Scholar Rock Holding (SRRK) 10-Q 12 Nov 19 2019 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Nov. 01, 2019
Document and Entity Information
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Entity Registrant Name	Scholar Rock Holding Corp
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		29,678,422
Entity Central Index Key	0001727196
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 32,641	$ 115,069
Marketable securities	143,441	60,576
Prepaid expenses and other current assets	3,157	2,296
Total current assets	179,239	177,941
Property and equipment, net	4,311	3,190
Operating lease right-of-use asset	4,702
Restricted cash	205	205
Other long-term assets	85
Total assets	188,542	181,336
Current liabilities:
Accounts payable	3,032	3,303
Accrued expenses	8,141	7,157
Deferred rent		16
Operating lease liability	1,082
Loan payable		424
Deferred revenue	20,252	20,209
Other current liabilities	15	14
Total current liabilities	32,522	31,123
Long-term portion of deferred rent		871
Long-term portion of operating lease liability	4,484
Other long-term liabilities	13	24
Long-term portion of deferred revenue	29,733	42,695
Total liabilities	66,752	74,713
Commitments and contingencies (Note 8)
Stockholders' equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized at September 30, 2019 and December 31, 2018; no shares issued and outstanding at September 30, 2019 and December 31, 2018
Common stock, $0.001 par value; 150,000,000 shares authorized and 29,678,422 shares issued and outstanding as of September 30, 2019; 150,000,000 shares authorized and 26,217,701 shares issued and outstanding as of December 31, 2018	30	26
Additional paid-in capital	268,009	213,453
Accumulated other comprehensive income (loss)	26	(8)
Accumulated deficit	(146,275)	(106,848)
Total stockholders' equity	121,790	106,623
Total liabilities and stockholders' equity	$ 188,542	$ 181,336

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	29,678,422	26,217,701
Common stock, shares outstanding	29,678,422	26,217,701

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
Revenue	$ 4,774		$ 12,919
Operating expenses:
Research and development	15,699	$ 8,061	40,153	$ 26,185
General and administrative	6,181	3,173	14,961	8,947
Total operating expenses	21,880	11,234	55,114	35,132
Loss from operations	(17,106)	(11,234)	(42,195)	(35,132)
Other income (expense), net	959	472	2,768	772
Net loss	$ (16,147)	$ (10,762)	$ (39,427)	$ (34,360)
Net loss per share, basic and diluted (in dollars per share)	$ (0.55)	$ (0.44)	$ (1.46)	$ (2.72)
Weighted average common shares outstanding, basic and diluted (in shares)	29,232,158	24,310,681	26,929,215	12,647,032
Comprehensive loss:
Net loss	$ (16,147)	$ (10,762)	$ (39,427)	$ (34,360)
Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities	(32)		34	2
Total other comprehensive income (loss)	(32)		34	2
Comprehensive loss	$ (16,179)	$ (10,762)	$ (39,393)	$ (34,358)

CONSOLIDATED STATEMENTS OF CONV

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Total
Balance at beginning at Dec. 31, 2017	$ 4	$ 4,001	$ (2)	$ (57,525)	$ (53,522)
Balance at beginning (in shares) at Dec. 31, 2017	3,970,586
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Unrealized gain (loss) on marketable securities			1		1
Equity-based compensation expense		482			482
Net loss				(8,892)	(8,892)
Balance at end at Mar. 31, 2018	$ 4	4,483	(1)	(66,417)	(61,931)
Balance at end (in shares) at Mar. 31, 2018	3,970,586
Balance at beginning at Dec. 31, 2017	$ 4	4,001	(2)	(57,525)	(53,522)
Balance at beginning (in shares) at Dec. 31, 2017	3,970,586
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Unrealized gain (loss) on marketable securities					2
Net loss					(34,360)
Balance at end at Sep. 30, 2018	$ 25	194,204		(91,886)	102,343
Balance at end (in shares) at Sep. 30, 2018	25,241,766
Balance at beginning at Mar. 31, 2018	$ 4	4,483	(1)	(66,417)	(61,931)
Balance at beginning (in shares) at Mar. 31, 2018	3,970,586
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Unrealized gain (loss) on marketable securities			1		1
Restricted shares forfeited during the period (in shares)	(852)
Equity-based compensation expense		1,089			1,089
Reclassification of warrant to stockholders' equity		93			93
Conversion of convertible preferred stock into common stock	$ 15	109,217			109,232
Conversion of convertible preferred stock into common stock (in shares)	15,109,950
Sale of common shares sold in IPO, net of offering costs	$ 6	77,829			77,835
Sale of common shares sold in IPO, net of offering costs (in shares)	6,164,000
Net loss				(14,707)	(14,707)
Balance at end at Jun. 30, 2018	$ 25	192,711		(81,124)	111,612
Balance at end (in shares) at Jun. 30, 2018	25,243,684
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Restricted shares forfeited during the period (in shares)	(2,367)
Exercise of stock options		3			3
Exercise of stock options (in shares)	449
Equity-based compensation expense		1,486			1,486
Sale of common shares sold in IPO, net of offering costs		4			4
Net loss				(10,762)	(10,762)
Balance at end at Sep. 30, 2018	$ 25	194,204		(91,886)	102,343
Balance at end (in shares) at Sep. 30, 2018	25,241,766
Balance at beginning at Dec. 31, 2018	$ 26	213,453	(8)	(106,848)	106,623
Balance at beginning (in shares) at Dec. 31, 2018	26,217,701
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Unrealized gain (loss) on marketable securities			24		24
Restricted shares forfeited during the period (in shares)	(2,237)
Exercise of stock options		13			13
Exercise of stock options (in shares)	1,983
Equity-based compensation expense		1,618			1,618
Net loss				(10,755)	(10,755)
Balance at end at Mar. 31, 2019	$ 26	215,084	16	(117,603)	97,523
Balance at end (in shares) at Mar. 31, 2019	26,217,447
Balance at beginning at Dec. 31, 2018	$ 26	213,453	(8)	(106,848)	106,623
Balance at beginning (in shares) at Dec. 31, 2018	26,217,701
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Unrealized gain (loss) on marketable securities					34
Net loss					(39,427)
Balance at end at Sep. 30, 2019	$ 30	268,009	26	(146,275)	121,790
Balance at end (in shares) at Sep. 30, 2019	29,678,422
Balance at beginning at Mar. 31, 2019	$ 26	215,084	16	(117,603)	97,523
Balance at beginning (in shares) at Mar. 31, 2019	26,217,447
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Unrealized gain (loss) on marketable securities			42		42
Exercise of stock options		79			79
Exercise of stock options (in shares)	12,883
Equity-based compensation expense		1,814			1,814
Sale of common shares	$ 3	42,019			42,022
Sale of common shares (in shares)	3,000,000
Net loss				(12,525)	(12,525)
Balance at end at Jun. 30, 2019	$ 29	258,996	58	(130,128)	128,955
Balance at end (in shares) at Jun. 30, 2019	29,230,330
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Unrealized gain (loss) on marketable securities			(32)		(32)
Restricted shares forfeited during the period (in shares)	(1,973)
Exercise of stock options (in shares)	65
Equity-based compensation expense		2,688			2,688
Sale of common shares	$ 1	6,325			6,326
Sale of common shares (in shares)	450,000
Net loss				(16,147)	(16,147)
Balance at end at Sep. 30, 2019	$ 30	$ 268,009	$ 26	$ (146,275)	$ 121,790
Balance at end (in shares) at Sep. 30, 2019	29,678,422

CONSOLIDATED STATEMENTS OF CO_2

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) - Temporary Equity - USD ($) $ in Thousands	Convertible preferred stock	Total
Balance, beginning at Dec. 31, 2017	$ 109,232
Balance, beginning (in shares) at Dec. 31, 2017	43,135,911
Convertible preferred equity
Conversion of convertible preferred stock into common stock	$ 0
Conversion of convertible preferred stock into common stock (in shares)	0
Balance, end at Mar. 31, 2018	$ 109,232
Balance, end (in shares) at Mar. 31, 2018	43,135,911
Convertible preferred equity
Conversion of convertible preferred stock into common stock	$ (109,232)	$ 109,232
Conversion of convertible preferred stock into common stock (in shares)	(43,135,911)
Balance, end at Jun. 30, 2018	$ 0
Balance, end (in shares) at Jun. 30, 2018	0

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities:
Net loss	$ (39,427)	$ (34,360)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	917	567
Gain or loss on sale of property and equipment	(8)
Equity-based compensation	6,120	3,057
Amortization/accretion of investment securities	(1,023)
Non-cash operating lease expense	742
Deferred payroll tax credit		199
Change in operating assets and liabilities:
Prepaid expenses and other current assets	(1,001)	(1,108)
Other assets	(85)
Accounts payable	(664)	294
Accrued expenses	984	543
Deferred rent		190
Operating lease liabilities	(625)
Deferred revenue	(12,919)
Other liabilities	(59)	95
Net cash used in operating activities	(47,048)	(30,523)
Cash flows from investing activities:
Purchase of property and equipment	(1,645)	(791)
Purchase of marketable securities	(194,608)
Proceeds from sale of property and equipment	8
Sales and maturities of marketable securities	112,800	1,499
Net cash (used in) provided by investing activities	(83,445)	708
Cash flows from financing activities:
Principal payments on loan payable	(365)	(500)
Proceeds from sale of common stock, net of issuance costs	48,348	77,839
Proceeds from stock option exercises	92	3
Other	(10)	(2)
Net cash provided by financing activities	48,065	77,340
Net (decrease) increase in cash and cash equivalents and restricted cash	(82,428)	47,525
Cash and cash equivalents and restricted cash, beginning of period	115,274	56,666
Cash and cash equivalents and restricted cash, end of period	32,846	104,191
Supplemental disclosure of non-cash items:
Property and equipment purchases in accounts payable and accrued expenses	832	177
Operating lease right-of-use asset obtained in exchange for operating lease obligation	5,444
Supplemental cash flow information:
Cash paid for interest	$ 7	$ 27

Nature of the Business

Nature of the Business	9 Months Ended
	Sep. 30, 2019
Nature of the Business
Nature of the Business	1. Nature of the Business Scholar Rock Holding Corporation (the “Company”) is a biopharmaceutical company focused on the discovery and development of innovative medicines for the treatment of serious diseases in which signaling by protein growth factors plays a fundamental role. The Company’s novel understanding of the molecular mechanisms of growth factor activation enabled the development of a proprietary platform for the discovery and development of monoclonal antibodies that locally and selectively target these signaling proteins at the cellular level. The Company’s lead product candidate, SRK-015, is a highly selective fully human, monoclonal antibody, with a unique mechanism of action that results in inhibition of the activation of the growth factor, myostatin, in skeletal muscle. SRK-015 is being developed as a potential first muscle-directed therapy for the treatment of spinal muscular atrophy (“SMA”). The Company is currently dosing patients with Type 2 and Type 3 SMA in its SRK-015 TOPAZ Phase 2 clinical trial. The Company’s second product candidate, SRK-181, is being developed for the treatment of cancers resistant to checkpoint blockade therapies (“CBTs”), such as anti-PD1 or anti-PDL 1 antibodies. SRK-181 is a highly selective inhibitor of the activation of transforming growth factor beta-1 (“TGFβ1”). Subject to regulatory feedback, the Company intends to initiate a Phase 1 clinical trial of SRK-181 in the first quarter of 2020 in patients with locally advanced or metastatic solid tumors that exhibit primary resistance to anti-PD(L)1 antibodies. Additionally, the Company continues to create a pipeline of novel product candidates with the potential to transform the lives of patients suffering from a wide range of serious diseases, including other neuromuscular disorders, cancer, fibrosis and anemia. The Company was originally formed in May 2012. Its principal offices are in Cambridge, Massachusetts. Since its inception, the Company’s operations have focused on research and development of monoclonal antibodies that selectively inhibit activation of growth factors for therapeutic effect, as well as establishing the Company’s intellectual property portfolio and performing research and development activities. The Company has primarily financed its operations through various equity financings, including the initial public offering of its common stock (the “IPO”) in May 2018 and a secondary offering in June 2019 (Note 6), as well as research and development collaboration agreements. Revenue generation activities have been limited to two collaborations, both containing research services and the issuance of a license. The first agreement, executed in 2013, was with Janssen Biotech, Inc. (“Janssen”), a subsidiary of Johnson & Johnson. The second agreement, executed in December 2018, was with Gilead Sciences, Inc. (“Gilead”). The Company began recognizing revenue on the Gilead Collaboration Agreement in 2019. No revenues have been recorded from the sale of any commercial product. The Company is subject to a number of risks similar to other life science companies, including, but not limited to, successful discovery and development of its drug candidates, raising additional capital, development by its competitors of new technological innovations, protection of proprietary technology and regulatory approval and market acceptance of the Company’s products. The Company anticipates that it will continue to incur significant operating losses for the next several years as it continues to develop its product candidates. The Company believes that its existing cash and cash equivalents, and marketable securities at September 30, 2019 will be sufficient to allow the Company to fund its current operations through at least a period of one year after the date the financial statements are issued.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2019
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Summary of Significant Accounting Policies The significant accounting policies used in preparation of the unaudited consolidated financial statements are described in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2018, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K. Material changes to the significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 are reflected below. Leases Effective January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”), Topic 842, Leases (“ASC 842”), using the modified retrospective approach and utilizing the effective date as its date of initial application, for which prior periods are presented in accordance with the previous guidance in ASC Topic 840, Leases. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as incentives received. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In accordance with the guidance in ASC 842, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area 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 the respective relative fair values to the lease components and non-lease components. Reclassifications Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year. Unaudited Interim Financial Information The consolidated financial statements of the Company included herein have been prepared, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The unaudited consolidated financial statements include the accounts of Scholar Rock Holding Corporation and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the results for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and judgments that may affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the date of the financial statements and the related reporting of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. Recently Adopted Accounting Pronouncements ASU 2016-02, Leases and ASU 2018-11, Leases, Targeted Improvements In February 2016, the FASB issued ASU 2016-02, Leases, (“ASU 2016-02”), which superseded the lease accounting requirements in ASC 840, Leases and created a new Topic 842, Leases. In adopting the new standard, the Company elected to utilize the available package of practical expedients permitted under the transition guidance within the new standard, which removed the requirement to reassess previous accounting conclusions around whether arrangements are or contain leases, the classification of leases, and the treatment of initial direct costs. The adoption of this standard resulted in the recognition of operating lease liabilities and right-of-use assets of $6.2 million and $5.4 million, respectively, as of January 1, 2019. There was no cumulative transition adjustment to retained earnings upon adoption of the standard and there was no material effect on the Company’s statements of operations or statement of cash flows as the difference relates to previously recorded deferred rent which was eliminated upon adoption of this standard. Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . The new standard will align the requirements for capitalizing implementation costs for hosting arrangements (services) with costs for internal-use software (assets). As a result, certain implementation costs incurred in hosting arrangements will be deferred and amortized. The new standard will be effective for the Company on January 1, 2020. The Company does not anticipate a material impact to its net financial position or disclosures as a result of the adoption of ASU 2018-15. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The standard requires that a financial asset or a group of financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. Under current GAAP, a company only considered past events and current conditions in measuring an incurred loss. Under ASU 2016-13, the information that a company must consider is broadened in developing an expected credit loss estimate for assets measured either collectively or individually. The use of forecasted information incorporates more timely information in the estimate of expected credit loss. The new guidance will be effective for annual and interim periods beginning after December 15, 2019. The guidance is applied using a modified retrospective, or prospective approach, depending on a specific amendment. The Company does not anticipate a material impact to its net financial position or disclosures as a result of the adoption of ASU 2016-13.

Fair Value of Financial Assets

Fair Value of Financial Assets and Liabilities	9 Months Ended
	Sep. 30, 2019
Fair Value of Financial Assets and Liabilities
Fair Value of Financial Assets and Liabilities	3. Fair Value of Financial Assets and Liabilities The following tables summarize the assets and liabilities measured at fair value on a recurring basis at September 30, 2019 and December 31, 2018 (in thousands): Fair Value Measurements at September 30, 2019 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 30,868 $ 30,868 $ — $ — Marketable securities: U.S. Treasury obligations 143,441 143,441 — — Total assets $ 174,309 $ 174,309 $ — $ — Fair Value Measurements at December 31, 2018 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 114,593 $ 114,593 $ — $ — Marketable securities: U.S. Treasury obligations 60,576 60,576 — — Total assets $ 175,169 $ 175,169 $ — $ — Cash and cash equivalents and marketable securities include investments in money market funds and U.S. government securities that are valued using quoted market prices. Accordingly, money market funds and government funds are categorized as Level 1 as of September 30, 2019 and December 31, 2018. There were no transfers between fair value measurements levels during the three or nine months ended September 30, 2019 or 2018. The carrying amounts reflected in the balance sheets for prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair values at September 30, 2019 and December 31, 2018, due to their short-term nature. Upon the completion of the IPO, the Company’s outstanding warrant to purchase preferred stock converted into a warrant to purchase common stock and the Company reclassified the fair value of the warrant to additional paid-in capital. As of September 30, 2019, the warrant is currently exercisable for 7,614 shares of the Company’s common stock at an exercise price of $3.94 per share.

Marketable Securities

Marketable Securities	9 Months Ended
	Sep. 30, 2019
Marketable Securities
Marketable Securities	4. Marketable Securities The following table summarizes the Company’s investments as of September 30, 2019 (in thousands): Gross Amortized Unrealized Estimated Cost Gains Losses Fair Value Marketable securities available-for-sale: U.S. Treasury obligations $ 143,415 $ 35 $ (9) $ 143,441 Total available-for-sale securities $ 143,415 $ 35 $ (9) $ 143,441 The following table summarizes the Company’s investments as of December 31, 2018 (in thousands): Gross Amortized Unrealized Estimated Cost Gains Losses Fair Value Marketable securities available-for-sale: U.S. Treasury obligations $ 60,584 $ — $ (8) $ 60,576 Total available-for-sale securities $ 60,584 $ — $ (8) $ 60,576

Accrued Expenses

Accrued Expenses	9 Months Ended
	Sep. 30, 2019
Accrued Expenses
Accrued Expenses	5. Accrued Expenses As of September 30, 2019 and December 31, 2018, accrued expenses consist of the following (in thousands): As of September 30, December 31, 2019 2018 Accrued external research and development expense $ 3,860 $ 3,284 Accrued payroll and related expenses 2,781 2,826 Accrued professional and consulting expense 1,309 890 Accrued other 191 157 $ 8,141 $ 7,157

Common Stock and Preferred Stoc

Common Stock and Preferred Stock	9 Months Ended
	Sep. 30, 2019
Common Stock and Preferred Stock
Common Stock and Preferred Stock	6. Common Stock and Preferred Stock Upon the closing of the IPO during the second quarter of 2018, all outstanding shares of convertible preferred stock converted into 15,109,950 shares of common stock. In connection with the consummation of the IPO, on May 29, 2018 the Company filed an amended and restated certificate of incorporation, which increased the number of shares of common stock authorized for issuance thereunder by 90,000,000 shares to 150,000,000 shares and also authorized for issuance 10,000,000 shares of Preferred Stock, par value $0.001. As of September 30, 2019, no shares of the Preferred Stock were issued or outstanding. In June 2019, the Company sold 3,000,000 shares of its common stock through an underwritten public offering at a price of $15.00 per share. The offering was made pursuant to the Company’s effective shelf registration statement on Form S‑3. In July 2019, the exercise of the overallotment was settled, resulting in the sale of an additional 450,000 shares at a price of $15.00 per share. As a result of the offering, including the exercise of the overallotment option, the Company received aggregate net proceeds, after underwriting discounts and commissions and other offering expenses, of approximately $48.3 million.

Equity-Based Compensation

Equity-Based Compensation	9 Months Ended
	Sep. 30, 2019
Equity-Based Compensation
Equity-Based Compensation	7. Equity-Based Compensation The Company recorded equity-based compensation expense related to all equity-based awards for employees and nonemployees, which was allocated as follows in the consolidated statements of operations (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Research and development expense $ 577 $ 453 $ 1,794 $ 1,240 General and administrative expense 2,111 1,033 4,326 1,817 $ 2,688 $ 1,486 $ 6,120 $ 3,057 Equity-based compensation during the three and nine months ended September 30, 2019 includes $0.6 million and $0.1 million related to the acceleration and modification, respectively, of certain equity awards. Equity-based compensation during the three and nine months ended September 30, 2018 includes $0.3 million related to the modification of certain other equity awards. Restricted Stock The following table summarizes restricted common stock activity as of September 30, 2019: Weighted Average Fair Value per Share Number of Shares at Issuance Restricted common stock as of December 31, 2018 664,174 $ 5.77 Granted — $ — Vested (271,062) $ 5.77 Forfeited (4,210) $ 5.77 Restricted common stock as of September 30, 2019 388,902 $ 5.77 As of September 30, 2019, the Company had unrecognized equity-based compensation expense of $1.7 million related to restricted stock issued to employees and directors, which is expected to be recognized over a period of 1.4 years. Stock Options The following table summarizes stock option activity as of September 30, 2019: Weighted Weighted Average Number of Average Remaining Aggregate Shares Exercise Price Contractual Term Intrinsic Value (in years) (in thousands) Outstanding as of December 31, 2018 1,627,947 $ 10.86 9.26 $ 19,831 Granted 976,835 15.35 Exercised (14,931) 6.23 Cancelled (119,381) 15.08 Outstanding as of September 30, 2019 2,470,470 12.46 8.17 $ 2,577 Options exercisable as of September 30, 2019 761,359 $ 10.09 6.26 $ 1,189 Using the Black-Scholes option pricing model, the weighted average fair value of options granted to employees and directors during the nine months ended September 30, 2019 was $10.75. The following assumptions were used in determining the fair value of options granted in the nine months ended September 30, 2019: Risk-free interest rate 2.34 % Expected dividend yield % Expected term (years to liquidity) 6.20 Expected volatility 79.74 % As of September 30, 2019, the Company has unrecognized equity-based compensation expense related to its employee stock options of $14.9 million which the Company expects to recognize over the remaining weighted average vesting period of 2.8 years.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2019
Commitments and Contingencies
Commitments and Contingencies	8. Commitments and Contingencies Operating Leases Facility Lease In March 2015, the Company entered into a 5‑year lease for its corporate headquarters (the ‘‘lease’’). The lease was further amended in February 2018, to add an additional space (the ‘‘expansion space’’) at the current location and to extend the lease term (the ‘‘amended lease’’). The amended lease expires in September 2023. Rent for the facility lease, including the expansion space, increases from $1.4 million per year to $1.7 million per year over the term of the lease. Variable lease payments include the Company’s allocated share of costs incurred and expenditures made by the landlord in the operation and management of the building. The Company has the option to extend the term of the amended lease for one additional term of 5 years commencing after the amended lease expires. Other information related to the Company’s lease was as follows (in thousands, except lease term and discount rate): For Three Months Ended For Nine Months Ended September 30, September 30, 2019 2019 Lease Cost: Operating lease cost $ 344 $ 1,031 Variable lease cost 149 506 Total lease cost $ 493 $ 1,537 For Nine Months Ended September 30, 2019 Other information: Operating cash flows used for operating leases $ 914 Weighted average remaining lease term 4.00 years Weighted average discount rate 6.47 % The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of September 30, 2019 (in thousands): Year Ending December 31, 2019 (excluding the nine months ended September 30, 2019) $ 351 2020 1,446 2021 1,619 2022 1,668 2023 1,279 Thereafter — Total lease payments 6,363 Less imputed interest (797) Total operating lease liabilities $ 5,566 Legal Proceedings The Company is not currently a party to any material legal proceedings.

Loan Payable

Loan Payable	9 Months Ended
	Sep. 30, 2019
Loan Payable
Loan Payable	9. Loan Payable In August 2015, the Company entered into a Loan and Security Agreement with Silicon Valley Bank (‘‘SVB’’), which provided the Company an equipment line of credit of up to $2.0 million to finance the purchase of eligible equipment. The Company made the final payments on the loan in June 2019.

Agreements

Agreements	9 Months Ended
	Sep. 30, 2019
Agreements
Agreements	10. Agreements Collaboration with Gilead Agreement Summary On December 19, 2018 (the “Effective Date”), the Company entered into a Master Collaboration Agreement (the “Gilead Collaboration Agreement”) with Gilead to discover and develop specific inhibitors of TGFβ activation focused on the treatment of fibrotic diseases. Under the collaboration, Gilead has exclusive options to license worldwide rights to product candidates that emerge from three of the Company’s TGFβ programs (each a “Gilead Program”). Pursuant to the Gilead Collaboration Agreement, the Company is responsible for antibody discovery and preclinical research through product candidate nomination, after which, upon exercising the option for a Gilead Program, Gilead will be responsible for the program’s preclinical and clinical development and commercialization. Such option may be exercised by Gilead at any time from the Effective Date through a date that is 90 days following the expiration of the Research Collaboration Term (as defined below) for a given Gilead Program, or until termination of the Gilead Program, whichever is earlier (the “Option Exercise Period”). The Company received a non-refundable upfront payment of $50 million under the Gilead Collaboration Agreement. If Gilead exercises its option to exclusively license a Gilead Program, the Company may earn a total potential aggregate option exercise fee, development, regulatory and commercial milestone payments with respect to each Gilead Program of $475 million, or a total of $1,425 million across all three Gilead Programs. Additionally, in partial consideration of the rights granted to Gilead pursuant to the License Agreement, Gilead shall pay to the Company certain tiered royalties at a rate ranging from the high single-digits to the low double-digits (depending on the amount of net sales) on each Licensed Product in a given calendar year, on a country-by-country basis. In addition, Gilead will pay the Company a one-time milestone payment in the amount of $25 million following achievement of successful demonstration of in vivo proof of concept consistent with certain criteria detailed in the Gilead Collaboration Agreement. None of the payments under the Gilead Collaboration Agreement are refundable. Simultaneously with the entry into the Gilead Collaboration Agreement, the Company entered into a Share Purchase Agreement with Gilead (the “Gilead Equity Agreement”). Pursuant to the terms of the Gilead Equity Agreement, Gilead purchased 980,392 shares of common stock of the Company (the “Shares”) at a purchase price of $30.60 per share, for an aggregate purchase price of $30 million. The Company did not incur any material costs in connection with the issuance of the Shares. The Company and Gilead have established a joint steering committee (the “JSC”). The JSC, among other powers and responsibilities, reviews, oversees and has decision-making responsibilities for certain strategic activities performed under the Gilead Programs, including reviewing and amending the research plans, reviewing any development candidate nominations, selecting a development candidate, and overseeing the strategic direction of the Gilead Programs. The Company conducts its activities for each Gilead Program under the Gilead Collaboration Agreement, on a program-by-program basis, during the period beginning on the Effective Date and ending on the earliest to occur of (a) the date that the JSC first approves a selected development candidate for such program, (b) the third anniversary of the Effective Date, or (c) the effective date of termination of the Gilead Collaboration Agreement (the “Research Collaboration Term”). During the Research Collaboration Term, for each Gilead Program, the Company will notify Gilead, through the JSC, of up to two Gilead Program antibodies (in the case that Gilead rejects one, in accordance with the terms of the Gilead Collaboration Agreement) that satisfy the development criteria for such program (the “Development Candidate Nomination”). This Gilead Collaboration Agreement remains in effect, unless otherwise earlier terminated in accordance with the terms of the Gilead Collaboration Agreement, on a program-by-program basis, until Gilead exercises its option with respect to a given Gilead Program or until expiration of the applicable Option Exercise Period, whichever is earlier (the “Term”). Unless earlier terminated, the Term shall expire in its entirety upon the expiration of the last to expire Option Exercise Period under the Gilead Collaboration Agreement. Gilead may terminate the Gilead Collaboration Agreement in its entirety or on a program-by-program basis in its sole discretion upon prior written notice to the Company pursuant to the terms of the agreement. The Gilead Collaboration Agreement may also be terminated on a program-by-program basis by either party in the event of an uncured material breach of the Gilead Collaboration Agreement by the other party. Prior to Gilead’s exercise of an option, the Company has the lead responsibility for drug discovery and pre-clinical development of all Gilead Programs through to Development Candidate Nomination. Within a certain period of time after receiving a data package for a Development Candidate Nomination, Gilead may exercise its option to enter into a Form of License Agreement for exclusive rights to develop, manufacture and commercialize the licensed antibodies and licensed products of such Gilead Program. Accounting Treatment The Company assessed this arrangement in accordance with ASC 606 and concluded that the contract counterparty, Gilead, is a customer. The Company identified the following material promises under the arrangement: (1) the non-exclusive, royalty-free research and development license; (2) the research and development services for the Gilead Programs; and (3) the options to license each of the three Gilead Programs to develop, manufacture and commercialize licensed candidates and resulting products, which were determined to be material rights for each program. The research and development services for each of the three Gilead Programs were determined to not be distinct from the research and development license and have been combined into a single performance obligation for each Gilead Program. Additionally, the option and associated material right for each Gilead Program represent separate performance obligations. The promises under the Gilead Collaboration Agreement relate primarily to the research and development required by the Company for each of the Gilead Programs nominated by Gilead. The Company does not have significant responsibilities subsequent to Gilead’s exercise of each option. At the commencement of the arrangement, two units of accounting were identified: the issuance of 980,392 of the Company’s common shares and the joint research activities during the three-year research collaboration term. The Company determined the total transaction price to be $80 million, consisting of $17.1 million attributed to the equity sold to Gilead and $62.9 million attributed to the joint research activities. In determining the fair value of the common stock at closing, the Company considered the closing price of the common stock at the time of the transaction and included a lack of marketability discount because the shares were subject to certain restrictions. Of the $30 million equity investment, $12.9 million was determined to be a premium and therefore was included as part of the transaction price to be allocated over the performance obligations. The potential incremental payment of $25 million is due following achievement of successful demonstration of in vivo proof of concept consistent with certain criteria detailed in the Gilead Collaboration Agreement and will be included in the transaction price when it becomes probable that a future material reversal will not occur. The Company will reevaluate the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur, and, if necessary, will adjust its estimate of the transaction price. The $62.9 million attributed to the joint research activities was allocated to the performance obligations based on their standalone selling prices (the “SSP”) when the Gilead Collaboration Agreement was executed. The Company made certain estimates when determining the SSP. For the research licenses and related research and development services, the estimated SSP is primarily based on the nature of the services to be performed and estimates of the associated effort and costs of the services. The Company developed the estimated SSP for the material rights based on the intrinsic value of the license upon exercise of the underlying option, industry standards for product development and estimates for the likelihood of option exercise. The consideration related to the underlying options will not be included in the transaction price until the options are exercised. Additionally, the subsequent potential development, regulatory and commercial milestones are excluded from the transaction price, until after Gilead exercises its respective options. Revenue associated with the research and development and license performance obligations relating to the Gilead Programs is recognized as revenue as the research and development services are provided using an input method, according to the costs incurred on each Gilead Program and the costs expected to be incurred in the future to satisfy the performance obligation. The transfer of control occurs over time. In management’s judgment, this input method is the best measure of progress towards satisfying the performance obligation. The amounts allocated to the three material rights will be recognized when Gilead exercises each respective option and delivers the underlying license and transfer of know-how, or immediately as each option expires unexercised. The amounts received that have not yet been recognized as revenue are recorded in deferred revenue on the Company’s consolidated balance sheet. None of the performance obligations have been fully satisfied as of September 30, 2019. As a result of the joint research activities conducted during the three and nine months ended September 30, 2019, the Company recognized $4.8 million and $12.9 million, respectively, in revenue in the Company’s consolidated statements of operations and comprehensive loss under the Gilead Collaboration Agreement. The aggregate amount of the transaction price allocated to the Company’s unsatisfied performance obligations and recorded in deferred revenue at September 30, 2019 is $50.0 million. The Company will recognize the deferred revenue related to the research and development services based on a cost input method, over the remaining research term for each respective Gilead Program, which is a maximum of 2.25 years as of September 30, 2019; each research term is dependent on the timing of Gilead either exercising its options for the Gilead Programs or terminating further development on the Gilead Programs prior to the expiration date of the research term.

Net Loss per Share

Net Loss per Share	9 Months Ended
	Sep. 30, 2019
Net Loss per Share
Net Loss per Share	11. Net Loss per Share The Company calculates basic net loss per share by dividing net loss by the weighted average number of common shares outstanding, excluding restricted common stock. The Company has generated a net loss in all periods presented, so the basic and diluted net loss per share are the same, as the inclusion of the potentially dilutive securities would be anti-dilutive. The following table sets forth the outstanding common stock equivalents, presented based on amounts outstanding at each period end, that have been excluded from the calculation of diluted net loss per share for the periods indicated because their inclusion would have been anti-dilutive: Three and Nine Months Ended September 30, 2019 2018 Restricted common stock 388,902 863,317 Warrant 7,614 7,614 Stock options 2,470,470 1,500,731 2,866,986 2,371,662

Subsequent Event

Subsequent Event	9 Months Ended
	Sep. 30, 2019
Subsequent Events
Subsequent Events	12. Subsequent Events In November 2019, the Company entered into a facility lease at 301 Binney Street in Cambridge, Massachusetts to be used as its new corporate headquarters. The Company is involved in the construction and design of the space and anticipates that it will incur construction costs, subject to an allowance for tenant improvements of up to $14.1 million. No construction costs have been incurred as of September 30, 2019. The estimated expiration date is in July 2025. The Company has the option to extend the term by two years. The base rent is $6.9 million per year, subject to an annual upward adjustment of 3.5%, and the Company is subject to a free-rent period. Variable lease payments include the Company’s allocated share of costs incurred and expenditures made by the landlord in the operation and management of the building. In connection with the facility lease, the Company has secured a letter of credit for $2.3 million which renews automatically each year.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2019
Summary of Significant Accounting Policies
Leases	Leases Effective January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”), Topic 842, Leases (“ASC 842”), using the modified retrospective approach and utilizing the effective date as its date of initial application, for which prior periods are presented in accordance with the previous guidance in ASC Topic 840, Leases. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as incentives received. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In accordance with the guidance in ASC 842, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area 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 the respective relative fair values to the lease components and non-lease components.
Reclassifications	Reclassifications Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year.
Unaudited Interim Financial Information	Unaudited Interim Financial Information The consolidated financial statements of the Company included herein have been prepared, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The unaudited consolidated financial statements include the accounts of Scholar Rock Holding Corporation and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the results for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period.
Use of Estimates	Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and judgments that may affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the date of the financial statements and the related reporting of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.
Recently Adopted and Issued Accounting Pronouncements	Recently Adopted Accounting Pronouncements ASU 2016-02, Leases and ASU 2018-11, Leases, Targeted Improvements In February 2016, the FASB issued ASU 2016-02, Leases, (“ASU 2016-02”), which superseded the lease accounting requirements in ASC 840, Leases and created a new Topic 842, Leases. In adopting the new standard, the Company elected to utilize the available package of practical expedients permitted under the transition guidance within the new standard, which removed the requirement to reassess previous accounting conclusions around whether arrangements are or contain leases, the classification of leases, and the treatment of initial direct costs. The adoption of this standard resulted in the recognition of operating lease liabilities and right-of-use assets of $6.2 million and $5.4 million, respectively, as of January 1, 2019. There was no cumulative transition adjustment to retained earnings upon adoption of the standard and there was no material effect on the Company’s statements of operations or statement of cash flows as the difference relates to previously recorded deferred rent which was eliminated upon adoption of this standard. Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . The new standard will align the requirements for capitalizing implementation costs for hosting arrangements (services) with costs for internal-use software (assets). As a result, certain implementation costs incurred in hosting arrangements will be deferred and amortized. The new standard will be effective for the Company on January 1, 2020. The Company does not anticipate a material impact to its net financial position or disclosures as a result of the adoption of ASU 2018-15. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The standard requires that a financial asset or a group of financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. Under current GAAP, a company only considered past events and current conditions in measuring an incurred loss. Under ASU 2016-13, the information that a company must consider is broadened in developing an expected credit loss estimate for assets measured either collectively or individually. The use of forecasted information incorporates more timely information in the estimate of expected credit loss. The new guidance will be effective for annual and interim periods beginning after December 15, 2019. The guidance is applied using a modified retrospective, or prospective approach, depending on a specific amendment. The Company does not anticipate a material impact to its net financial position or disclosures as a result of the adoption of ASU 2016-13.

Fair Value of Financial Asset_2

Fair Value of Financial Assets and Liabilities (Tables)	9 Months Ended
	Sep. 30, 2019
Fair Value of Financial Assets and Liabilities
Schedule of summary of the assets and liabilities measured at fair value on a recurring basis	The following tables summarize the assets and liabilities measured at fair value on a recurring basis at September 30, 2019 and December 31, 2018 (in thousands): Fair Value Measurements at September 30, 2019 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 30,868 $ 30,868 $ — $ — Marketable securities: U.S. Treasury obligations 143,441 143,441 — — Total assets $ 174,309 $ 174,309 $ — $ — Fair Value Measurements at December 31, 2018 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 114,593 $ 114,593 $ — $ — Marketable securities: U.S. Treasury obligations 60,576 60,576 — — Total assets $ 175,169 $ 175,169 $ — $ —

Marketable Securities (Tables)

Marketable Securities (Tables)	9 Months Ended
	Sep. 30, 2019
Marketable Securities
Summary of investments	The following table summarizes the Company’s investments as of September 30, 2019 (in thousands): Gross Amortized Unrealized Estimated Cost Gains Losses Fair Value Marketable securities available-for-sale: U.S. Treasury obligations $ 143,415 $ 35 $ (9) $ 143,441 Total available-for-sale securities $ 143,415 $ 35 $ (9) $ 143,441 The following table summarizes the Company’s investments as of December 31, 2018 (in thousands): Gross Amortized Unrealized Estimated Cost Gains Losses Fair Value Marketable securities available-for-sale: U.S. Treasury obligations $ 60,584 $ — $ (8) $ 60,576 Total available-for-sale securities $ 60,584 $ — $ (8) $ 60,576

Accrued Expenses (Tables)

Accrued Expenses (Tables)	9 Months Ended
	Sep. 30, 2019
Accrued Expenses
Summary of accrued expenses	As of September 30, 2019 and December 31, 2018, accrued expenses consist of the following (in thousands): As of September 30, December 31, 2019 2018 Accrued external research and development expense $ 3,860 $ 3,284 Accrued payroll and related expenses 2,781 2,826 Accrued professional and consulting expense 1,309 890 Accrued other 191 157 $ 8,141 $ 7,157

Equity-Based Compensation (Tabl

Equity-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2019
Equity-Based Compensation
Summary of allocation of equity-based compensation	The Company recorded equity-based compensation expense related to all equity-based awards for employees and nonemployees, which was allocated as follows in the consolidated statements of operations (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Research and development expense $ 577 $ 453 $ 1,794 $ 1,240 General and administrative expense 2,111 1,033 4,326 1,817 $ 2,688 $ 1,486 $ 6,120 $ 3,057
Summary of restricted common stock activity	Weighted Average Fair Value per Share Number of Shares at Issuance Restricted common stock as of December 31, 2018 664,174 $ 5.77 Granted — $ — Vested (271,062) $ 5.77 Forfeited (4,210) $ 5.77 Restricted common stock as of September 30, 2019 388,902 $ 5.77
Summary of stock option activity	Weighted Weighted Average Number of Average Remaining Aggregate Shares Exercise Price Contractual Term Intrinsic Value (in years) (in thousands) Outstanding as of December 31, 2018 1,627,947 $ 10.86 9.26 $ 19,831 Granted 976,835 15.35 Exercised (14,931) 6.23 Cancelled (119,381) 15.08 Outstanding as of September 30, 2019 2,470,470 12.46 8.17 $ 2,577 Options exercisable as of September 30, 2019 761,359 $ 10.09 6.26 $ 1,189
Schedule of fair value assumptions	Risk-free interest rate 2.34 % Expected dividend yield % Expected term (years to liquidity) 6.20 Expected volatility 79.74 %

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2019
Commitments and Contingencies
Summary of lease costs	Other information related to the Company’s lease was as follows (in thousands, except lease term and discount rate): For Three Months Ended For Nine Months Ended September 30, September 30, 2019 2019 Lease Cost: Operating lease cost $ 344 $ 1,031 Variable lease cost 149 506 Total lease cost $ 493 $ 1,537 For Nine Months Ended September 30, 2019 Other information: Operating cash flows used for operating leases $ 914 Weighted average remaining lease term 4.00 years Weighted average discount rate 6.47 %
Summary of minimum lease payments	The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of September 30, 2019 (in thousands): Year Ending December 31, 2019 (excluding the nine months ended September 30, 2019) $ 351 2020 1,446 2021 1,619 2022 1,668 2023 1,279 Thereafter — Total lease payments 6,363 Less imputed interest (797) Total operating lease liabilities $ 5,566

Net Loss per Share (Tables)

Net Loss per Share (Tables)	9 Months Ended
	Sep. 30, 2019
Net Loss per Share
Summary of anti-dilutive securities	Three and Nine Months Ended September 30, 2019 2018 Restricted common stock 388,902 863,317 Warrant 7,614 7,614 Stock options 2,470,470 1,500,731 2,866,986 2,371,662

Nature of the Business (Details

Nature of the Business (Details)	9 Months Ended
	Sep. 30, 2019item
Nature of the Business
Number of collaborations	2

Summary of Significant Accoun_3

Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 01, 2019
Significant accounting policies
Operating lease liabilities	$ 5,566
Right-of-use assets	$ 4,702
ASU 2016-02 | Restatement
Significant accounting policies
Operating lease liabilities		$ 6,200
Right-of-use assets		$ 5,400

Fair Value of Financial Asset_3

Fair Value of Financial Assets and Liabilities - (Details) - USD ($) $ / shares in Units, $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Marketable securities:
Shares that warrant can purchase	7,614
Warrant purchase price	$ 3.94
Recurring
Assets:
Money market funds, included in cash and cash equivalents	$ 30,868	$ 114,593
Marketable securities:
U.S. Treasury obligations	143,441	60,576
Total assets	174,309	175,169
Recurring | Level 1
Assets:
Money market funds, included in cash and cash equivalents	30,868	114,593
Marketable securities:
U.S. Treasury obligations	143,441	60,576
Total assets	$ 174,309	$ 175,169

Marketable Securities - Summary

Marketable Securities - Summary of Investments (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Marketable securities available-for-sale
Amortization Cost	$ 143,415	$ 60,584
Gross Unrealized Gains	35
Gross Unrealized Losses	(9)	(8)
Estimated Fair Value	143,441	60,576
U.S. Treasury obligations
Marketable securities available-for-sale
Amortization Cost	143,415	60,584
Gross Unrealized Gains	35
Gross Unrealized Losses	(9)	(8)
Estimated Fair Value	$ 143,441	$ 60,576

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Accrued Expenses
Accrued external research and development expense	$ 3,860	$ 3,284
Accrued payroll and related expenses	2,781	2,826
Accrued professional and consulting expense	1,309	890
Accrued other	191	157
Accrued expenses	$ 8,141	$ 7,157

Common Stock and Preferred St_2

Common Stock and Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	May 29, 2019	Jul. 31, 2019	Jun. 30, 2019	Jun. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Common Stock and Preferred Stock
Convertible preferred stock converted into shares				15,109,950
Increase in common stock authorized (in shares)	90,000,000
Common stock, shares authorized	150,000,000				150,000,000		150,000,000
Preferred stock, shares authorized	10,000,000				10,000,000		10,000,000
Preferred stock, par value	$ 0.001				$ 0.001		$ 0.001
Preferred stock, shares issued					0		0
Preferred stock, shares outstanding					0		0
Sale of common shares (in shares)		450,000	3,000,000
Purchase price (in dollars per share)		$ 15	$ 15
Proceeds from sale of common stock					$ 48,348	$ 77,839

Equity-Based Compensation - Exp

Equity-Based Compensation - Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Equity-based compensation
Equity-based compensation expense	$ 2,688	$ 1,486	$ 6,120	$ 3,057
Equity-based compensation expense related to modifications of equity awards	600	300	100	300
Research and development expense
Equity-based compensation
Equity-based compensation expense	577	453	1,794	1,240
General and administrative expense
Equity-based compensation
Equity-based compensation expense	$ 2,111	$ 1,033	$ 4,326	$ 1,817

Equity-Based Compensation - Res

Equity-Based Compensation - Restricted stock (Details) - Restricted common stock $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2019USD ($)$ / sharesshares
Number of unvested awards
Outstanding, beginning (in shares) | shares	664,174
Vested (in shares) | shares	(271,062)
Forfeited (in shares) | shares	(4,210)
Outstanding, end (in shares) | shares	388,902
Weighted Average Fair Value
Outstanding, beginning (in dollars per share) | $ / shares	$ 5.77
Vested (in dollars per share) | $ / shares	5.77
Forfeited (in dollars per share) | $ / shares	5.77
Outstanding, end (in dollars per share) | $ / shares	$ 5.77
Unrecognized equity based compensation expense | $	$ 1.7
Period for recognition	1 year 4 months 24 days

Equity-Based Compensation - Sto

Equity-Based Compensation - Stock Options (Details) - Stock options $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2019USD ($)$ / sharesshares	Dec. 31, 2018USD ($)$ / sharesshares
Number of Units
Outstanding, beginning (in shares) | shares	1,627,947
Granted (in shares) | shares	976,835
Exercised (in shares) | shares	(14,931)
Cancelled (in shares) | shares	(119,381)
Outstanding, end (in shares) | shares	2,470,470	1,627,947
Options exercisable, end (in shares) | shares	761,359
Weighted Average Exercise Price
Outstanding, beginning (in dollars per share)	$ 10.86
Granted (in dollars per share)	15.35
Exercised (in dollars per share)	6.23
Cancelled (in dollars per share)	15.08
Outstanding, end (in dollars per share)	12.46	$ 10.86
Options exercisable, end (in dollars per share)	$ 10.09
Stock options
Weighted average remaining contractual term	8 years 2 months 1 day	9 years 3 months 4 days
Weighted average remaining contractual term, exercisable	6 years 3 months 4 days
Aggregate intrinsic value, beginning | $	$ 19,831
Aggregate intrinsic value, end | $	2,577	$ 19,831
Aggregate intrinsic value, exercisable | $	$ 1,189
Weighted average grant date fair value (in dollars per share)	$ 10.75

Equity-Based Compensation - Ass

Equity-Based Compensation - Assumptions (Details) - Stock options $ in Millions	9 Months Ended
	Sep. 30, 2019USD ($)
Assumptions used in determining the fair value of options
Risk-free interest rate	2.34%
Expected dividend yield	0.00%
Expected term (years to liquidity)	6 years 2 months 12 days
Expected volatility	79.74%
Unrecognized equity-based compensation expense	$ 14.9
Period for recognition	2 years 9 months 18 days

Commitments and Contingencies_2

Commitments and Contingencies (Details) $ in Thousands	1 Months Ended	3 Months Ended	9 Months Ended
	Feb. 28, 2018USD ($)item	Sep. 30, 2019USD ($)	Sep. 30, 2019USD ($)	Mar. 31, 2015
Leased assets
Term of lease				5 years
Option to extend the term	true
Number of renewal option | item	1
Renewal term	5 years
Lease Cost:
Operating lease cost		$ 344	$ 1,031
Variable lease cost		149	506
Total lease cost		$ 493	1,537
Operating cash flows used for operating leases			$ 914
Weighted average remaining lease term		4 years	4 years
Weighted average discount rate		6.47%	6.47%
Minimum
Leased assets
Rent for facility lease	$ 1,400
Maximum
Leased assets
Rent for facility lease	$ 1,700

Commitments and Contingencies -

Commitments and Contingencies - Maturities (Details) $ in Thousands	Sep. 30, 2019USD ($)
Maturity analysis of the annual undiscounted cash flows
2019 (excluding the nine months ended September 30, 2019)	$ 351
2020	1,446
2021	1,619
2022	1,668
2023	1,279
Total lease payments	6,363
Less imputed interest	(797)
Total operating lease liabilities	$ 5,566

Loan Payable (Details)

Loan Payable (Details) $ in Millions	Aug. 31, 2015USD ($)
SVB
Loan Payable
Line of credit maximum	$ 2

Agreements - Gilead (Details)

Agreements - Gilead (Details) $ / shares in Units, $ in Thousands	Dec. 19, 2018USD ($)item$ / sharesshares	Jul. 31, 2019$ / sharesshares	Jun. 30, 2019$ / sharesshares	Sep. 30, 2019USD ($)	Jun. 30, 2019USD ($)$ / shares	Sep. 30, 2019USD ($)
Agreements
Sale of common shares (in shares) | shares		450,000	3,000,000
Purchase price (in dollars per share) | $ / shares		$ 15	$ 15		$ 15
Sale of common shares				$ 6,326	$ 42,022
Revenue received				4,774		$ 12,919
Gilead
Agreements
Number of programs | item	3
Option exercise period	90 days
Upfront payment received	$ 50,000
Potential milestone payments	475,000
Total potential milestone payments	1,425,000
Refundable payments under the agreement	$ 0
Sale of common shares (in shares) | shares	980,392
Purchase price (in dollars per share) | $ / shares	$ 30.60
Sale of common shares	$ 30,000
Maximum number of program antibodies to be notified which satisfies development criteria | item	2
Transaction price	$ 80,000
Research collaboration term	3 years
Equity investment included in transaction price	$ 17,100
Contract liability	62,900
Securities premium				12,900		12,900
Revenue received				$ 4,800		$ 12,900
Gilead | Development milestones
Agreements
Potential milestone payments	$ 25,000

Agreements - Gilead obligation

Agreements - Gilead obligation period (Details) - Gilead - USD ($) $ in Millions	Sep. 30, 2019	Dec. 19, 2018
Agreements
Contract liability		$ 62.9
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01
Agreements
Contract liability	$ 50
Expected to recognize remaining deferred revenue	2 years 3 months

Net Loss per Share - Anti-dilut

Net Loss per Share - Anti-dilutive (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Anti-dilutive securities
Anti-dilutive securities excluded from the calculation of net loss per share	2,866,986	2,371,662	2,866,986	2,371,662
Restricted common stock
Anti-dilutive securities
Anti-dilutive securities excluded from the calculation of net loss per share	388,902	863,317	388,902	863,317
Warrant
Anti-dilutive securities
Anti-dilutive securities excluded from the calculation of net loss per share	7,614	7,614	7,614	7,614
Stock options
Anti-dilutive securities
Anti-dilutive securities excluded from the calculation of net loss per share	2,470,470	1,500,731	2,470,470	1,500,731

Subsequent Events (Details)

Subsequent Events (Details) - USD ($) $ in Millions	1 Months Ended
	Nov. 30, 2019	Feb. 28, 2018
Subsequent Events
Option to extend the term		true
Renewal term		5 years
Subsequent event | Binney St, Cambridge MA
Subsequent Events
Incentive to lease	$ 14.1
Allowance for tenant improvements	$ 0
Option to extend the term	true
Renewal term	2 years
Minimum annual lease	$ 6.9
Annual upward adjustment (as a percent)	3.50%
Letter of credit	$ 2.3