [Abstract]
Fair value asset, Level 1 to Level 2 transfers, amount	$ 0		$ 0
Fair value asset, Level 2 to Level 1 transfers, amount	0		0
Fair value liabilities, Level 1 to Level 2 transfers, amount	0		0
Fair value liabilities, Level 2 to Level 1 transfers, amount	0		0
Unrealized or realized gains or losses during the period	0	$ 0
Financial liabilities subject to fair value measurements on a recurring basis	$ 0		$ 0

Property and Equipment, Net - S

Property and Equipment, Net - Schedule of Property and Equipment, Net (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,100	$ 1,089
Less: Accumulated depreciation and amortization	(773)	(839)
Property and equipment, net	327	250
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	24	24
Software Development [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	30	30
Lab Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	964	969
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	26	10
Leaseholds and Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 56	$ 56

Property and Equipment, Net - A

Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Property, Plant and Equipment [Abstract]
Depreciation and amortization	$ 52	$ 52

Accrued Liabilities - Schedule

Accrued Liabilities - Schedule of Accrued Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Accrued Liabilities and Other Liabilities [Abstract]
Accrued payroll and related expenses	$ 728	$ 208
Accrued research and clinical trial expenses	7,714	4,443
Other accrued liabilities	299	1,063
Accrued liabilities	$ 8,741	$ 5,714

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2018USD ($)ft²	Mar. 31, 2017USD ($)
Contingencies And Commitments [Line Items]
Facility lease, description	The original lease agreement, entered into in February 2013, was scheduled to terminate in May 2017. In October 2016, the Company amended the lease agreement to provide an extension to the original lease term. Under this amendment, the lease terminates in May 2022. The monthly rental payment increased as a result of the amendment, with such increases effective beginning in May 2017.
Rent expense	$ 131,000	$ 132,000
Initial non-refundable payment obligation	$ 4,000,000
Lease Properties [Member]
Contingencies And Commitments [Line Items]
Area of office space | ft²	25,956
Noncancelable operating lease agreement term	7 years
Aggregate base rent commitment	$ 10,100,000
Maximum cost of tenant improvement paid by lessor	3,200,000
Expected cost of tenant improvements	$ 2,700,000

Commitments and Contingencies30

Commitments and Contingencies - Schedule of Future Minimum Lease Payment Under Operating Leases (Detail) $ in Thousands	Mar. 31, 2018USD ($)
Leases [Abstract]
Last Nine Months of 2018	$ 836
2,019	1,885
2,020	1,949
2,021	2,014
2,022	1,685
Thereafter	3,960
Total	$ 12,329

Stock-Based Awards - Additional

Stock-Based Awards - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	3 Months Ended
	Jan. 31, 2018	Mar. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted		301,190
Weighted-average grant date fair value		$ 30.78
Options granted, Weighted average exercise price		$ 39.16
Grant date fair value of awards		$ 9.3
Total unrecognized compensation expense		$ 17.8
Period for recognition of unrecognized compensation expense		3 years 3 months 19 days
2018 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock available for future issuance	3,175,864
Increase in shares as per plan	1,905,518
Percentage of number of shares of common stock outstanding on the last business day of the prior fiscal year, annual increase	4.00%
Equity incentive plan description		The 2018 Plan replaced the 2012 Stock Plan (the 2012 Plan) and provides for the granting of stock-based awards to employees, directors, and consultants under similar terms, conditions and provisions as the 2012 Plan.
2018 Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of number of shares of common stock outstanding on the last business day of the prior fiscal year, annual increase	1.00%
Shares reserved for issuance	317,586
ESPP automatic annual increases in shares available for grant	476,380
Share-based compensation arrangement by share-based payment award, eligible employees discount from lesser of market price, at offering date or purchase date	85.00%

Stock-Based Awards - Summary of

Stock-Based Awards - Summary of Activity Under Stock Plans (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, options granted	301,190
Outstanding options, Weighted-average exercise price, options granted	$ 39.16
2012 Plan and 2018 Stock Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for grant, beginning balance	1,042,744
Shares available for grant, Retirement of shares available for grant under the 2012 Plan	(1,042,744)
Shares available for grant, Increase in shares reserved for issuance under the 2018 Plan	3,175,864
Shares available for grant, options granted	(301,190)
Shares available for grant, ending balance	2,874,674	1,042,744
Shares, beginning balance	2,269,610
Shares, options granted	301,190
Shares, ending balance	2,570,800	2,269,610
Vested at March 31, 2018	783,940
Exercisable at March 31, 2018	2,272,609
Outstanding options, Weighted-average exercise price, beginning balance	$ 4.79
Outstanding options, Weighted-average exercise price, options granted	39.16
Outstanding options, Weighted-average exercise price, ending balance	8.82	$ 4.79
Vested at March 31, 2018	2.75
Exercisable at March 31, 2018	$ 4.84
Outstanding options,Weighted- average remaining contractual life (in years)	8 years 8 months 5 days	8 years 6 months 29 days
Vested at March 31, 2018	7 years 3 months 11 days
Exercisable at March 31, 2018	8 years 6 months 3 days
Outstanding options, Aggregate intrinsic value at Dec. 31, 2017	$ 74,681	$ 11,030
Vested at March 31, 2018	27,178
Exercisable at March 31, 2018	$ 74,031

Stock-Based Awards - Schedule o

Stock-Based Awards - Schedule of Stock-based Compensation (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 894	$ 187
Research and Development [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	409	84
General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 485	$ 103

Net Loss Per Share - Schedule o

Net Loss Per Share - Schedule of Potentially Dilutive Securities Excluded from Calculation (Detail) - shares	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares	2,584,853	16,081,826
Convertible Redeemable Preferred Stock, as Converted to Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares		14,733,837
Option Shares to Purchase Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares	2,570,800	1,277,006
Common Stock Subject to Repurchase and Unvested Restricted Shares Issued Under 2012 Plan [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares	14,053	70,983

Subsequent Events - Additional

Subsequent Events - Additional Information (Detail) - $ / shares	May 09, 2018	Mar. 31, 2018	Dec. 31, 2017
Subsequent Event [Line Items]
Common stock par value		$ 0.0001	$ 0.0001
Subsequent Event [Member] | Merger Agreement [Member]
Subsequent Event [Line Items]
Common stock par value	$ 0.0001
Common stock share price	$ 50