Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 05, 2020 | Jun. 28, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | SURF | ||
Entity Registrant Name | SURFACE ONCOLOGY, INC. | ||
Entity Central Index Key | 0001718108 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Shell Company | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity File Number | 001-38459 | ||
Entity Tax Identification Number | 46-5543980 | ||
Entity Address, Address Line One | 50 Hampshire Street | ||
Entity Address, Address Line Two | 8th Floor | ||
Entity Address, City or Town | Cambridge | ||
Entity Address, State or Province | MA | ||
Entity Address, Postal Zip Code | 02139 | ||
City Area Code | 617 | ||
Local Phone Number | 714-4096 | ||
Entity Interactive Data Current | Yes | ||
Entity Common Stock, Shares Outstanding | 28,061,197 | ||
Entity Public Float | $ 56,408,807 | ||
Title of 12(b) Security | Common stock, $0.0001 | ||
Security Exchange Name | NASDAQ | ||
Entity Incorporation, State or Country Code | DE | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s Definitive Proxy Statement relating to the Annual Meeting of Shareholders, scheduled to be held on June 10, 2020, are incorporated by reference into Part III of this Report. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 46,755 | $ 82,912 |
Marketable securities | 58,406 | 75,923 |
Prepaid expenses and other current assets | 2,765 | 5,766 |
Total current assets | 107,926 | 164,601 |
Property and equipment, net | 7,286 | 8,226 |
Operating lease right-of-use asset | 14,858 | |
Restricted cash | 1,595 | 1,198 |
Other assets | 28 | 40 |
Total assets | 131,693 | 174,065 |
Current liabilities: | ||
Accounts payable | 3,384 | 3,412 |
Accrued expenses and other current liabilities | 8,012 | 8,803 |
Deferred revenue - related party | 4,916 | 14,610 |
Deferred rent | 352 | |
Operating lease liability | 2,962 | |
Total current liabilities | 19,274 | 27,177 |
Deferred revenue - related party, non-current | 33,676 | 39,342 |
Deferred rent, non-current | 4,684 | |
Operating lease liability, non-current | 16,968 | |
Convertible note payable, non-current | 5,109 | |
Total liabilities | 75,027 | 71,203 |
Commitments and contingencies (Note 17) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value per share; 5,000,000 shares authorized at December 31, 2019 and December 31, 2018; no shares issued and outstanding at December 31, 2019 and December 31, 2018 | ||
Common stock, $0.0001 par value; 150,000,000 authorized at December 31, 2019 and December 31, 2018; 27,893,337 and 27,772,600 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively | 3 | 3 |
Additional paid-in capital | 178,155 | 169,784 |
Accumulated other comprehensive income (loss) | 103 | (119) |
Accumulated deficit | (121,595) | (66,806) |
Total stockholders’ equity | 56,666 | 102,862 |
Total liabilities and stockholders’ equity | $ 131,693 | $ 174,065 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 150,000,000 | 150,000,000 |
Common stock, issued | 27,893,337 | 27,772,600 |
Common stock, outstanding | 27,893,337 | 27,772,600 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Collaboration revenue - related party | $ 15,360 | $ 59,417 | $ 12,826 |
Type of Revenue [Extensible List] | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember |
Operating expenses: | |||
Research and development | $ 52,118 | $ 52,492 | $ 47,783 |
General and administrative | 20,608 | 16,076 | 11,033 |
Total operating expenses | 72,726 | 68,568 | 58,816 |
Loss from operations | (57,366) | (9,151) | (45,990) |
Interest and other income, net | 2,577 | 2,554 | 613 |
Net loss | (54,789) | (6,597) | (45,377) |
Accretion of redeemable convertible preferred stock to redemption value | (11) | (40) | |
Net loss attributable to common stockholders | $ (54,789) | $ (6,608) | $ (45,417) |
Net loss per share attributable to common stockholders—basic and diluted | $ (1.97) | $ (0.33) | $ (18.35) |
Weighted average common shares outstanding—basic and diluted | 27,854,912 | 19,990,773 | 2,474,800 |
Comprehensive loss: | |||
Net loss | $ (54,789) | $ (6,597) | $ (45,377) |
Other comprehensive loss: | |||
Unrealized gain on marketable securities, net of tax | 222 | 127 | 107 |
Comprehensive loss | $ (54,567) | $ (6,470) | $ (45,270) |
Consolidated Statements of Rede
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders Equity (Deficit) - USD ($) $ in Thousands | Total | Series A and A-1 Redeemable Convertible Preferred Stock | Initial Public Offering | Private PlacementNovartis Institutes for Biomedical Research, Inc. | Common Stock | Common StockInitial Public Offering | Common StockPrivate PlacementNovartis Institutes for Biomedical Research, Inc. | Additional Paid-in Capital | Additional Paid-in CapitalInitial Public Offering | Additional Paid-in CapitalPrivate PlacementNovartis Institutes for Biomedical Research, Inc. | Note Receivable From Officer | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning balance at Dec. 31, 2016 | $ (26,912) | $ 2,040 | $ (31) | $ (353) | $ (28,568) | ||||||||
Temporary equity beginning balance, share at Dec. 31, 2016 | 37,100,000 | ||||||||||||
Temporary equity beginning balance at Dec. 31, 2016 | $ 48,477 | ||||||||||||
Beginning balance, share at Dec. 31, 2016 | 2,399,265 | ||||||||||||
Issuance of common stock upon exercise of stock options | 102 | 102 | |||||||||||
Issuance of common stock upon exercise of stock options, share | 287,085 | ||||||||||||
Vesting of restricted common stock | 35 | 35 | |||||||||||
Stock-based compensation expense | 4,709 | 4,709 | |||||||||||
Collection of note receivable from officer | 62 | 31 | $ 31 | ||||||||||
Accretion of redeemable convertible preferred stock to redemption value | 40 | ||||||||||||
Accretion of redeemable convertible preferred stock to redemption value | (40) | (40) | |||||||||||
Unrealized gain on marketable securities | 107 | 107 | |||||||||||
Net income (loss) | (45,377) | (45,377) | |||||||||||
Ending balance at Dec. 31, 2017 | $ (67,314) | 6,877 | (246) | (73,945) | |||||||||
Temporary equity ending balance, share at Dec. 31, 2017 | 37,100,000 | ||||||||||||
Temporary equity ending balance at Dec. 31, 2017 | $ 48,517 | ||||||||||||
Ending balance, share at Dec. 31, 2017 | 2,686,350 | ||||||||||||
Issuance of common stock upon exercise of stock options | 467 | 467 | |||||||||||
Issuance of common stock upon exercise of stock options, share | 272,895 | ||||||||||||
Repurchases of unvested restricted stock, shares | (16,935) | ||||||||||||
Stock-based compensation expense | 5,217 | 5,217 | |||||||||||
Accretion of redeemable convertible preferred stock to redemption value | $ 11 | ||||||||||||
Accretion of redeemable convertible preferred stock to redemption value | (11) | (11) | |||||||||||
Conversion of redeemable convertible preferred stock to common stock | 48,528 | $ 2 | 48,526 | ||||||||||
Temporary equity conversion of convertible preferred stock, shares | (37,100,000) | ||||||||||||
Temporary equity conversion of convertible preferred stock | $ (48,528) | ||||||||||||
Conversion of convertible preferred stock, shares | 16,863,624 | ||||||||||||
Issuance of common stock | $ 97,209 | $ 11,500 | $ 1 | $ 97,208 | $ 11,500 | ||||||||
Issuance of common stock, shares | 7,200,000 | 766,666 | |||||||||||
Adjustment due to the adoption of ASC 606 | 13,736 | 13,736 | |||||||||||
Unrealized gain on marketable securities | 127 | 127 | |||||||||||
Net income (loss) | (6,597) | (6,597) | |||||||||||
Ending balance at Dec. 31, 2018 | $ 102,862 | $ 3 | 169,784 | (119) | (66,806) | ||||||||
Ending balance, share at Dec. 31, 2018 | 27,772,600 | 27,772,600 | |||||||||||
Issuance of common stock upon exercise of stock options | $ 255 | 255 | |||||||||||
Issuance of common stock upon exercise of stock options, share | 110,156 | ||||||||||||
Stock-based compensation expense | 5,991 | 5,991 | |||||||||||
Issuance of common stock | 24 | 24 | |||||||||||
Issuance of common stock, shares | 10,581 | ||||||||||||
Portion of convertible note payable proceeds allocated to beneficial conversion feature | 2,101 | 2,101 | |||||||||||
Unrealized gain on marketable securities | 222 | 222 | |||||||||||
Net income (loss) | (54,789) | (54,789) | |||||||||||
Ending balance at Dec. 31, 2019 | $ 56,666 | $ 3 | $ 178,155 | $ 103 | $ (121,595) | ||||||||
Ending balance, share at Dec. 31, 2019 | 27,893,337 | 27,893,337 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net loss | $ (54,789) | $ (6,597) | $ (45,377) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization expense | 1,785 | 1,347 | 964 |
Stock-based compensation expense | 5,991 | 5,217 | 4,709 |
Non-cash interest expense related to note payable | 74 | ||
Net amortization of premiums and discounts on marketable securities | (764) | (377) | 516 |
Realized losses on marketable securities | 2 | ||
Loss on disposal of property and equipment | 1 | 14 | 35 |
Non-cash operating lease cost | 1,814 | ||
Changes in operating assets and liabilities: | |||
Amounts due from related party | 5,000 | ||
Prepaid expenses and other current assets | 3,001 | 2,170 | 1,088 |
Other assets | 12 | (26) | (12) |
Accounts payable | 583 | 23 | 285 |
Accrued expenses and other current liabilities | (710) | (524) | 2,945 |
Deferred rent | (52) | 249 | |
Operating lease liability | (1,778) | ||
Deferred revenue - related party | (15,360) | (14,417) | 17,174 |
Net cash used in operating activities | (60,140) | (13,222) | (12,422) |
Cash flows from investing activities: | |||
Purchases of property and equipment | (1,538) | (2,019) | (1,973) |
Purchases of marketable securities | (118,347) | (107,257) | |
Proceeds from sales or maturities of marketable securities | 136,850 | 72,692 | 27,891 |
Net cash provided by (used in) investing activities | 16,965 | (36,584) | 25,918 |
Cash flows from financing activities: | |||
Payments of initial public offering costs | (2,031) | (1,200) | |
Proceeds from initial public offering of common stock, net of commissions and underwriting discounts | 100,440 | ||
Proceeds from issuance of common stock to a related party | 11,500 | ||
Collection of note receivable from officer | 62 | ||
Proceeds from issuance of convertible note payable, net of issuance costs | 7,217 | ||
Payments of debt issuance costs | (81) | ||
Proceeds for issuance of common stock offering, net | 24 | ||
Proceeds from exercise of stock options | 255 | 467 | 102 |
Net cash provided by (used in) financing activities | 7,415 | 110,376 | (1,036) |
Net increase (decrease) in cash and cash equivalents and restricted cash | (35,760) | 60,570 | 12,460 |
Cash and cash equivalents and restricted cash at beginning of period | 84,110 | 23,540 | 11,080 |
Cash and cash equivalents and restricted cash at end of period | $ 48,350 | 84,110 | 23,540 |
Supplemental disclosure of cash flow information: | |||
Cash paid for income taxes | 28 | 3,297 | |
Supplemental disclosure of non-cash investing and financing activities: | |||
Accretion of redeemable convertible preferred stock to redemption value | 11 | 40 | |
Purchases of property and equipment included in accounts payable and accrued expenses | $ 692 | 450 | |
Deferred offering costs included in accrued expenses | 584 | ||
Reclassification of restricted cash from non-current assets to current assets | 85 | ||
Reclassification of deposit liability for restricted stock upon vesting of shares | 35 | ||
Landlord incentives for construction of leasehold improvements recorded as deferred rent | $ 2,377 |
Nature of the Business
Nature of the Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of the Business | 1. Surface Oncology, Inc. (the “Company” or “Surface”) is a clinical-stage immuno-oncology company focused on using its specialized knowledge of the biological pathways critical to the immunosuppressive tumor microenvironment (“TME”) for the development of next-generation cancer therapies. Surface was incorporated in April 2014 under the laws of the State of Delaware. The Company is subject to risks common to early-stage companies in the biotechnology industry including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, compliance with government regulations and the ability to obtain additional financing 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 infrastructure and extensive compliance-reporting capabilities. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. On April 6, 2018, the Company effected a one-for-2.2 reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company’s Redeemable Convertible Preferred Stock. Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock split and adjustment of the preferred stock conversion ratios. On April 23, 2018, the Company completed its initial public offering of its common stock by issuing 7,200,000 shares of common stock, at $15.00 per share for gross proceeds of $108,000, or net proceeds of $97,209 after deducting underwriting discounts, commissions and offering expenses. Concurrent with the initial public offering, the Company issued Novartis Institutes for Biomedical Research, Inc. (Novartis) 766,666 shares of its common stock at $15.00 per share for proceeds of $11,500, in a private placement. Upon the closing of the Company’s initial public offering on April 23, 2018, all shares of Series A and A-1 redeemable convertible preferred stock (the “Series A Preferred Stock” and “Series A-1 Preferred Stock”, respectively) automatically converted into 16,863,624 shares of common stock. On May 1, 2019, the Company entered into a Capital on Demand TM The Company’s financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business. The Company has primarily funded its operations with proceeds from the sales of redeemable convertible preferred stock, proceeds from a collaboration agreement with Novartis, issuance of a debt facility with K2 Health Ventures and proceeds from the Company’s initial public offering of common stock The Company will seek additional funding through public financings, debt financings, collaboration agreements, strategic alliances and licensing arrangements. The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into collaborations or other arrangements. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. If the Company is unable to obtain funding, the Company could be required to delay, reduce, or eliminate research and development programs, product portfolio expansion, or future commercialization efforts, which could adversely affect its business prospects. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its wholly owned subsidiary, Surface Securities Corporation, a Massachusetts corporation, after elimination of all intercompany accounts and transactions. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, revenue recognition and the accrual of research and development expenses. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from the Company’s estimates. Cash Equivalents The Company considers all short-term, highly liquid investments with original maturities of 90 days or less at the acquisition date to be cash equivalents. Cash equivalents, which consist of money market funds are stated at fair value. Marketable Securities Marketable securities consist of investments with original maturities greater than 90 days at their acquisition date. The Company has classified its investments with maturities beyond one year as current, based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. The Company classifies all of its marketable securities as available-for-sale securities. The Company’s marketable securities are measured and reported at fair value using quoted prices in active markets for similar securities. Unrealized gains and losses on available-for-sale debt securities are reported as accumulated other comprehensive income (loss), which is a separate component of stockholders’ equity. The cost of debt securities sold is determined on a specific identification basis, and realized gains and losses are included in interest and other income (expense), net in the consolidated statements of operations and comprehensive loss. The Company evaluates its marketable securities with unrealized losses for other-than-temporary impairment. When assessing marketable securities for other-than-temporary declines in value, the Company considers such factors as, among other things, how significant the decline in value is as a percentage of the original cost, how long the market value of the investment has been less than its original cost, the Company’s ability and intent to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair value and market conditions in general. If any adjustment to fair value reflects a decline in the value of the investment that the Company considers to be “other than temporary,” the Company reduces the investment to fair value through a charge to the statement of operations and comprehensive loss. No such adjustments were necessary during the periods presented. Restricted Cash At December 31, 2019 and 2018, restricted cash consisted of cash deposited in a separate bank account as collateral for the Company’s facilities lease obligations. At December 31, 2019 and 2018, $1,595 and $1,198 of restricted cash was classified as non-current. Concentration of Credit Risk and of Significant Suppliers Financial instruments that potentially expose the Company to concentrations of credit risk primarily consist of cash, cash equivalents and marketable securities. The Company maintains its cash, cash equivalents, and marketable securities at one accredited financial institution in amounts that exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company is dependent on third-party manufacturers to supply products for research and development activities of its programs, including preclinical testing. These programs could be adversely affected by a significant interruption in the supply of such drug substance products. Fair Value of Financial Instruments Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as 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 on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The Company’s cash equivalents and marketable securities are carried at fair value, determined according to the fair value hierarchy described above. The carrying values of the Company’s prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities. Deferred Offering Costs The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs (non-current) until such financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders’ equity as a reduction of additional paid-in capital generated as a result of the offering. Should the planned equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the statement of operations and comprehensive loss. The Company did not record any deferred offering costs as of December 31, 2019 or 2018. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expense is recognized using the straight-line method over the useful life of the asset. Laboratory equipment is depreciated over five years. Computer equipment and furniture and office equipment are depreciated over three years. Leasehold improvements are amortized over the shorter of the lease term or 10 years. Expenditures for repairs and maintenance of assets are charged to expense as incurred. Upon retirement or sale, the cost and related accumulated depreciation and amortization of assets disposed of are removed from the accounts, and any resulting gain or loss is included in loss from operations. Impairment of Long-Lived Assets Long-lived assets consist of property and equipment. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset group over its fair value, determined based on discounted cash flows. To date, the Company has not recorded any impairment losses on long-lived assets. Revenue Recognition Effective January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, using the modified retrospective transition method. Under this method, the Company recognized the cumulative effect of initially adopting ASC Topic 606, as an adjustment to the opening balance of accumulated deficit. Additionally, under this method of adoption, the Company applies the guidance to all incomplete contracts in scope as of the date of initial application. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. In accordance with ASC Topic 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC Topic 606, it performs the following five steps: i. identify the contract(s) with a customer; ii. identify the performance obligations in the contract; iii. determine the transaction price iv. allocate the transaction price to the performance obligations within the contract; and v. recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it determines that it is probable it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within the contract to determine whether each promised good or service is a performance obligation. The promised goods or services in the Company’s arrangements typically consist of a license to the Company’s intellectual property and/or research and development services. The Company may provide options to additional items in such arrangements, which are accounted for as separate contracts when the customer elects to exercise such options, unless the option provides a material right to the customer. Performance obligations are promises in a contract to transfer a distinct good or service to the customer that (i) the customer can benefit from on its own or together with other readily available resources, and (ii) is separately identifiable from other promises in the contract. Goods or services that are not individually distinct performance obligations are combined with other promised goods or services until such combined group of promises meet the requirements of a performance obligation. The Company determines transaction price based on the amount of consideration the Company expects to receive for transferring the promised goods or services in the contract. Consideration may be fixed, variable, or a combination of both. At contract inception for arrangements that include variable consideration, the Company estimates the probability and extent of consideration it expects to receive under the contract utilizing either the most likely amount method or expected amount method, whichever best estimates the amount expected to be received. The Company then considers any constraints on the variable consideration and includes in the transaction price variable consideration to the extent it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company then allocates the transaction price to each performance obligation based on the relative standalone selling price and recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) control is transferred to the customer and the performance obligation is satisfied. For performance obligations which consist of licenses and other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company records amounts as accounts receivable when the right to consideration is deemed unconditional. When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded for deferred revenue. Amounts received prior to satisfying the revenue recognition criteria are recognized as deferred revenue in the Company’s balance sheet. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, non-current. The Company’s revenue arrangement includes the following: Up-front License Fees: If a license is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from nonrefundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone Payments: At the inception of an agreement that includes research and development milestone payments, the Company evaluates each milestone to determine when and how much of the milestone to include in the transaction price. The Company first estimates the amount of the milestone payment that the Company could receive using either the expected value or the most likely amount approach. The Company primarily uses the most likely amount approach as that approach is generally most predictive for milestone payments with a binary outcome. Then, the Company considers whether any portion of that estimated amount is subject to the variable consideration constraint (that is, whether it is probable that a significant reversal of cumulative revenue would not occur upon resolution of the uncertainty.) The Company updates the estimate of variable consideration included in the transaction price at each reporting date which includes updating the assessment of the likely amount of consideration and the application of the constraint to reflect current facts and circumstances. Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any revenue related to sales-based royalties or milestone payments based on the level of sales. The Company’s revenues have been generated through the Collaboration Agreement with Novartis See Note 8, “Collaboration Agreement with Novartis” for additional details regarding the Company’s Collaboration Agreement. Research and Development Costs Research and development costs are expensed as incurred. Research and development expenses include salaries, stock-based compensation and benefits of employees, third-party license fees and other operational costs related to the Company’s research and development activities, including allocated facility-related expenses and external costs of outside vendors engaged to conduct both preclinical studies and clinical trials. Research Contract Costs and Accruals The Company has entered into various research and development contracts with research institutions and other companies. These agreements are generally cancelable, and related payments are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing research costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs. Nonrefundable prepayments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized. Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered or the services rendered. Patent Costs All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses in the accompanying statements of operations and comprehensive loss. Stock-Based Compensation The Company measures all stock options and other stock-based awards granted to employees and directors based on the fair value on the date of the grant and recognizes compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award. Generally, the Company issues stock options and restricted stock awards with only service-based vesting conditions and records the expense for these awards using the straight-line method. Following the Company’s adoption of ASU 2018-07, Compensation—Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), on January 1, 2019, for stock-based awards issued to non-employees, the Company no longer revalues non-employee awards at each reporting date and instead calculates the fair value of the awards as of the grant date using the Black-Scholes option-pricing model. Compensation expense for these awards is recognized over the related service period. The Company classifies stock-based compensation expense in its statement of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipients’ service payments are classified. The fair value of each stock option grant is estimated using the Black- Scholes option-pricing model. The Company has historically been a private company and lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The Company elects to account for forfeitures as they occur rather than apply an estimated forfeiture rate to share based payment expense. Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) asset, operating lease liability, and operating lease liability, non-current in the Company’s consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Many lease agreements include the option to renew or extend the lease term. The exercise of lease renewal options or extensions is at the Company’s sole discretion, and are only included in the calculation of the operating lease ROU asset and operating lease liability when it is reasonably certain that the Company would exercise such options. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, which it calculates based on the credit quality of the Company, and by comparing interest rates available in the market for similar borrowings, and adjusting this amount based on the impact of collateral over the term of each lease. The components of a lease are split into three categories: lease components (e.g., land, building, etc.), non-lease components (e.g., common area maintenance, maintenance, consumables, etc.), and non-components (e.g., property taxes, insurance, etc.). Then the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on fair values to the lease components and non-lease components. Although separation of lease and non-lease components is required, certain practical expedients are available to entities. Entities electing the practical expedient would not separate lease and non-lease components. Rather, they would account for each lease component and the related non-lease component together as a single component. The Company’s facilities operating leases have lease and non-lease components to which the Company has elected to apply the practical expedient and account for each lease component and related non-lease component as one single component. The Company also elected the package of practical expedients, which, among other things, allows the Company to carry forward prior conclusions related to whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases and initial direct costs for existing leases. The Company also made an accounting policy election not to recognize leases with an initial term of 12 months or less within its consolidated balance sheets and to recognize those lease payments on a straight-line basis in its consolidated statements of operations and comprehensive loss over the lease term. Segment Data The Company manages its operations as a single segment for the purposes of assessing performance and making decisions. The Company’s singular focus is using its specialized knowledge of the biological pathways critical to the TME for the development of next-generation cancer therapies. All of the Company’s tangible assets are held in the United States, and all collaboration revenue is derived from the Company’s collaboration partner in the United States. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the financial statements or in the Company's tax returns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by analyzing carryback capacity in periods with taxable income, reversal of existing taxable temporary differences and estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company accounts for uncertainty in income taxes recognized in the financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. The Company’s only element of other comprehensive loss in all periods presented was unrealized gains (losses) on marketable securities. Net Loss per Share The Company follows the two-class method when computing net loss per share as the Company has issued shares that meet the definition of participating securities. The two-class method determines net loss per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted net loss attributable to common stockholders is computed by adjusting net loss attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities, including the assumed conversion of the Company’s convertible note payable and outstanding options to purchase common stock, except where the results would be anti-dilutive. Diluted net loss per share attributable to common stockholders is computed by dividing the diluted net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period, including potential dilutive common shares assuming the dilutive effective of the conversion of the convertible note payable and outstanding options to purchase common stock. In the diluted net loss per share calculation, net loss would also be adjusted for the elimination of interest expense on the convertible note payable (which includes amortization of the discount created for the beneficial conversion feature), if the impact was not anti-dilutive. For purpose of this calculation, outstanding options to purchase common stock or redeemable convertible preferred stock are considered potential dilutive common shares. Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2016-02, Leases “Codification Improvements to Topic 842, Leases” The Company adopted ASC 842 using the modified retrospective approach with an effective date of January 1, 2019 for leases that existed on that date. Prior period results continue to be presented under ASC 840 based on the accounting standards originally in effect for such periods. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allows the Company to carry forward the historical lease classification. In connection with the adoption of ASC 842, the Company recorded an impact of $16,672 on its assets and $21,708 on its liabilities for the recognition of operating lease right-of-use-assets and operating lease liabilities, respectively, which are primarily related to the lease of the Company’s corporate headquarters in Cambridge, Massachusetts. The adoption of ASC 842 did not have a material impact on the Company’s results of operations or cash flows. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share, Distinguishing Liabilities from Equity, Derivatives and Hedging (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting Recently Issued Accounting Pronouncements In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 ASU No. 2018-18 In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, (“ASU 2018-13”). Other accounting standards that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption. |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 2019 | |
Marketable Securities [Abstract] | |
Marketable Securities | 3. As of December 31, 2019, the fair value of available-for-sale marketable debt securities by type of security was as follows: December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable debt securities: U.S. Treasury notes $ 42,795 $ 73 $ — $ 42,868 U.S. government agency bonds 15,508 31 (1 ) 15,538 $ 58,303 $ 104 $ (1 ) $ 58,406 The amortized cost and fair value of the Company’s available-for-sale securities by contractual maturity are summarized as follows: December 31, 2019 Amortized Cost Fair Value Maturing in one year or less $ 58,303 $ 58,406 $ 58,303 $ 58,406 As of December 31, 2018, the fair value of available-for-sale marketable securities by type of security was as follows: December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable debt securities: U.S. Treasury notes $ 62,866 $ — $ (24 ) $ 62,842 U.S. government agency bonds 2,900 — (15 ) 2,885 Corporate bonds 10,276 — (80 ) 10,196 $ 76,042 $ — $ (119 ) $ 75,923 The amortized cost and fair value of the Company’s available-for-sale securities by contractual maturity are summarized as follows: December 31, 2018 Amortized Cost Fair Value Maturing in one year or less $ 76,042 $ 75,923 $ 76,042 $ 75,923 The cost of securities sold is determined based on the specific identification method for purposes of recording realized gains and losses. During the year ended December 31, 2019 realized gain on sales of marketable securities was $7. During the year ended December 31, 2018 there were no realized gains (losses) on sales of marketable securities. During the year ended December 31, 2017, realized losses on sales of marketable securities were $(2). There were no marketable securities that required adjustment for other-than-temporary declines in fair value during the years ended December 31, 2019, 2018, and 2017. The aggregate fair value of securities held by the Company in an unrealized loss position for less than twelve months as of December 31, 2019 and 2018 was $8,031 and $62,842, respectively. There were no securities held in an unrealized loss position for more than twelve months as of December 31, 2019. The aggregate fair value of securities held by the Company in an unrealized loss position for more than twelve months as of December 31, 2018 was $13,081. The Company determined that there was no material change in the credit risk of these investments. As a result, the Company determined it did not hold any investments with an other-than-temporary decline in fair value as of December 31, 2019 and 2018. |
Fair Value of Financial Assets
Fair Value of Financial Assets | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets | 4 . The following tables present information about the Company’s financial assets that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values: Fair Value Measurements as of December 31, 2019 using: Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 30,490 $ — $ — $ 30,490 U.S. government agency bonds — $ 2,500 — $ 2,500 Marketable securities: U.S. Treasury notes — 42,868 — $ 42,868 U.S. government agency bonds — 15,538 — $ 15,538 $ 30,490 $ 60,906 $ — $ 91,396 Fair Value Measurements as of December 31, 2018 using: Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 77,737 $ — $ — $ 77,737 Marketable securities: U.S. Treasury notes — 62,842 — 62,842 U.S. government agency bonds — 2,885 — 2,885 Corporate bonds — 10,196 — 10,196 $ 77,737 $ 75,923 $ — $ 153,660 As of December 31, 2019 and 2018, the Company’s cash equivalents were invested in money market funds and were valued based on Level 1 inputs. As of December 31, 2019 the Company’s marketable securities consisted of U.S. Treasury notes and U.S. government agency bonds and were valued based on Level 2 inputs. As of December 31, 2018, the Company’s marketable securities consisted of U.S. Treasury notes, U.S. government agency bonds and corporate bonds and were valued based on Level 2 inputs. In determining the fair value of its U.S. Treasury notes, U.S. government agency bonds and corporate bonds, the Company relied on quoted prices for similar securities in active markets or other inputs that are observable or can be corroborated by observable market data. During the years ended December 31, 2019 and 2018, there were no transfers between Level 1, Level 2 and Level 3. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | 5. Property and equipment, net consisted of the following: Year Ended December 31, 2019 2018 Laboratory equipment $ 3,583 $ 2,970 Leasehold improvements 6,632 6,531 Computer equipment 511 305 Furniture and office equipment 1,074 1,074 Construction in progress — 79 11,800 10,959 Less: Accumulated depreciation and amortization (4,514 ) (2,733 ) $ 7,286 $ 8,226 For the years ended December 31, 2019, 2018, and 2017 depreciation and amortization expense was $1,785, $1,347, and $964 respectively. During the years ended December 31, 2019, 2018, and 2017 the Company recorded a loss on disposal of property and equipment of $1, $14, and $35, respectively. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2019 | |
Prepaid Expense And Other Assets Current [Abstract] | |
Prepaid Expenses and Other Current Assets | 6. Prepaid expenses and other current assets consisted of the following: Year Ended December 31, 2019 2018 Prepaid income taxes $ — $ 923 Prepaid expenses 2,429 4,520 Interest receivable on marketable securities 336 323 $ 2,765 $ 5,766 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Payables And Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | 7. Accrued expenses and other current liabilities consisted of the following: Year Ended December 31, 2019 2018 Accrued external research and development costs $ 3,468 $ 5,011 Accrued payroll and payroll-related costs 3,380 2,618 Accrued professional fees 410 634 Other 754 540 $ 8,012 $ 8,803 |
Collaboration Agreement with No
Collaboration Agreement with Novartis | 12 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Collaboration Agreement with Novartis | 8. Overview In January 2016, the Company entered into a collaboration agreement with Novartis (the “Collaboration Agreement”), which was subsequently amended in May 2016, July 2017, September 2017, and October 2018 (the “October 2018 Amendment”). Pursuant to the Collaboration Agreement, the Company granted Novartis a worldwide exclusive license to research, develop, manufacture and commercialize antibodies that target CD73. In addition, the Company initially granted Novartis the right to purchase exclusive option rights (each an “Option”) for up to four specified targets (each an “Option Target”) including certain development, manufacturing and commercialization rights. Novartis initially had the right to exercise up to three purchased Options. Under the Collaboration Agreement, therefore, Novartis had the ability to exclusively license the development and manufacturing rights for up to four targets (inclusive of CD73). As of December 31, 2019, Novartis had one Option remaining eligible for purchase, and potential exercise. In January 2020, Novartis did not purchase and exercise its single remaining Option under the Collaboration Agreement and, as a result, the option purchase period expired. Accordingly, there are no Options remaining eligible for purchase and exercise, and the Company’s performance obligations under the Collaboration Agreement have ended. (See Note 21). Novartis is a related party because it is a greater than 5% stockholder of the Company. In January 2016, the Company entered into the Collaboration Agreement and sold 2,000,000 shares of its Series A-1 preferred stock to Novartis. In addition, concurrent with the Company’s initial public offering of common stock, the Company issued Novartis 766,666 shares of its common stock at $15.00 per share for proceeds of $11,500 in a private placement. During the year ended December 31, 2019, the Company made no cash payments to Novartis related to the Collaboration Agreement. During the year ended December 31, 2018, the Company made a payment of $3,437 to Novartis for the reimbursement of manufacturing costs incurred by Novartis prior to December 31, 2017. Development and Commercialization of CD73 Products Novartis has the sole right to develop and commercialize CD73 antibody candidates and corresponding licensed products worldwide pursuant to a development plan and a commercialization plan, respectively. Novartis is obligated to use commercially reasonable efforts to develop the CD73 antibody candidates and corresponding licensed products, obtain regulatory approval of such products, including within certain defined markets, and commercialize such products following regulatory approval. Novartis is responsible for all costs and expenses of such development and commercialization and is obligated to provide the Company with updates on its development and commercialization activities through the joint steering committee, joint development committee and joint commercialization committee. Exclusivity Neither the Company nor Novartis may, alone or with any affiliate or third party develop or commercialize any antibody that specifically binds to CD73. The October 2018 Amendment clarified that Novartis is permitted to research, develop, manufacture or commercialize any diagnostic product that specifically binds to CD73, subject to Novartis’ compliance with its rights and obligations under the Collaboration Agreement, and provided that where such diagnostic product is an Adimab diagnostic product, Novartis may research, develop, manufacture or commercialize such Adimab diagnostic product solely for the purpose of research, development or commercialization of a therapeutic or prophylactic licensed product that specifically binds to the same licensed target. Financial Terms Upon entering into the Collaboration Agreement in January 2016, Novartis made an upfront payment to the Company of $70,000. The Company is also eligible to receive payments upon the achievement of specified development and sales milestones as well as tiered royalties on annual net sales by Novartis ranging from high single-digit to mid-teens percentages, upon successful commercialization of NZV930. Under the Collaboration Agreement, as a result of the option purchase period for the single remaining Option under the Collaboration Agreement expiring in January 2020, the Company is now entitled to potential milestones of $525,000, as well as tiered royalties on annual net sales by Novartis ranging from high single-digit to mid-teens percentages upon the successful commercialization of NZV930 (formerly SRF373). Termination Unless terminated earlier, the Collaboration Agreement will continue in effect until neither the Company nor Novartis is researching, developing, manufacturing or commercializing NZV930. Novartis may terminate the Collaboration Agreement for any reason upon prior notice to the Company within a specified time period. Either party may terminate the Collaboration Agreement in full if an undisputed material breach is not cured within a certain period of time or upon notice of insolvency of the other party. To the extent Novartis terminates for convenience, or the Company terminates for Novartis’ material breach, Novartis will grant the Company, on mutually agreeable financial terms, an exclusive, worldwide, irrevocable, perpetual and royalty-bearing license with respect to intellectual property controlled by Novartis that is reasonably necessary to research, develop, manufacture or commercialize NZV930. Revenue Recognition - In determining the appropriate amount of revenue to be recognized under ASC 606, the Company performed the following steps: (i) identified the promised goods or services in the contract; (ii) determined whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. Under ASC 606, the Company recognized revenue using the cost-to-cost method, which it believes best depicts the transfer of control to the customer. Under the cost-to-cost method, the extent of progress towards completion is measured based on the ratio of actual costs incurred to the total estimated costs expected upon satisfying the identified performance obligation. Under this method, revenue will be recorded as a percentage of the estimated transaction price based on the extent of progress towards completion. Under ASC 606, the estimated transaction price will include variable consideration. The Company does not include variable consideration to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will occur when any uncertainty associated with the variable consideration is resolved. The estimate of the Company’s measure of progress and estimate of variable consideration to be included in the transaction price will be updated at each reporting date as a change in estimate. The amount related to the unsatisfied portion will be recognized as that portion is satisfied over time. Under ASC 606 the Company accounts for (i) the license it conveyed with respect to CD73 and (ii) its obligations to perform research on CD73 and other specified targets as a single performance obligation under the collaboration agreement with Novartis. Novartis’ right to purchase exclusive options to obtain certain development, manufacturing and commercialization rights are accounted for separately as they do not represent material rights, based on the criteria of ASC 606. Upon the exercise of any purchased option by Novartis, the contract promises associated with an option target would use a separate cost-to-cost model for purposes of revenue recognition under ASC 606. In February 2018, the Company received an additional milestone payment of $45,000 from Novartis upon Novartis’ receipt and acceptance of the first final audited Good Laboratory Practices (“GLP”) toxicology study report for NZV930. Upon achieving the milestone, the Company concluded this variable consideration associated with this milestone was no longer constrained and included the $45,000 in the transaction price. The Company recognized $4,882 and $27,850 as collaboration revenue – related party in the twelve months ended December 31, 2019 and 2018, respectively, based on the ratio of actual costs incurred as of the milestone achievement date to the total estimated costs with respect to performing research on antibodies that bind to CD73 and other specified targets under the Collaboration Agreement. The remaining unrecognized amount of $12,268 is recorded as deferred revenue – related party as of December 31, 2019 and will subsequently be recognized as revenue over the performance period in proportion to the costs incurred under the Collaboration Agreement. In March 2018, Novartis notified the Company of its decision not to exercise its Option related to CD47. The Company recognized the $5,000 exclusive option right payment as collaboration revenue – related party in the first quarter of 2018 because the Company no longer has any remaining performance obligations related to CD47. In March 2018, the Company and Novartis elected to terminate a specified target under the Collaboration Agreement. Future costs associated with this target were removed from the estimated total costs in the cost-to-cost model. In February 2019, Novartis notified the Company of its decision not to purchase the Option related to IL-27. Future costs associated with this target were removed from the estimated total costs in the cost-to-cost model. In January 2020, Novartis did not purchase and exercise its single remaining Option under the Collaboration Agreement and, as a result, the option purchase period expired. Accordingly, there are no Options remaining eligible for purchase and exercise, and the Company’s performance obligations under the Collaboration Arrangement have ended. The maximum aggregate amount of potential milestone payments that the Company is currently entitled to receive under the Collaboration Agreement was reduced from $745,000 as of December 31, 2019 to $525,000 in January 2020. The Company will remove all costs associated with its remaining performance obligation, as of December 31, 2019, for the single remaining Option from the cost-to-cost model in the first quarter of 2020. This will result in the Company recognizing the remaining deferred revenue of $ 38,592 For the years ended December 31, 2019, 2018, and 2017, the Company recognized the following totals of collaboration revenue – related party: Year Ended December 31, 2019 2018 2017 Collaboration revenue - related party $ 15,360 $ 59,417 $ 12,826 The following table presents changes in the Company’s contract liabilities during the year ended December 31, 2019 (in thousands): December 31, 2018 Additions Deductions December 31, 2019 Contract Liabilities (1) Total deferred revenue - related party $ 53,952 — $ (15,360 ) $ 38,592 (1) Additions to contract liabilities relate to consideration from Novartis during the reporting period. Deductions to contract liabilities relate to deferred revenue recognized as revenue during the reporting period. During $15,360 of revenue related to the amounts included in the contract liability balance at the beginning of the period. The aggregate amount of the transaction price allocated to the single performance obligation that is partially unsatisfied was The Company |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Convertible Preferred Stock | 9. The Company has issued Series A and Series A-1 preferred stock (together, the “Redeemable Convertible Preferred Stock”). The Redeemable Convertible Preferred Stock is classified outside of stockholders’ deficit because the shares contain redemption features that are not solely within the control of the Company. Upon the closing of the Company’s initial public offering on April 23, 2018, all shares of the Redeemable Convertible Preferred Stock automatically converted into 16,863,624 shares of common stock. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 10. Common Stock As of December 31, 2019 and 2018, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue 150,000,000 shares of $0.0001 par value common stock. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any, subject to the preferential dividend rights of any outstanding preferred stock. No dividends have been declared or paid by the Company through December 31, 2019. As of December 31, 2019 and 2018, the Company had reserved 17,351,095 and 6,083,202 shares, respectively, of common stock for the shares available for offering under the Sales Agreement with JonesTrading, Reserved for future issuance The Company has reserved for future issuance the following number of shares of common stock: As of December 31, 2019 2018 Options to purchase common stock 5,418,113 4,414,225 Shares available for future grant 1,409,019 1,412,159 2018 Employee Stock Purchase Plan 534,544 256,818 Shares available from ATM offering 9,989,419 — Total reserved 17,351,095 6,083,202 In May 2019, the Company entered into the Sales Agreement with JonesTrading to issue and sell shares up to $30,000 in shares of the Company’s common stock from time to time. As of December 31, 2019, the Company has sold 10,581 shares under the ATM Facility for net proceeds of $24. On April 23, 2018, the Company completed its initial public offering of its common stock by issuing 7,200,000 shares of common stock, at $15.00 per share for gross proceeds of $108,000, or net proceeds of $97,209. Concurrent with the initial public offering, the Company issued Novartis 766,666 shares of its common stock at $15.00 per share for proceeds of $11,500, in a private placement. |
Stock-Based Awards
Stock-Based Awards | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Awards | 11. 2014 Stock Incentive Plan The Company’s 2014 Stock Incentive Plan (the “2014 Plan”) provides for the Company to grant incentive stock options or nonqualified stock options, restricted stock awards, unrestricted stock awards or restricted stock units to employees, directors and consultants of the Company. The 2014 Plan is administered by the board of directors, or at the discretion of the board of directors, by a committee of the board of directors. The exercise prices, vesting and other restrictions are determined at the discretion of the board of directors, or their committee if so delegated, except that the exercise price per share of the stock options may not be less than 100% of the fair market value of a share of the Company’s common stock on the date of grant and the term of the stock options may not be greater than ten years. As of December 31, 2019 and 2018 all remaining shares available under the 2014 Plan were transferred to the 2018 Plan. 2018 Stock Option and Incentive Plan On April 3, 2018, the Company’s stockholders approved the 2018 Stock Option and Incentive Plan (the “2018 Plan”), which became effective on April 18, 2018, the date on which the registration statement for the Company’s initial public offering was declared effective. The 2018 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock units, restricted stock awards, unrestricted stock awards, cash-based awards and dividend equivalent rights to the Company’s officers, employees, non-employee directors and other key persons (including consultants). The number of shares initially reserved for issuance under the 2018 Plan was 1,545,454, plus the shares of common stock remaining available for issuance under the 2014 Plan, which shall be cumulatively increased on each January 1 by 4% of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31 or such lesser number of shares determined by the Company’s board of directors or compensation committee of the board of directors. The shares of common stock underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of stock, expire or are otherwise terminated (other than by exercise) under the 2018 Plan and the 2014 Plan will be added back to the shares of common stock available for issuance under the 2018 Plan. As of December 31, 2019 and 2018, 1,409,019 shares and 1,412,159 shares were available for future issuance under the 2018 Plan, respectively. Stock options granted under the 2014 Plan and 2018 Plan to employees generally vest over four years and expire after ten years. The Company does not currently hold any treasury shares. Upon stock option exercise, the Company issues new shares and delivers them to the participant. Stock Option Valuation The assumptions that the Company used to determine the fair value of the stock options granted to employees and directors were as follows, presented on a weighted average basis: Year Ended December 31, 2019 2018 2017 Risk-free interest rate 2.46 % 2.67 % 2.04 % Expected term (in years) 6.12 6.18 6.25 Expected volatility 73.62 % 72.70 % 78.60 % Expected dividend yield 0.0 % 0.0 % 0.0 % Stock Options The following table summarizes the Company’s stock option activity for the year ended December 31, 2019: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in years) Outstanding as of December 31, 2018 4,414,225 $ 6.79 8.29 $ 2,031 Granted 1,518,500 4.06 Exercised (110,156 ) 2.31 Forfeited (404,456 ) 6.85 Outstanding as of December 31, 2019 5,418,113 $ 6.11 7.69 $ 690 Options exercisable at December 31, 2019 2,919,360 $ 5.54 7.02 $ 665 Vested and expected to vest at December 31, 2019 5,418,113 $ 6.11 7.69 $ 690 The weighted average grant-date fair value per share of stock options granted during the years ended December 31, 2019 and 2018, was $2.71 and $7.47, respectively. The aggregate fair value of stock options vested during the years ended December 31, 2019 and 2018, was $6,634 and $4,493, respectively. The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2019, 2018, and 2017 was $208, $1,887, and $1,876 respectively. As of December 31, 2019, and 2018, there were outstanding stock options held by non-employees for the purchase of 272,343 and 317,957 shares of common stock, respectively, with service-based vesting conditions. Restricted Common Stock The Company has granted restricted common stock with service-based vesting conditions. The purchase price of the restricted common stock is determined by the Company’s board of directors. Unvested shares of restricted common stock may not be sold or transferred by the holder. These restrictions lapse according to the service-based vesting conditions of each award. The Company has the option to repurchase the restricted stock at the original purchase price if the grantee terminates its working relationship with the Company prior to the stock becoming vested. As of December 31, 2019 and 2018 there was no unvested restricted common stock. The aggregate intrinsic value of restricted stock awards that vested during the year ended December 31, 2018 was $810. 2018 Employee Stock Purchase Plan On April 3, 2018, the Company’s stockholders approved the 2018 Employee Stock Purchase Plan (the “ESPP”), which became effective on April 18, 2018, the date on which the registration statement for the Company’s initial public offering was declared effective. A total of 256,818 shares of common stock were initially reserved for issuance under this plan. In addition, the number of shares of common stock that may be issued under the ESPP automatically increased on January 1, 2019, and shall increase each January 1 thereafter through January 1, 2028, by the lesser of (i) 1% of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31 and (ii) such lesser number of shares as determined by the administrator of the Company’s ESPP. As of December 31, 2019, a total of 534,544 shares of common stock were reserved for issuance under this plan. For the years ended December 31, 2019 and 2018, the Company did not issue any shares of common stock under the 2018 ESPP. Stock-Based Compensation The Company recorded stock-based compensation expense related to stock options, restricted stock awards, and the ESPP in the following expense categories of its statements of operations and comprehensive loss: Year Ended December 31, 2019 2018 2017 Research and development expenses $ 2,350 $ 2,557 $ 1,917 General and administrative expenses 3,641 2,660 2,792 $ 5,991 $ 5,217 $ 4,709 As of December 31, 2019, the Company had an aggregate of $10,733 of unrecognized stock-based compensation cost, which is expected to be recognized over a weighted average period of 2.25 years. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | 12. Debt On November 22, 2019, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with K2 HealthVentures LLC (the “Lender”). The Lender has agreed to make available to the Company term loans in an aggregate principal amount of up to $25,000 under the Loan Agreement. The Company plans to use the proceeds of the term loans to support clinical development as well as for working capital and general corporate purposes. The Loan Agreement provides a term loan commitment of $25,000 in three potential tranches: (i) a $7,500 term loan facility funded on November 22, 2019 (the “First Tranche Term Loan”), (ii) a $10,000 term loan facility (the “Second Tranche Term Loan”), and (iii) a $7,500 term loan facility (the “Third Tranche Term Loan”). All three of these term loans have a maturity date of December 1, 2023. Borrowings under all three loan facilities bear interest at a floating per annum rate equal to the greater of (i) 8.65% and (ii) the Prime Rate plus 3.90%. The Company is permitted to make interest-only payments on the First Tranche Term Loan for the first nineteen months following the funding date. The interest-only period can be extended by an additional seven months, subject to the funding of the Second Tranche Term Loan; and by an additional seven months, subject to the funding of the Third Tranche Term Loan. The term of the combined facility will be 48 months, with repayment in monthly installments commencing at the end of the resulting interest-only period as outlined above through the end of the 48-month term. The Company is obligated to pay a final fee equal to 4.45% of the aggregate amount of the term loans funded, to occur upon the earliest of (i) the maturity date, (ii) the acceleration of the term loans, and (iii) the prepayment of the term loans. The Company has the option to prepay all, but not less than all, of the outstanding principal balance of the term loans under the Loan Agreement. If the Company prepays all of the term loans prior to the maturity date, it will pay the Lender a prepayment penalty fee based on a percentage of the outstanding principal balance, equal to 5% if the payment occurs on or before 24 months after the initial funding date, 3% if the prepayment occurs more than 24 months after, but on or before 36 months after the initial funding date, or 1% if the prepayment occurs more than 36 months after the initial funding date. The Lender may, at their option, elect to convert any portion of no more than $4,000 of the then outstanding term loan amount and all accrued and unpaid interest thereon into shares of the Company’s common stock at a conversion price of $1.56 per share. The Company determined that the embedded conversion option is not required to be separated from the term loan. The embedded conversion option meets the derivative accounting scope exception since the embedded conversion option is indexed to the Company’s own common stock and qualifies for classification within stockholders’ equity. The Company did recognize a beneficial conversion feature of $2,101, which represents the difference between the commitment date stock price of $2.33 per share and the conversion price of $1.56 per share. The beneficial conversion feature was recorded as a discount on the term loan and is accreted to interest expense using the effective interest method over the term of the loan. The effective interest rate of the term loan is 27.84%. The Company’s obligations under the Loan Agreement are secured by a first priority security interest in substantially all of its assets. The Loan Agreement contains customary representations, warranties and also includes customary events of default, including payment defaults, breaches of covenants, change of control and a material adverse effect clause. Upon the occurrence of an event of default, a default interest rate of an addition 5.00% per annum may be applied to the outstanding loan balances, and the Lender may declare all outstanding obligations immediately due and payable and exercise all of its rights and remedies as set forth in the Loan Agreement and under applicable law. The Company recorded interest expense related to the loan facility of $147 for the year ended December 31, 2019. The fair value of the loan at December 31, 2019 approximates its face amount given the close proximity of the execution to December 31, 2019 and due to the floating interest rate. Future principal debt payments on the loan payable are as follows (in thousands): December 31, 2019 2020 $ - 2021 1,602 2022 2,947 2023 2,951 Total principal payments 7,500 Final fee due at maturity in 2024 334 Total principal payments and final fee 7,834 Unamortized debt discount and final fee 2,725 Note payable $ 5,109 |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | 13. Basic and diluted net loss per share attributable to common stockholders was calculated as follows: Year Ended December 31, 2019 2018 2017 Basic and Diluted net loss per share attributable to common stockholders: Numerator: Net loss $ (54,789 ) $ (6,597 ) $ (45,377 ) Accretion of redeemable convertible preferred stock to redemption value — (11 ) (40 ) Net loss attributable to common stockholders $ (54,789 ) $ (6,608 ) $ (45,417 ) Denominator: Weighted average commons shares outstanding—basic and diluted 27,854,912 19,990,773 2,474,800 Net loss per share attributable to common stockholders—basic and diluted $ (1.97 ) $ (0.33 ) $ (18.35 ) The Company’s potential dilutive securities, which include stock options to purchase common stock and shares issuable upon conversion of the convertible note payable have been excluded from the computation of diluted net loss per share attributable to common stockholders whenever the effect of including them would be to reduce the net loss per share. The following potential common shares, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect: Year Ended December 31, 2019 2018 Outstanding options to purchase common stock 5,418,113 4,414,225 Shares issuable upon conversion of the convertible note payable 2,564,103 — 7,982,216 4,414,225 |
License Agreements
License Agreements | 12 Months Ended |
Dec. 31, 2019 | |
License Agreement [Abstract] | |
License Agreements | 1 4 . Adimab Development and Option Agreement In October 2018, the Company and Adimab LLC (“Adimab”), entered into an amended and restated development and option agreement, (“the A&R Adimab Agreement”), which amended and restated the development and option agreement with Adimab dated July 2014, as amended, (“the Original Adimab Agreement”), for the discovery and optimization of proprietary antibodies as potential therapeutic product candidates. Under the A&R Adimab Agreement, the Company will select biological targets against which Adimab will use its proprietary platform technology to research and develop antibody proteins using a mutually agreed upon research plan. The A&R Adimab Agreement, among other things, extended the discovery term of the Original Adimab Agreement, provided access to additional antibodies, and expanded the Company’s right to evaluate and use antibodies that were modified or derived using Adimab technology for diagnostic purposes. Upon the Company’s selection of a target, the Company and Adimab will initiate a research plan and the discovery term begins. During the discovery term, Adimab will grant the Company a non-exclusive, non-sublicenseable license under its technology with respect to the target, to research, design and preclinically develop and use antibodies that were modified or derived using Adimab technology, solely to evaluate such antibodies, perform the Company’s responsibilities under the research plan, and use such antibodies for certain diagnostic purposes. The Company also will grant to Adimab a non-exclusive, nontransferable license with respect to the target under the Company’s technology that covers or relates to such target, solely to perform its responsibilities under the research plan during the discovery period. The Company is required to pay Adimab at an agreed upon rate for its full-time employees during the discovery period while Adimab performs research on each target under the applicable research plan. Adimab granted the Company an exclusive option to obtain a non-exclusive, worldwide, fully paid-up, sublicensable license under Adimab’s platform patents and other Adimab technology solely to research up to ten antibodies, chosen by the Company against a specific biological target for a specified period of time (the “Research Option”). In addition, Adimab granted the Company an exclusive option to obtain a worldwide, royalty-bearing, sublicensable license under Adimab platform patents and other Adimab technology to exploit, including commercially, 20 or more antibodies against specific biological targets (the “Commercialization Option”). Upon the exercise of a Commercialization Option, and payment of the applicable option fee to Adimab, Adimab will assign the Company the patents that cover the antibodies selected by such Commercialization Option. The Company will be required to use commercially reasonable efforts to develop, seek market approval of, and commercialize at least one antibody against the target covered by the Commercialization Option in specified markets upon the exercise of a Commercialization Option. Under the agreement, the Company is obligated to make milestone payments and to pay specified fees upon the exercise of the Research or Commercialization Options. During the discovery term, the Company may be obligated to pay Adimab up to $250 for technical milestones achieved against each biological target. Upon exercise of a Research Option, the Company is obligated to pay a nominal research maintenance fee on each of the next four anniversaries of the exercise. Upon the exercise of each Commercialization Option, the Company will be required to pay an option exercise fee of a low seven-digit dollar amount, and the Company may be responsible for milestone payments of up to an aggregate of $13,000 for each licensed product that receives marketing approval. For any licensed product that is commercialized, the Company is obligated to pay Adimab tiered royalties of a low to mid single-digit percentage on worldwide net sales of such product. The Company may also partially exercise a Commercialization Option with respect to ten antibodies against a biological target by paying 65% of the option fee and later either (i) paying the balance and choosing additional antibodies for commercialization, up to the maximum number under the Commercialization Option, or (ii) foregoing the Commercialization Option entirely. For any Adimab diagnostic product that is used with or in connection with any compound or product other than a licensed antibody or licensed product, the Company is obligated to pay Adimab up to a low seven digits in regulatory milestone payments and low single-digit royalties on net sales. No additional payment is due with respect to any companion diagnostic or any diagnostic product that does not contain any licensed antibody. The A&R Adimab Agreement will remain in effect until (a) the earlier of (i) the expiration of the Research and Commercialization Options (if they expire without exercise) and (ii) 12 months from the effective date without the Company providing materials that pass Adimab’s quality control; or (b) if a Research Option is exercised but the Commercialization Option is not, then upon the expiration of the last to expire research license term; or (c) upon commercialization of a product, until the end of the royalty term, which will vary on a product-by-product and country-by-country basis, ending on the later of (y) the expiration of the last valid claim covering the licensed product in such country as the product is manufactured or sold, or (z) ten after the first commercial sale of the licensed product in such country. Either party may terminate the A&R Adimab Agreement for material breach if such breach remains uncured for a specified period of time, however, if a Research Option or Commercialization Option has been exercised and the breach only applies to the applicable target of such Research Option or Commercialization Option, then the termination right will only apply to such target. The Company may also terminate the A&R Adimab Agreement for any reason with prior notice to Adimab. If Adimab is bankrupt, the Company will be entitled to a complete duplicate of, or complete access to, all rights and licenses granted under or pursuant to the A&R Adimab Agreement. During the years ended December 31, 2019, 2018, and 2017, the Company recognized research and development expense under the agreement of $1,175, $2,480, and $2,172, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 1 5 . Year Ended December 31, 2019 2018 2017 Income Before Taxes: Domestic $ (54,789 ) $ (6,597 ) $ (45,377 ) Foreign — — — Total income before income taxes $ (54,789 ) $ (6,597 ) $ (45,377 ) Income Taxes During the years ended December 31, 2019, 2018, and 2017, the Company recorded no income tax benefits for the net losses incurred or for the research and development tax credits generated in each year due to its uncertainty of realizing a benefit from those items. A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate is as follows: Year Ended December 31, 2019 2018 2017 Federal statutory income tax rate (21.0 )% (21.0 )% (35.0 )% State taxes, net of federal benefit (6.2 ) (6.2 ) (5.2 ) Permanent differences 0.0 1.1 0.3 Stock-based compensation 1.0 5.2 2.6 Research and development tax credits (7.9 ) (13.7 ) (0.9 ) Increase in deferred tax asset valuation allowance 33.7 34.5 18.6 Other 0.4 0.1 — Change in statutory tax rate — — 19.6 Effective income tax rate — % — % — % Significant components of Surface Oncology’s deferred tax assets and liabilities as of December 31, 2019 and 2018 are as follows: December 31, 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 19,629 $ 5,240 Research and development tax credit carryforwards 6,234 1,945 Deferred revenue 10,543 14,740 Deferred rent — 1,376 Intangible assets 430 791 Accrued expenses 843 687 Stock-based compensation 2,414 1,468 Lease liability 5,445 — Other 23 73 Total deferred tax assets 45,561 26,320 Valuation allowance (36,535 ) (18,602 ) Deferred tax assets 9,026 7,718 Deferred tax liabilities: Right-of-use asset (4,059 ) — Depreciation (1,281 ) (1,629 ) Deferred revenue tax accounting method change (3,045 ) (6,089 ) Beneficial conversion feature on convertible note payable (559 ) — Other (82 ) — Total deferred tax liabilities (9,026 ) (7,718 ) Net deferred tax assets $ — $ — As of December 31, 2019, the Company had federal and state net operating loss carryforwards of $71,495 and $73,021, respectively, and federal and state research and development tax credit carryforwards of $4,501 and $2,025, respectively, available to reduce future income tax liabilities. The federal and state net operating loss carryforwards each begin to expire in 2034. The federal and state research and development tax credit carryforwards begin to expire in 2034 and 2030, respectively. Utilization of the Company's net operating loss ("NOL") carryforwards and research and development ("R&D") credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred previously or that could occur in the future in accordance with Section 382 of the Internal Revenue Code of 1986 ("Section 382") as well as similar state provisions. These ownership changes may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and taxes, respectively. In general, an ownership change as defined by Section 382 results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% over a three-year period. Since its formation, the Company has raised capital through the issuance of capital stock on several occasions. These financings, combined with the purchasing shareholders' subsequent disposition of those shares, could result in a change of control as defined by Section 382. The Company conducted an analysis under Section 382 to determine if historical changes in ownership through December 31, 2018 would limit or otherwise restrict its ability to utilize its NOL and R&D credit carryforwards. As a result of this analysis, the Company does not believe there are any significant limitations on its ability to utilize these carryforwards. However, future changes in ownership occurring after December 31, 2018 could affect the limitation in future years, and any limitation may result in expiration of a portion of the NOL or R&D credit carryforwards before utilization. As required by the provisions of ASC 740, management considers whether it is more likely than not that some portion or all of the net deferred tax assets will not be realized. Based upon the level of historical U.S. losses, management has determined that it is “more-likely-than-not” that the Company will not utilize the benefits of federal and state deferred tax assets for financial reporting purposes and, as a result, a full valuation allowance has been established at December 31, 2019 and 2018. The valuation allowance decrease primarily relates to the decrease in deferred revenue, and were as follows: Year Ended December 31, 2019 2018 2017 Valuation allowance at beginning of year $ (18,602 ) $ (19,956 ) $ (11,531 ) Increases recorded to income tax provision (17,933 ) (5,644 ) (17,302 ) Decreases recorded as a benefit to income tax provision — 6,998 8,877 Valuation allowance at end of year $ (36,535 ) $ (18,602 ) $ (19,956 ) The Company had no unrecognized tax benefits or related interest and penalties accrued for the years ended December 31, 2019 and 2018. The Company will recognize interest and penalties related to uncertain tax positions in income tax expense. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. The Company is currently under examination by the Internal Revenue Service ("IRS") for the period ended December 31, 2016. The Company's tax years are still open under statute from 2016 to present. All years may be examined to the extent the tax credit or net operating loss carryforwards are used in future periods. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | 1 6 . The Company leases real estate, primarily its corporate headquarters in Cambridge, Massachusetts. The Company’s leases have remaining terms ranging from less than 1 year to 10 years. Certain leases include options to renew, exercised at the Company’s sole discretion, with renewal terms that can extend the lease five years. The Company evaluated the renewal options in its leases to determine if it was reasonably certain that the renewal option would be exercised, and therefore should be included in the calculation of the operating lease assets and operating lease liabilities. Given the Company’s current business structure, uncertainty of future growth, and the associated impact to real estate, the Company concluded that it is not reasonably certain that the renewal option related to its corporate headquarters would be exercised, however, for leases it determined the renewal option was probable to be exercised, the Company included the renewal period in the calculation of the operating lease right-of-use assets and operating lease liabilities. All of the Company’s leases qualify as operating leases. With the adoption of the new leasing standard, the Company has recorded a right-of-use asset and corresponding lease liability, by calculating the present value of future lease payments, discounted at either 9.5% or 10.5%, the Company’s incremental borrowing rates, over the expected term. The right-of-use asset is reduced by any lease incentives received and the legacy deferred rent balance. In May 2016, the Company entered into an operating lease agreement for its corporate headquarters in Cambridge, Massachusetts, with a ten-year term that expires in February 2027. Rental payments related to the lease commenced in April 2017. In connection with this lease, the Company was entitled to cash incentives from the landlord to be used for the construction of leasehold improvements within the facility. As of January 1, 2019, the Company was entitled to $4,803 of such incentives, which were recorded as a reduction to the right-of-use asset and included as a straight-line reduction to lease expense over the lease term. In May 2018, the Company executed an amendment to lease an additional 33,526 square feet at 50 Hampshire Street in Cambridge, Massachusetts, with a 10-year term. This additional space became available for occupancy on January 1, 2020. In December 2020, the Company entered into a sublease agreement with EQRx, Inc. (“EQRx”) to sublease the entire space for three years. The term of the sublease agreement commenced in January 1, 2020. (See Note 21). The components of the Company’s lease expense are as follows: Lease Costs Classification Year Ended December 31, 2019 Operating lease cost R&D Expense 2,312 G&A Expense 899 Variable lease costs (1) R&D Expense 707 G&A Expense 276 Total lease cost 4,194 Weighted-average remaining lease term (in months) 119.6 Weighted-average discount rate 10.5 % (1) Variable lease costs include certain additional charges for operating costs, including insurance, maintenance, taxes, utilities, and other costs incurred, which are billed based on both usage and as a percentage of the Company’s share of total square footage. Short term lease costs are immaterial. Cash paid for amounts included in the measurement of the Company’s operating lease liabilities was $4,148 for the year ended December 31, 2019. As of December 31, 2019, the maturities of the Company’s operating lease liabilities were as follows: Year Ending December 31, 2020 3,796 2021 5,529 2022 5,385 2023 5,413 2024 5,533 Thereafter 31,827 Total future lease payments 57,483 Less: Interest (37,553 ) Present value of future lease payments (lease liability) $ 19,930 Future minimum lease payments for the Company’s operating leases as of December 31, 2018 were as follows: Year Ending December 31, 2019 2,546 2020 4,258 2021 5,176 2022 5,292 2023 5,376 Thereafter 37,573 $ 60,221 Prior to the adoption of ASU 2016-02 and for the years ended December 31, 2018 and 2017, the Company recognized rent expense on a straight-line basis over the lease period and recorded deferred rent expense for rent expense incurred but not yet paid. The Company also recorded deferred rent attributable to cash incentives received under its lease agreements which were amortized to rent expense over the lease term. During the years ended December 31, 2018 and 2017, the Company recognized total rent expense of $1,649 and $1,194, respectively. In November 2014, the Company entered into an operating sublease agreement with CoStim Pharmaceuticals, Inc. (“CoStim”), a subsidiary of Novartis, for office and laboratory space that expired in March 2018 (see Note 18). The Company began to sublease this space to a third-party tenant in April 2017. Sublease payments received from a third-party tenant under a sublease that expired in March 2018 were $231 and $305 for the years ended December 31, 2018 and 2017, respectively, and were recorded as reduction of rent expense. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 17. Lease Agreements Future minimum lease payments for the Company’s operating leases as of December 31, 2019 were as follows: Year Ended December 31, 2020 3,541 2021 5,179 2022 5,295 2023 5,413 2024 5,533 Thereafter 31,827 $ 56,788 Manufacturing and Research Agreements The Company has entered into agreements with external contract manufacturing organizations and contract research organizations engaged to manufacture clinical trial materials as well as to conduct discovery research and preclinical development activities. As of December 31, 2019, the Company had committed to minimum payments under these arrangements totaling $5,171, of which $4,263 is due in 2020 and $908 is due in 2021. License Agreements The Company has entered into license agreements with various parties under which it is obligated to make contingent and non-contingent payments (see Note 14). Indemnification Agreements In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and its officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any claims under indemnification arrangements that would have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its financial statements as of December 31, 2019. Legal Proceedings On September 13, 2019, a purported stockholder of the Company filed a putative class action against the Company, certain of its directors and officers, or the Individual Defendants, and the underwriters in its initial public offering, collectively, the Defendants, in the Supreme Court of the State of New York, captioned Ang v. Surface Oncology, Inc., et al., No. 655304/2019 (N.Y. Sup. Ct. Sept. 13, 2019). The complaint was filed on behalf of a putative class of purchasers of the Company’s common stock in and/or traceable to its April 19, 2018 initial public offering (the first day of trading of its common stock on the Nasdaq Stock Market) and alleged violations of Section 11 (against all Defendants) and 15 (against the Company and the Individual Defendants) of the Securities Act of 1933, as amended. The complaint alleged that the Defendants made false or misleading statements in the Company’s Registration Statement on Form S-1 for its initial public offering regarding SRF231 and hematologic toxicities allegedly caused by SRF231. The lawsuit sought On November 1, 2019, the Company and the other Defendants moved to dismiss the Complaint in its entirety on the grounds that the facts and documentary evidence established that its initial public offering documents were true and accurate in all material respects. Based upon the Company’s arguments and confidential discussions between its counsel and counsel for the Plaintiff, on December 3, 2019, the Plaintiff notified the Court that it wished to voluntarily dismiss the case. As required by Court Order, the Plaintiff provided notice to all members of the purported class of its intention to voluntarily dismiss the case and following the Court-ordered notice, on January 14, 2020, the Plaintiff filed a Stipulation of Discontinuance Without Prejudice withdrawing the case. On January 15, 2020, the Court “So-Ordered” the Stipulation of Discontinuance formally ending the case. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 1 8 . Novartis Institutes for BioMedical Research, Inc. Novartis is a related party because it is a greater than 5% stockholder of the Company. In January 2016, the Company entered into the Collaboration Agreement and sold 2,000,000 shares of its Series A-1 preferred stock to Novartis for gross proceeds of $13,500. In addition, concurrent with the Company’s initial public offering of common stock, the Company issued Novartis 766,666 shares of its common stock at $15.00 per share for proceeds of $11,500 in a private placement. During the year ended December 31, 2019, the Company did not receive any cash payments from Novartis. As of December 31, 2019 and 2018, no amounts were due from Novartis. During the year ended December 31, 2019, the Company made no cash payments to Novartis related to the Collaboration Agreement. During the year ended December 31, 2018, the Company made a payment of $3,437 to Novartis for the reimbursement of manufacturing costs incurred by Novartis prior to December 31, 2017. During the year ended December 31, 2017, the Company made no cash payments to Novartis related to the Collaboration Agreement. Unrelated to the Collaboration Agreement, the Company subleased office and laboratory space from CoStim, a subsidiary of Novartis (see Note 16). No payments were made by the Company to CoStim for this sublease during the year ended December 31, 2019. Payments made by the Company to CoStim for this sublease during the years ended December 31, 2018, and 2017 totaled $106, and $569, respectively. As of December 31, 2019 and 2018, no amounts were due by the Company to CoStim for this sublease. Research Agreement with Vaccinex, Inc. On November 30, 2017, the Company entered into an agreement with Vaccinex, Inc. (“Vaccinex”) whereby Vaccinex will use its technology to assist the Company with identifying and selecting experimental human monoclonal antibodies against targets selected by the Company. The Company’s Chief Executive Officer is a member of the board of directors of Vaccinex. During the year ended December 31, 2019, 2018, and 2017, the Company paid Vaccinex an aggregate of $606, $199 and $250 relating to the agreement. The amount of the payment was recognized as research and development expense during the years ended December 31, 2019, 2018, and 2017. No amounts were due by the Company to Vaccinex as of December 31, 2019. As of December 31, 2018, $83 was due by the Company to Vaccinex. |
401(k) Savings Plan
401(k) Savings Plan | 12 Months Ended |
Dec. 31, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
401(k) Savings Plan | 1 9 . The Company has a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all employees who meet minimum age and service requirements. The Company matches 50% of employees’ contributions to the 401(k) Plan up to 6% of compensation. The Company’s contributions made under the 401(k) Savings Plan for the years ended December 31, 2019, 2018, and 2017 totaled $399, $339, and $207, respectively. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | 20 . The following table contains quarterly financial information for 2019 and 2018. The Company believes that the following information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. (In thousands, except share and per share amounts) 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Collaboration revenue - related party $ 14,434 $ 143 $ 344 $ 439 Total operating expenses 19,402 18,653 17,900 16,771 Loss from operations (4,968 ) (18,510 ) (17,556 ) (16,332 ) Net loss (4,199 ) (17,758 ) (16,878 ) (15,954 ) Net loss per share attributable to common stockholders—basic and diluted $ (0.15 ) $ (0.64 ) $ (0.61 ) $ (0.57 ) 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Collaboration revenue - related party $ 45,495 $ 2,428 $ 1,730 $ 9,764 Total operating expenses 14,452 19,011 19,760 15,345 Loss from operations 31,043 (16,583 ) (18,030 ) (5,581 ) Net loss 31,212 (15,852 ) (17,222 ) (4,735 ) Net loss per share attributable to common stockholders—basic $ 1.59 $ (0.73 ) $ (0.62 ) $ (0.17 ) Net loss per share attributable to common stockholders— diluted $ 1.05 $ (0.73 ) $ (0.62 ) $ (0.17 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 21 . Collaboration Agreement with Novartis In January 2020, Novartis did not purchase and exercise its single remaining Option under the Collaboration Agreement and, as a result, the option purchase period expired (see Note 8). Accordingly, there are no Options remaining eligible for purchase and exercise, and the Company’s performance obligations under the Collaboration Arrangement have ended. The maximum aggregate amount of potential option purchase, option exercise and milestone payments that the Company is currently entitled to receive under the Collaboration Agreement was reduced from $745,000 at December 31, 2019 to $525,000 in January 2020. The Company will remove all costs associated with its remaining performance obligation for the single remaining Option from the cost-to-cost model in the first quarter of 2020. This will result in the Company recognizing the remaining deferred revenue of $38,592 to collaboration revenue - related party in the first quarter of 2020. This represents a non-recognized subsequent event as the Novartis decision was in their control and was not known to the Company as of December 31, 2019. Sublease Agreement with EQRx In May 2018, the Company executed an amendment to lease an additional 33,526 square feet at 50 Hampshire Street in Cambridge, Massachusetts, with a 10-year term. On the lease commencement date of January 1, 2020, the Company recorded the impact on its consolidated balance sheet, which increased the Company’s operating lease right-of-use-assets and operating lease liabilities by 15,003. T he Company also entered into a sublease agreement with EQRx to sublease the entire space. The term of the sublease agreement commenced in January 2020 and ends on the last day of the 36 th calendar month following commencement. The annual rent for the subleased premises is greater than the annual rent owed by the Company to the landlord for the leased premises. Strategic Restructuring The U.S. Food and Drug Administration cleared the applications for the Company’s antibody candidates, SRF617 and SRF388, and the Company is executing on plans to initiate clinical trials to advance both programs in 2020. The Company concurrently announced a strategic restructuring in January 2020, which will reduce the Company’s workforce by approximately 35%. As a result, the Company will incur severance costs of $1,272 in the first quarter 2020, which will be recorded within operating expenses in the consolidated statements of operations and comprehensive loss. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its wholly owned subsidiary, Surface Securities Corporation, a Massachusetts corporation, after elimination of all intercompany accounts and transactions. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, revenue recognition and the accrual of research and development expenses. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from the Company’s estimates. |
Cash Equivalents | Cash Equivalents The Company considers all short-term, highly liquid investments with original maturities of 90 days or less at the acquisition date to be cash equivalents. Cash equivalents, which consist of money market funds are stated at fair value. |
Marketable Securities | Marketable Securities Marketable securities consist of investments with original maturities greater than 90 days at their acquisition date. The Company has classified its investments with maturities beyond one year as current, based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. The Company classifies all of its marketable securities as available-for-sale securities. The Company’s marketable securities are measured and reported at fair value using quoted prices in active markets for similar securities. Unrealized gains and losses on available-for-sale debt securities are reported as accumulated other comprehensive income (loss), which is a separate component of stockholders’ equity. The cost of debt securities sold is determined on a specific identification basis, and realized gains and losses are included in interest and other income (expense), net in the consolidated statements of operations and comprehensive loss. The Company evaluates its marketable securities with unrealized losses for other-than-temporary impairment. When assessing marketable securities for other-than-temporary declines in value, the Company considers such factors as, among other things, how significant the decline in value is as a percentage of the original cost, how long the market value of the investment has been less than its original cost, the Company’s ability and intent to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair value and market conditions in general. If any adjustment to fair value reflects a decline in the value of the investment that the Company considers to be “other than temporary,” the Company reduces the investment to fair value through a charge to the statement of operations and comprehensive loss. No such adjustments were necessary during the periods presented. |
Restricted Cash | Restricted Cash At December 31, 2019 and 2018, restricted cash consisted of cash deposited in a separate bank account as collateral for the Company’s facilities lease obligations. At December 31, 2019 and 2018, $1,595 and $1,198 of restricted cash was classified as non-current. |
Concentration of Credit Risk and of Significant Suppliers | Concentration of Credit Risk and of Significant Suppliers Financial instruments that potentially expose the Company to concentrations of credit risk primarily consist of cash, cash equivalents and marketable securities. The Company maintains its cash, cash equivalents, and marketable securities at one accredited financial institution in amounts that exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company is dependent on third-party manufacturers to supply products for research and development activities of its programs, including preclinical testing. These programs could be adversely affected by a significant interruption in the supply of such drug substance products. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as 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 on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The Company’s cash equivalents and marketable securities are carried at fair value, determined according to the fair value hierarchy described above. The carrying values of the Company’s prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities. |
Deferred Offering Costs | Deferred Offering Costs The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs (non-current) until such financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders’ equity as a reduction of additional paid-in capital generated as a result of the offering. Should the planned equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the statement of operations and comprehensive loss. The Company did not record any deferred offering costs as of December 31, 2019 or 2018. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expense is recognized using the straight-line method over the useful life of the asset. Laboratory equipment is depreciated over five years. Computer equipment and furniture and office equipment are depreciated over three years. Leasehold improvements are amortized over the shorter of the lease term or 10 years. Expenditures for repairs and maintenance of assets are charged to expense as incurred. Upon retirement or sale, the cost and related accumulated depreciation and amortization of assets disposed of are removed from the accounts, and any resulting gain or loss is included in loss from operations. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets consist of property and equipment. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset group over its fair value, determined based on discounted cash flows. To date, the Company has not recorded any impairment losses on long-lived assets. |
Revenue Recognition | Revenue Recognition Effective January 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, using the modified retrospective transition method. Under this method, the Company recognized the cumulative effect of initially adopting ASC Topic 606, as an adjustment to the opening balance of accumulated deficit. Additionally, under this method of adoption, the Company applies the guidance to all incomplete contracts in scope as of the date of initial application. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. In accordance with ASC Topic 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC Topic 606, it performs the following five steps: i. identify the contract(s) with a customer; ii. identify the performance obligations in the contract; iii. determine the transaction price iv. allocate the transaction price to the performance obligations within the contract; and v. recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it determines that it is probable it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within the contract to determine whether each promised good or service is a performance obligation. The promised goods or services in the Company’s arrangements typically consist of a license to the Company’s intellectual property and/or research and development services. The Company may provide options to additional items in such arrangements, which are accounted for as separate contracts when the customer elects to exercise such options, unless the option provides a material right to the customer. Performance obligations are promises in a contract to transfer a distinct good or service to the customer that (i) the customer can benefit from on its own or together with other readily available resources, and (ii) is separately identifiable from other promises in the contract. Goods or services that are not individually distinct performance obligations are combined with other promised goods or services until such combined group of promises meet the requirements of a performance obligation. The Company determines transaction price based on the amount of consideration the Company expects to receive for transferring the promised goods or services in the contract. Consideration may be fixed, variable, or a combination of both. At contract inception for arrangements that include variable consideration, the Company estimates the probability and extent of consideration it expects to receive under the contract utilizing either the most likely amount method or expected amount method, whichever best estimates the amount expected to be received. The Company then considers any constraints on the variable consideration and includes in the transaction price variable consideration to the extent it is deemed probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company then allocates the transaction price to each performance obligation based on the relative standalone selling price and recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) control is transferred to the customer and the performance obligation is satisfied. For performance obligations which consist of licenses and other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company records amounts as accounts receivable when the right to consideration is deemed unconditional. When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded for deferred revenue. Amounts received prior to satisfying the revenue recognition criteria are recognized as deferred revenue in the Company’s balance sheet. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, non-current. The Company’s revenue arrangement includes the following: Up-front License Fees: If a license is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from nonrefundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone Payments: At the inception of an agreement that includes research and development milestone payments, the Company evaluates each milestone to determine when and how much of the milestone to include in the transaction price. The Company first estimates the amount of the milestone payment that the Company could receive using either the expected value or the most likely amount approach. The Company primarily uses the most likely amount approach as that approach is generally most predictive for milestone payments with a binary outcome. Then, the Company considers whether any portion of that estimated amount is subject to the variable consideration constraint (that is, whether it is probable that a significant reversal of cumulative revenue would not occur upon resolution of the uncertainty.) The Company updates the estimate of variable consideration included in the transaction price at each reporting date which includes updating the assessment of the likely amount of consideration and the application of the constraint to reflect current facts and circumstances. Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any revenue related to sales-based royalties or milestone payments based on the level of sales. The Company’s revenues have been generated through the Collaboration Agreement with Novartis See Note 8, “Collaboration Agreement with Novartis” for additional details regarding the Company’s Collaboration Agreement. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. Research and development expenses include salaries, stock-based compensation and benefits of employees, third-party license fees and other operational costs related to the Company’s research and development activities, including allocated facility-related expenses and external costs of outside vendors engaged to conduct both preclinical studies and clinical trials. |
Research Contract Costs and Accruals | Research Contract Costs and Accruals The Company has entered into various research and development contracts with research institutions and other companies. These agreements are generally cancelable, and related payments are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing research costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs. Nonrefundable prepayments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized. Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered or the services rendered. |
Patent Costs | Patent Costs All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses in the accompanying statements of operations and comprehensive loss. |
Stock-Based Compensation | Stock-Based Compensation The Company measures all stock options and other stock-based awards granted to employees and directors based on the fair value on the date of the grant and recognizes compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award. Generally, the Company issues stock options and restricted stock awards with only service-based vesting conditions and records the expense for these awards using the straight-line method. Following the Company’s adoption of ASU 2018-07, Compensation—Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), on January 1, 2019, for stock-based awards issued to non-employees, the Company no longer revalues non-employee awards at each reporting date and instead calculates the fair value of the awards as of the grant date using the Black-Scholes option-pricing model. Compensation expense for these awards is recognized over the related service period. The Company classifies stock-based compensation expense in its statement of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipients’ service payments are classified. The fair value of each stock option grant is estimated using the Black- Scholes option-pricing model. The Company has historically been a private company and lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The Company elects to account for forfeitures as they occur rather than apply an estimated forfeiture rate to share based payment expense. |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) asset, operating lease liability, and operating lease liability, non-current in the Company’s consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Many lease agreements include the option to renew or extend the lease term. The exercise of lease renewal options or extensions is at the Company’s sole discretion, and are only included in the calculation of the operating lease ROU asset and operating lease liability when it is reasonably certain that the Company would exercise such options. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, which it calculates based on the credit quality of the Company, and by comparing interest rates available in the market for similar borrowings, and adjusting this amount based on the impact of collateral over the term of each lease. The components of a lease are split into three categories: lease components (e.g., land, building, etc.), non-lease components (e.g., common area maintenance, maintenance, consumables, etc.), and non-components (e.g., property taxes, insurance, etc.). Then the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on fair values to the lease components and non-lease components. Although separation of lease and non-lease components is required, certain practical expedients are available to entities. Entities electing the practical expedient would not separate lease and non-lease components. Rather, they would account for each lease component and the related non-lease component together as a single component. The Company’s facilities operating leases have lease and non-lease components to which the Company has elected to apply the practical expedient and account for each lease component and related non-lease component as one single component. The Company also elected the package of practical expedients, which, among other things, allows the Company to carry forward prior conclusions related to whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases and initial direct costs for existing leases. The Company also made an accounting policy election not to recognize leases with an initial term of 12 months or less within its consolidated balance sheets and to recognize those lease payments on a straight-line basis in its consolidated statements of operations and comprehensive loss over the lease term. |
Segment Data | Segment Data The Company manages its operations as a single segment for the purposes of assessing performance and making decisions. The Company’s singular focus is using its specialized knowledge of the biological pathways critical to the TME for the development of next-generation cancer therapies. All of the Company’s tangible assets are held in the United States, and all collaboration revenue is derived from the Company’s collaboration partner in the United States. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the financial statements or in the Company's tax returns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by analyzing carryback capacity in periods with taxable income, reversal of existing taxable temporary differences and estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company accounts for uncertainty in income taxes recognized in the financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. The Company’s only element of other comprehensive loss in all periods presented was unrealized gains (losses) on marketable securities. |
Net Loss per Share | Net Loss per Share The Company follows the two-class method when computing net loss per share as the Company has issued shares that meet the definition of participating securities. The two-class method determines net loss per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted net loss attributable to common stockholders is computed by adjusting net loss attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities, including the assumed conversion of the Company’s convertible note payable and outstanding options to purchase common stock, except where the results would be anti-dilutive. Diluted net loss per share attributable to common stockholders is computed by dividing the diluted net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period, including potential dilutive common shares assuming the dilutive effective of the conversion of the convertible note payable and outstanding options to purchase common stock. In the diluted net loss per share calculation, net loss would also be adjusted for the elimination of interest expense on the convertible note payable (which includes amortization of the discount created for the beneficial conversion feature), if the impact was not anti-dilutive. For purpose of this calculation, outstanding options to purchase common stock or redeemable convertible preferred stock are considered potential dilutive common shares. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) No. 2016-02, Leases “Codification Improvements to Topic 842, Leases” The Company adopted ASC 842 using the modified retrospective approach with an effective date of January 1, 2019 for leases that existed on that date. Prior period results continue to be presented under ASC 840 based on the accounting standards originally in effect for such periods. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allows the Company to carry forward the historical lease classification. In connection with the adoption of ASC 842, the Company recorded an impact of $16,672 on its assets and $21,708 on its liabilities for the recognition of operating lease right-of-use-assets and operating lease liabilities, respectively, which are primarily related to the lease of the Company’s corporate headquarters in Cambridge, Massachusetts. The adoption of ASC 842 did not have a material impact on the Company’s results of operations or cash flows. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share, Distinguishing Liabilities from Equity, Derivatives and Hedging (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 ASU No. 2018-18 In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, (“ASU 2018-13”). Other accounting standards that have been issued by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption. |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Marketable Securities [Abstract] | |
Summary of Fair Value of Available-for-sale Marketable Debt Securities by Type of Security | As of December 31, 2019, the fair value of available-for-sale marketable debt securities by type of security was as follows: December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable debt securities: U.S. Treasury notes $ 42,795 $ 73 $ — $ 42,868 U.S. government agency bonds 15,508 31 (1 ) 15,538 $ 58,303 $ 104 $ (1 ) $ 58,406 As of December 31, 2018, the fair value of available-for-sale marketable securities by type of security was as follows: December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Marketable debt securities: U.S. Treasury notes $ 62,866 $ — $ (24 ) $ 62,842 U.S. government agency bonds 2,900 — (15 ) 2,885 Corporate bonds 10,276 — (80 ) 10,196 $ 76,042 $ — $ (119 ) $ 75,923 |
Summary of Available-for-sale Debt Securities by Contractual Maturity | The amortized cost and fair value of the Company’s available-for-sale securities by contractual maturity are summarized as follows: December 31, 2019 Amortized Cost Fair Value Maturing in one year or less $ 58,303 $ 58,406 $ 58,303 $ 58,406 The amortized cost and fair value of the Company’s available-for-sale securities by contractual maturity are summarized as follows: December 31, 2018 Amortized Cost Fair Value Maturing in one year or less $ 76,042 $ 75,923 $ 76,042 $ 75,923 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets Measured at Fair Value on Recurring Basis | The following tables present information about the Company’s financial assets that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values: Fair Value Measurements as of December 31, 2019 using: Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 30,490 $ — $ — $ 30,490 U.S. government agency bonds — $ 2,500 — $ 2,500 Marketable securities: U.S. Treasury notes — 42,868 — $ 42,868 U.S. government agency bonds — 15,538 — $ 15,538 $ 30,490 $ 60,906 $ — $ 91,396 Fair Value Measurements as of December 31, 2018 using: Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 77,737 $ — $ — $ 77,737 Marketable securities: U.S. Treasury notes — 62,842 — 62,842 U.S. government agency bonds — 2,885 — 2,885 Corporate bonds — 10,196 — 10,196 $ 77,737 $ 75,923 $ — $ 153,660 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment Net | Property and equipment, net consisted of the following: Year Ended December 31, 2019 2018 Laboratory equipment $ 3,583 $ 2,970 Leasehold improvements 6,632 6,531 Computer equipment 511 305 Furniture and office equipment 1,074 1,074 Construction in progress — 79 11,800 10,959 Less: Accumulated depreciation and amortization (4,514 ) (2,733 ) $ 7,286 $ 8,226 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Prepaid Expense And Other Assets Current [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following: Year Ended December 31, 2019 2018 Prepaid income taxes $ — $ 923 Prepaid expenses 2,429 4,520 Interest receivable on marketable securities 336 323 $ 2,765 $ 5,766 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables And Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: Year Ended December 31, 2019 2018 Accrued external research and development costs $ 3,468 $ 5,011 Accrued payroll and payroll-related costs 3,380 2,618 Accrued professional fees 410 634 Other 754 540 $ 8,012 $ 8,803 |
Collaboration Agreement with _2
Collaboration Agreement with Novartis (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Collaboration Revenue Related Party | For the years ended December 31, 2019, 2018, and 2017, the Company recognized the following totals of collaboration revenue – related party: Year Ended December 31, 2019 2018 2017 Collaboration revenue - related party $ 15,360 $ 59,417 $ 12,826 |
Summary of Changes in Contract Liabilities | The following table presents changes in the Company’s contract liabilities during the year ended December 31, 2019 (in thousands): December 31, 2018 Additions Deductions December 31, 2019 Contract Liabilities (1) Total deferred revenue - related party $ 53,952 — $ (15,360 ) $ 38,592 (1) Additions to contract liabilities relate to consideration from Novartis during the reporting period. Deductions to contract liabilities relate to deferred revenue recognized as revenue during the reporting period. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Summary of Shares of Common Stock Reserved for Future Issuance | The Company has reserved for future issuance the following number of shares of common stock: As of December 31, 2019 2018 Options to purchase common stock 5,418,113 4,414,225 Shares available for future grant 1,409,019 1,412,159 2018 Employee Stock Purchase Plan 534,544 256,818 Shares available from ATM offering 9,989,419 — Total reserved 17,351,095 6,083,202 |
Stock-Based Awards (Tables)
Stock-Based Awards (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Assumptions used to Determine Fair Value of Stock Options Granted to Employees and Directors | The assumptions that the Company used to determine the fair value of the stock options granted to employees and directors were as follows, presented on a weighted average basis: Year Ended December 31, 2019 2018 2017 Risk-free interest rate 2.46 % 2.67 % 2.04 % Expected term (in years) 6.12 6.18 6.25 Expected volatility 73.62 % 72.70 % 78.60 % Expected dividend yield 0.0 % 0.0 % 0.0 % |
Summary of Stock Option Activity | The following table summarizes the Company’s stock option activity for the year ended December 31, 2019: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in years) Outstanding as of December 31, 2018 4,414,225 $ 6.79 8.29 $ 2,031 Granted 1,518,500 4.06 Exercised (110,156 ) 2.31 Forfeited (404,456 ) 6.85 Outstanding as of December 31, 2019 5,418,113 $ 6.11 7.69 $ 690 Options exercisable at December 31, 2019 2,919,360 $ 5.54 7.02 $ 665 Vested and expected to vest at December 31, 2019 5,418,113 $ 6.11 7.69 $ 690 |
Summary of Stock-Based Compensation Expense Related to Stock Options, Restricted Stock Awards and ESPP | The Company recorded stock-based compensation expense related to stock options, restricted stock awards, and the ESPP in the following expense categories of its statements of operations and comprehensive loss: Year Ended December 31, 2019 2018 2017 Research and development expenses $ 2,350 $ 2,557 $ 1,917 General and administrative expenses 3,641 2,660 2,792 $ 5,991 $ 5,217 $ 4,709 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Future Principal Debt Payments on the Loan Payable | Future principal debt payments on the loan payable are as follows (in thousands): December 31, 2019 2020 $ - 2021 1,602 2022 2,947 2023 2,951 Total principal payments 7,500 Final fee due at maturity in 2024 334 Total principal payments and final fee 7,834 Unamortized debt discount and final fee 2,725 Note payable $ 5,109 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders | Basic and diluted net loss per share attributable to common stockholders was calculated as follows: Year Ended December 31, 2019 2018 2017 Basic and Diluted net loss per share attributable to common stockholders: Numerator: Net loss $ (54,789 ) $ (6,597 ) $ (45,377 ) Accretion of redeemable convertible preferred stock to redemption value — (11 ) (40 ) Net loss attributable to common stockholders $ (54,789 ) $ (6,608 ) $ (45,417 ) Denominator: Weighted average commons shares outstanding—basic and diluted 27,854,912 19,990,773 2,474,800 Net loss per share attributable to common stockholders—basic and diluted $ (1.97 ) $ (0.33 ) $ (18.35 ) |
Schedule of Anti-dilutive Securities Excluded from Calculation of Diluted Net Loss per Share Attributable to Common Stockholders | The following potential common shares, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect: Year Ended December 31, 2019 2018 Outstanding options to purchase common stock 5,418,113 4,414,225 Shares issuable upon conversion of the convertible note payable 2,564,103 — 7,982,216 4,414,225 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Income Taxes | Year Ended December 31, 2019 2018 2017 Income Before Taxes: Domestic $ (54,789 ) $ (6,597 ) $ (45,377 ) Foreign — — — Total income before income taxes $ (54,789 ) $ (6,597 ) $ (45,377 ) |
Schedule of Reconciliation of Effective Income Tax Rate | A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate is as follows: Year Ended December 31, 2019 2018 2017 Federal statutory income tax rate (21.0 )% (21.0 )% (35.0 )% State taxes, net of federal benefit (6.2 ) (6.2 ) (5.2 ) Permanent differences 0.0 1.1 0.3 Stock-based compensation 1.0 5.2 2.6 Research and development tax credits (7.9 ) (13.7 ) (0.9 ) Increase in deferred tax asset valuation allowance 33.7 34.5 18.6 Other 0.4 0.1 — Change in statutory tax rate — — 19.6 Effective income tax rate — % — % — % |
Schedule of Components of Deferred Tax Assets and Liabilities | Significant components of Surface Oncology’s deferred tax assets and liabilities as of December 31, 2019 and 2018 are as follows: December 31, 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 19,629 $ 5,240 Research and development tax credit carryforwards 6,234 1,945 Deferred revenue 10,543 14,740 Deferred rent — 1,376 Intangible assets 430 791 Accrued expenses 843 687 Stock-based compensation 2,414 1,468 Lease liability 5,445 — Other 23 73 Total deferred tax assets 45,561 26,320 Valuation allowance (36,535 ) (18,602 ) Deferred tax assets 9,026 7,718 Deferred tax liabilities: Right-of-use asset (4,059 ) — Depreciation (1,281 ) (1,629 ) Deferred revenue tax accounting method change (3,045 ) (6,089 ) Beneficial conversion feature on convertible note payable (559 ) — Other (82 ) — Total deferred tax liabilities (9,026 ) (7,718 ) Net deferred tax assets $ — $ — |
Summary of Changes in Valuation Allowance for Deferred Tax Assets | The valuation allowance decrease primarily relates to the decrease in deferred revenue, and were as follows Year Ended December 31, 2019 2018 2017 Valuation allowance at beginning of year $ (18,602 ) $ (19,956 ) $ (11,531 ) Increases recorded to income tax provision (17,933 ) (5,644 ) (17,302 ) Decreases recorded as a benefit to income tax provision — 6,998 8,877 Valuation allowance at end of year $ (36,535 ) $ (18,602 ) $ (19,956 ) |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Summary of Components of Lease Expense | The components of the Company’s lease expense are as follows: Lease Costs Classification Year Ended December 31, 2019 Operating lease cost R&D Expense 2,312 G&A Expense 899 Variable lease costs (1) R&D Expense 707 G&A Expense 276 Total lease cost 4,194 Weighted-average remaining lease term (in months) 119.6 Weighted-average discount rate 10.5 % (1) Variable lease costs include certain additional charges for operating costs, including insurance, maintenance, taxes, utilities, and other costs incurred, which are billed based on both usage and as a percentage of the Company’s share of total square footage. Short term lease costs are immaterial. |
Schedule of Maturities of Operating Lease Liabilities | As of December 31, 2019, the maturities of the Company’s operating lease liabilities were as follows: Year Ending December 31, 2020 3,796 2021 5,529 2022 5,385 2023 5,413 2024 5,533 Thereafter 31,827 Total future lease payments 57,483 Less: Interest (37,553 ) Present value of future lease payments (lease liability) $ 19,930 |
Schedule of Future Minimum Lease Payments | Future minimum lease payments for the Company’s operating leases as of December 31, 2018 were as follows: Year Ending December 31, 2019 2,546 2020 4,258 2021 5,176 2022 5,292 2023 5,376 Thereafter 37,573 $ 60,221 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments of Operating Leases | Future minimum lease payments for the Company’s operating leases as of December 31, 2019 were as follows: Year Ended December 31, 2020 3,541 2021 5,179 2022 5,295 2023 5,413 2024 5,533 Thereafter 31,827 $ 56,788 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Financial Information | The following table contains quarterly financial information for 2019 and 2018. The Company believes that the following information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. (In thousands, except share and per share amounts) 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Collaboration revenue - related party $ 14,434 $ 143 $ 344 $ 439 Total operating expenses 19,402 18,653 17,900 16,771 Loss from operations (4,968 ) (18,510 ) (17,556 ) (16,332 ) Net loss (4,199 ) (17,758 ) (16,878 ) (15,954 ) Net loss per share attributable to common stockholders—basic and diluted $ (0.15 ) $ (0.64 ) $ (0.61 ) $ (0.57 ) 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Collaboration revenue - related party $ 45,495 $ 2,428 $ 1,730 $ 9,764 Total operating expenses 14,452 19,011 19,760 15,345 Loss from operations 31,043 (16,583 ) (18,030 ) (5,581 ) Net loss 31,212 (15,852 ) (17,222 ) (4,735 ) Net loss per share attributable to common stockholders—basic $ 1.59 $ (0.73 ) $ (0.62 ) $ (0.17 ) Net loss per share attributable to common stockholders— diluted $ 1.05 $ (0.73 ) $ (0.62 ) $ (0.17 ) |
Nature of the Business - Additi
Nature of the Business - Additional Information (Details) | May 01, 2019USD ($) | Apr. 23, 2018USD ($)$ / sharesshares | Apr. 06, 2018 | Jan. 31, 2016shares | Dec. 31, 2019USD ($)shares | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($)shares | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($) |
Class Of Stock [Line Items] | |||||||||||||||
State of incorporation | DE | ||||||||||||||
Net proceeds from issuance of common stock | $ 24,000 | ||||||||||||||
Common stock, issued | shares | 27,893,337 | 27,772,600 | 27,893,337 | 27,772,600 | |||||||||||
Net loss | $ (15,954,000) | $ (16,878,000) | $ (17,758,000) | $ (4,199,000) | $ (4,735,000) | $ (17,222,000) | $ (15,852,000) | $ 31,212,000 | $ (54,789,000) | $ (6,597,000) | $ (45,377,000) | ||||
Accumulated deficit | 121,595,000 | $ 66,806,000 | $ 121,595,000 | $ 66,806,000 | |||||||||||
Operating expenses and capital expenditure requirements | 12 months | ||||||||||||||
Cash, cash equivalents and marketable securities | $ 105,161,000 | $ 105,161,000 | |||||||||||||
Series A and A-1 Redeemable Convertible Preferred Stock | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Convertible preferred stock converted into common stock | shares | 16,863,624 | ||||||||||||||
Initial Public Offering | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Issuance of common stock (in shares) | shares | 7,200,000 | ||||||||||||||
Shares issued, price per share | $ / shares | $ 15 | ||||||||||||||
Gross proceeds from issuance of common stock | $ 108,000,000 | ||||||||||||||
Net proceeds from issuance of common stock | $ 97,209,000 | ||||||||||||||
ATM Facility | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Net proceeds from issuance of common stock | $ 24,000 | ||||||||||||||
Common stock, issued | shares | 10,581 | 10,581 | |||||||||||||
Novartis Institutes for Biomedical Research, Inc. | Novartis Collaboration | Private Placement | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Issuance of common stock (in shares) | shares | 766,666 | 766,666 | |||||||||||||
Shares issued, price per share | $ / shares | $ 15 | ||||||||||||||
Net proceeds from issuance of common stock | $ 11,500,000 | ||||||||||||||
JonesTrading Institutional Services LLC | ATM Facility | Maximum | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Gross proceeds from issuance of common stock | $ 30,000,000 | ||||||||||||||
Percentage of gross proceeds of shares sold for compensation | 3.00% | ||||||||||||||
Common Stock | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Reverse stock split, conversion ratio | 0.4545 | ||||||||||||||
Issuance of common stock (in shares) | shares | 10,581 | ||||||||||||||
Common Stock | Initial Public Offering | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Issuance of common stock (in shares) | shares | 7,200,000 | ||||||||||||||
Common Stock | Novartis Institutes for Biomedical Research, Inc. | Private Placement | |||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||
Issuance of common stock (in shares) | shares | 766,666 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)FinancialInstitutionSegment | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||
Maximum maturity period of short-term, highly liquid investments for qualifying cash equivalents | 90 days | ||
Minimum maturity period of investments for qualifying marketable securities | 90 days | ||
Restricted cash, non-current | $ 1,595,000 | $ 1,198,000 | |
Number of accredited financial institution where cash, cash equivalents and marketable securities maintained | FinancialInstitution | 1 | ||
Deferred offering costs | $ 0 | $ 0 | |
Impairment losses on long-lived assets | $ 0 | ||
Number of operating segments | Segment | 1 | ||
Operating lease, right-of-use asset | $ 14,858,000 | $ 16,672,000 | |
Operating lease, right-of-use liabilities | $ 21,708,000 | ||
Minimum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Percentage of likelihood of tax benefit being realized | 50.00% | ||
Laboratory Equipment | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property and equipment depreciated or amortized over useful life | 5 years | ||
Computer Equipment | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property and equipment depreciated or amortized over useful life | 3 years | ||
Furniture and Office Equipment | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property and equipment depreciated or amortized over useful life | 3 years | ||
Leasehold Improvements | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Description of property and equipment depreciated or amortized over useful life | Leasehold improvements are amortized over the shorter of the lease term or 10 years. | ||
Leasehold Improvements | Maximum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Property and equipment depreciated or amortized over useful life | 10 years |
Marketable Securities - Summary
Marketable Securities - Summary of Fair Value of Available-for-sale Marketable Debt Securities by Type of Security (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 58,303 | $ 76,042 |
Gross Unrealized Gains | 104 | |
Gross Unrealized Losses | (1) | (119) |
Fair Value | 58,406 | 75,923 |
Corporate Bonds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 10,276 | |
Gross Unrealized Losses | (80) | |
Fair Value | 10,196 | |
U.S. Treasury Notes | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 42,795 | 62,866 |
Gross Unrealized Gains | 73 | |
Gross Unrealized Losses | (24) | |
Fair Value | 42,868 | 62,842 |
U.S. Government Agency Bonds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 15,508 | 2,900 |
Gross Unrealized Gains | 31 | |
Gross Unrealized Losses | (1) | (15) |
Fair Value | $ 15,538 | $ 2,885 |
Marketable Securities - Summa_2
Marketable Securities - Summary of Fair Value of Available-for-sale Debt Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Available For Sale Securities [Abstract] | ||
Maturing in one year or less, Amortized Cost | $ 58,303 | $ 76,042 |
Amortized Cost | 58,303 | 76,042 |
Maturing in one year or less, Fair Value | 58,406 | 75,923 |
Fair Value | $ 58,406 | $ 75,923 |
Marketable Securities - Additio
Marketable Securities - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Available For Sale Securities [Abstract] | |||
Gain (losses) on marketable securities | $ 7,000 | $ 0 | $ (2,000) |
Investments in other-than-temporary decline in fair value | 0 | 0 | $ 0 |
Fair value of securities, unrealized loss position for less than twelve months | 8,031,000 | 62,842,000 | |
Fair value of securities, unrealized loss position for more than twelve months | $ 0 | $ 13,081,000 |
Fair Value of Financial Assets
Fair Value of Financial Assets - Summary of Financial Assets Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured on recurring basis | $ 91,396 | $ 153,660 |
Cash Equivalents | Money Market Funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured on recurring basis | 30,490 | 77,737 |
Cash Equivalents | U.S. Government Agency Bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured on recurring basis | 2,500 | |
Marketable Securities | U.S. Treasury Notes | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured on recurring basis | 42,868 | 62,842 |
Marketable Securities | U.S. Government Agency Bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured on recurring basis | 15,538 | 2,885 |
Marketable Securities | Corporate Bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured on recurring basis | 10,196 | |
Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured on recurring basis | 30,490 | 77,737 |
Level 1 | Cash Equivalents | Money Market Funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured on recurring basis | 30,490 | 77,737 |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured on recurring basis | 60,906 | 75,923 |
Level 2 | Cash Equivalents | U.S. Government Agency Bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured on recurring basis | 2,500 | |
Level 2 | Marketable Securities | U.S. Treasury Notes | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured on recurring basis | 42,868 | 62,842 |
Level 2 | Marketable Securities | U.S. Government Agency Bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured on recurring basis | $ 15,538 | 2,885 |
Level 2 | Marketable Securities | Corporate Bonds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured on recurring basis | $ 10,196 |
Fair Value of Financial Asset_2
Fair Value of Financial Assets - Additional Information (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Disclosures [Abstract] | ||
Fair value assets transfers between level 1 to level 2 | $ 0 | $ 0 |
Fair value assets transfers between level 2 to level 1 | 0 | 0 |
Fair value assets transfers between level 1 to level 3 | 0 | 0 |
Fair value assets transfers between level 3 to level 1 | 0 | 0 |
Fair value assets transfers between level 2 to level 3 | 0 | 0 |
Fair value assets transfers between level 3 to level 2 | $ 0 | $ 0 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment Net (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 11,800 | $ 10,959 |
Less: Accumulated depreciation and amortization | (4,514) | (2,733) |
Property, plant and equipment, net | 7,286 | 8,226 |
Laboratory Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 3,583 | 2,970 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 6,632 | 6,531 |
Computer Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | 511 | 305 |
Furniture and Office Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,074 | 1,074 |
Construction in Progress | ||
Property Plant And Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 79 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |||
Depreciation and amortization expense | $ 1,785 | $ 1,347 | $ 964 |
Loss on disposal of property and equipment | $ 1 | $ 14 | $ 35 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Prepaid Expense And Other Assets Current [Abstract] | ||
Prepaid income taxes | $ 923 | |
Prepaid expenses | $ 2,429 | 4,520 |
Interest receivable on marketable securities | 336 | 323 |
Prepaid expenses and other current assets | $ 2,765 | $ 5,766 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts Payable And Accrued Liabilities Current [Abstract] | ||
Accrued external research and development costs | $ 3,468 | $ 5,011 |
Accrued payroll and payroll-related costs | 3,380 | 2,618 |
Accrued professional fees | 410 | 634 |
Other | 754 | 540 |
Accrued expenses and other current liabilities | $ 8,012 | $ 8,803 |
Collaboration Agreement with _3
Collaboration Agreement with Novartis - Additional Information (Details) - USD ($) | Apr. 23, 2018 | Mar. 31, 2018 | Feb. 28, 2018 | Jan. 31, 2016 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 31, 2020 |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||||||||
Preferred stock shares issued to related party | 0 | 0 | 0 | 0 | |||||||||||||
Proceeds from stock issued to related party in private placement | $ 11,500,000 | ||||||||||||||||
Deferred revenue - related party, non-current | $ 33,676,000 | $ 39,342,000 | $ 33,676,000 | 39,342,000 | |||||||||||||
Collaboration revenue - related party | $ 439,000 | $ 344,000 | $ 143,000 | $ 14,434,000 | $ 9,764,000 | $ 1,730,000 | $ 2,428,000 | $ 45,495,000 | $ 15,360,000 | $ 59,417,000 | $ 12,826,000 | ||||||
Type of Revenue [Extensible List] | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | ||||||
ASU 2014-09 | |||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||||||||
Collaboration revenue - related party | $ 59,417,000 | $ 12,826,000 | |||||||||||||||
Novartis | |||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||||||||
Payment for reimbursement of manufacturing costs incurred | $ 0 | 3,437,000 | |||||||||||||||
Novartis Collaboration | |||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||||||||
Revenue performance obligation | $ 38,592,000 | 38,592,000 | |||||||||||||||
Novartis Collaboration | Novartis Institutes for Biomedical Research, Inc. | |||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||||||||
Payment for reimbursement of manufacturing costs incurred | 0 | 3,437,000 | $ 0 | ||||||||||||||
Proceeds from collaboration arrangement | $ 0 | ||||||||||||||||
Type of Revenue [Extensible List] | us-gaap:CollaborativeArrangementMember | ||||||||||||||||
Novartis Collaboration | Novartis Institutes for Biomedical Research, Inc. | Scenario, Forecast | |||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||||||||
Collaboration revenue - related party | $ 38,592,000 | ||||||||||||||||
Novartis Collaboration | Novartis Institutes for Biomedical Research, Inc. | ASU 2014-09 | |||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||||||||
Proceeds from collaboration arrangement | $ 5,000,000 | $ 45,000,000 | |||||||||||||||
Revenue recognized under milestone payment | $ 4,882,000 | $ 27,850,000 | |||||||||||||||
Deferred revenue - related party, non-current | 12,268,000 | 12,268,000 | |||||||||||||||
Novartis Collaboration | Novartis Institutes for Biomedical Research, Inc. | Up Front Payment Arrangement | |||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||||||||
Proceeds from collaboration arrangement | $ 70,000,000 | ||||||||||||||||
Novartis Collaboration | Novartis Institutes for Biomedical Research, Inc. | Milestone Payment | |||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||||||||
Potential milestones payment | 525,000,000 | ||||||||||||||||
Novartis Collaboration | Novartis Institutes for Biomedical Research, Inc. | Minimum | |||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||||||||
Percentage of share holding | 5.00% | ||||||||||||||||
Novartis Collaboration | Novartis Institutes for Biomedical Research, Inc. | Maximum | Milestone Payment | |||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||||||||
Maximum aggregate amount of potential option purchase, option exercise and milestone payments to be currently received | $ 745,000,000 | $ 745,000,000 | |||||||||||||||
Novartis Collaboration | Novartis Institutes for Biomedical Research, Inc. | Maximum | Milestone Payment | Subsequent Event | |||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||||||||
Maximum aggregate amount of potential option purchase, option exercise and milestone payments to be currently received | $ 525,000,000 | ||||||||||||||||
Novartis Collaboration | Series A One Redeemable Convertible Preferred Stock | Novartis Institutes for Biomedical Research, Inc. | |||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||||||||
Preferred stock shares issued to related party | 2,000,000 | ||||||||||||||||
Novartis Collaboration | Private Placement | Novartis Institutes for Biomedical Research, Inc. | |||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||||||||
Common stock shares issued to related party | 766,666 | 766,666 | |||||||||||||||
Share price | $ 15 | ||||||||||||||||
Proceeds from stock issued to related party in private placement | $ 11,500,000 |
Collaboration Agreement with _4
Collaboration Agreement with Novartis - Schedule of Collaboration Revenue Related Party (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||
Collaboration revenue - related party | $ 439 | $ 344 | $ 143 | $ 14,434 | $ 9,764 | $ 1,730 | $ 2,428 | $ 45,495 | $ 15,360 | $ 59,417 | $ 12,826 |
ASU 2014-09 | |||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||||
Collaboration revenue - related party | $ 59,417 | $ 12,826 |
Collaboration Agreement with _5
Collaboration Agreement with Novartis - Summary of Changes in Contract Liabilities (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Change In Contract With Customer Asset And Liability [Abstract] | |
Deferred revenue - Beginning balance | $ 53,952 |
Deferred revenue - Deductions | (15,360) |
Deferred revenue - Ending balance | $ 38,592 |
Redeemable Convertible Prefer_2
Redeemable Convertible Preferred Stock - Additional Information (Details) | Apr. 23, 2018shares |
Series A and A-1 Redeemable Convertible Preferred Stock | |
Temporary Equity [Line Items] | |
Convertible preferred stock converted into common stock | 16,863,624 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) | May 01, 2019USD ($) | Apr. 23, 2018USD ($)$ / sharesshares | Jan. 31, 2016shares | Dec. 31, 2019USD ($)Vote$ / sharesshares | Dec. 31, 2018$ / sharesshares |
Subsidiary Sale Of Stock [Line Items] | |||||
Common stock, authorized | shares | 150,000,000 | 150,000,000 | |||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | |||
Number of votes entitled by each share of common stock holder | Vote | 1 | ||||
Common stock voting rights | Each share of common stock entitles the holder to one vote | ||||
Dividends, declared or paid | $ 0 | ||||
Total reserved | shares | 17,351,095 | 6,083,202 | |||
Common stock, issued | shares | 27,893,337 | 27,772,600 | |||
Net proceeds from issuance of common stock | $ 24,000 | ||||
ATM Facility | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Common stock, issued | shares | 10,581 | ||||
Net proceeds from issuance of common stock | $ 24,000 | ||||
Initial Public Offering | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Net proceeds from issuance of common stock | $ 97,209,000 | ||||
Issuance of common stock (in shares) | shares | 7,200,000 | ||||
Shares issued, price per share | $ / shares | $ 15 | ||||
Gross proceeds from issuance of common stock | $ 108,000,000 | ||||
JonesTrading Institutional Services LLC | ATM Facility | Maximum | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Gross proceeds from issuance of common stock | $ 30,000,000 | ||||
Novartis Institutes for Biomedical Research, Inc. | Private Placement | Novartis Collaboration | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Net proceeds from issuance of common stock | $ 11,500,000 | ||||
Issuance of common stock (in shares) | shares | 766,666 | 766,666 | |||
Shares issued, price per share | $ / shares | $ 15 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Shares of Common Stock Reserved for Future Issuance (Details) - shares | Dec. 31, 2019 | Dec. 31, 2018 |
Class Of Stock [Line Items] | ||
Total reserved | 17,351,095 | 6,083,202 |
Options to Purchase Common Stock | ||
Class Of Stock [Line Items] | ||
Total reserved | 5,418,113 | 4,414,225 |
Shares Available for Future Grant | ||
Class Of Stock [Line Items] | ||
Total reserved | 1,409,019 | 1,412,159 |
Shares Available from ATM Offering | ||
Class Of Stock [Line Items] | ||
Total reserved | 9,989,419 | |
2018 Employee Stock Purchase Plan | ||
Class Of Stock [Line Items] | ||
Total reserved | 534,544 | 256,818 |
Stock-Based Awards - Additional
Stock-Based Awards - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 03, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
2018 Employee Stock Purchase Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation cost | $ 10,733 | |||
Unrecognized stock-based compensation cost, weighted-average period | 2 years 3 months | |||
Employee Stock Option | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Aggregate fair value of stock options vested | $ 6,634 | $ 4,493 | ||
Aggregate intrinsic value of stock options exercised | $ 208 | $ 1,887 | $ 1,876 | |
Employee Stock Option | Non-Employees | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares of common stock converted under option plan | 272,343 | 317,957 | ||
Restricted Common Stock | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Aggregate intrinsic value of restricted stock awards vested | $ 810 | |||
Number of unvested restricted common stock | 0 | 0 | ||
2014 Plan | Employee Stock Option | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Percentage of exercise price per share of stock options to fair market value of share of common stock | 100.00% | |||
Stock options granted expiry period | 10 years | |||
Weighted average grant-date fair value per share of stock options granted | $ 2.71 | $ 7.47 | ||
2018 Stock Option and Incentive Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares of common stock to be issued | 1,545,454 | |||
Percentage of authorized number of shares of common stock outstanding | 4.00% | |||
Number of shares of common stock converted under option plan | 5,418,113 | 4,414,225 | ||
2018 Stock Option and Incentive Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of common stock shares available for further issuance | 1,409,019 | 1,412,159 | ||
2018 Stock Option and Incentive Plan | 2018 Employee Stock Purchase Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares of common stock to be issued | 256,818 | 534,544 | ||
Percentage of authorized number of shares of common stock outstanding | 1.00% | |||
Number of shares of common stock issued | 0 | 0 | ||
2014 Plan and 2018 Plan | Employee Stock Option | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock options granted expiry period | 10 years | |||
Stock options granted vesting period | 4 years |
Stock-Based Awards - Summary of
Stock-Based Awards - Summary of Assumptions used to Determine Fair Value of Stock Options Granted to Employees and Directors (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Risk-free interest rate | 2.46% | 2.67% | 2.04% |
Expected term (in years) | 6 years 1 month 13 days | 6 years 2 months 4 days | 6 years 3 months |
Expected volatility | 73.62% | 72.70% | 78.60% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Stock-Based Awards - Summary _2
Stock-Based Awards - Summary of Stock Option Activity (Details) - 2018 Stock Option and Incentive Plan - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of Shares, Outstanding beginning balance | 4,414,225 | |
Number of Shares, Granted | 1,518,500 | |
Number of Shares, Exercised | (110,156) | |
Number of Shares, Forfeited | (404,456) | |
Number of Shares, Outstanding ending balance | 5,418,113 | 4,414,225 |
Number of Shares, Options exercisable at December 31, 2019 | 2,919,360 | |
Number of Shares, Vested and expected to vest at December 31, 2019 | 5,418,113 | |
Weighted Average Exercise Price, Outstanding beginning balance | $ 6.79 | |
Weighted Average Exercise Price, Granted | 4.06 | |
Weighted Average Exercise Price, Exercised | 2.31 | |
Weighted Average Exercise Price, Forfeited | 6.85 | |
Weighted Average Exercise Price, Outstanding ending balance | 6.11 | $ 6.79 |
Weighted Average Exercise Price, Options exercisable at December 31, 2019 | 5.54 | |
Weighted Average Exercise Price, Vested and expected to vest at December 31, 2019 | $ 6.11 | |
Weighted Average Remaining Contractual Term (in years), Outstanding | 7 years 8 months 8 days | 8 years 3 months 14 days |
Weighted Average Remaining Contractual Term (in years), Options exercisable | 7 years 7 days | |
Weighted Average Remaining Contractual Term (in years), Vested and expected to vest | 7 years 8 months 8 days | |
Aggregate Intrinsic Value | $ 690 | $ 2,031 |
Aggregate Intrinsic Value, Options exercisable at December 31, 2019 | 665 | |
Aggregate Intrinsic Value, Vested and expected to vest at December 31, 2019 | $ 690 |
Stock-Based Awards - Summary _3
Stock-Based Awards - Summary of Stock-Based Compensation Expense Related to Stock Options, Restricted Stock Awards and ESPP (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 5,991 | $ 5,217 | $ 4,709 |
Research and Development Expenses | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock-based compensation expense | 2,350 | 2,557 | 1,917 |
General and Administrative Expenses | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 3,641 | $ 2,660 | $ 2,792 |
Debt - Additional Information (
Debt - Additional Information (Details) - Loan and Security Agreement - K2 Health Ventures LLC | Nov. 22, 2019USD ($)Tranche$ / shares | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | ||
Commitment date stock price | $ / shares | $ 2.33 | |
Effective interest rate | 27.84 | |
Term Loans | ||
Debt Instrument [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 25,000,000 | |
Number of potential tranches | Tranche | 3 | |
Line of credit facility, expiration date | Dec. 1, 2023 | |
Debt instrument interest rate, floating | 8.65% | |
Term of the combined facility | 48 months | |
Final fee percentage | 4.45% | |
Conversion price per share | $ / shares | $ 1.56 | |
Beneficial conversion feature | $ 2,101,000 | |
Default interest rate | 5.00% | |
Interest expense | $ 147,000 | |
Term Loans | Maximum | ||
Debt Instrument [Line Items] | ||
Portion of outstanding term loan amount converted | $ 4,000,000 | |
Term Loans | Payment Occurs on or before Twenty Four Months after Initial Funding Date [Member] | ||
Debt Instrument [Line Items] | ||
Prepayment penalty fee percentage | 5.00% | |
Term Loans | Prepayment Occurs More than Twenty Four Months after, but on or before Thirty Six Months after Initial Funding Date | ||
Debt Instrument [Line Items] | ||
Prepayment penalty fee percentage | 3.00% | |
Term Loans | Prepayment Occurs More than Thirty Six Months after Initial Funding Date | ||
Debt Instrument [Line Items] | ||
Prepayment penalty fee percentage | 1.00% | |
Term Loans | Prime Rate | ||
Debt Instrument [Line Items] | ||
Debt instrument variable rate | 3.90% | |
First Tranche Term Loan | ||
Debt Instrument [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 7,500,000 | |
Line of credit facility, initiation date | Nov. 22, 2019 | |
Debt instrument interest only payment period | 19 months | |
Debt instrument interest only payment extension period subject to funding of second tranche term loan | 7 months | |
Debt instrument interest only payment extension period subject to funding of third tranche term loan | 7 months | |
Second Tranche Term Loan | ||
Debt Instrument [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 10,000,000 | |
Third Tranche Term Loan | ||
Debt Instrument [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 7,500,000 |
Debt - Schedule of Future Princ
Debt - Schedule of Future Principal Debt Payments on the Loan Payable (Details) - Notes Payable $ in Thousands | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | |
2021 | $ 1,602 |
2022 | 2,947 |
2023 | 2,951 |
Total principal payments | 7,500 |
Final fee due at maturity in 2024 | 334 |
Total principal payments and final fee | 7,834 |
Unamortized debt discount and final fee | 2,725 |
Note payable | $ 5,109 |
Net Loss per Share - Schedule o
Net Loss per Share - Schedule of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator: | |||||||||||
Net loss | $ (15,954) | $ (16,878) | $ (17,758) | $ (4,199) | $ (4,735) | $ (17,222) | $ (15,852) | $ 31,212 | $ (54,789) | $ (6,597) | $ (45,377) |
Accretion of redeemable convertible preferred stock to redemption value | (11) | (40) | |||||||||
Net loss attributable to common stockholders | $ (54,789) | $ (6,608) | $ (45,417) | ||||||||
Denominator: | |||||||||||
Weighted average commons shares outstanding—basic and diluted | 27,854,912 | 19,990,773 | 2,474,800 | ||||||||
Net loss per share attributable to common stockholders—basic and diluted | $ (0.57) | $ (0.61) | $ (0.64) | $ (0.15) | $ (1.97) | $ (0.33) | $ (18.35) |
Net Loss per Share - Schedule_2
Net Loss per Share - Schedule of Anti-dilutive Securities Excluded from Calculation of Diluted Net Loss per Share Attributable to Common Stockholders (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from the computation of diluted net loss per share | 7,982,216 | 4,414,225 |
Outstanding Options to Purchase Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from the computation of diluted net loss per share | 5,418,113 | 4,414,225 |
Shares Issuable Upon Conversion of the Convertible Note Payable | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from the computation of diluted net loss per share | 2,564,103 |
License Agreements - Additional
License Agreements - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2014 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
License Agreements | ||||
Research and development | $ 52,118 | $ 52,492 | $ 47,783 | |
Adimab LLC | ||||
License Agreements | ||||
License agreement entered date | Jul. 31, 2014 | |||
License agreement amendment date | 2018-10 | |||
Option fee percentage | 65.00% | |||
Adimab LLC | License Agreements | ||||
License Agreements | ||||
Research and development | $ 1,175 | $ 2,480 | $ 2,172 | |
Adimab LLC | Maximum | ||||
License Agreements | ||||
Technical milestones payment | $ 250 | |||
License agreement milestone payments | $ 13,000 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Before Taxes: | |||
Domestic | $ (54,789) | $ (6,597) | $ (45,377) |
Total income before income taxes | $ (54,789) | $ (6,597) | $ (45,377) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | |||
Income tax benefits for the net losses incurred | $ 0 | $ 0 | $ 0 |
Income tax benefits for the research and development tax credits | $ 0 | 0 | $ 0 |
Period of measurement for change in ownership | 3 years | ||
Unrecognized tax benefits | $ 0 | 0 | |
Interest and penalties accrued | $ 0 | $ 0 | |
Income tax examination, description | The Company is currently under examination by the Internal Revenue Service ("IRS") for the period ended December 31, 2016. | ||
Minimum | |||
Operating Loss Carryforwards [Line Items] | |||
Percentage increase in the ownership | 50.00% | ||
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Income tax benefits for the net losses incurred | $ 71,495,000 | ||
Net operating loss carryforwards, expiration year | 2034 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Income tax benefits for the net losses incurred | $ 73,021,000 | ||
Net operating loss carryforwards, expiration year | 2034 | ||
Research and Development | Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforwards | $ 4,501,000 | ||
Tax credit carryforwards, expiration year | 2034 | ||
Research and Development | State | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforwards | $ 2,025,000 | ||
Tax credit carryforwards, expiration year | 2030 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Federal statutory income tax rate | (21.00%) | (21.00%) | (35.00%) |
State taxes, net of federal benefit | (6.20%) | (6.20%) | (5.20%) |
Permanent differences | 0.00% | 1.10% | 0.30% |
Stock-based compensation | 1.00% | 5.20% | 2.60% |
Research and development tax credits | (7.90%) | (13.70%) | (0.90%) |
Increase in deferred tax asset valuation allowance | 33.70% | 34.50% | 18.60% |
Other | 0.40% | 0.10% | |
Change in statutory tax rate | 19.60% |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||||
Net operating loss carryforwards | $ 19,629 | $ 5,240 | ||
Research and development tax credit carryforwards | 6,234 | 1,945 | ||
Deferred revenue | 10,543 | 14,740 | ||
Deferred rent | 1,376 | |||
Intangible assets | 430 | 791 | ||
Accrued expenses | 843 | 687 | ||
Stock-based compensation | 2,414 | 1,468 | ||
Lease liability | 5,445 | |||
Other | 23 | 73 | ||
Total deferred tax assets | 45,561 | 26,320 | ||
Valuation allowance | (36,535) | (18,602) | $ (19,956) | $ (11,531) |
Deferred tax assets | 9,026 | 7,718 | ||
Deferred tax liabilities: | ||||
Right-of-use asset | (4,059) | |||
Depreciation | (1,281) | (1,629) | ||
Deferred revenue tax accounting method change | (3,045) | (6,089) | ||
Beneficial conversion feature on convertible note payable | (559) | |||
Other | (82) | |||
Total deferred tax liabilities | $ (9,026) | $ (7,718) |
Income Taxes - Changes in the V
Income Taxes - Changes in the Valuation Allowance for Deferred Tax Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation allowance at beginning of year | $ (18,602) | $ (19,956) | $ (11,531) |
Increases recorded to income tax provision | (17,933) | (5,644) | (17,302) |
Decreases recorded as a benefit to income tax provision | 6,998 | 8,877 | |
Valuation allowance at end of year | $ (36,535) | $ (18,602) | $ (19,956) |
Leases - Additional Information
Leases - Additional Information (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
May 30, 2018ft² | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2020 | Jan. 01, 2019USD ($) | |
Lease Agreements [Line Items] | ||||||
Cash paid for lease liabilities | $ 4,148 | |||||
Total rent expense | $ 1,649 | $ 1,194 | ||||
Office and Laboratory Space | CoStim Pharmaceuticals, Inc | ||||||
Lease Agreements [Line Items] | ||||||
Operating sublease, expiration period | 2018-03 | |||||
Sublease payments received from third-party tenant | $ 231 | $ 305 | ||||
Massachusetts | ||||||
Lease Agreements [Line Items] | ||||||
Lease term | 10 years | |||||
Renewal terms of lease | 5 years | |||||
Operating lease, expiration period | 2027-02 | |||||
Lease commenced period | 2017-04 | |||||
Operting lease, incentives | $ 4,803 | |||||
Massachusetts | Sublease agreement with EQRx | Office Space | ||||||
Lease Agreements [Line Items] | ||||||
Sublease commenced date | Jan. 1, 2020 | |||||
Massachusetts | Sublease agreement with EQRx | Office Space | Scenario, Forecast | ||||||
Lease Agreements [Line Items] | ||||||
Lease term | 3 years | |||||
Massachusetts | Lease Amendment | ||||||
Lease Agreements [Line Items] | ||||||
Lease term | 10 years | |||||
Lease term, description | In May 2018, the Company executed an amendment to lease an additional 33,526 square feet at 50 Hampshire Street in Cambridge, Massachusetts, with a 10-year term. This additional space became available for occupancy on January 1, 2020 | |||||
Land subject to additional ground leases | ft² | 33,526 | |||||
Massachusetts | Lease Amendment | Sublease agreement with EQRx | ||||||
Lease Agreements [Line Items] | ||||||
Lease term | 10 years | |||||
Lease term, description | In May 2018, the Company executed an amendment to lease an additional 33,526 square feet at 50 Hampshire Street in Cambridge, Massachusetts, with a 10-year term. | |||||
Land subject to additional ground leases | ft² | 33,526 | |||||
Massachusetts | Minimum | ||||||
Lease Agreements [Line Items] | ||||||
Lease term | 1 year | |||||
Operating lease, discount rate | 950.00% | |||||
Massachusetts | Maximum | ||||||
Lease Agreements [Line Items] | ||||||
Lease term | 10 years | |||||
Operating lease, discount rate | 1050.00% |
Leases - Summary of Components
Leases - Summary of Components of Lease Expense (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($) | ||
Lease Agreements [Line Items] | ||
Operating lease cost | $ 1,814 | |
Total lease cost | $ 4,194 | |
Weighted-average remaining lease term (in months) | 119 months 18 days | |
Weighted-average discount rate | 10.50% | |
Research and Development Expenses | ||
Lease Agreements [Line Items] | ||
Operating lease cost | $ 2,312 | |
Variable lease costs | 707 | [1] |
General and Administrative Expenses | ||
Lease Agreements [Line Items] | ||
Operating lease cost | 899 | |
Variable lease costs | $ 276 | |
[1] | Variable lease costs include certain additional charges for operating costs, including insurance, maintenance, taxes, utilities, and other costs incurred, which are billed based on both usage and as a percentage of the Company’s share of total square footage. Short term lease costs are immaterial. |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 3,796 |
2021 | 5,529 |
2022 | 5,385 |
2023 | 5,413 |
2024 | 5,533 |
Thereafter | 31,827 |
Total future lease payments | 57,483 |
Less: Interest | (37,553) |
Present value of future lease payments (lease liability) | $ 19,930 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 2,546 |
2020 | 4,258 |
2021 | 5,176 |
2022 | 5,292 |
2023 | 5,376 |
Thereafter | 37,573 |
Total operating leases | $ 60,221 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments of Operating Leases (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2020 | $ 3,541 |
2021 | 5,179 |
2022 | 5,295 |
2023 | 5,413 |
2024 | 5,533 |
Thereafter | 31,827 |
Total future minimum lease payments | $ 56,788 |
Commitments and Contingencies_2
Commitments and Contingencies - Additional Information (Detail) - Manufacturing and Research Agreements $ in Thousands | Dec. 31, 2019USD ($) |
Commitments And Contingencies [Line Items] | |
Total minimum payments due | $ 5,171 |
Minimum payments due in 2020 | 4,263 |
Minimum payments due in 2021 | $ 908 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | Apr. 23, 2018 | Jan. 31, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | |||||
Preferred stock shares issued to related party | 0 | 0 | |||
Proceeds from private placement | $ 11,500,000 | ||||
Novartis Institutes for Biomedical Research, Inc. | Novartis Collaboration | |||||
Related Party Transaction [Line Items] | |||||
Proceeds from collaboration arrangement | $ 0 | ||||
Amounts due from related party | 0 | 0 | |||
Payment for reimbursement of manufacturing costs incurred | 0 | 3,437,000 | $ 0 | ||
Novartis Institutes for Biomedical Research, Inc. | Novartis Collaboration | Minimum | |||||
Related Party Transaction [Line Items] | |||||
Percentage of share holding | 5.00% | ||||
Novartis Institutes for Biomedical Research, Inc. | Novartis Collaboration | Series A One Redeemable Convertible Preferred Stock | |||||
Related Party Transaction [Line Items] | |||||
Preferred stock shares issued to related party | 2,000,000 | ||||
Gross proceeds from issuance of preference stock | $ 13,500,000 | ||||
Novartis Institutes for Biomedical Research, Inc. | Novartis Collaboration | Private Placement | |||||
Related Party Transaction [Line Items] | |||||
Common stock shares issued to related party | 766,666 | 766,666 | |||
Share price | $ 15 | ||||
Proceeds from private placement | $ 11,500,000 | ||||
CoStim Pharmaceuticals, Inc | Office and Laboratory Space | |||||
Related Party Transaction [Line Items] | |||||
Sublease payment | 0 | 106,000 | 569,000 | ||
Sublease payments due | 0 | 0 | |||
Vaccinex, Inc. | |||||
Related Party Transaction [Line Items] | |||||
Due to related party | 0 | 83,000 | |||
Vaccinex, Inc. | Research and Development Expenses | |||||
Related Party Transaction [Line Items] | |||||
Payments to related party | $ 606,000 | $ 199,000 | $ 250,000 |
401(K) Savings Plan - Additiona
401(K) Savings Plan - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Defined contribution savings plan name | 401(k) | ||
Defined Contribution Plan, Sponsor Location [Extensible List] | country:US | ||
Defined Benefit Plan, Tax Status [Extensible List] | us-gaap:QualifiedPlanMember | ||
Employer matching contribution, percent of match | 50.00% | ||
Contributions made under the savings plan | $ 399 | $ 339 | $ 207 |
Maximum | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer matching contribution, percent of employees' gross pay | 6.00% |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) - Summary of Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Collaboration revenue - related party | $ 439 | $ 344 | $ 143 | $ 14,434 | $ 9,764 | $ 1,730 | $ 2,428 | $ 45,495 | $ 15,360 | $ 59,417 | $ 12,826 |
Type of Revenue [Extensible List] | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember |
Total operating expenses | $ 16,771 | $ 17,900 | $ 18,653 | $ 19,402 | $ 15,345 | $ 19,760 | $ 19,011 | $ 14,452 | $ 72,726 | $ 68,568 | $ 58,816 |
Loss from operations | (16,332) | (17,556) | (18,510) | (4,968) | (5,581) | (18,030) | (16,583) | 31,043 | (57,366) | (9,151) | (45,990) |
Net loss | $ (15,954) | $ (16,878) | $ (17,758) | $ (4,199) | $ (4,735) | $ (17,222) | $ (15,852) | $ 31,212 | $ (54,789) | $ (6,597) | $ (45,377) |
Net loss per share attributable to common stockholders—basic and diluted | $ (0.57) | $ (0.61) | $ (0.64) | $ (0.15) | $ (1.97) | $ (0.33) | $ (18.35) | ||||
Net loss per share attributable to common stockholders—basic | $ (0.17) | $ (0.62) | $ (0.73) | $ 1.59 | |||||||
Net loss per share attributable to common stockholders— diluted | $ (0.17) | $ (0.62) | $ (0.73) | $ 1.05 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||
Jan. 31, 2020USD ($) | May 30, 2018ft² | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2020 | Jan. 01, 2019USD ($) | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Deferred revenue recognized | $ 439,000 | $ 344,000 | $ 143,000 | $ 14,434,000 | $ 9,764,000 | $ 1,730,000 | $ 2,428,000 | $ 45,495,000 | $ 15,360,000 | $ 59,417,000 | $ 12,826,000 | |||||
Type of Revenue [Extensible List] | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | us-gaap:CollaborativeArrangementMember | |||||
Operating lease, right-of-use asset | $ 14,858,000 | $ 14,858,000 | $ 16,672,000 | |||||||||||||
Operating lease liabilities | $ 19,930,000 | $ 19,930,000 | ||||||||||||||
Massachusetts | ||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Lease term | 10 years | 10 years | ||||||||||||||
Lease Amendment | Massachusetts | ||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Lease term, description | In May 2018, the Company executed an amendment to lease an additional 33,526 square feet at 50 Hampshire Street in Cambridge, Massachusetts, with a 10-year term. This additional space became available for occupancy on January 1, 2020 | |||||||||||||||
Land subject to additional ground leases | ft² | 33,526 | |||||||||||||||
Lease term | 10 years | |||||||||||||||
Scenario, Forecast | Employee Severance | Operating Expenses | ||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Severance Costs | $ 1,272,000 | |||||||||||||||
Maximum | Massachusetts | ||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Lease term | 10 years | 10 years | ||||||||||||||
Minimum | Massachusetts | ||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Lease term | 1 year | 1 year | ||||||||||||||
Novartis Collaboration | Novartis Institutes for Biomedical Research, Inc. | ||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Type of Revenue [Extensible List] | us-gaap:CollaborativeArrangementMember | |||||||||||||||
Novartis Collaboration | Novartis Institutes for Biomedical Research, Inc. | Scenario, Forecast | ||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Deferred revenue recognized | $ 38,592,000 | |||||||||||||||
Sublease agreement with EQRx | Massachusetts | ||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Term of contract | The term of the sublease agreement commenced in January 2020 and ends on the last day of the 36th calendar month following commencement. | |||||||||||||||
Sublease agreement with EQRx | Massachusetts | Office Space | ||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Lease commenced date | Jan. 1, 2020 | |||||||||||||||
Sublease agreement with EQRx | Lease Amendment | Massachusetts | ||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Lease term, description | In May 2018, the Company executed an amendment to lease an additional 33,526 square feet at 50 Hampshire Street in Cambridge, Massachusetts, with a 10-year term. | |||||||||||||||
Land subject to additional ground leases | ft² | 33,526 | |||||||||||||||
Lease term | 10 years | |||||||||||||||
Sublease agreement with EQRx | Scenario, Forecast | Massachusetts | Office Space | ||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Lease term | 3 years | |||||||||||||||
Subsequent Event | Employee Severance | ||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Percentage of reduction of company's workforce | 35.00% | |||||||||||||||
Subsequent Event | Sublease agreement with EQRx | Massachusetts | ||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Operating lease, right-of-use asset | $ 15,003,000 | |||||||||||||||
Operating lease liabilities | 15,003,000 | |||||||||||||||
Milestone Payment | Novartis Collaboration | Novartis Institutes for Biomedical Research, Inc. | Maximum | ||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Maximum aggregate amount of potential option purchase, option exercise and milestone payments to be currently received | $ 745,000,000 | $ 745,000,000 | ||||||||||||||
Milestone Payment | Subsequent Event | Novartis Collaboration | Novartis Institutes for Biomedical Research, Inc. | Maximum | ||||||||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||
Maximum aggregate amount of potential option purchase, option exercise and milestone payments to be currently received | $ 525,000,000 |