Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 01, 2020 | Jun. 28, 2019 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Entity Registrant Name | Scholar Rock Holding Corp | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 185.1 | ||
Entity Common Stock, Shares Outstanding | 29,808,174 | ||
Entity Central Index Key | 0001727196 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 36,308 | $ 115,069 |
Marketable securities | 121,140 | 60,576 |
Accounts receivable | 25,000 | |
Prepaid expenses and other current assets | 2,719 | 2,296 |
Total current assets | 185,167 | 177,941 |
Property and equipment, net | 4,171 | 3,190 |
Operating lease right-of-use asset | 4,447 | |
Restricted cash | 2,498 | 205 |
Other long-term assets | 98 | |
Total assets | 196,381 | 181,336 |
Current liabilities: | ||
Accounts payable | 1,130 | 3,303 |
Accrued expenses | 9,610 | 7,157 |
Deferred rent | 16 | |
Operating lease liability | 1,135 | |
Loan payable | 424 | |
Deferred revenue | 20,923 | 20,209 |
Other current liabilities | 16 | 14 |
Total current liabilities | 32,814 | 31,123 |
Long-term portion of deferred rent | 871 | |
Long-term portion of operating lease liability | 4,168 | |
Other long-term liabilities | 9 | 24 |
Long-term portion of deferred revenue | 46,489 | 42,695 |
Total liabilities | 83,480 | 74,713 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 10,000,000 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, $0.001 par value; 150,000,000 shares authorized and 29,792,922 shares issued and outstanding as of December 31, 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 | 270,682 | 213,453 |
Accumulated other comprehensive income (loss) | 37 | (8) |
Accumulated deficit | (157,848) | (106,848) |
Total stockholders' equity | 112,901 | 106,623 |
Total liabilities and stockholders' equity | $ 196,381 | $ 181,336 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 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 | 29,792,922 | 26,217,701 |
Common stock, shares outstanding | 29,792,922 | 26,217,701 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS | ||
Revenue | $ 20,492 | |
Operating expenses: | ||
Research and development | 54,217 | $ 36,310 |
General and administrative | 20,817 | 14,382 |
Total operating expenses | 75,034 | 50,692 |
Loss from operations | (54,542) | (50,692) |
Other income (expense), net | 3,542 | 1,366 |
Net loss | $ (51,000) | $ (49,326) |
Net loss per share, basic and diluted (in dollars per share) | $ (1.85) | $ (3.15) |
Weighted average common shares outstanding, basic and diluted (in shares) | 27,537,939 | 15,655,293 |
Comprehensive loss: | ||
Net loss | $ (51,000) | $ (49,326) |
Other comprehensive income (loss): | ||
Unrealized gain (loss) on marketable securities | 45 | (6) |
Total other comprehensive income (loss) | 45 | (6) |
Comprehensive loss | $ (50,955) | $ (49,332) |
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 | |||||
Unrealized gain (loss) on marketable securities | (6) | (6) | |||
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 | 77,833 | 77,839 | ||
Sale of common shares sold in IPO, net of offering costs (in shares) | 6,164,000 | ||||
Sale of common shares, net of issuance costs | $ 1 | 17,095 | 17,096 | ||
Sale of common shares (in shares) | 980,392 | ||||
Restricted shares forfeited during the period (in shares) | (8,125) | ||||
Exercise of stock options | 6 | 6 | |||
Exercise of stock options (in shares) | 898 | ||||
Equity-based compensation expense | 5,211 | 5,211 | |||
Cumulative effective adjustment for ASU 2018-07 | (3) | 3 | |||
Net Loss | (49,326) | (49,326) | |||
Balance at end at Dec. 31, 2018 | $ 26 | 213,453 | (8) | (106,848) | 106,623 |
Balance at end (in shares) at Dec. 31, 2018 | 26,217,701 | ||||
Increase (decrease) in Stockholders' Equity | |||||
Unrealized gain (loss) on marketable securities | 45 | 45 | |||
Sale of common shares, net of issuance costs | $ 4 | 48,344 | 48,348 | ||
Sale of common shares (in shares) | 3,450,000 | ||||
Restricted shares forfeited during the period (in shares) | (4,210) | ||||
Exercise of stock options | 913 | 913 | |||
Exercise of stock options (in shares) | 129,431 | ||||
Equity-based compensation expense | 7,972 | 7,972 | |||
Net Loss | (51,000) | (51,000) | |||
Balance at end at Dec. 31, 2019 | $ 30 | $ 270,682 | $ 37 | $ (157,848) | $ 112,901 |
Balance at end (in shares) at Dec. 31, 2019 | 29,792,922 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) - Temporary Equity - 12 months ended Dec. 31, 2018 - 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 | $ (109,232) | $ 109,232 |
Conversion of convertible preferred stock into common stock (in shares) | (43,135,911) | |
Balance, end at Dec. 31, 2018 | $ 0 | |
Balance, end (in shares) at Dec. 31, 2018 | 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (51,000) | $ (49,326) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,303 | 807 |
Gain or loss on sale of property and equipment | (8) | |
Equity-based compensation | 7,972 | 5,211 |
Amortization/accretion of investment securities | (1,390) | (345) |
Non-cash operating lease expense | 997 | |
Deferred payroll tax credit | 176 | 272 |
Change in operating assets and liabilities: | ||
Accounts receivable | (25,000) | |
Prepaid expenses and other current assets | (739) | (1,276) |
Other assets | (98) | |
Accounts payable | (1,342) | 1,664 |
Accrued expenses | 2,453 | 4,361 |
Deferred rent | 191 | |
Operating lease liabilities | (888) | |
Deferred revenue | 4,508 | 62,904 |
Other liabilities | (59) | 108 |
Net cash (used in) provided by operating activities | (63,115) | 24,571 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (3,115) | (1,492) |
Purchase of marketable securities | (235,417) | (75,239) |
Proceeds from sale of property and equipment | 8 | |
Sales and maturities of marketable securities | 176,288 | 16,500 |
Net cash used in investing activities | (62,236) | (60,231) |
Cash flows from financing activities: | ||
Principal payments on loan payable | (365) | (667) |
Proceeds from sale of common stock, net of issuance costs | 48,348 | 94,935 |
Proceeds from stock option exercises | 913 | 6 |
Other | (13) | (6) |
Net cash provided by financing activities | 48,883 | 94,268 |
Net (decrease) increase in cash and cash equivalents and restricted cash | (76,468) | 58,608 |
Cash and cash equivalents and restricted cash, beginning of period | 115,274 | 56,666 |
Cash and cash equivalents and restricted cash, end of period | 38,806 | 115,274 |
Supplemental disclosure of non-cash items: | ||
Property and equipment purchases in accounts payable and accrued expenses | $ 439 | |
Operating lease right-of-use asset obtained in exchange for operating lease obligation | $ 5,444 |
Nature of the Business and Basi
Nature of the Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2019 | |
Nature of the Business and Basis of Presentation | |
Nature of the Business and Basis of Presentation | 1. Nature of the Business and Basis of Presentation Organization 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 first 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”). SRK-015 is being evaluated in the Company’s TOPAZ Phase 2 proof-of-concept trial for the treatment of patients with Type 2 and Type 3 SMA. The Company’s second product candidate, SRK-181, is being developed for the treatment of cancers that are resistant to checkpoint inhibitor (“CPI”) therapies, such as anti-PD-1 or anti-PD-L1 (collectively called anti-PD-(L)1) antibody therapies. SRK-181 is a potent and highly selective inhibitor of the activation of latent transforming growth factor beta-1 (“TGFβ1”). In the first quarter of 2020, the Company initiated a Phase 1 proof-of-concept clinical trial of SRK-181 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 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 9), 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 (the “Gilead Collaboration 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 December 31, 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. Basis of Presentation The consolidated financial statements include the accounts of Scholar Rock Holding Corporation and its wholly owned subsidiaries. All intercompany balances have been eliminated in consolidation. These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies 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. Significant estimates of accounting reflected in these consolidated financial statements include, but are not limited to, estimates related to revenue recognition, research and development, accrued expenses, the valuation of equity-based compensation, including common stock, restricted common stock and stock options, and income taxes. Actual results could differ from those estimates. Prior to the IPO, the Company utilized significant estimates and assumptions in determining the fair value of its equity-based compensation, including common stock, restricted common stock and stock options. The Company utilized various valuation methodologies in accordance with the framework of the 2013 American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its equity awards. Each valuation methodology included estimates and assumptions that required the Company’s judgment. These estimates and assumptions included a number of objective and subjective factors, including external market conditions, guideline public company information, the prices at which the Company sold convertible preferred units and convertible preferred stock, the superior rights and preferences of securities senior to the Company’s common units and common stock at the time and the likelihood of achieving a liquidity event such as an initial public offering or sale. Significant changes to the assumptions used in the valuations could have resulted in different fair values of common stock, restricted common stock and stock options at each valuation date, as applicable. Concentration of Credit Risk and Off-Balance Sheet Risk The Company has no off-balance sheet risk, such as foreign exchange contracts, option contracts or other foreign-hedging arrangements. The Company follows an investment policy approved by the Board of Directors. Its primary objectives are the preservation of capital and maintenance of liquidity. The Company invests only in fixed income instruments denominated and payable in U.S. dollars including obligations of the U.S. government and its agencies and money market funds registered according to SEC Rule 2a‑7 of the Investment Company Act of 1940. All securities must have a readily ascertainable market value , must be readily marketable and be U.S. dollar denominated. Cash and Cash Equivalents and Restricted Cash The Company considers highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents are stated at cost, which approximates market value. At December 31, 2019 and 2018, cash equivalents include money market funds that invest primarily in U.S. government-backed securities and treasuries. Restricted cash consists of letters of credit in the amount of $2.5 million related to its leased facilities. The following table reconciles cash and cash equivalents and restricted cash per the balance sheet to the statement of cash flows: As of December 31, 2019 2018 Cash and cash equivalents $ 36,308 $ 115,069 Restricted cash 2,498 205 $ 38,806 $ 115,274 Property and Equipment Property and equipment are recorded at cost. Expenditures for major renewals or betterments that extend the useful lives of property and equipment are capitalized; expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is calculated on a straight-line basis over the estimated useful lives of the related asset. Property and equipment are depreciated as follows: Estimated Useful Life (in Years) Laboratory equipment 3 – 5 Computer equipment & software 3 Furniture & fixtures 5 Machinery & equipment 3 – 5 Leasehold improvements Shorter of the useful life or remaining lease term Impairment of Long-Lived Assets Long-lived assets consist of property and equipment and right-of-use assets. 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. The Company did not record any impairment losses on long-lived assets during the years ended December 31, 2019 or 2018. Leases Effective January 1, 2019, the Company adopted 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. The Company elected the package of practical expedients permitted under the transition guidance. 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. For operating leases, lease expense relating to fixed payments is recognized on a straight-line basis over the term and lease expense relating to variable payments is expensed as incurred. Fair Value Measurements ASC Topic 820, Fair Value Measurement ("ASC 820"), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following: Level 1 — Quoted market prices in active markets for identical assets or liabilities. Level 2 — Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves. Level 3 — Unobservable inputs developed using estimates of assumptions developed by the Company, which reflect those that a market participant would use. To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Segment Information Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment operating exclusively in the U.S. Revenue Recognition The Company accounts for revenue using the provisions of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, an entity 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 the appropriate amount of revenue to be recognized for arrangements determined to be within the scope of ASC 606, the Company performs the following five steps: (i) identification of the contract(s) with the customer, (ii) identification of the promised goods or services in the contract and determination of whether the promised goods or services are performance obligations, (iii) measurement of the transaction price, (iv) allocation of the transaction price to the performance obligations, and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect 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 each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company accounts for a contract with a customer that is within the scope of ASC 606 when all of the following criteria are met: (i) the arrangement has been approved by the parties and the parties are committed to perform their respective obligations, (ii) each party’s rights regarding the goods or services to be transferred can be identified, (iii) the payment terms for the goods or services to be transferred can be identified, (iv) the arrangement has commercial substance and (v) collection of substantially all of the consideration to which the Company will be entitled in exchange for the goods or services that will be transferred to the customer is probable. The Company first evaluates license and/or collaboration arrangements to determine whether the arrangement (or part of the arrangement) represents a collaborative arrangement pursuant to ASC Topic 808, Collaborative Arrangements, based on the risks and rewards and activities of the parties pursuant to the contractual arrangement. The Company accounts for collaborative arrangements (or elements within the contract that are deemed part of a collaborative arrangement) , which represent a collaborative relationship and not a customer relationship, outside of the scope of ASC 606. The Company’s existing collaborations represent revenue arrangements. For the arrangements or arrangement components that are subject to revenue accounting guidance, in determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of 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. As part of the accounting for these arrangements, the Company must use significant judgment to determine: a) the number of performance obligations based on the determination under step (ii) above and whether those performance obligations are distinct from other performance obligations in the contract; b) the transaction price under step (iii) above; and c) the standalone selling price for each performance obligation identified in the contract for the allocation of transaction price in step (iv) above. The Company uses judgment to determine whether milestones or other variable consideration, except for royalties, should be included in the transaction price as described further below. The transaction price is allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. In determining the stand-alone selling price of a license to the Company’s proprietary technology or a material right provided by a customer option, the Company considers market conditions as well as entity-specific factors, including those factors contemplated in negotiating the agreements as well as internally developed estimates that include assumptions related to the market opportunity, estimated development costs, probability of success and the time needed to commercialize a product candidate pursuant to the license. In validating its estimated stand-alone selling prices, the Company evaluates whether changes in the key assumptions used to determine its estimated stand-alone selling prices will have a significant effect on the allocation of arrangement consideration between performance obligations. The Company estimates the transaction price based on the amount of consideration the Company expects to be received for transferring the promised goods or services in the contract. The consideration may include both fixed consideration and variable consideration. At the inception of each arrangement that includes variable consideration, the Company evaluates the amount of the potential payments and the likelihood that the payments will be received. The Company utilizes either the most likely amount method or expected value method to estimate the transaction price based on which method better predicts the amount of consideration expected to be received. If it is probable that a significant revenue reversal would not occur, the variable consideration is included in the transaction price. Performance obligations are promised goods or services in a contract to transfer a distinct good or service to the customer. Promised goods or services are considered distinct when: (i) the customer can benefit from the good or service on its own or together with other readily available resources and (ii) the promised good or service is separately identifiable from other promises in the contract. In assessing whether promised goods or services are distinct, the Company considers factors such as the stage of development of the underlying intellectual property, the capabilities of the customer to develop the intellectual property on their own and whether the required expertise is readily available. The Company allocates the transaction price based on the estimated standalone selling price. The Company must develop assumptions that require judgment to determine the standalone selling price for each performance obligation identified in the contract. The Company utilizes key assumptions to determine the standalone selling price, which may include other comparable transactions, pricing considered in negotiating the transaction and the estimated costs. Estimating costs for research and development programs is subjective as the Company estimates the costs anticipated to successfully complete the research performance obligations. As the research is novel, efforts to be successful may be significantly different than the estimated costs at the beginning of the contract. Certain variable consideration is allocated specifically to one or more performance obligations in a contract when the terms of the variable consideration relate to the satisfaction of the performance obligation and the resulting amounts allocated to each performance obligation are consistent with the amounts the Company would expect to receive for each performance obligation. For performance obligations which consist of licenses and other promises, the Company utilizes judgment to assess the nature of the combined performance obligation in order to determine whether the combined performance obligation is satisfied over time or at a point in time. The Company determines the appropriate method of measuring progress of combined performance obligations satisfied over time for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The estimated remaining costs is highly subjective, as the research is novel, therefore efforts to be successful may be significantly different than the estimated costs made at the balance sheet date. If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company will recognize revenue from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. The Company receives payments from customers based on billing schedules established in each contract. Up-front payments and fees are recorded as deferred revenue upon receipt or when due until the Company performs its obligations under these arrangements. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue in the accompanying consolidated balance sheets. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. Amounts recognized as revenue, but not yet received or invoiced are generally recognized as contract assets. Exclusive Licenses – If the license granted in the arrangement is determined to be distinct from the other promises or performance obligations identified in the arrangement, which generally include research and development services, the Company recognizes revenue from non-refundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. In assessing whether a license is distinct from the other promises, the Company considers relevant facts and circumstances of each arrangement, including the research and development capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. In addition, the Company considers whether the collaboration partner can benefit from the license for its intended purpose without the receipt of the remaining promise, whether the value of the license is dependent on the unsatisfied promise, whether there are other vendors that could provide the remaining promise, and whether it is separately identifiable from the remaining promise. For licenses that are combined 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. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The measure of progress, and thereby periods over which revenue should be recognized, are subject to estimates by management and may change over the course of the arrangement. Research and Development Services – The promises under the Company’s collaboration and license agreements generally include research and development services to be performed by the Company on behalf of the collaboration partner. For performance obligations that include research and development services, the Company generally recognizes revenue allocated to such performance obligations based on an appropriate measure of progress. The Company utilizes judgment to determine the appropriate method of measuring progress for purposes of recognizing revenue, which is generally an input measure, such as costs incurred. The Company evaluates the measure of progress each reporting period as described under Exclusive Licenses above. Reimbursements from the partner that are the result of a collaborative relationship with the partner, instead of a customer relationship, such as co-development activities, are generally recorded as a reduction to research and development expense. Customer Options – The Company’s arrangements may provide a collaborator with the right to certain optional purchases, such as the right to license a target either at the inception of the arrangement or within a pre-defined option period. Under these agreements, fees may be due to the Company (i) at the inception of the arrangement as an upfront fee or payment or (ii) upon the exercise of an option to acquire a license. If an arrangement is determined to contain customer options that allow the customer to acquire additional goods or services, the goods and services underlying the customer options are not considered to be performance obligations at the outset of the arrangement, as they are contingent upon option exercise. The Company evaluates the customer options for material rights, or options to acquire additional goods or services for free or at a discount. If the customer options are determined to represent a material right, the material right is recognized as a separate performance obligation at the inception of the arrangement. The Company allocates the transaction price to material rights based on the relative stand-alone selling price, which is determined based on the identified discount, and the probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until, at the earliest, the option is exercised or expires. Milestone Payments – At the inception of each arrangement that includes milestone payments based on certain events, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The Company evaluates factors such as the scientific, clinical, regulatory, commercial, and other risks that must be overcome to achieve the particular milestone in making this assessment. There is considerable judgment involved in determining whether it is probable that a significant revenue reversal would not occur. At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of all milestones subject to constraint and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. If a milestone or other variable consideration relates specifically to the Company’s efforts to satisfy a single performance obligation or to a specific outcome from satisfying the performance obligation, the Company generally allocates the milestone amount entirely to that performance obligation once it is probable that a significant revenue reversal would not occur. Royalties – For arrangements that include sales-based royalties, including milestone payments based on a level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes 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 royalty revenue resulting from any of its licensing arrangements. For a complete discussion of accounting for collaboration revenues, see Note 14, Agreements. Research and Development Expenses and Accruals Research and development expenses are expensed as incurred and consist of costs incurred in performing research and development activities, including compensation related expenses for research and development personnel, preclinical and clinical activities including cost of supply, overhead expenses including facilities expenses, materials and supplies, amounts paid to consultants and outside service providers, and depreciation of equipment. Upfront license payments related to acquired technologies which have not yet reached technological feasibility and have no alternative future use are also included in research and development expense. The Company has entered into various research and development service arrangements under which vendors perform various services. The Company records accrued expenses for estimated costs incurred under the arrangements. When evaluating the adequacy of the accrued expenses, the Company analyzed the progress of the studies, trials or other services performed, including invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued expense balances at the end of each reporting period. Equity-Based Compensation The Company accounts for equity awards, including common stock, restricted common stock, common stock options, granted to employees as equity award compensation in accordance with ASC Topic 718, Compensation — Stock Compensation ("ASC 718"). ASC 718 requires all stock-based payments to employees, which includes grants of employee equity awards, to be recognized as expense in the statements of operations based on their grant date fair values. Prior to becoming a public company, the Company estimated the fair value of common stock using an appropriate valuation methodology, based on the guideline public company (“GPC”) method or the precedent transaction method which "backsolves" to a preferred price. The use of these valuation approaches requires management to make assumptions with respect to the expected volatility of its common stock, time until a liquidity event and risk-free interest rates. The fair value of each restricted common stock award is based on the fair value of the Company’s common stock less any purchase price, if applicable. The fair value of each stock option award is estimated using the Black-Scholes option-pricing model, which uses as inputs the fair value of the Company’s common stock and certain subjective assumptions, including the expected stock price volatility, the expected term of the award, the risk-free rate, and expected dividends. Expected volatility is calculated based on reported volatility data for a representative group of publicly traded companies for which historical information was available. The historical volatility is generally calculated based on a period of time commensurate with the expected term assumptions. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected term assumption. The Company uses the simplified method, under which the expected term is presumed to be the midpoint between the vesting date and the end of the contractual term. The Company utilizes this method due to lack of historical exercise data and the plain nature of its stock-based awards. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on common stock. Compensation expense related to equity awards to employees that are subject to graded vesting is recognized on a straight-line basis, based on the grant date fair value, over the requisite service period of the award, which is generally the vesting term. For awards subject to performance conditions, the Company recognizes equity award compensation expense using an accelerated recognition method over the remaining service period when management determines that achievement of the milestone is probable. Management evaluates when the achievement of a performance-based milestone is probable based on the relative satisfaction of the performance conditions as of the reporting date. The Company adopted ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”) in the fourth quarter of 2018. The standard expands the scope of ASC 718 to include all share-based payment arrangements related to the acquisition of goods and services from both non-employees and employees. Prior to the adoption of ASU 2018-07, for equity awards granted to non-employees, the Company accounted for the related equity award compensation in accordance with the provisions of ASC 718 and ASC Topic 505, Equity, and recognized equity award compensation expense over the related service period of the non-employee award. Equity awards issued to non-employees were recorded at their fair values, using the then-current fair value of the common stock and updated assumption inputs in the Black-Scholes option-pricing model, as applicable, and were periodically revalued as the equity instruments vested. After the adoption of ASU 2018-07, equity-classified share-based payment awards issued to non-employees are measured at grant date fair value similarly to those of employees and are no longer revalued as the equity instruments vest. The new standard allows entities to use the expected term to measure non-employee options or elect to use the contractual term as the expected term, on an award-by-award basis. The Company classifies equity-based compensation expense in its consolidated statements of operations in the same manner in which the award recipient’s salary and related costs are classified or in which the award recipient’s service payments are classified. The Company accounts for forfeitures when they occur. Convertible Preferred Stock The Company records all convertible preferred shares at their respective fair values on the dates of issuance less issuance costs. The Company classifies its convertible preferred shares outside of stockholders’ equity when the redemption of such shares is outside the Company’s control. The Company does not adjust the carrying values of the c |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 12 Months Ended |
Dec. 31, 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 December 31, 2019 and 2018 (in thousands): Fair Value Measurements at December 31, 2019 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 34,896 $ 34,896 $ — $ — Marketable securities: U.S. Treasury obligations 121,140 121,140 — — Total assets $ 156,036 $ 156,036 $ — $ — 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 December 31, 2019 and 2018. There were no transfers of assets between fair value measurement levels during the years ended December 31, 2019 and 2018. The carrying amounts reflected in the balance sheets for accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair values at December 31, 2019 and 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 December 31, 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 | 12 Months Ended |
Dec. 31, 2019 | |
Marketable Securities | |
Marketable Securities | 4. Marketable Securities The following table summarizes the Company’s investments as of December 31, 2019 (in thousands): Gross Amortized Unrealized Estimated Cost Gains Losses Fair Value Marketable securities available-for-sale: U.S. Treasury obligations $ 121,103 $ 39 $ (2) $ 121,140 Total available-for-sale securities $ 121,103 $ 39 $ (2) $ 121,140 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 The aggregate fair value of marketable securities with unrealized losses was $19.6 million and $60.6 million at December 31, 2019 and 2018, respectively. At December 31, 2019 and 2018, 3 investments and 16 investments, respectively, were in an unrealized loss position. All such investments have been in an unrealized loss position for less than a year and these losses are considered temporary. The Company has the ability and intent to hold these investments until a recovery of their amortized cost, which may be until maturity. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2019 | |
Property and Equipment, Net | |
Property and Equipment, Net | 5. Property and Equipment, Net At December 31, 2019 and 2018, property and equipment consists of the following (in thousands): December 31, December 31, 2019 2018 Laboratory equipment $ 5,432 $ 3,585 Leasehold improvements 1,580 1,578 Computer equipment & software 423 — Furniture & fixtures 219 219 Machinery & equipment 75 75 Construction in progress — 89 7,729 5,546 Less: Accumulated depreciation and amortization (3,558) (2,356) $ 4,171 $ 3,190 Depreciation and amortization expense was $1.3 million and $0.8 million for the years ended December 31, 2019 and 2018, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Expenses | |
Accrued Expenses | 6. Accrued Expenses At December 31, 2019 and 2018, accrued expenses consist of the following (in thousands): As of December 31, December 31, 2019 2018 Accrued external research and development expense $ 4,088 $ 3,284 Accrued payroll and related expenses 4,380 2,826 Accrued professional and consulting expense 929 890 Accrued other 213 157 $ 9,610 $ 7,157 |
Convertible Preferred Stock
Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2019 | |
Convertible Preferred Stock. | |
Convertible Preferred Stock | 7 . Convertible Preferred Stock The Series A‑1, A‑2, A‑3, A‑4, B, and C Convertible Preferred Stock are collectively referred to as Convertible Preferred Stock. In conjunction with the IPO, all Convertible Preferred Stock was converted to common stock. |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2019 | |
Common Stock and Preferred Stock | |
Common Stock and Preferred Stock | 8. Preferred Stock The Board of Directors or any authorized committee thereof is expressly authorized, to the fullest extent permitted by law, to provide by resolution or resolutions for, out of the unissued shares of Preferred Stock, the issuance of the shares of Preferred Stock in one or more series of such stock, and by filing a certificate of designations pursuant to applicable law of the State of Delaware, to establish or change from time to time the number of shares of each such series, and to fix the designations, powers, including voting powers, full or limited, or no voting powers, preferences and the relative, participating, optional or other special rights of the shares of each series and any qualifications, limitations and restrictions thereof. In connection with the consummation of the IPO, on May 29, 2018 the Company filed an amended and restated certificate of incorporation which authorized for issuance 10,000,000 shares of Preferred Stock, par value $0.001. As of December 31, 2019, no shares of the Preferred Stock were issued or outstanding. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2019 | |
Common Stock. | |
Common Stock | 9. Common Stock In June and July 2019, the Company sold 3,450,000 shares of its common stock, including the exercise of the overallotment option, 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. The Company received aggregate net proceeds, after underwriting discounts and commissions and other offering expenses, of approximately $48.3 million. During the second quarter of 2018, the Company completed its IPO, in which the Company sold 6,164,000 shares of common stock, including all additional shares available to cover overallotments, at a price of $14.00 per share. The Company received aggregate net proceeds of approximately $77.8 million, after deducting underwriting discounts and commissions and other offering expenses payable by the Company. Upon the closing of the IPO, all outstanding shares of convertible preferred stock converted into 15,109,950 shares of common stock and the Company’s outstanding warrant to purchase preferred stock converted into a warrant to purchase 7,614 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. The voting, dividend and liquidation rights of the holders of common stock are subject to and qualified by the rights, powers and preferences of the holders of Preferred Stock. The common stock has the following characteristics: Voting The holders of shares of common stock are entitled to one vote for each share of common stock held at any meeting of stockholders and at the time of any written action in lieu of a meeting. Dividends The holders of shares of common stock are entitled to receive dividends, if and when declared by the Company’s Board of Directors. No dividends have been declared or paid by the company to the holders of common stock since the issuance of the common stock. Liquidation The holders of common stock are entitled to share ratably in the Company’s net assets available for distribution to its stockholders in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or upon the occurrence of a deemed liquidation event. Shares Reserved For Future Issuance As of December 31, 2019, the Company had reserved common shares as follows: As of December 31, 2019 Common shares reserved for exercise of a warrant 7,614 Common shares reserved for future issuance under the 2018 ESPP 497,920 Common shares reserved for exercise of outstanding stock options under the 2017 and 2018 Plans 2,401,382 Common shares reserved for future issuance under the 2018 Plan 2,684,464 5,591,380 |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Equity-Based Compensation | |
Equity-Based Compensation | 10. Equity-Based Compensation Equity Plans As of December 31, 2019, the Company has three active equity plans, the 2018 Stock Option and Incentive Plan (the “2018 Plan”), the 2017 Stock Option and Incentive Plan (the “2017 Plan”), and the 2018 Employee Stock Purchase Plan (the “2018 ESPP”). 2018 Stock Option and Incentive Plan The 2018 Plan was adopted by the Company’s Board of Directors on May 2, 2018, and approved by the Company’s stockholders on May 11, 2018. The 2018 Plan has replaced the 2017 Plan as no additional awards will be granted under that plan following the consummation of the IPO. The Company initially reserved 3,139,274 shares of common stock for the issuance of awards under the 2018 Plan (the “Initial Limit”), which included 352,204 unused shares reserved for issuance under the 2017 Plan that became available under the 2018 Plan upon the completion of the IPO. The 2018 Plan provides for the grant of equity-based incentive awards, including incentive stock options, non‑qualified stock options, restricted stock awards, unrestricted stock awards and restricted stock units t o the Company’s officers, employees, directors and other key persons (including consultants). Stock options granted under the 2018 Plan to employees generally vest over four years. The shares of common stock underlying any awards that are forfeited, cancelled, repurchased or are otherwise terminated by the Company under the 2018 Plan will be added back to the shares of common stock available for issuance under the 2018 Plan. The 2018 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2019, by 4% of the outstanding number of shares of common stock on the immediately preceding December 31 or such lesser number of shares as determined by the Board of Directors or compensation committee (the “Annual Increase”). These limits are subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. 2017 Stock Option and Incentive Plan The 2017 Plan provides for the grant of incentive stock options, non‑qualified stock options, restricted stock awards, unrestricted stock awards and restricted stock units. Stock options granted under the 2017 Plan to employees generally vest over four years. The number of shares initially reserved for issuance under the 2017 Plan was 3,455,330 shares of common stock. The shares of common stock underlying any awards that are forfeited, cancelled, repurchased or are otherwise terminated by the Company under the 2017 Plan will be added back to the shares of common stock available for issuance under the 2018 Plan. 2018 Employee Stock Purchase Plan On May 2, 2018, the Board of Directors adopted the 2018 ESPP, and it was approved by the stockholders on May 11, 2018. The 2018 ESPP initially reserved and authorized the issuance of 235,743 shares of common stock to participating employees. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2019, by the lesser of (i) 353,614 shares of common stock, (ii) 1% of the outstanding number of shares of the Company’s common stock on the immediately preceding December 31 or (iii) such lesser number of shares as determined by the 2018 ESPP administrator. The number of shares reserved under the 2018 ESPP is subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. As of December 31, 2019, no shares have been issued under the 2018 ESPP. Total Equity‑Based Compensation Expense The Company recorded equity‑based compensation expense related to all equity‑based awards for employees and non‑employees, which was allocated as follows in the consolidated statements of operations and comprehensive loss (in thousands): Year Ended December 31, 2019 2018 Research and development expense $ 2,425 $ 1,661 General and administrative expense 5,547 3,550 $ 7,972 $ 5,211 Equity-based compensation during the year ended December 31, 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 year ended December 31, 2018 includes $1.2 million related to the modification of certain other equity awards. Restricted Stock The following table summarizes restricted common stock activity as of December 31, 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 (357,604) $ 5.77 Forfeited (4,210) $ 5.77 Restricted common stock as of December 31, 2019 302,360 $ 5.77 As of December 31, 2019, the Company had unrecognized equity-based compensation expense of $1.3 million related to restricted stock issued to employees and directors, which is expected to be recognized over a period of 1.2 years. Stock Options The following table summarizes the Company’s stock option activity as of December 31, 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 1,034,825 $ 15.07 Exercised (129,431) $ 7.06 Cancelled (131,959) $ 15.46 Outstanding as of December 31, 2019 2,401,382 $ 12.63 8.36 $ 6,523 Options exercisable as of December 31, 2019 787,537 $ 11.17 7.40 $ 2,902 Using the Black-Scholes option pricing model, the weighted average fair value of options granted to employees and directors during the year ended December 31, 2019 was $10.53. The following assumptions were used in determining the fair value of options granted in the year ended December 31, 2019: Risk-free interest rate 2.31 % Expected dividend yield % Expected term (years to liquidity) 6.20 Expected volatility 79.50 % As of December 31, 2019, the Company has unrecognized equity-based compensation expense related to its employee stock options of $13.8 million which the Company expects to recognize over the remaining weighted-average vesting period of 2.6 years. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Income Taxes | 11. Income Taxes The Company has not recorded a current or deferred tax provision for the years ended December 31, 2019 and 2018. The effective income tax rate differed from the amount computed by applying the federal statutory rate to the Company’s loss before income taxes as follows: For Year Ended December 31, 2019 2018 Tax effected at statutory rate 21.0 % 21.0 % State taxes 7.2 6.6 Stock compensation (1.7) (1.7) Non deductible expenses (0.4) (0.1) Federal research and development credits 7.8 5.9 Change in valuation allowance (33.9) (31.7) — % — % Deferred tax assets (liabilities) consist of the following at December 31, 2019 and 2018 (in thousands): As of December 31, 2019 2018 Deferred tax assets: Reserve and accruals $ 1,704 $ 1,031 Net operating loss carryforwards 26,932 25,380 Deferred rent — 242 Operating lease liability 1,448 — Deferred revenue 13,173 3,525 Tax credits 9,569 4,976 Stock based compensation 1,049 314 Total gross deferred tax assets 53,875 35,468 Valuation allowance (52,260) (34,970) Total deferred tax assets 1,615 498 Total deferred tax liabilities: Operating lease right-of-use asset (1,214) — Fixed and intangible assets (401) (498) Total deferred tax liabilities (1,615) (498) Total net deferred tax assets $ — $ — Total Net Deferred Tax Assets Deferred tax assets are reduced by a valuation allowance if, based on the weight of available positive and negative evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Accordingly, a full valuation allowance has been established against the net deferred tax assets as of December 31, 2019 and 2018. The valuation allowance for deferred tax assets increased by $17.3 million and $19.2 million in 2019 and 2018, respectively. This increase mainly relates to the establishment of a valuation allowance against the Company’s net domestic deferred tax assets in connection with net operating losses generated in each year and the recording of additional net operating losses and credit carryforwards, partially offset by a revaluation of the federal deferred tax assets in 2018 based on the tax law change. As of December 31, 2019, the Company had approximately $98.1 million and $100.1 million of Federal and State operating loss carryforwards respectively, which begin to expire in 2032. The Company also had federal net operating loss carryforwards of $47.6 million that do not expire. These loss carryforwards are available to reduce future taxable income, if any. These loss carryforwards are subject to review and possible adjustment by the appropriate taxing authorities. As of December 31, 2019, the Company also had federal and state credit carryovers of $8.0 million and $2.0 million, respectively. The amount of loss and credit carryforwards that may be utilized in any future period may be limited based upon changes in the ownership of the Company’s ultimate parent. Additionally, the deductibility of federal net operating losses generated after December 31, 2017 is limited to 80% of the Company’s taxable income in any future taxable year. The Company follows the provisions of ASC 740-10, “Accounting for Uncertainty in Income Taxes,” which specifies how tax benefits for uncertain tax positions are to be recognized, measured, and recorded in financial statements; requires certain disclosures of uncertain tax matters; specifies how reserves for uncertain tax positions should be classified on the balance sheet; and provides transition and interim period guidance, among other provisions. As of December 31, 2019 and 2018, the Company has not recorded any amounts for uncertain tax positions. The Company’s policy is to recognize interest and penalties accrued on any uncertain tax positions as a component of income tax expense, if any, in its statements of income. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 12. Commitments and Contingencies Operating Leases 620 Memorial Facility Lease In March 2015, the Company entered into a 5‑year facility lease for its corporate headquarters (the “lease”) at 620 Memorial Drive in Cambridge, Massachusetts. The lease was 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 a year to $1.7 million a 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 is as follows (in thousands, except lease term and discount rate): For Year Ended December 31, 2019 Lease Cost: Operating lease cost $ 1,375 Variable lease cost 674 Total lease cost $ 2,049 For Year Ended December 31, 2019 Other information: Operating cash flows used for operating leases $ 1,266 Weighted average remaining lease term 3.75 years Weighted average incremental borrowing 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 December 31, 2019 (in thousands): Year Ending December 31, 2020 $ 1,446 2021 1,619 2022 1,668 2023 1,279 Total lease payments 6,012 Less imputed interest (709) Total operating lease liabilities $ 5,303 The Company recorded approximately $1.4 million and $1.0 million in rent expense for the years ended December 31, 2019 and 2018, respectively. 301 Binney Facility Lease 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 December 31, 2019. The expiration date of the lease is in August 2025 and the Company has the option to extend the term by two years. The base rent is $6.9 million per year, subject to an increase of 3.5%, and the Company is subject to a free-rent period through mid-August 2020. 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. The lease commencement date, for accounting purposes, was not reached as of December 31, 2019 and therefore the lease is not included in the Company’s operating lease right-of-use asset or operating lease liabilities as of December 31, 2019. Legal Proceedings The Company, from time to time, may be party to litigation arising in the ordinary course of its business. The Company was not subject to any material legal proceedings during the years ended December 31, 2019 and 2018. |
Loan Payable
Loan Payable | 12 Months Ended |
Dec. 31, 2019 | |
Loan Payable | |
Loan Payable | 13. 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, which the Company borrowed the full $2.0 million against the line of credit. The loan balance at December 31, 2018 was $0.4 million. The Company made the final payments on the loan in June 2019. For the years ended December 31, 2019 and 2018, the Company recorded total interest expense for this loan of $27,000 and $0.1 million, respectively. |
Agreements
Agreements | 12 Months Ended |
Dec. 31, 2019 | |
Agreements | |
Agreements | 14. 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 m ay 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 December 2019, the Company achieved a $25 million preclinical milestone for the successful demonstration of efficacy in preclinical in vivo proof-of-concept studies. 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 “ The 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 Gilead 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. O f 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. At the commencement of the arrangement, the $25 million milestone for the successful demonstration of efficacy in preclinical in vivo proof-of-concept studies was not included in the transaction price. 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 December 31, 2019. A $25 million preclinical milestone was achieved in December 2019 for the successful demonstration of efficacy in preclinical in vivo proof-of-concept studies. As a result, the associated $25 million was included in the consideration transferred and proportionally allocated to the performance obligations, as it was probable that a future material reversal will not occur. In 2019, the Company recognized $20.5 million in revenue under the Gilead Collaboration Agreement, of which $14.7 million was included in the deferred revenue balance at the beginning of the period. The aggregate amount of the transaction price allocated to the Company’s unsatisfied performance obligations and recorded in deferred revenue at December 31, 2019 is $67.4 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 years as of December 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 | 12 Months Ended |
Dec. 31, 2019 | |
Net Loss per Share | |
Net Loss per Share | 15. 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. Basic and diluted net loss per share is calculated as follows (in thousands, except share and per share data): Year Ended Year Ended December 31, 2019 December 31, 2018 Net loss $ (51,000) $ (49,326) Weighted average common shares outstanding, basic and diluted 27,537,939 15,655,293 Net loss per share, basic and diluted $ (1.85) $ (3.15) 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: Year Ended December 31, 2019 2018 Restricted common stock 302,360 664,174 Warrant 7,614 7,614 Stock options 2,401,382 1,627,947 2,711,356 2,299,735 |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Plan | |
Retirement Plan | 16. Retirement Plan The Company sponsors a 401(K) retirement plan, in which substantially all employees are eligible to participate upon employment. Participants may contribute a percentage of their annual compensation to this plan, subject to statutory limitations. The Company did not provide any contributions to this plan during the years ended December 31, 2019 and 2018. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
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. Significant estimates of accounting reflected in these consolidated financial statements include, but are not limited to, estimates related to revenue recognition, research and development, accrued expenses, the valuation of equity-based compensation, including common stock, restricted common stock and stock options, and income taxes. Actual results could differ from those estimates. Prior to the IPO, the Company utilized significant estimates and assumptions in determining the fair value of its equity-based compensation, including common stock, restricted common stock and stock options. The Company utilized various valuation methodologies in accordance with the framework of the 2013 American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its equity awards. Each valuation methodology included estimates and assumptions that required the Company’s judgment. These estimates and assumptions included a number of objective and subjective factors, including external market conditions, guideline public company information, the prices at which the Company sold convertible preferred units and convertible preferred stock, the superior rights and preferences of securities senior to the Company’s common units and common stock at the time and the likelihood of achieving a liquidity event such as an initial public offering or sale. Significant changes to the assumptions used in the valuations could have resulted in different fair values of common stock, restricted common stock and stock options at each valuation date, as applicable. |
Concentration of Credit Risk and Off-Balance Sheet Risk | Concentration of Credit Risk and Off-Balance Sheet Risk The Company has no off-balance sheet risk, such as foreign exchange contracts, option contracts or other foreign-hedging arrangements. The Company follows an investment policy approved by the Board of Directors. Its primary objectives are the preservation of capital and maintenance of liquidity. The Company invests only in fixed income instruments denominated and payable in U.S. dollars including obligations of the U.S. government and its agencies and money market funds registered according to SEC Rule 2a‑7 of the Investment Company Act of 1940. All securities must have a readily ascertainable market value , must be readily marketable and be U.S. dollar denominated. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash The Company considers highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents are stated at cost, which approximates market value. At December 31, 2019 and 2018, cash equivalents include money market funds that invest primarily in U.S. government-backed securities and treasuries. Restricted cash consists of letters of credit in the amount of $2.5 million related to its leased facilities. The following table reconciles cash and cash equivalents and restricted cash per the balance sheet to the statement of cash flows: As of December 31, 2019 2018 Cash and cash equivalents $ 36,308 $ 115,069 Restricted cash 2,498 205 $ 38,806 $ 115,274 |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Expenditures for major renewals or betterments that extend the useful lives of property and equipment are capitalized; expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is calculated on a straight-line basis over the estimated useful lives of the related asset. Property and equipment are depreciated as follows: Estimated Useful Life (in Years) Laboratory equipment 3 – 5 Computer equipment & software 3 Furniture & fixtures 5 Machinery & equipment 3 – 5 Leasehold improvements Shorter of the useful life or remaining lease term |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets consist of property and equipment and right-of-use assets. 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. The Company did not record any impairment losses on long-lived assets during the years ended December 31, 2019 or 2018. |
Leases | Leases Effective January 1, 2019, the Company adopted 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. The Company elected the package of practical expedients permitted under the transition guidance. 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. For operating leases, lease expense relating to fixed payments is recognized on a straight-line basis over the term and lease expense relating to variable payments is expensed as incurred. |
Fair Value Measurements | Fair Value Measurements ASC Topic 820, Fair Value Measurement ("ASC 820"), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following: Level 1 — Quoted market prices in active markets for identical assets or liabilities. Level 2 — Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves. Level 3 — Unobservable inputs developed using estimates of assumptions developed by the Company, which reflect those that a market participant would use. To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. |
Segment Information | Segment Information Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment operating exclusively in the U.S. |
Revenue Recognition | Revenue Recognition The Company accounts for revenue using the provisions of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, an entity 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 the appropriate amount of revenue to be recognized for arrangements determined to be within the scope of ASC 606, the Company performs the following five steps: (i) identification of the contract(s) with the customer, (ii) identification of the promised goods or services in the contract and determination of whether the promised goods or services are performance obligations, (iii) measurement of the transaction price, (iv) allocation of the transaction price to the performance obligations, and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect 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 each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company accounts for a contract with a customer that is within the scope of ASC 606 when all of the following criteria are met: (i) the arrangement has been approved by the parties and the parties are committed to perform their respective obligations, (ii) each party’s rights regarding the goods or services to be transferred can be identified, (iii) the payment terms for the goods or services to be transferred can be identified, (iv) the arrangement has commercial substance and (v) collection of substantially all of the consideration to which the Company will be entitled in exchange for the goods or services that will be transferred to the customer is probable. The Company first evaluates license and/or collaboration arrangements to determine whether the arrangement (or part of the arrangement) represents a collaborative arrangement pursuant to ASC Topic 808, Collaborative Arrangements, based on the risks and rewards and activities of the parties pursuant to the contractual arrangement. The Company accounts for collaborative arrangements (or elements within the contract that are deemed part of a collaborative arrangement) , which represent a collaborative relationship and not a customer relationship, outside of the scope of ASC 606. The Company’s existing collaborations represent revenue arrangements. For the arrangements or arrangement components that are subject to revenue accounting guidance, in determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of 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. As part of the accounting for these arrangements, the Company must use significant judgment to determine: a) the number of performance obligations based on the determination under step (ii) above and whether those performance obligations are distinct from other performance obligations in the contract; b) the transaction price under step (iii) above; and c) the standalone selling price for each performance obligation identified in the contract for the allocation of transaction price in step (iv) above. The Company uses judgment to determine whether milestones or other variable consideration, except for royalties, should be included in the transaction price as described further below. The transaction price is allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. In determining the stand-alone selling price of a license to the Company’s proprietary technology or a material right provided by a customer option, the Company considers market conditions as well as entity-specific factors, including those factors contemplated in negotiating the agreements as well as internally developed estimates that include assumptions related to the market opportunity, estimated development costs, probability of success and the time needed to commercialize a product candidate pursuant to the license. In validating its estimated stand-alone selling prices, the Company evaluates whether changes in the key assumptions used to determine its estimated stand-alone selling prices will have a significant effect on the allocation of arrangement consideration between performance obligations. The Company estimates the transaction price based on the amount of consideration the Company expects to be received for transferring the promised goods or services in the contract. The consideration may include both fixed consideration and variable consideration. At the inception of each arrangement that includes variable consideration, the Company evaluates the amount of the potential payments and the likelihood that the payments will be received. The Company utilizes either the most likely amount method or expected value method to estimate the transaction price based on which method better predicts the amount of consideration expected to be received. If it is probable that a significant revenue reversal would not occur, the variable consideration is included in the transaction price. Performance obligations are promised goods or services in a contract to transfer a distinct good or service to the customer. Promised goods or services are considered distinct when: (i) the customer can benefit from the good or service on its own or together with other readily available resources and (ii) the promised good or service is separately identifiable from other promises in the contract. In assessing whether promised goods or services are distinct, the Company considers factors such as the stage of development of the underlying intellectual property, the capabilities of the customer to develop the intellectual property on their own and whether the required expertise is readily available. The Company allocates the transaction price based on the estimated standalone selling price. The Company must develop assumptions that require judgment to determine the standalone selling price for each performance obligation identified in the contract. The Company utilizes key assumptions to determine the standalone selling price, which may include other comparable transactions, pricing considered in negotiating the transaction and the estimated costs. Estimating costs for research and development programs is subjective as the Company estimates the costs anticipated to successfully complete the research performance obligations. As the research is novel, efforts to be successful may be significantly different than the estimated costs at the beginning of the contract. Certain variable consideration is allocated specifically to one or more performance obligations in a contract when the terms of the variable consideration relate to the satisfaction of the performance obligation and the resulting amounts allocated to each performance obligation are consistent with the amounts the Company would expect to receive for each performance obligation. For performance obligations which consist of licenses and other promises, the Company utilizes judgment to assess the nature of the combined performance obligation in order to determine whether the combined performance obligation is satisfied over time or at a point in time. The Company determines the appropriate method of measuring progress of combined performance obligations satisfied over time for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The estimated remaining costs is highly subjective, as the research is novel, therefore efforts to be successful may be significantly different than the estimated costs made at the balance sheet date. If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company will recognize revenue from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. The Company receives payments from customers based on billing schedules established in each contract. Up-front payments and fees are recorded as deferred revenue upon receipt or when due until the Company performs its obligations under these arrangements. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue in the accompanying consolidated balance sheets. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. Amounts recognized as revenue, but not yet received or invoiced are generally recognized as contract assets. Exclusive Licenses – If the license granted in the arrangement is determined to be distinct from the other promises or performance obligations identified in the arrangement, which generally include research and development services, the Company recognizes revenue from non-refundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. In assessing whether a license is distinct from the other promises, the Company considers relevant facts and circumstances of each arrangement, including the research and development capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. In addition, the Company considers whether the collaboration partner can benefit from the license for its intended purpose without the receipt of the remaining promise, whether the value of the license is dependent on the unsatisfied promise, whether there are other vendors that could provide the remaining promise, and whether it is separately identifiable from the remaining promise. For licenses that are combined 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. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The measure of progress, and thereby periods over which revenue should be recognized, are subject to estimates by management and may change over the course of the arrangement. Research and Development Services – The promises under the Company’s collaboration and license agreements generally include research and development services to be performed by the Company on behalf of the collaboration partner. For performance obligations that include research and development services, the Company generally recognizes revenue allocated to such performance obligations based on an appropriate measure of progress. The Company utilizes judgment to determine the appropriate method of measuring progress for purposes of recognizing revenue, which is generally an input measure, such as costs incurred. The Company evaluates the measure of progress each reporting period as described under Exclusive Licenses above. Reimbursements from the partner that are the result of a collaborative relationship with the partner, instead of a customer relationship, such as co-development activities, are generally recorded as a reduction to research and development expense. Customer Options – The Company’s arrangements may provide a collaborator with the right to certain optional purchases, such as the right to license a target either at the inception of the arrangement or within a pre-defined option period. Under these agreements, fees may be due to the Company (i) at the inception of the arrangement as an upfront fee or payment or (ii) upon the exercise of an option to acquire a license. If an arrangement is determined to contain customer options that allow the customer to acquire additional goods or services, the goods and services underlying the customer options are not considered to be performance obligations at the outset of the arrangement, as they are contingent upon option exercise. The Company evaluates the customer options for material rights, or options to acquire additional goods or services for free or at a discount. If the customer options are determined to represent a material right, the material right is recognized as a separate performance obligation at the inception of the arrangement. The Company allocates the transaction price to material rights based on the relative stand-alone selling price, which is determined based on the identified discount, and the probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until, at the earliest, the option is exercised or expires. Milestone Payments – At the inception of each arrangement that includes milestone payments based on certain events, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The Company evaluates factors such as the scientific, clinical, regulatory, commercial, and other risks that must be overcome to achieve the particular milestone in making this assessment. There is considerable judgment involved in determining whether it is probable that a significant revenue reversal would not occur. At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of all milestones subject to constraint and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. If a milestone or other variable consideration relates specifically to the Company’s efforts to satisfy a single performance obligation or to a specific outcome from satisfying the performance obligation, the Company generally allocates the milestone amount entirely to that performance obligation once it is probable that a significant revenue reversal would not occur. Royalties – For arrangements that include sales-based royalties, including milestone payments based on a level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes 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 royalty revenue resulting from any of its licensing arrangements. For a complete discussion of accounting for collaboration revenues, see Note 14, Agreements. |
Research and Development Expenses and Accruals | Research and Development Expenses and Accruals Research and development expenses are expensed as incurred and consist of costs incurred in performing research and development activities, including compensation related expenses for research and development personnel, preclinical and clinical activities including cost of supply, overhead expenses including facilities expenses, materials and supplies, amounts paid to consultants and outside service providers, and depreciation of equipment. Upfront license payments related to acquired technologies which have not yet reached technological feasibility and have no alternative future use are also included in research and development expense. The Company has entered into various research and development service arrangements under which vendors perform various services. The Company records accrued expenses for estimated costs incurred under the arrangements. When evaluating the adequacy of the accrued expenses, the Company analyzed the progress of the studies, trials or other services performed, including invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued expense balances at the end of each reporting period. |
Equity-Based Compensation | Equity-Based Compensation The Company accounts for equity awards, including common stock, restricted common stock, common stock options, granted to employees as equity award compensation in accordance with ASC Topic 718, Compensation — Stock Compensation ("ASC 718"). ASC 718 requires all stock-based payments to employees, which includes grants of employee equity awards, to be recognized as expense in the statements of operations based on their grant date fair values. Prior to becoming a public company, the Company estimated the fair value of common stock using an appropriate valuation methodology, based on the guideline public company (“GPC”) method or the precedent transaction method which "backsolves" to a preferred price. The use of these valuation approaches requires management to make assumptions with respect to the expected volatility of its common stock, time until a liquidity event and risk-free interest rates. The fair value of each restricted common stock award is based on the fair value of the Company’s common stock less any purchase price, if applicable. The fair value of each stock option award is estimated using the Black-Scholes option-pricing model, which uses as inputs the fair value of the Company’s common stock and certain subjective assumptions, including the expected stock price volatility, the expected term of the award, the risk-free rate, and expected dividends. Expected volatility is calculated based on reported volatility data for a representative group of publicly traded companies for which historical information was available. The historical volatility is generally calculated based on a period of time commensurate with the expected term assumptions. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected term assumption. The Company uses the simplified method, under which the expected term is presumed to be the midpoint between the vesting date and the end of the contractual term. The Company utilizes this method due to lack of historical exercise data and the plain nature of its stock-based awards. The expected dividend yield is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on common stock. Compensation expense related to equity awards to employees that are subject to graded vesting is recognized on a straight-line basis, based on the grant date fair value, over the requisite service period of the award, which is generally the vesting term. For awards subject to performance conditions, the Company recognizes equity award compensation expense using an accelerated recognition method over the remaining service period when management determines that achievement of the milestone is probable. Management evaluates when the achievement of a performance-based milestone is probable based on the relative satisfaction of the performance conditions as of the reporting date. The Company adopted ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”) in the fourth quarter of 2018. The standard expands the scope of ASC 718 to include all share-based payment arrangements related to the acquisition of goods and services from both non-employees and employees. Prior to the adoption of ASU 2018-07, for equity awards granted to non-employees, the Company accounted for the related equity award compensation in accordance with the provisions of ASC 718 and ASC Topic 505, Equity, and recognized equity award compensation expense over the related service period of the non-employee award. Equity awards issued to non-employees were recorded at their fair values, using the then-current fair value of the common stock and updated assumption inputs in the Black-Scholes option-pricing model, as applicable, and were periodically revalued as the equity instruments vested. After the adoption of ASU 2018-07, equity-classified share-based payment awards issued to non-employees are measured at grant date fair value similarly to those of employees and are no longer revalued as the equity instruments vest. The new standard allows entities to use the expected term to measure non-employee options or elect to use the contractual term as the expected term, on an award-by-award basis. The Company classifies equity-based compensation expense in its consolidated statements of operations in the same manner in which the award recipient’s salary and related costs are classified or in which the award recipient’s service payments are classified. The Company accounts for forfeitures when they occur. |
Convertible Preferred Stock | Convertible Preferred Stock The Company records all convertible preferred shares at their respective fair values on the dates of issuance less issuance costs. The Company classifies its convertible preferred shares outside of stockholders’ equity when the redemption of such shares is outside the Company’s control. The Company does not adjust the carrying values of the convertible preferred stock to the liquidation preferences of such units or shares until such time as a deemed liquidation event is probable of occurring. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Comprehensive loss includes net loss and the change in accumulated other comprehensive income (loss) for the period. Accumulated other comprehensive loss consisted entirely of unrealized gains and losses on available-for-sale marketable securities during the period ending December 31, 2019 and 2018. |
Net Loss per Share | Net Loss per Share The Company applies the two-class method to compute basic and diluted net loss per share because it has issued shares that meet the definition of participating securities. The two-class method determines net income (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 (losses) available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to share in the earnings as if all income (losses) for the period had been distributed. During periods of loss, there is no allocation required under the two-class method since the participating securities do not have a contractual obligation to fund the losses of the Company. 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 calculates diluted net loss per share by dividing net loss by the weighted average number of common shares outstanding, as applicable, after giving consideration to the dilutive effect of convertible preferred stock, restricted common stock, warrants and stock options that are outstanding during the period. |
Income Taxes | Income Taxes Income taxes for Scholar Rock Holding Corporation and Scholar Rock, Inc. are recorded in accordance with ASC Topic 740, Income Taxes ("ASC 740"), which provides for deferred taxes using an asset and liability approach. Under this method, deferred income tax assets and liabilities are recognized based on future income tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities, and their respective income tax basis. Deferred income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in income tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that a valuation allowance for any income tax benefits of which future realization is not more likely than not. The Company provides reserves for potential payments of tax to various tax authorities related to uncertain tax positions, as necessary. The tax benefits recorded are based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings or positions is "more likely than not" to be realized following resolution of any uncertainty related to the tax benefit, assuming that the matter in question will be raised by the tax authorities. The Company is open to examination by the Internal Revenue Service for the tax years ended December 31, 2013 to December 31, 2019. Since the Company is in a U.S. loss carryforward position, carryforward tax attributes generated in prior years may still be adjusted upon future examination if they have or will be used in a future period. The Company is currently not under examination by the Internal Revenue Service or any other jurisdictions for any tax years. The Company has not recorded any interest or penalties on any unrecognized tax benefits since its inception. |
Marketable Securities | Marketable Securities The Company classifies its marketable securities as available-for-sale. Marketable securities with a remaining maturity date greater than one year are classified as non-current. Marketable securities are maintained by an investment manager and consist of U.S. treasury securities. Marketable securities are carried at fair value with the unrealized gains and losses included in accumulated other comprehensive loss as a component of stockholders’ equity until realized. Any premium or discount arising at purchase is amortized and/or accreted to interest income and/or expense over the life of the underlying marketable security. Although available to be sold to meet operating needs or otherwise, securities are generally held through maturity. The cost of securities sold is determined on a specific identification basis, and realized gains and losses are included in other income (expense) within the statement of operations and comprehensive loss. During the years ended December 31, 2019 and 2018, there was an immaterial amount of realized gains on sales of marketable securities and no marketable securities were adjusted for other than temporary declines in fair value. 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 would reduce 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. |
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 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 consolidated statement of operations and comprehensive loss. |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements 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 guidance is applied using a modified retrospective, or prospective approach, depending on a specific amendment. In November 2019, the FASB deferred the effective date for smaller reporting companies to fiscal years beginning after December 15, 2022. 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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Schedule of reconciles of cash and cash equivalents and restricted cash | As of December 31, 2019 2018 Cash and cash equivalents $ 36,308 $ 115,069 Restricted cash 2,498 205 $ 38,806 $ 115,274 |
Schedule of useful life of property, plant and equipment | Estimated Useful Life (in Years) Laboratory equipment 3 – 5 Computer equipment & software 3 Furniture & fixtures 5 Machinery & equipment 3 – 5 Leasehold improvements Shorter of the useful life or remaining lease term |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2019 and 2018 (in thousands): Fair Value Measurements at December 31, 2019 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 34,896 $ 34,896 $ — $ — Marketable securities: U.S. Treasury obligations 121,140 121,140 — — Total assets $ 156,036 $ 156,036 $ — $ — 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) | 12 Months Ended |
Dec. 31, 2019 | |
Marketable Securities | |
Summary of investments | The following table summarizes the Company’s investments as of December 31, 2019 (in thousands): Gross Amortized Unrealized Estimated Cost Gains Losses Fair Value Marketable securities available-for-sale: U.S. Treasury obligations $ 121,103 $ 39 $ (2) $ 121,140 Total available-for-sale securities $ 121,103 $ 39 $ (2) $ 121,140 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 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property and Equipment, Net | |
Summary of property and equipment | At December 31, 2019 and 2018, property and equipment consists of the following (in thousands): December 31, December 31, 2019 2018 Laboratory equipment $ 5,432 $ 3,585 Leasehold improvements 1,580 1,578 Computer equipment & software 423 — Furniture & fixtures 219 219 Machinery & equipment 75 75 Construction in progress — 89 7,729 5,546 Less: Accumulated depreciation and amortization (3,558) (2,356) $ 4,171 $ 3,190 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Expenses | |
Summary of accrued expenses | At December 31, 2019 and 2018, accrued expenses consist of the following (in thousands): As of December 31, December 31, 2019 2018 Accrued external research and development expense $ 4,088 $ 3,284 Accrued payroll and related expenses 4,380 2,826 Accrued professional and consulting expense 929 890 Accrued other 213 157 $ 9,610 $ 7,157 |
Common Stock (Tables)
Common Stock (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Common Stock. | |
Schedule of reserved common stock | As of December 31, 2019 Common shares reserved for exercise of a warrant 7,614 Common shares reserved for future issuance under the 2018 ESPP 497,920 Common shares reserved for exercise of outstanding stock options under the 2017 and 2018 Plans 2,401,382 Common shares reserved for future issuance under the 2018 Plan 2,684,464 5,591,380 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 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 non‑employees, which was allocated as follows in the consolidated statements of operations and comprehensive loss (in thousands): Year Ended December 31, 2019 2018 Research and development expense $ 2,425 $ 1,661 General and administrative expense 5,547 3,550 $ 7,972 $ 5,211 |
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 (357,604) $ 5.77 Forfeited (4,210) $ 5.77 Restricted common stock as of December 31, 2019 302,360 $ 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 1,034,825 $ 15.07 Exercised (129,431) $ 7.06 Cancelled (131,959) $ 15.46 Outstanding as of December 31, 2019 2,401,382 $ 12.63 8.36 $ 6,523 Options exercisable as of December 31, 2019 787,537 $ 11.17 7.40 $ 2,902 |
Schedule of fair value assumptions | Risk-free interest rate 2.31 % Expected dividend yield % Expected term (years to liquidity) 6.20 Expected volatility 79.50 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Schedule of reconciliation of effective income tax rate differed from the amount computed by applying the federal statutory rate | For Year Ended December 31, 2019 2018 Tax effected at statutory rate 21.0 % 21.0 % State taxes 7.2 6.6 Stock compensation (1.7) (1.7) Non deductible expenses (0.4) (0.1) Federal research and development credits 7.8 5.9 Change in valuation allowance (33.9) (31.7) — % — % |
Summary of deferred tax assets (liabilities) | Deferred tax assets (liabilities) consist of the following at December 31, 2019 and 2018 (in thousands): As of December 31, 2019 2018 Deferred tax assets: Reserve and accruals $ 1,704 $ 1,031 Net operating loss carryforwards 26,932 25,380 Deferred rent — 242 Operating lease liability 1,448 — Deferred revenue 13,173 3,525 Tax credits 9,569 4,976 Stock based compensation 1,049 314 Total gross deferred tax assets 53,875 35,468 Valuation allowance (52,260) (34,970) Total deferred tax assets 1,615 498 Total deferred tax liabilities: Operating lease right-of-use asset (1,214) — Fixed and intangible assets (401) (498) Total deferred tax liabilities (1,615) (498) Total net deferred tax assets $ — $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies | |
Summary of lease costs | Other information related to the Company’s lease is as follows (in thousands, except lease term and discount rate): For Year Ended December 31, 2019 Lease Cost: Operating lease cost $ 1,375 Variable lease cost 674 Total lease cost $ 2,049 For Year Ended December 31, 2019 Other information: Operating cash flows used for operating leases $ 1,266 Weighted average remaining lease term 3.75 years Weighted average incremental borrowing 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 December 31, 2019 (in thousands): Year Ending December 31, 2020 $ 1,446 2021 1,619 2022 1,668 2023 1,279 Total lease payments 6,012 Less imputed interest (709) Total operating lease liabilities $ 5,303 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Net Loss per Share | |
Schedule of basic and diluted net loss per share | Basic and diluted net loss per share is calculated as follows (in thousands, except share and per share data): Year Ended Year Ended December 31, 2019 December 31, 2018 Net loss $ (51,000) $ (49,326) Weighted average common shares outstanding, basic and diluted 27,537,939 15,655,293 Net loss per share, basic and diluted $ (1.85) $ (3.15) |
Summary of anti-dilutive securities | Year Ended December 31, 2019 2018 Restricted common stock 302,360 664,174 Warrant 7,614 7,614 Stock options 2,401,382 1,627,947 2,711,356 2,299,735 |
Nature of the Business and Ba_2
Nature of the Business and Basis of Presentation (Details) | 12 Months Ended |
Dec. 31, 2019item | |
Nature of the Business and Basis of Presentation | |
Number of collaborations | 2 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Concentration of Credit Risk and Off-Balance Sheet Risk (Details) $ in Billions | Dec. 31, 2019USD ($) |
Summary of Significant Accounting Policies | |
Off-balance sheet risk | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Cash and cash equivalents and restricted cash | |||
Letter of credit | $ 2,500 | ||
Cash and cash equivalents | 36,308 | $ 115,069 | |
Restricted cash | 2,498 | 205 | |
Total | $ 38,806 | $ 115,274 | $ 56,666 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Property and Equipment, Net | |
Lease, Practical Expedients, Package [true false] | true |
Laboratory equipment | Minimum | |
Property and Equipment, Net | |
Estimated Useful Life | 3 years |
Laboratory equipment | Maximum | |
Property and Equipment, Net | |
Estimated Useful Life | 5 years |
Computer equipment & software | |
Property and Equipment, Net | |
Estimated Useful Life | 3 years |
Furniture & fixtures | |
Property and Equipment, Net | |
Estimated Useful Life | 5 years |
Machinery & equipment | Minimum | |
Property and Equipment, Net | |
Estimated Useful Life | 3 years |
Machinery & equipment | Maximum | |
Property and Equipment, Net | |
Estimated Useful Life | 5 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Misc (Details) | 12 Months Ended | |
Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | |
Number of operating segments | segment | 1 | |
Adjustment for other than temporary decline in fair value | $ | $ 0 | $ 0 |
Stock options | ||
Expected dividend yield | 0.00% |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Jan. 01, 2019 | |
Significant accounting policies | ||
Lease, Practical Expedients, Package [true false] | true | |
Operating lease liabilities | $ 5,303 | |
Right-of-use assets | $ 4,447 | |
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 | Dec. 31, 2019 | Dec. 31, 2018 |
Marketable securities: | ||
Warrant to purchase preferred stock converted into warrant to purchase common stock | 7,614 | |
Warrant purchase price | $ 3.94 | |
Recurring | ||
Assets: | ||
Money market funds, included in cash and cash equivalents | $ 34,896 | $ 114,593 |
Marketable securities: | ||
U.S. Treasury obligations | 121,140 | 60,576 |
Total assets | 156,036 | 175,169 |
Recurring | Level 1 | ||
Assets: | ||
Money market funds, included in cash and cash equivalents | 34,896 | 114,593 |
Marketable securities: | ||
U.S. Treasury obligations | 121,140 | 60,576 |
Total assets | $ 156,036 | $ 175,169 |
Marketable Securities - Summary
Marketable Securities - Summary of Investments (Details) $ in Thousands | Dec. 31, 2019USD ($)security | Dec. 31, 2018USD ($)security |
Marketable securities available-for-sale | ||
Amortization Cost | $ 121,103 | $ 60,584 |
Gross Unrealized Gains | 39 | |
Gross Unrealized Losses | (2) | (8) |
Estimated Fair Value | 121,140 | 60,576 |
Aggregate fair value of marketable securities with unrealized losses position for less than a year | $ 19,600 | $ 60,600 |
Number of investments in an unrealized loss position for less than a year | security | 3 | 16 |
U.S. Treasury obligations | ||
Marketable securities available-for-sale | ||
Amortization Cost | $ 121,103 | $ 60,584 |
Gross Unrealized Gains | 39 | |
Gross Unrealized Losses | (2) | (8) |
Estimated Fair Value | $ 121,140 | $ 60,576 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property and Equipment, Net | ||
Property and equipment, gross | $ 7,729 | $ 5,546 |
Less: Accumulated depreciation and amortization | (3,558) | (2,356) |
Total property and equipment, net | 4,171 | 3,190 |
Depreciation and amortization expense | 1,303 | 807 |
Laboratory equipment | ||
Property and Equipment, Net | ||
Property and equipment, gross | 5,432 | 3,585 |
Leasehold improvements | ||
Property and Equipment, Net | ||
Property and equipment, gross | 1,580 | 1,578 |
Computer equipment & software | ||
Property and Equipment, Net | ||
Property and equipment, gross | 423 | |
Furniture & fixtures | ||
Property and Equipment, Net | ||
Property and equipment, gross | 219 | 219 |
Machinery & equipment | ||
Property and Equipment, Net | ||
Property and equipment, gross | $ 75 | 75 |
Construction in progress | ||
Property and Equipment, Net | ||
Property and equipment, gross | $ 89 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accrued Expenses | ||
Accrued external research and development expense | $ 4,088 | $ 3,284 |
Accrued payroll and related expenses | 4,380 | 2,826 |
Accrued professional and consulting expense | 929 | 890 |
Accrued other | 213 | 157 |
Accrued expenses | $ 9,610 | $ 7,157 |
Preferred Stock (Details)
Preferred Stock (Details) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 | May 29, 2018 |
Common Stock and Preferred Stock | |||
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 |
Common Stock (Details)
Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | May 29, 2018 | Jul. 31, 2019 | Jun. 30, 2018 | Dec. 31, 2019 | 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) | 3,450,000 | 6,164,000 | |||
Purchase price (in dollars per share) | $ 15 | $ 14 | |||
Proceeds from sale of common stock | $ 77,800 | $ 48,348 | $ 94,935 | ||
Warrant to purchase preferred stock converted into warrant to purchase common stock | 7,614 |
Common Stock - Shares Reserved
Common Stock - Shares Reserved For Future Issuance (Details) | 12 Months Ended |
Dec. 31, 2019USD ($)Voteshares | |
Class of Stock [Line Items] | |
Number of votes per share | Vote | 1 |
Dividend declared or paid | $ | $ 0 |
Shares reserved for future issuance | 5,591,380 |
2018 ESPP | |
Class of Stock [Line Items] | |
Shares reserved for future issuance | 497,920 |
2018 Plan | |
Class of Stock [Line Items] | |
Shares reserved for future issuance | 2,684,464 |
Stock options | |
Class of Stock [Line Items] | |
Shares reserved for future issuance | 2,401,382 |
Warrant | |
Class of Stock [Line Items] | |
Shares reserved for future issuance | 7,614 |
Equity-Based Compensation - 201
Equity-Based Compensation - 2018 Plan (Details) | May 11, 2018shares | Dec. 31, 2019item | Dec. 31, 2017shares |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Number of share-based compensation plans | item | 3 | ||
2018 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Additional shares authorized under stock-based plans (in shares) | 352,204 | ||
Shares authorized for issuance | 3,139,274 | ||
Increase as percentage of outstanding shares | 4.00% | ||
Vesting period | 4 years | ||
2017 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Additional shares authorized under stock-based plans (in shares) | 0 | ||
Shares authorized for issuance | 3,455,330 | ||
Vesting period | 4 years |
Equity-Based Compensation - 2_2
Equity-Based Compensation - 2017 Plan (Details) - 2017 Plan | 12 Months Ended |
Dec. 31, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 4 years |
Shares authorized for issuance | 3,455,330 |
Equity-Based Compensation - 2_3
Equity-Based Compensation - 2018 ESPP (Details) - 2018 ESPP - shares | May 02, 2018 | Dec. 31, 2019 | May 11, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award | |||
Shares authorized for issuance | 235,743 | ||
Additional shares authorized under stock-based plans (in shares) | 353,614 | ||
Increase as percentage of outstanding shares | 1.00% | ||
Shares issued | 0 |
Equity-Based Compensation - Exp
Equity-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Equity-based compensation | ||
Equity-based compensation expense | $ 7,972 | $ 5,211 |
Equity-based compensation expense related to acceleration of equity awards | 600 | |
Equity-based compensation expense related to modifications of equity awards | 100 | 1,200 |
Research and development expense | ||
Equity-based compensation | ||
Equity-based compensation expense | 2,425 | 1,661 |
General and administrative expense | ||
Equity-based compensation | ||
Equity-based compensation expense | $ 5,547 | $ 3,550 |
Equity-Based Compensation - Res
Equity-Based Compensation - Restricted stock (Details) - Restricted common stock $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Number of unvested awards | |
Outstanding, beginning (in shares) | shares | 664,174 |
Vested (in shares) | shares | (357,604) |
Forfeited (in shares) | shares | (4,210) |
Outstanding, end (in shares) | shares | 302,360 |
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 | $ | $ 1.3 |
Period for recognition | 1 year 2 months 12 days |
Equity-Based Compensation - Sto
Equity-Based Compensation - Stock Options (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Units | ||
Outstanding, beginning (in shares) | 1,627,947 | |
Granted (in shares) | 1,034,825 | |
Exercised (in shares) | (129,431) | |
Cancelled (in shares) | (131,959) | |
Outstanding, end (in shares) | 2,401,382 | 1,627,947 |
Options exercisable, end (in shares) | 787,537 | |
Weighted Average Exercise Price | ||
Outstanding, beginning (in dollars per share) | $ 10.86 | |
Granted (in dollars per share) | 15.07 | |
Exercised (in dollars per share) | 7.06 | |
Cancelled (in dollars per share) | 15.46 | |
Outstanding, end (in dollars per share) | 12.63 | $ 10.86 |
Options exercisable, end (in dollars per share) | $ 11.17 | |
Stock options | ||
Weighted average remaining contractual term | 8 years 4 months 10 days | 9 years 3 months 4 days |
Weighted average remaining contractual term, exercisable | 7 years 4 months 24 days | |
Aggregate intrinsic value, beginning | $ 19,831 | |
Aggregate intrinsic value, end | 6,523 | $ 19,831 |
Aggregate intrinsic value, exercisable | $ 2,902 | |
Weighted average grant date fair value (in dollars per share) | $ 10.53 |
Equity-Based Compensation - Ass
Equity-Based Compensation - Assumptions (Details) - Stock options $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Assumptions used in determining the fair value of options | |
Risk-free interest rate | 2.31% |
Expected dividend yield | 0.00% |
Expected term (years to liquidity) | 6 years 2 months 12 days |
Expected volatility | 79.50% |
Unrecognized equity-based compensation expense | $ 13.8 |
Period for recognition | 2 years 7 months 6 days |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Effective income tax rate | ||
Tax effected at statutory rate | 21.00% | 21.00% |
State taxes | 7.20% | 6.60% |
Stock compensation | (1.70%) | (1.70%) |
Non deductible expenses | (0.40%) | (0.10%) |
Federal research and development credits | 7.80% | 5.90% |
Change in valuation allowance | (33.90%) | (31.70%) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Reserve and accruals | $ 1,704 | $ 1,031 |
Net operating loss carryforwards | 26,932 | 25,380 |
Deferred rent | 242 | |
Operating lease liability | 1,448 | |
Deferred revenue | 13,173 | 3,525 |
Tax credits | 9,569 | 4,976 |
Stock based compensation | 1,049 | 314 |
Total gross deferred tax assets | 53,875 | 35,468 |
Valuation allowance | (52,260) | (34,970) |
Total deferred tax assets | 1,615 | 498 |
Operating lease right-of-use asset | (1,214) | |
Fixed and intangible assets | (401) | (498) |
Total deferred tax liabilities | $ (1,615) | $ (498) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Contingency | ||
Increase in valuation allowance for deferred tax assets | $ 17.3 | $ 19.2 |
Federal operating loss carryforwards without expiration date | 47.6 | |
Federal | ||
Income Tax Contingency | ||
Net operating loss carryforwards | 98.1 | |
Tax credit carryforward amount | 8 | |
State | ||
Income Tax Contingency | ||
Net operating loss carryforwards | 100.1 | |
Tax credit carryforward amount | $ 2 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2018USD ($)item | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Mar. 31, 2015 | |
Leased assets | ||||
Rent for facility lease | $ 1,400 | $ 1,000 | ||
Lease Cost: | ||||
Operating lease cost | 1,375 | |||
Variable lease cost | 674 | |||
Total lease cost | 2,049 | |||
Operating cash flows used for operating leases | $ 1,266 | |||
Weighted average remaining lease term | 3 years 9 months | |||
Weighted average incremental borrowing rate | 6.47% | |||
Memorial Drive, Cambridge MA | ||||
Leased assets | ||||
Term of lease | 5 years | |||
Option to extend the term | true | |||
Number of renewal options | item | 1 | |||
Renewal term | 5 years | |||
Memorial Drive, Cambridge MA | Minimum | ||||
Leased assets | ||||
Rent for facility lease | $ 1,400 | |||
Memorial Drive, Cambridge MA | Maximum | ||||
Leased assets | ||||
Rent for facility lease | $ 1,700 |
Commitments and Contingencies -
Commitments and Contingencies - Maturities (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Nov. 30, 2019 | Dec. 31, 2019 | |
Maturity analysis of the annual undiscounted cash flows | ||
2020 | $ 1,446 | |
2021 | 1,619 | |
2022 | 1,668 | |
2023 | 1,279 | |
Total lease payments | 6,012 | |
Less imputed interest | (709) | |
Total operating lease liabilities | 5,303 | |
Letter of credit | 2,500 | |
Binney St, Cambridge MA | ||
Maturity analysis of the annual undiscounted cash flows | ||
Incentive to lease | $ 14,100 | |
Payments for tenant improvements | $ 0 | |
Lease not yet commenced, option to extend the term | true | |
Lease not yet commenced, renewal term | 2 years | |
Base rent | $ 6,900 | |
Annual upward adjustment (as a percent) | 3.50% | |
Letter of credit | $ 2,300 |
Loan Payable (Details)
Loan Payable (Details) - SVB - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Aug. 31, 2015 | |
Loan Payable | |||
Line of credit maximum | $ 2,000,000 | ||
Amount borrowed | $ 400,000 | $ 2,000,000 | |
Interest expense | $ 27,000 | $ 100,000 |
Agreements - Gilead (Details)
Agreements - Gilead (Details) $ / shares in Units, $ in Thousands | Dec. 19, 2018USD ($)item$ / sharesshares | Jul. 31, 2019$ / sharesshares | Jun. 30, 2018$ / sharesshares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Agreements | |||||
Accounts receivable | $ 25,000 | ||||
Sale of common shares (in shares) | shares | 3,450,000 | 6,164,000 | |||
Purchase price (in dollars per share) | $ / shares | $ 15 | $ 14 | |||
Sale of common shares | 48,348 | $ 17,096 | |||
Revenue earned | 20,492 | ||||
Gilead | |||||
Agreements | |||||
Number of programs | item | 3 | ||||
Option exercise period | 90 days | ||||
Revenue proceeds | $ 50,000 | ||||
Potential milestone payments | $ 475,000 | ||||
Accounts receivable | 25,000 | ||||
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 | 67,400 | |||
Securities premium | 12,900 | ||||
Revenue earned | 20,500 | ||||
Deferred revenue recognized | $ 14,700 | ||||
Gilead | Maximum | |||||
Agreements | |||||
Potential milestone payments | $ 1,425,000 |
Agreements - Gilead obligation
Agreements - Gilead obligation period (Details) - Gilead - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 19, 2018 |
Agreements | ||
Contract liability | $ 67.4 | $ 62.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | ||
Agreements | ||
Expected to recognize remaining deferred revenue | 2 years |
Net Loss per Share - Basic and
Net Loss per Share - Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Loss per share | ||
Net loss | $ (51,000) | $ (49,326) |
Weighted average common shares outstanding, basic and diluted (in shares) | 27,537,939 | 15,655,293 |
Net loss per share, basic and diluted (in dollars per share) | $ (1.85) | $ (3.15) |
Net Loss per Share - Anti-dilut
Net Loss per Share - Anti-dilutive (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Anti-dilutive securities | ||
Anti-dilutive securities excluded from the calculation of net loss per share | 2,711,356 | 2,299,735 |
Restricted common stock | ||
Anti-dilutive securities | ||
Anti-dilutive securities excluded from the calculation of net loss per share | 302,360 | 664,174 |
Warrant | ||
Anti-dilutive securities | ||
Anti-dilutive securities excluded from the calculation of net loss per share | 7,614 | 7,614 |
Stock options | ||
Anti-dilutive securities | ||
Anti-dilutive securities excluded from the calculation of net loss per share | 2,401,382 | 1,627,947 |
Retirement Plan (Details)
Retirement Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Retirement Plan | ||
Company contributions | $ 0 | $ 0 |