Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 01, 2021 | Jun. 30, 2020 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 001-38501 | ||
Entity Registrant Name | SCHOLAR ROCK HOLDING CORP | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 82-3750435 | ||
Entity Address, Address Line One | 301 Binney Street, 3rd Floor | ||
Entity Address, City or Town | Cambridge | ||
Entity Address, State or Province | MA | ||
Entity Address, Postal Zip Code | 02142 | ||
City Area Code | 857 | ||
Local Phone Number | 259-3860 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | SRRK | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 339.8 | ||
Entity Common Stock, Shares Outstanding | 34,262,713 | ||
Entity Central Index Key | 0001727196 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 160,358 | $ 36,308 |
Marketable securities | 180,673 | 121,140 |
Accounts receivable | 25,000 | |
Prepaid expenses and other current assets | 3,373 | 2,719 |
Total current assets | 344,404 | 185,167 |
Property and equipment, net | 8,121 | 4,171 |
Operating lease right-of-use asset | 32,261 | 4,447 |
Restricted cash | 2,498 | 2,498 |
Other long-term assets | 1,021 | 98 |
Total assets | 388,305 | 196,381 |
Current liabilities: | ||
Accounts payable | 3,409 | 1,130 |
Accrued expenses | 14,958 | 9,610 |
Operating lease liability | 5,366 | 1,135 |
Deferred revenue | 18,816 | 20,923 |
Other current liabilities | 15 | 16 |
Total current liabilities | 42,564 | 32,814 |
Long-term portion of operating lease liability | 27,093 | 4,168 |
Long-term debt | 24,680 | |
Other long-term liabilities | 5 | 9 |
Long-term portion of deferred revenue | 33,193 | 46,489 |
Total liabilities | 127,535 | 83,480 |
Commitments and contingencies (Note 11) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized at December 31, 2020 and December 31, 2019; no shares issued and outstanding at December 31, 2020 and December 31, 2019 | ||
Common stock, $0.001 par value; 150,000,000 shares authorized and 34,152,470 shares issued and outstanding as of December 31, 2020; 150,000,000 shares authorized and 29,792,922 shares issued and outstanding as of December 31, 2019 | 34 | 30 |
Additional paid-in capital | 505,069 | 270,682 |
Accumulated other comprehensive income (loss) | (2) | 37 |
Accumulated deficit | (244,331) | (157,848) |
Total stockholders' equity | 260,770 | 112,901 |
Total liabilities and stockholders' equity | $ 388,305 | $ 196,381 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
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 | 34,152,470 | 29,792,922 |
Common stock, shares outstanding | 34,152,470 | 29,792,922 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||
Revenue | $ 15,403 | $ 20,492 |
Operating expenses: | ||
Research and development | 74,062 | 54,217 |
General and administrative | 28,219 | 20,817 |
Total operating expenses | 102,281 | 75,034 |
Loss from operations | (86,878) | (54,542) |
Other income (expense), net | 395 | 3,542 |
Net loss | $ (86,483) | $ (51,000) |
Net loss per share, basic and diluted | $ (2.81) | $ (1.85) |
Weighted average common shares outstanding, basic and diluted | 30,734,109 | 27,537,939 |
Comprehensive loss: | ||
Net loss | $ (86,483) | $ (51,000) |
Other comprehensive income (loss): | ||
Unrealized gain (loss) on marketable securities | (39) | 45 |
Total other comprehensive income (loss) | (39) | 45 |
Comprehensive loss | $ (86,522) | $ (50,955) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total |
Balance at beginning at Dec. 31, 2018 | $ 26 | $ 213,453 | $ (8) | $ (106,848) | $ 106,623 |
Balance at beginning (in shares) at Dec. 31, 2018 | 26,217,701 | ||||
Increase (decrease) in Stockholders' Equity | |||||
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, net of issuance costs (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 | ||||
Increase (decrease) in Stockholders' Equity | |||||
Unrealized gain (loss) on marketable securities | (39) | (39) | |||
Sale of common shares, net of issuance costs | $ 4 | 215,918 | 215,922 | ||
Sale of common shares, net of issuance costs (in shares) | 3,717,948 | ||||
Restricted shares forfeited during the period (in shares) | (42,010) | ||||
Exercise of stock options | 7,294 | 7,294 | |||
Exercise of stock options (in shares) | 676,649 | ||||
Equity-based compensation expense | 11,175 | 11,175 | |||
Exercise of warrants (in shares) | 6,961 | ||||
Net Loss | (86,483) | (86,483) | |||
Balance at end at Dec. 31, 2020 | $ 34 | $ 505,069 | $ (2) | $ (244,331) | $ 260,770 |
Balance at end (in shares) at Dec. 31, 2020 | 34,152,470 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (86,483) | $ (51,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,491 | 1,303 |
Amortization of debt discount and debt issuance costs | 58 | |
Gain or loss on sale of property and equipment | 28 | (8) |
Equity-based compensation | 11,175 | 7,972 |
Amortization/accretion of investment securities | (162) | (1,390) |
Non-cash operating lease expense | 2,380 | 997 |
Deferred payroll tax credit | 176 | |
Change in operating assets and liabilities: | ||
Accounts receivable | 25,000 | (25,000) |
Prepaid expenses and other current assets | (3,361) | (739) |
Other assets | (923) | (98) |
Accounts payable | 2,101 | (1,342) |
Accrued expenses | 5,089 | 2,453 |
Operating lease liabilities | (1,261) | (888) |
Deferred revenue | (15,403) | 4,508 |
Other liabilities | (59) | |
Net cash used in operating activities | (60,271) | (63,115) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (4,088) | (3,115) |
Purchases of marketable securities | (200,110) | (235,417) |
Sales and maturities of marketable securities | 140,700 | 176,288 |
Proceeds from sale of property and equipment | 8 | |
Net cash used in investing activities | (63,498) | (62,236) |
Cash flows from financing activities: | ||
Principal payments on debt | (365) | |
Proceeds from debt | 24,622 | |
Proceeds from sale of common shares and pre-funded warrants, net of issuance costs | 215,922 | 48,348 |
Proceeds from stock option exercises | 7,294 | 913 |
Other | (19) | (13) |
Net cash provided by financing activities | 247,819 | 48,883 |
Net increase (decrease) in cash and cash equivalents and restricted cash | 124,050 | (76,468) |
Cash and cash equivalents and restricted cash, beginning of period | 38,806 | 115,274 |
Cash and cash equivalents and restricted cash, end of period | 162,856 | 38,806 |
Supplemental disclosure of non-cash items: | ||
Property and equipment purchases in accounts payable and accrued expenses | 1,368 | |
Operating lease right-of-use asset obtained in exchange for operating lease obligation | 31,286 | $ 5,444 |
Supplemental cash flow information: | ||
Cash paid for interest | $ 251 |
Nature of the Business and Basi
Nature of the Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2020 | |
Nature of the Business and Basis of Presentation | |
Nature of the Business and Basis of Presentation | 1. Nature of the Business and Basis of Presentation Organization Scholar Rock Holding Corporation and its subsidiaries (collectively, 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, apitegromab (formerly SRK-015), is a highly selective fully human, monoclonal antibody, with a unique mechanism of action that results in the inhibition of the activation of the growth factor, myostatin, in skeletal muscle. Apitegromab is being developed as a potential first muscle-directed therapy for the treatment of spinal muscular atrophy (“SMA”). Apitegromab 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. In October 2020, the Company announced positive six-month interim analysis results from the TOPAZ trial. 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 antibody therapies. SRK-181 is a potent and highly selective inhibitor of the activation of latent transforming growth factor beta-1 (“TGFβ1”). In May 2020, the Company announced the initiation of patient dosing in our DRAGON 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, and fibrosis. 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, a secondary offering in June 2019, and a follow-on offering of common stock and pre-funded warrants completed in November 2020 (Note 8), 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 product candidates. 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, 2020 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, 2020 | |
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. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. 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, 2020 and 2019, 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, 2020 2019 Cash and cash equivalents $ 160,358 $ 36,308 Restricted cash 2,498 2,498 $ 162,856 $ 38,806 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, 2020 or 2019. 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. 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, , which represent a collaborative relationship and not a customer relationship, 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 – Research and Development Services – Exclusive Licenses Customer Options – Milestone Payments – 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 a complete discussion of accounting for collaboration revenues, see Note 13, 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 drug 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 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. 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 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. 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, 2020 and 2019. 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, including pre-funded warrants and 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 restricted common stock, warrants, pre-funded warrants, and stock options that are outstanding during the period. Income Taxes Income taxes 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, 2020. 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 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, 2020 and 2019, 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. Recently Adopted 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 Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 and 2019 (in thousands): Fair Value Measurements at December 31, 2020 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 119,841 $ 119,841 $ — $ — U.S. Treasury obligations, included in cash and cash equivalents 9,998 $ 9,998 $ — $ — Marketable securities: U.S. Treasury obligations 180,673 180,673 — — Total assets $ 310,512 $ 310,512 $ — $ — 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 $ — $ — 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, 2020 and 2019. There were no transfers of assets between fair value measurement levels during the years ended December 31, 2020 and 2019. 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, 2020 and 2019, due to their short-term nature. The Company believes the terms of its debt reflect current market conditions for an instrument with similar terms and maturity, therefore the carrying value of the Company's debt approximates its fair value based on Level 3 of the fair value hierarchy. 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. On November 13, 2020, the warrant for 7,614 shares of the Company’s common stock was exercised at a price of $3.94 per share in a cashless transaction resulting in the issuance of 6,961 shares. |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 2020 | |
Marketable Securities | |
Marketable Securities | 4. Marketable Securities The following table summarizes the Company’s investments as of December 31, 2020 (in thousands): Gross Amortized Unrealized Estimated Cost Gains Losses Fair Value Marketable securities available-for-sale: U.S. Treasury obligations $ 180,675 $ 7 $ (9) $ 180,673 Total available-for-sale securities $ 180,675 $ 7 $ (9) $ 180,673 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 aggregate fair value of marketable securities with unrealized losses was $45.7 million and $19.6 million at December 31, 2020 and 2019, respectively. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2020 | |
Property and Equipment, Net | |
Property and Equipment, Net | 5. Property and Equipment, Net At December 31, 2020 and 2019, property and equipment consists of the following (in thousands): December 31, December 31, 2020 2019 Laboratory equipment $ 5,359 $ 5,432 Leasehold improvements 1,579 1,580 Computer equipment & software 461 423 Furniture & fixtures 224 219 Machinery & equipment 75 75 Construction in progress 5,282 — 12,980 7,729 Less: Accumulated depreciation and amortization (4,859) (3,558) $ 8,121 $ 4,171 Depreciation and amortization expense was $1.5 million and $1.3 million for the years ended December 31, 2020 and 2019, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Expenses | |
Accrued Expenses | 6. Accrued Expenses At December 31, 2020 and 2019, accrued expenses consist of the following (in thousands): As of December 31, December 31, 2020 2019 Accrued payroll and related expenses $ 6,663 $ 4,380 Accrued external research and development expense 5,387 4,088 Accrued payable for property and equipment 1,291 — Accrued professional and consulting expense 1,141 929 Accrued other 476 213 $ 14,958 $ 9,610 |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2020 | |
Preferred Stock | |
Preferred Stock | 7. 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. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2020 | |
Common Stock. | |
Common Stock | 8. Common Stock On October 28, 2020, the Company entered into an underwriting agreement relating to the issuance and sale of an aggregate of 3,717,948 shares of its common stock at $39.00 per share and pre-funded warrants to purchase 2,179,487 shares of its common stock. The price of each pre-funded warrant was $38.9999 , which The shares of common stock sold include 769,230 shares pursuant to the overallotment option granted by the Company to the underwriters, which option was exercised in full. Total gross proceeds of the transaction was $230.0 million, including the proceeds from the option granted to the underwriters. The offering was made pursuant to the Company’s effective shelf registration on Form S-3. The offering closed on November 2, 2020 and the Company received approximately $215.9 million in net proceeds, after deducting underwriting discounts and commissions and offering expenses. The pre-funded warrants are exercisable at any time, do not expire, and meet the condition for equity classification and were therefore recorded as a component of stockholders’ equity within additional paid-in capital. No pre-funded warrants have been exercised as of December 31, 2020. 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. Shares Reserved For Future Issuance As of December 31, 2020, the Company had reserved common shares as follows: As of December 31, 2020 Common shares reserved for exercise of pre-funded warrants 2,179,487 Common shares reserved for future issuance under the 2018 ESPP 795,849 Common shares reserved for exercise of outstanding stock options under the 2017 and 2018 Plans 3,679,931 Common shares reserved for future issuance under the 2018 Plan 1,962,992 8,618,259 |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Equity-Based Compensation | |
Equity-Based Compensation | 9. Equity-Based Compensation Equity Plans As of December 31, 2020, 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. At December 31, 2020 there were 1,962,992 shares available to grant under the 2018 Plan. 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 to 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 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, 2020, no shares have been issued under the 2018 ESPP. At December 31, 2020 there were 795,849 shares available to grant under the 2018 Plan. Total Equity-Based Compensation Expense The Company recorded equity-based compensation expense related to all equity-based awards, which was allocated as follows in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2020 and 2019 (in thousands): Year Ended December 31, 2020 2019 Research and development expense $ 3,554 $ 2,425 General and administrative expense 7,621 5,547 $ 11,175 $ 7,972 Equity-based compensation during the year ended December 31, 2020 includes $1.5 million related to the modification of certain equity awards. 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 other equity awards. Restricted Stock The following table summarizes restricted common stock activity for the current year: Weighted Average Fair Value per Share Number of Shares at Issuance Restricted common stock as of December 31, 2019 302,360 $ 5.77 Granted — $ — Vested (202,381) $ 5.77 Forfeited (42,010) $ 5.77 Restricted common stock as of December 31, 2020 57,969 $ 5.77 As of December 31, 2020, the Company had unrecognized equity-based compensation expense of $0.3 million related to restricted stock issued to employees and directors, which is expected to be recognized over a period of 0.6 years. Stock Options The following table summarizes the Company’s stock option activity for the current year: Weighted Weighted Average Number of Average Remaining Aggregate Shares Exercise Price Contractual Term Intrinsic Value (in years) (in thousands) Outstanding as of December 31, 2019 2,401,382 $ 12.63 8.36 $ 6,523 Granted 2,388,340 $ 16.01 Exercised (676,649) $ 10.78 Cancelled (433,142) $ 14.38 Outstanding as of December 31, 2020 3,679,931 $ 14.96 8.01 $ 123,600 Options exercisable as of December 31, 2020 900,142 $ 13.72 7.76 $ 31,332 Using the Black-Scholes option pricing model, the weighted average fair value of options granted during the year ended December 31, 2020 was $11.29. The following assumptions were used in determining the fair value of options granted in the year ended December 31, 2020: Year Ended December 31, 2020 2019 Risk-free interest rate 0.92 % 2.31 % Expected dividend yield 0.0 % 0.0 % Expected term (years to liquidity) 6.21 6.20 Expected volatility 82.09 % 79.50 % As of December 31, 2020, the Company has unrecognized equity-based compensation expense related to its stock options of $24.7 million which the Company expects to recognize over the remaining weighted-average vesting period of 2.7 years. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Income Taxes | 10. Income Taxes The Company has not recorded a current or deferred tax provision for the years ended December 31, 2020 and 2019. 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, 2020 2019 Tax effected at statutory rate 21.0 % 21.0 % State taxes 6.8 7.2 Stock compensation 1.6 (1.7) Non deductible expenses (2.4) (0.4) Federal research and development credits 7.9 7.8 Other (0.5) — Change in valuation allowance (34.4) (33.9) — % — % Deferred tax assets (liabilities) consist of the following at December 31, 2020 and 2019 (in thousands): As of December 31, 2020 2019 Deferred tax assets: Reserve and accruals $ 2,635 $ 1,704 Net operating loss carryforwards 46,112 26,932 Operating lease liability 9,196 1,448 Deferred revenue 14,194 13,173 Tax credits 17,423 9,569 Stock based compensation 1,892 1,049 Total gross deferred tax assets 91,452 53,875 Valuation allowance (81,980) (52,260) Total deferred tax assets 9,472 1,615 Total deferred tax liabilities: Operating lease right-of-use asset (8,805) (1,214) Fixed and intangible assets (667) (401) Total deferred tax liabilities (9,472) (1,615) 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, 2020 and 2019. The valuation allowance for deferred tax assets increased by $29.7 million and $17.3 million in 2020 and 2019, 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 additional tax credit carryforwards generated. As of December 31, 2020, the Company had approximately $168.4 million and $170.1 million of Federal and State operating loss carryforwards respectively, which begin to expire in 2032, except for the $117.9 million of the Company’s federal net operating loss carryforwards 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, 2020, the Company also had federal and state credit carryovers of $15.4 million and $2.6 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, 2020 and 2019, 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, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 11. Commitments and Contingencies Operating Leases 620 Memorial Lease In March 2015, the Company entered into a 5-year lease of office and laboratory space 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 covers approximately 20,751 square feet and expires in September 2023. Annual rent payments, including the Expansion Space, increase from $1.4 million to $1.7 million over the term of the Amended 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. On October 5, 2020, the Company entered into a Sublease Agreement (the “Sublease”) with Orna Therapeutics, Inc. (the “Subtenant”) to sublease the space covered by the Amended Lease at 620 Memorial Drive, Cambridge, Massachusetts. The Sublease term commences on February 1, 2021 and ends on August 31, 2023, unless terminated earlier. The Sublease provides for initial annual base rent of approximately $1.9 million. The Subtenant is obligated to pay for certain costs, taxes and operating expenses, subject to certain exclusions. The Sublease is subordinate to that certain Indenture of Lease, dated March 5, 2015, by and between 620 Memorial Leasehold LLC and Scholar Rock, Inc., as amended. 301 Binney Lease In November 2019, the Company entered into a lease of office and laboratory space at 301 Binney Street in Cambridge, Massachusetts to be used as its new corporate headquarters. 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 was 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. Under this lease, the Company will receive lease incentives of $14.1 million in the form of an allowance for tenant improvements related to the design and build out of the space. In connection with the 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 reached in September 2020. Other information related to the Company’s leases (excluding the Company’s sublease) is as follows (in thousands, except lease term and discount rate): For Year Ended December 31, 2020 Lease Cost: Operating lease cost $ 3,229 Variable lease cost 1,027 Total lease cost $ 4,256 For Year Ended December 31, 2020 Other information: Operating cash flows used for operating leases (1) $ 2,111 Weighted average remaining lease term 4.4 years Weighted average incremental borrowing rate 7.5 % (1) 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, 2020 (in thousands): Year Ending December 31, 2021 (1) $ 7,657 2022 9,196 2023 9,070 2024 8,064 2025 4,498 Total lease payments 38,485 Less imputed interest (6,026) Total operating lease liabilities $ 32,459 (1) The Company recorded approximately $3.2 million and $1.4 million in rent expense for the years ended December 31, 2020 and 2019, respectively. Specifica Antibody Library On December 20, 2019 (the “Effective Date”), the Company entered into a Library Development and Transfer Agreement with Specifica Inc. (“Specifica”), whereby Specifica is responsible for developing and delivering a customized antibody display library (the “Library”) for the Company to use to identify antibodies for further research, development, and commercialization. As of December 31, 2020 the Company has paid $1.2 million of the total $3.7 million in fees expected to be paid through 2023 related to the Library. 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, 2020 and 2019. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt | |
Debt | 12. Debt On October 16, 2020 (the “Closing Date”) the Company entered into a Loan and Security Agreement with Oxford Finance LLC and Silicon Valley Bank (“SVB”) for $50.0 million (the “Loan and Security Agreement”). The first tranche of $25.0 million was funded on the Closing Date. The second $25.0 million tranche is available through December 31, 2021 upon dosing of the first patient in a Phase 3 trial for apitegromab and dosing of the first patient in Part B of the DRAGON Phase 1 trial for SRK-181. The Loan and Security Agreement will mature on May 1, 2025 and requires interest only payments for the first two years. The interest rate on the unpaid principal will be the greater of the Wall Street Journal prime rate plus 4.60% or 7.85% per annum. Prepayment is permitted and may include either a 2% or 3% fee (of the principal amount being prepaid), depending on when the prepayment is made. The Company is also required to make a final payment equal to 4% of the original principal amount. The following table shows required payments, excluding interest, during the next five years on debt outstanding at December 31, 2020 (in thousands): Year Ending December 31, Total future payments 2021 $ — 2022 833 2023 10,000 2024 10,000 2025 5,167 Total payments $ 26,000 The Company incurred costs on behalf of the lender recorded as a debt discount of $0.3 million and incurred debt issuance costs of $0.1 million, both of which are recorded as a deduction from the carrying amount of the debt and are being amortized as interest expense over the term of the loan. The final payment fee will be treated as an additional debt discount and accreted to the debt balance over the term. In August 2015, the Company entered into a Loan and Security Agreement with 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 Company made the final payments on the loan in June 2019. For the years ended December 31, 2020 and 2019, the Company recorded total interest expense for these loans of $0.4 million and $27,000, respectively. |
Agreements
Agreements | 12 Months Ended |
Dec. 31, 2020 | |
Agreements | |
Agreements | 13. Agreements Collaboration with Gilead On December 19, 2018 (the “Effective Date”), the Company entered into a Master Collaboration Agreement (the “Gilead Collaboration Agreement”) with Gilead to discover and develop specific inhibitors of TGFβ activation focused on the treatment of fibrotic diseases. Under the collaboration, Gilead has exclusive options to license worldwide rights to product candidates that emerge from three of the Company’s TGFβ programs (each a “Gilead Program”). Pursuant to the Gilead Collaboration Agreement, the Company is responsible for antibody discovery and preclinical research through product candidate nomination, after which, upon exercising the option for a Gilead Program, Gilead will be responsible for the program’s preclinical and clinical development and commercialization. Such option may be exercised by Gilead at any time from the Effective Date through a date that is 90 days following the expiration of the Research Collaboration Term for a given Gilead Program, or until termination of the Gilead Program, whichever is earlier (the “Option Exercise Period”). 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. 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, 2020. A $25.0 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 $25.0 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 the year ended December 31, 2020, the Company recognized $15.4 million in revenue in the Company’s consolidated statements of operations and comprehensive loss under the Gilead Collaboration Agreement, compared to $20.5 million in the year ended December 31, 2019. The aggregate amount of the transaction price allocated to the Company’s unsatisfied performance obligations and recorded in deferred revenue at December 31, 2020 is $52.0 million. The Company will recognize the deferred revenue related to the research and development services based on a cost input method, over the remaining research term for each respective Gilead Program, which is a maximum of 1 year as of December 31, 2020; 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. The deferred revenue related to the material rights will be recognized as options are exercised by Gilead or at the conclusion of the Option Exercise Period. |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Dec. 31, 2020 | |
Net Loss per Share | |
Net Loss per Share | 14. 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, 2020 December 31, 2019 Net loss $ (86,483) $ (51,000) Weighted average common shares outstanding, basic and diluted 30,734,109 27,537,939 Net loss per share, basic and diluted $ (2.81) $ (1.85) The weighted average number of common shares used in the basic and diluted net loss per share calculation include the pre-funded warrants issued in connection with the Company’s November 2, 2020 follow-on offering as the warrants are exercisable at any time for nominal cash consideration. 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, 2020 2019 Restricted common stock 57,969 302,360 Warrant — 7,614 Stock options 3,679,931 2,401,382 3,737,900 2,711,356 |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Plan | |
Retirement Plan | 15. 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. Effective, January 1, 2020, the Company adopted a policy to match 50% of the employee contributions to the 401(k) plan up to a maximum of 6% of the participating employee’s eligible earnings, resulting in a maximum company match of 3% of the participating employee’s eligible earnings subject to statutory limitations. The Company recognized $0.5 million and $0 in expense related to the match during the years ended December 31, 2020 and 2019, respectively. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
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. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. |
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, 2020 and 2019, 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, 2020 2019 Cash and cash equivalents $ 160,358 $ 36,308 Restricted cash 2,498 2,498 $ 162,856 $ 38,806 |
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, 2020 or 2019. |
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. 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, , which represent a collaborative relationship and not a customer relationship, 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 – Research and Development Services – Exclusive Licenses Customer Options – Milestone Payments – 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 a complete discussion of accounting for collaboration revenues, see Note 13, 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 drug 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 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. 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 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. |
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, 2020 and 2019. |
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, including pre-funded warrants and 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 restricted common stock, warrants, pre-funded warrants, and stock options that are outstanding during the period. |
Income Taxes | Income Taxes Income taxes 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, 2020. 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, 2020 and 2019, 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. |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted 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 Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Schedule of reconciles of cash and cash equivalents and restricted cash | As of December 31, 2020 2019 Cash and cash equivalents $ 160,358 $ 36,308 Restricted cash 2,498 2,498 $ 162,856 $ 38,806 |
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, 2020 | |
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, 2020 and 2019 (in thousands): Fair Value Measurements at December 31, 2020 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 119,841 $ 119,841 $ — $ — U.S. Treasury obligations, included in cash and cash equivalents 9,998 $ 9,998 $ — $ — Marketable securities: U.S. Treasury obligations 180,673 180,673 — — Total assets $ 310,512 $ 310,512 $ — $ — 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 $ — $ — |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Marketable Securities | |
Summary of investments | The following table summarizes the Company’s investments as of December 31, 2020 (in thousands): Gross Amortized Unrealized Estimated Cost Gains Losses Fair Value Marketable securities available-for-sale: U.S. Treasury obligations $ 180,675 $ 7 $ (9) $ 180,673 Total available-for-sale securities $ 180,675 $ 7 $ (9) $ 180,673 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 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property and Equipment, Net | |
Summary of property and equipment | At December 31, 2020 and 2019, property and equipment consists of the following (in thousands): December 31, December 31, 2020 2019 Laboratory equipment $ 5,359 $ 5,432 Leasehold improvements 1,579 1,580 Computer equipment & software 461 423 Furniture & fixtures 224 219 Machinery & equipment 75 75 Construction in progress 5,282 — 12,980 7,729 Less: Accumulated depreciation and amortization (4,859) (3,558) $ 8,121 $ 4,171 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Expenses | |
Summary of accrued expenses | At December 31, 2020 and 2019, accrued expenses consist of the following (in thousands): As of December 31, December 31, 2020 2019 Accrued payroll and related expenses $ 6,663 $ 4,380 Accrued external research and development expense 5,387 4,088 Accrued payable for property and equipment 1,291 — Accrued professional and consulting expense 1,141 929 Accrued other 476 213 $ 14,958 $ 9,610 |
Common Stock (Tables)
Common Stock (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Common Stock. | |
Schedule of reserved common stock | As of December 31, 2020 Common shares reserved for exercise of pre-funded warrants 2,179,487 Common shares reserved for future issuance under the 2018 ESPP 795,849 Common shares reserved for exercise of outstanding stock options under the 2017 and 2018 Plans 3,679,931 Common shares reserved for future issuance under the 2018 Plan 1,962,992 8,618,259 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity-Based Compensation | |
Summary of allocation of equity-based compensation | The Company recorded equity-based compensation expense related to all equity-based awards, which was allocated as follows in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2020 and 2019 (in thousands): Year Ended December 31, 2020 2019 Research and development expense $ 3,554 $ 2,425 General and administrative expense 7,621 5,547 $ 11,175 $ 7,972 |
Summary of restricted common stock activity | Weighted Average Fair Value per Share Number of Shares at Issuance Restricted common stock as of December 31, 2019 302,360 $ 5.77 Granted — $ — Vested (202,381) $ 5.77 Forfeited (42,010) $ 5.77 Restricted common stock as of December 31, 2020 57,969 $ 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, 2019 2,401,382 $ 12.63 8.36 $ 6,523 Granted 2,388,340 $ 16.01 Exercised (676,649) $ 10.78 Cancelled (433,142) $ 14.38 Outstanding as of December 31, 2020 3,679,931 $ 14.96 8.01 $ 123,600 Options exercisable as of December 31, 2020 900,142 $ 13.72 7.76 $ 31,332 |
Schedule of fair value assumptions | Year Ended December 31, 2020 2019 Risk-free interest rate 0.92 % 2.31 % Expected dividend yield 0.0 % 0.0 % Expected term (years to liquidity) 6.21 6.20 Expected volatility 82.09 % 79.50 % |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2019 Tax effected at statutory rate 21.0 % 21.0 % State taxes 6.8 7.2 Stock compensation 1.6 (1.7) Non deductible expenses (2.4) (0.4) Federal research and development credits 7.9 7.8 Other (0.5) — Change in valuation allowance (34.4) (33.9) — % — % |
Summary of deferred tax assets (liabilities) | Deferred tax assets (liabilities) consist of the following at December 31, 2020 and 2019 (in thousands): As of December 31, 2020 2019 Deferred tax assets: Reserve and accruals $ 2,635 $ 1,704 Net operating loss carryforwards 46,112 26,932 Operating lease liability 9,196 1,448 Deferred revenue 14,194 13,173 Tax credits 17,423 9,569 Stock based compensation 1,892 1,049 Total gross deferred tax assets 91,452 53,875 Valuation allowance (81,980) (52,260) Total deferred tax assets 9,472 1,615 Total deferred tax liabilities: Operating lease right-of-use asset (8,805) (1,214) Fixed and intangible assets (667) (401) Total deferred tax liabilities (9,472) (1,615) Total net deferred tax assets $ — $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies | |
Summary of lease costs | Other information related to the Company’s leases (excluding the Company’s sublease) is as follows (in thousands, except lease term and discount rate): For Year Ended December 31, 2020 Lease Cost: Operating lease cost $ 3,229 Variable lease cost 1,027 Total lease cost $ 4,256 For Year Ended December 31, 2020 Other information: Operating cash flows used for operating leases (1) $ 2,111 Weighted average remaining lease term 4.4 years Weighted average incremental borrowing rate 7.5 % (1) |
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, 2020 (in thousands): Year Ending December 31, 2021 (1) $ 7,657 2022 9,196 2023 9,070 2024 8,064 2025 4,498 Total lease payments 38,485 Less imputed interest (6,026) Total operating lease liabilities $ 32,459 (1) |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt | |
Schedule of future principal payments of loan | The following table shows required payments, excluding interest, during the next five years on debt outstanding at December 31, 2020 (in thousands): Year Ending December 31, Total future payments 2021 $ — 2022 833 2023 10,000 2024 10,000 2025 5,167 Total payments $ 26,000 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 December 31, 2019 Net loss $ (86,483) $ (51,000) Weighted average common shares outstanding, basic and diluted 30,734,109 27,537,939 Net loss per share, basic and diluted $ (2.81) $ (1.85) |
Summary of anti-dilutive securities | Year Ended December 31, 2020 2019 Restricted common stock 57,969 302,360 Warrant — 7,614 Stock options 3,679,931 2,401,382 3,737,900 2,711,356 |
Nature of the Business (Details
Nature of the Business (Details) | 12 Months Ended |
Dec. 31, 2020item | |
Nature of the Business and Basis of Presentation | |
Number of collaborations | 2 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Risk (Details) $ in Billions | Dec. 31, 2020USD ($) |
Summary of Significant Accounting Policies | |
Off-balance sheet risk | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Cash and cash equivalents and restricted cash | |||
Letters of Credit Outstanding, Amount | $ 2,500 | ||
Cash and cash equivalents | 160,358 | $ 36,308 | |
Restricted cash | 2,498 | 2,498 | |
Total | $ 162,856 | $ 38,806 | $ 115,274 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020USD ($)segment | Dec. 31, 2019USD ($) | |
Number of operating segments | segment | 1 | |
Adjustment for other than temporary decline in fair value | $ | $ 0 | $ 0 |
Stock options | ||
Expected dividend yield | 0.00% | 0.00% |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities - (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 13, 2020 | Dec. 31, 2020 | Oct. 28, 2020 | Dec. 31, 2019 |
Marketable securities: | ||||
Warrant to purchase preferred stock converted into warrant to purchase common stock | 7,614 | 2,179,487 | ||
Warrant purchase price (in dollars per share) | $ 3.94 | $ 0.0001 | ||
Conversion of stock shares issued | 6,961 | |||
Recurring | ||||
Marketable securities: | ||||
U.S. Treasury obligations | $ 180,673 | $ 121,140 | ||
Total assets | 310,512 | 156,036 | ||
Recurring | Money market funds | ||||
Assets: | ||||
Cash and cash equivalents | 119,841 | 34,896 | ||
Recurring | U.S. Treasury obligations | ||||
Assets: | ||||
Cash and cash equivalents | 9,998 | |||
Recurring | Level 1 | ||||
Marketable securities: | ||||
U.S. Treasury obligations | 180,673 | 121,140 | ||
Total assets | 310,512 | 156,036 | ||
Recurring | Level 1 | Money market funds | ||||
Assets: | ||||
Cash and cash equivalents | 119,841 | $ 34,896 | ||
Recurring | Level 1 | U.S. Treasury obligations | ||||
Assets: | ||||
Cash and cash equivalents | $ 9,998 |
Marketable Securities - Summary
Marketable Securities - Summary of Investments (Details) $ in Thousands | Dec. 31, 2020USD ($)security | Dec. 31, 2019USD ($)security |
Marketable securities available-for-sale | ||
Amortization Cost | $ 180,675 | $ 121,103 |
Gross Unrealized Gains | 7 | 39 |
Gross Unrealized Losses | (9) | (2) |
Estimated Fair Value | 180,673 | 121,140 |
Aggregate fair value of marketable securities with unrealized gains (losses) position for less than a year | $ 45,700 | $ 19,600 |
Number of investments in an unrealized loss position for less than a year | security | 5 | 3 |
U.S. Treasury obligations | ||
Marketable securities available-for-sale | ||
Amortization Cost | $ 180,675 | $ 121,103 |
Gross Unrealized Gains | 7 | 39 |
Gross Unrealized Losses | (9) | (2) |
Estimated Fair Value | $ 180,673 | $ 121,140 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property and Equipment, Net | ||
Property and equipment, gross | $ 12,980 | $ 7,729 |
Less: Accumulated depreciation and amortization | (4,859) | (3,558) |
Total property and equipment, net | 8,121 | 4,171 |
Depreciation and amortization expense | 1,491 | 1,303 |
Laboratory equipment | ||
Property and Equipment, Net | ||
Property and equipment, gross | 5,359 | 5,432 |
Leasehold improvements | ||
Property and Equipment, Net | ||
Property and equipment, gross | 1,579 | 1,580 |
Computer equipment & software | ||
Property and Equipment, Net | ||
Property and equipment, gross | 461 | 423 |
Furniture & fixtures | ||
Property and Equipment, Net | ||
Property and equipment, gross | 224 | 219 |
Machinery & equipment | ||
Property and Equipment, Net | ||
Property and equipment, gross | 75 | $ 75 |
Construction in progress | ||
Property and Equipment, Net | ||
Property and equipment, gross | $ 5,282 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued Expenses | ||
Accrued payroll and related expenses | $ 6,663 | $ 4,380 |
Accrued external research and development expense | 5,387 | 4,088 |
Accrued payable for property and equipment | 1,291 | |
Accrued professional and consulting expense | 1,141 | 929 |
Accrued other | 476 | 213 |
Accrued expenses | $ 14,958 | $ 9,610 |
Common Stock - (Details)
Common Stock - (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 02, 2020 | Oct. 28, 2020 | Jul. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Nov. 13, 2020 |
Subsidiary, Sale of Stock [Line Items] | ||||||
Sale of common shares, net of issuance costs (in shares) | 3,717,948 | 3,450,000 | ||||
Purchase price (in dollars per share) | $ 39 | $ 15 | ||||
Warrant to purchase | 2,179,487 | 7,614 | ||||
Pre-funded warrants (in dollars per share) | $ 38.9999 | |||||
Warrant purchase price (in dollars per share) | $ 0.0001 | $ 3.94 | ||||
Proceeds from stock before issuance costs | $ 230,000 | |||||
Proceeds from sale of common shares and pre-funded warrants, net of issuance costs | $ 215,900 | $ 215,922 | $ 48,348 | |||
Over-Allotment Option | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Sale of common shares, net of issuance costs (in shares) | 769,230 |
Common Stock - Reserved (Detail
Common Stock - Reserved (Details) | Dec. 31, 2020shares |
Class of Stock [Line Items] | |
Shares reserved for future issuance | 8,618,259 |
2018 ESPP | |
Class of Stock [Line Items] | |
Shares reserved for future issuance | 795,849 |
2018 Plan | |
Class of Stock [Line Items] | |
Shares reserved for future issuance | 1,962,992 |
Stock options | |
Class of Stock [Line Items] | |
Shares reserved for future issuance | 3,679,931 |
Warrant | |
Class of Stock [Line Items] | |
Shares reserved for future issuance | 2,179,487 |
Equity-Based Compensation - 201
Equity-Based Compensation - 2017 and 2018 Plan (Details) | May 11, 2018shares | Dec. 31, 2020itemshares | Dec. 31, 2017 |
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 | |||
Unused shares available to be granted (in shares) | 1,962,992 | ||
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 | ||
Vesting period | 4 years |
Equity-Based Compensation - 2_2
Equity-Based Compensation - 2018 ESPP (Details) - 2018 ESPP - shares | May 02, 2018 | Dec. 31, 2020 | 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 | ||
Unused shares available to be granted (in shares) | 795,849 |
Equity-Based Compensation - Exp
Equity-Based Compensation - Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity-based compensation | ||
Equity-based compensation expense | $ 11,175 | $ 7,972 |
Acceleration of equity awards expense | 600 | |
Modification of equity awards expense | 1,500 | 100 |
Research and development expense | ||
Equity-based compensation | ||
Equity-based compensation expense | 3,554 | 2,425 |
General and administrative expense | ||
Equity-based compensation | ||
Equity-based compensation expense | $ 7,621 | $ 5,547 |
Equity-Based Compensation - Res
Equity-Based Compensation - Restricted stock (Details) - Restricted common stock $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Number of unvested awards | |
Outstanding, beginning (in shares) | shares | 302,360 |
Vested (in shares) | shares | (202,381) |
Forfeited (in shares) | shares | (42,010) |
Outstanding, end (in shares) | shares | 57,969 |
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 | $ | $ 0.3 |
Period for recognition | 7 months 6 days |
Equity-Based Compensation - Sto
Equity-Based Compensation - Stock Options (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Units | ||
Outstanding, beginning (in shares) | 2,401,382 | |
Granted (in shares) | 2,388,340 | |
Exercised (in shares) | (676,649) | |
Cancelled (in shares) | (433,142) | |
Outstanding, end (in shares) | 3,679,931 | 2,401,382 |
Options exercisable, end (in shares) | 900,142 | |
Weighted Average Exercise Price | ||
Outstanding, beginning (in dollars per share) | $ 12.63 | |
Granted (in dollars per share) | 16.01 | |
Exercised (in dollars per share) | 10.78 | |
Cancelled (in dollars per share) | 14.38 | |
Outstanding, end (in dollars per share) | 14.96 | $ 12.63 |
Options exercisable, end (in dollars per share) | $ 13.72 | |
Stock options | ||
Weighted average remaining contractual term | 8 years 3 days | 8 years 4 months 9 days |
Weighted average remaining contractual term, exercisable | 7 years 9 months 3 days | |
Aggregate intrinsic value, beginning | $ 6,523 | |
Aggregate intrinsic value, end | 123,600 | $ 6,523 |
Aggregate intrinsic value, exercisable | $ 31,332 | |
Weighted average grant date fair value (in dollars per share) | $ 11.29 |
Equity-Based Compensation - Ass
Equity-Based Compensation - Assumptions (Details) - Stock options - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Assumptions used in determining the fair value of options | ||
Risk-free interest rate | 0.92% | 2.31% |
Expected dividend yield | 0.00% | 0.00% |
Expected term (years to liquidity) | 6 years 2 months 15 days | 6 years 2 months 12 days |
Expected volatility | 82.09% | 79.50% |
Unrecognized equity-based compensation expense | $ 24.7 | |
Period for recognition | 2 years 8 months 12 days |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Effective income tax rate | ||
Tax effected at statutory rate | 21.00% | 21.00% |
State taxes | 6.80% | 7.20% |
Stock compensation | 1.60% | (1.70%) |
Non deductible expenses | (2.40%) | (0.40%) |
Federal research and development credits | 7.90% | 7.80% |
Other | (0.50%) | |
Change in valuation allowance | (34.40%) | (33.90%) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Reserve and accruals | $ 2,635 | $ 1,704 |
Net operating loss carryforwards | 46,112 | 26,932 |
Operating lease liability | 9,196 | 1,448 |
Deferred revenue | 14,194 | 13,173 |
Tax credits | 17,423 | 9,569 |
Stock based compensation | 1,892 | 1,049 |
Total gross deferred tax assets | 91,452 | 53,875 |
Valuation allowance | (81,980) | (52,260) |
Total deferred tax assets | 9,472 | 1,615 |
Operating lease right-of-use asset | (8,805) | (1,214) |
Fixed and intangible assets | (667) | (401) |
Total deferred tax liabilities | $ (9,472) | $ (1,615) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Contingency | ||
Increase in valuation allowance for deferred tax assets | $ 29.7 | $ 17.3 |
Federal | ||
Income Tax Contingency | ||
Net operating loss carryforwards | 168.4 | |
Operating loss carryforwards without expiration date | 117.9 | |
Tax credit carryforward amount | 15.4 | |
State | ||
Income Tax Contingency | ||
Net operating loss carryforwards | 170.1 | |
Tax credit carryforward amount | $ 2.6 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | Oct. 05, 2020USD ($) | Nov. 30, 2019USD ($) | Feb. 28, 2018USD ($)ft² | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Mar. 31, 2015 |
Leased assets | ||||||
Rent for facility lease | $ 3,200 | $ 1,400 | ||||
Letter of credit | 2,500 | |||||
Lease Cost: | ||||||
Operating lease cost | 3,229 | |||||
Variable lease cost | 1,027 | |||||
Total lease cost | 4,256 | |||||
Operating cash flows used for operating leases | $ 2,111 | |||||
Weighted average remaining lease term | 4 years 4 months 24 days | |||||
Weighted average incremental borrowing rate | 7.50% | |||||
620 Memorial Drive, Cambridge MA | ||||||
Leased assets | ||||||
Term of lease | 5 years | |||||
Option to extend the term | true | |||||
Area of lease space | ft² | 20,751 | |||||
Renewal term | 5 years | |||||
Sublease annual base rent | $ 1,900 | |||||
620 Memorial Drive, Cambridge MA | Minimum | ||||||
Leased assets | ||||||
Rent for facility lease | $ 1,400 | |||||
620 Memorial Drive, Cambridge MA | Maximum | ||||||
Leased assets | ||||||
Rent for facility lease | $ 1,700 | |||||
301 Binney St, Cambridge MA | ||||||
Leased assets | ||||||
Option to extend the term | true | |||||
Renewal term | 2 years | |||||
Base rent | $ 6,900 | |||||
Annual upward adjustment (as a percent) | 3.50% | |||||
Incentive to lease | $ 14,100 | |||||
Letter of credit | $ 2,300 |
Commitments and Contingencies -
Commitments and Contingencies - Maturities (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Maturity analysis of the annual undiscounted cash flows | |
2021 | $ 7,657 |
2022 | 9,196 |
2023 | 9,070 |
2024 | 8,064 |
2025 | 4,498 |
Total lease payments | 38,485 |
Less imputed interest | (6,026) |
Total operating lease liabilities | 32,459 |
Payment made on commitment | 1,200 |
Payment commitment | $ 3,700 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Oct. 16, 2020 | Dec. 31, 2020 |
Debt | ||
Proceeds from credit facility | $ 24,622 | |
Loan and Security Agreement | ||
Debt | ||
Line of credit maximum | $ 50,000 | |
Proceeds from credit facility | 25,000 | |
Remaining borrowing capacity | $ 25,000 | |
Interest only period | 2 years | |
Variable rate (as a percent) | 7.85% | |
Final payment fee (as a percent) | 4.00% | |
Loan and Security Agreement | Minimum | ||
Debt | ||
Prepayment penalty (as a percent) | 2.00% | |
Loan and Security Agreement | Maximum | ||
Debt | ||
Prepayment penalty (as a percent) | 3.00% | |
Loan and Security Agreement | Wall Street Journal prime rate | ||
Debt | ||
Variable rate (as a percent) | 4.60% |
Debt - Future Payments (Details
Debt - Future Payments (Details) - USD ($) | Oct. 16, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Aug. 31, 2015 |
Debt | ||||
2022 | $ 833,000 | |||
2023 | 10,000,000 | |||
2024 | 10,000,000 | |||
2025 | 5,167,000 | |||
Total payments | 26,000,000 | |||
Interest expense | $ 400,000 | $ 27,000 | ||
Loan and Security Agreement | ||||
Debt | ||||
Debt discount | $ 300,000 | |||
Debt issuance costs payment | 100,000 | |||
Line of credit maximum | $ 50,000,000 | |||
SVB | ||||
Debt | ||||
Line of credit maximum | $ 2,000,000 | |||
Amount outstanding | $ 2,000,000 |
Agreements - Gilead (Details)
Agreements - Gilead (Details) $ in Thousands | Dec. 19, 2018item | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Agreements | |||
Revenue earned | $ 15,403 | $ 20,492 | |
Accounts receivable | 25,000 | ||
Gilead | |||
Agreements | |||
Number of programs | item | 3 | ||
Option exercise period | 90 days | ||
Revenue proceeds | 25,000 | ||
Revenue earned | $ 15,400 | $ 20,500 |
Agreements - Gilead obligation
Agreements - Gilead obligation period (Details) - Gilead $ in Millions | Dec. 31, 2020USD ($) |
Agreements | |
Contract liability | $ 52 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Agreements | |
Expected to recognize remaining deferred revenue | 1 year |
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, 2020 | Dec. 31, 2019 | |
Loss per share | ||
Net loss | $ (86,483) | $ (51,000) |
Weighted average common shares outstanding, basic and diluted | 30,734,109 | 27,537,939 |
Net loss per share, basic and diluted | $ (2.81) | $ (1.85) |
Net Loss per Share - Anti-dilut
Net Loss per Share - Anti-dilutive (Details) - shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Anti-dilutive securities | ||
Anti-dilutive securities excluded from the calculation of net loss per share | 3,737,900 | 2,711,356 |
Restricted common stock | ||
Anti-dilutive securities | ||
Anti-dilutive securities excluded from the calculation of net loss per share | 57,969 | 302,360 |
Warrant | ||
Anti-dilutive securities | ||
Anti-dilutive securities excluded from the calculation of net loss per share | 7,614 | |
Stock options | ||
Anti-dilutive securities | ||
Anti-dilutive securities excluded from the calculation of net loss per share | 3,679,931 | 2,401,382 |
Retirement Plan (Details)
Retirement Plan (Details) - USD ($) $ in Millions | Jan. 01, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Retirement Plan | |||
Matching contribution 401(k) | 50.00% | ||
Matching contribution per employee | 6.00% | ||
Employer matching contribution | 3.00% | ||
Company contributions | $ 0.5 | $ 0 |