Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document And Entity Information [Abstract] | |
Trading Symbol | ORTX |
Entity Registrant Name | ORCHARD THERAPEUTICS PLC |
Entity Central Index Key | 0001748907 |
Entity Current Reporting Status | Yes |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Well-known Seasoned Issuer | No |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | FY |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2018 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 85,865,557 |
Entity Shell Company | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 335,844 | $ 89,856 |
Trade and other receivables | 2,153 | 1,247 |
Prepaid expenses and other current assets | 6,935 | 2,247 |
Research and development tax credit receivable | 10,585 | 871 |
Total current assets | 355,517 | 94,221 |
Non-current assets: | ||
Property and equipment, net | 5,476 | 2,713 |
Restricted cash | 3,837 | 0 |
Other long-term assets | 1,212 | 360 |
Total non-current assets | 10,525 | 3,073 |
Total assets | 366,042 | 97,294 |
Current liabilities: | ||
Accounts payable | 18,125 | 3,891 |
Accrued expenses and other current liabilities | 29,780 | 6,864 |
Total current liabilities | 47,905 | 10,755 |
Other long-term liabilities | 6,799 | 134 |
Total liabilities | 54,704 | 10,889 |
Commitments and contingencies (Note 12) | ||
Shareholders’ equity: | ||
Ordinary shares, £0.10 par value, authority to allot up to a maximum nominal value of £13,023,851.50 and £675,413 of shares at December 31, 2018 and 2017, respectively;85,865,557 and 8,927,121 shares issued and outstanding at December 31, 2018 and 2017, respectively. | 10,924 | 1,145 |
Additional paid-in capital | 587,490 | 6,808 |
Accumulated other comprehensive income | 3,163 | 4,127 |
Accumulated deficit | (290,239) | (59,744) |
Total shareholders’ equity | 311,338 | 86,405 |
Total liabilities, convertible preferred shares and shareholders’ equity | $ 366,042 | 97,294 |
Convertible Preferred Shares | ||
Shareholders’ equity: | ||
Convertible preferred shares, £0.00001 par value; 33,771,174 shares authorized as of December 31, 2017; 33,277,678 shares issued and outstanding as of December 31, 2017; aggregate liquidation preference of $139,954 as of December 31, 2017. | $ 134,069 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) | Dec. 31, 2018GBP (£)£ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017GBP (£)£ / sharesshares |
Ordinary Shares, Par Value | £ / shares | £ 0.10 | £ 0.10 | |
Ordinary Shares, Authorized | £ | £ 13,023,851.50 | £ 675,413 | |
Ordinary Shares, Issued | 85,865,557 | 8,927,121 | 8,927,121 |
Ordinary Shares, Outstanding | 85,865,557 | 8,927,121 | 8,927,121 |
Convertible Preferred Shares | |||
Convertible Preferred Shares, Par Value | (per share) | $ 0.00001 | £ 0.00001 | |
Convertible Preferred Shares, Authorized | 33,771,174 | 33,771,174 | |
Convertible Preferred Shares, Issued | 33,277,678 | 33,277,678 | |
Convertible Preferred Shares, Outstanding | 0 | 33,277,678 | 33,277,678 |
Convertible Preferred Shares, Liquidation Preference Value | $ | $ 139,954 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Product sales, net | $ 2,076 | ||
Type of Revenue [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Costs and operating expenses | |||
Cost of product sales | $ 422 | ||
Type of Cost, Good or Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Research and development | $ 205,319 | $ 32,527 | $ 16,206 |
Selling, general and administrative | 31,366 | 5,985 | 2,997 |
Total costs and operating expenses | 237,107 | 38,512 | 19,203 |
Loss from operations | (235,031) | (38,512) | (19,203) |
Other income (expense): | |||
Interest income | 1,116 | 3 | |
Change in fair value of tranche obligations | 289 | ||
Other income (expense) | 4,390 | (1,179) | (154) |
Total other income (expense), net | 5,506 | (1,179) | 138 |
Net loss before income tax | (229,525) | (39,691) | (19,065) |
Income tax expense | (970) | (53) | (20) |
Net loss attributable to ordinary shareholders | (230,495) | (39,744) | (19,085) |
Other comprehensive (loss) income | |||
Foreign currency translation adjustment | (964) | 4,398 | (271) |
Total comprehensive loss | $ (231,459) | $ (35,346) | $ (19,356) |
Net loss per share attributable to ordinary shareholders, basic and diluted | $ (10.22) | $ (4.48) | $ (2.69) |
Weighted average number of ordinary shares outstanding, basic and diluted | 22,559,389 | 8,872,768 | 7,100,528 |
Consolidated Statement of Conve
Consolidated Statement of Convertible Preferred Shares and Shareholders' Equity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stockholders Equity, Beginning Balance | $ 86,405 | $ (16,524) | $ (572) |
Temporary equity, Beginning balance, Shares | 33,277,678 | ||
Reclassification of convertible preferred shares Value | 83,951 | ||
Issuance of convertible preferred shares, net of issuance costs, Value | $ 242,744 | 50,118 | |
Share-based compensation expense | 6,766 | $ 1,019 | $ 204 |
Exercise of share options, Value | $ 28 | ||
Exercise of share options, Shares | 14,547 | 0 | 0 |
Ordinary shares committed to be issued as part of license agreements | $ 1,534 | $ 465 | |
Ordinary shares issued as part of license agreements, Value | $ 1,385 | 1,653 | 2,735 |
Issuance of ordinary shares in initial public offering net of issuance, Value | 205,469 | ||
Foreign currency translation adjustment | (964) | 4,398 | (271) |
Net loss | (230,495) | (39,744) | (19,085) |
Stockholders Equity, Ending Balance | 311,338 | $ 86,405 | (16,524) |
Temporary equity, Ending balance, Shares | 33,277,678 | ||
Convertible Preferred Shares | |||
Stockholders Equity, Beginning Balance | $ 134,069 | ||
Temporary equity, Beginning balance, Shares | 11,204,199 | ||
Temporary equity, Beginning balance, Value | $ 16,970 | ||
Stockholders Equity, Beginning Balance, Shares | 33,277,678 | ||
Temporary equity, Issuance of convertible preferred shares, net of issuance costs, Value | $ 66,981 | $ 16,970 | |
Temporary equity, Issuance of convertible preferred shares, net of issuance costs, Shares | 14,693,207 | 11,204,199 | |
Reclassification of convertible preferred shares Value | $ 83,951 | ||
Temporary Equity Reclassification of convertible preferred shares, Shares | (25,897,406) | ||
Temporary Equity Reclassification of convertible preferred shares, Value | $ (83,951) | ||
Reclassification of convertible preferred shares, Shares | 25,897,406 | ||
Issuance of convertible preferred shares, net of issuance costs, Value | $ 242,744 | $ 50,118 | |
Issuance of convertible preferred shares, net of issuance costs, Shares | 26,891,222 | 7,380,272 | |
Effect of corporate reorganization, including conversion of preferred shares to ordinary shares | $ (376,813) | ||
Effect of corporate reorganization, including conversion of preferred shares to ordinary shares | (60,168,900) | ||
Stockholders Equity, Ending Balance | $ 134,069 | ||
Temporary equity, Ending balance, Shares | 11,204,199 | ||
Temporary equity balance, Values | $ 16,970 | ||
Stockholders Equity, Ending Balance, Shares | 33,277,678 | ||
Ordinary Shares | |||
Stockholders Equity, Beginning Balance | $ 1,145 | $ 957 | $ 343 |
Stockholders Equity, Beginning Balance, Shares | 8,927,121 | 7,446,931 | 2,697,151 |
Conversion of ordinary shares to deferred shares | (80,030) | ||
Exercise of share options, Value | $ 2 | ||
Exercise of share options, Shares | 14,545 | ||
Ordinary shares issued as part of license agreements, Value | $ 83 | $ 188 | $ 614 |
Ordinary shares issued as part of license agreements, Shares | 651,419 | 1,480,190 | 4,829,810 |
Effect of corporate reorganization, including conversion of preferred shares to ordinary shares | $ 7,647 | ||
Effect of corporate reorganization, including conversion of preferred shares to ordinary shares | 60,168,900 | ||
Issuance of ordinary shares in initial public offering net of issuance, Value | $ 2,047 | ||
Issuance of ordinary shares in initial public offering net of issuance, Shares | 16,103,572 | ||
Stockholders Equity, Ending Balance | $ 10,924 | $ 1,145 | $ 957 |
Stockholders Equity, Ending Balance, Shares | 85,865,557 | 8,927,121 | 7,446,931 |
Additional Paid-in Capital | |||
Stockholders Equity, Beginning Balance | $ 6,808 | $ 2,790 | |
Share-based compensation expense | 6,766 | 1,019 | $ 204 |
Exercise of share options, Value | 26 | ||
Ordinary shares committed to be issued as part of license agreements | 1,534 | 465 | |
Ordinary shares issued as part of license agreements, Value | 1,302 | 1,465 | 2,121 |
Effect of corporate reorganization, including conversion of preferred shares to ordinary shares | 369,166 | ||
Issuance of ordinary shares in initial public offering net of issuance, Value | 203,422 | ||
Stockholders Equity, Ending Balance | 587,490 | 6,808 | 2,790 |
Accumulated Other Comprehensive Income (Loss) | |||
Stockholders Equity, Beginning Balance | 4,127 | (271) | |
Foreign currency translation adjustment | (964) | 4,398 | (271) |
Stockholders Equity, Ending Balance | 3,163 | 4,127 | (271) |
Accumulated Deficit | |||
Stockholders Equity, Beginning Balance | (59,744) | (20,000) | (915) |
Net loss | (230,495) | (39,744) | (19,085) |
Stockholders Equity, Ending Balance | $ (290,239) | $ (59,744) | $ (20,000) |
Consolidated Statement of Con_2
Consolidated Statement of Convertible Preferred Shares and Shareholders' Equity (Parenthetical) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Statement Of Stockholders Equity [Abstract] | |
Issuance of ordinary shares in initial public offering, issuance costs | $ 4,200 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities | |||
Net loss | $ (230,495) | $ (39,744) | $ (19,085) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation expense | 1,199 | 302 | 6 |
Share-based compensation | 6,766 | 1,019 | 204 |
Amortization of provision on loss contract | (6,300) | ||
Non-cash consideration for licenses and milestones | 94,776 | 3,126 | 3,089 |
Change in fair value of tranche obligation liability | (289) | ||
Changes in components of operating assets and liabilities: | |||
Trade and other receivables | (927) | (1,168) | |
Research and development tax credit receivable, prepaids and other assets | (15,946) | (2,737) | (639) |
Accounts payable | 14,848 | 1,930 | 666 |
Accrued expenses and other current liabilities | 31,663 | 4,672 | 1,460 |
Other long-term liabilities | 6,880 | 113 | 22 |
Net cash used in operating activities | (97,536) | (32,487) | (14,566) |
Cash flows from investing activities | |||
Purchases of property and equipment | (4,032) | (1,559) | (190) |
Net cash used in investing activities | (4,032) | (1,559) | (190) |
Cash flows from financing activities | |||
Issuance of convertible preferred shares, net of issuance costs | 149,367 | 115,696 | 18,034 |
Issuance of ADRs in initial public offering, net of issuance costs | 205,469 | ||
Proceeds from share options | 28 | ||
Net cash provided by financing activities | 354,864 | 115,696 | 18,034 |
Effect of exchange rate changes on cash | (3,471) | 4,709 | (751) |
Net increase in cash and restricted cash | 249,825 | 86,359 | 2,527 |
Cash and restricted cash —beginning of year | 89,856 | 3,497 | 970 |
Cash and restricted cash —end of year | 339,681 | 89,856 | 3,497 |
Supplemental disclosure of non-cash investing and financing activities | |||
Conversion of promissory note to convertible preferred shares | 946 | ||
Issuance of tranche obligations with convertible preferred shares | 2,459 | ||
Settlement of tranche obligations | 1,402 | $ 451 | |
Property and equipment included in accrued expenses and accounts payable at period end | $ 1,247 | ||
Convertible preferred shares issued for licenses | $ 93,391 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | 1. Nature of Business and Basis of Presentation Orchard Therapeutics plc (the “Company”), a commercial-stage fully-integrated biopharmaceutical company dedicated to transforming the lives of patients with serious and life- threatening rare diseases through autologous ex vivo gene therapies. The Company’s gene therapy approach seeks to transform a patient’s own, or autologous, hematopoietic stem cells (HSCs) into a gene-modified drug product to treat the patient’s disease through a single administration. The Company has acquired and developed a portfolio of autologous ex vivo gene therapies focused on three franchises in which it accumulates expertise, including primary immune deficiencies, inherited metabolic disorders and hemoglobinopathies. The Company’s programs include Strimvelis, the first autologous ex vivo gene therapy approved by the EMA for ADA-SCID, three clinical programs in advanced registrational studies in metachromatic leukodystrophy (“MLD”), Wiskott–Aldrich syndrome (“WAS”) and adenosine deaminase severe combined immunodeficiency (“ADA-SCID”), other clinical programs in X-linked chronic granulomatous disease (“X-CGD”) and transfusion-dependent beta-thalassemia (“TDBT”), as well as an extensive preclinical pipeline. The Company is a public limited company incorporated pursuant to the laws of England and Wales. Orchard Therapeutics plc (formerly Orchard Rx Limited) was originally incorporated under the laws of England and Wales in August 2018 to become a holding company for Orchard Therapeutics Limited. Orchard Therapeutics Limited was originally incorporated under the laws of England and Wales in September 2015 as Newincco 1387 Limited and subsequently changed its name to Orchard Therapeutics Limited in November 2015. Pursuant to the corporate reorganization, all the interests in Orchard Therapeutics Limited were exchanged for the same number and class of newly issued shares of Orchard Rx Limited and, as a result, Orchard Therapeutics Limited became a wholly owned subsidiary of Orchard Rx Limited. On October 29, 2018, Orchard Rx Limited re-registered as a public limited company and changed its name to Orchard Therapeutics plc and Orchard Therapeutics Limited changed its name to Orchard Therapeutics (Europe) Limited. On November 1, 2018, our different classes of preferred shares and our ordinary shares were consolidated on a one-for-0.8003 basis. Following the share consolidation, each share was re-designated as an ordinary share on a one-for-one basis. Accordingly, all share and per share amounts for all periods presented in the consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the reverse stock split. On November 2, 2018, the Company closed its initial public offering (IPO) of American Depositary Shares (“ADS”) in which the Company sold an aggregate of 16,103,572 ADSs representing the same number of ordinary shares at a public offering price of $14.00 per ADS. Net proceeds were $205.5 million, after deducting underwriting discounts and commissions of $15.8 million and offering expenses of $4.2 million paid by the Company. As part of the corporate reorganization as described above, each ordinary share with a nominal value of £ 0.00001 £ 0.10 Orchard Therapeutics plc is a continuation of Orchard Therapeutics Limited and its subsidiaries, and the corporate reorganization has been accounted for as a combination of entities under common control. The corporate reorganization has been given retrospective effect in these financial statements and such financial statements represent the financial statements of Orchard Therapeutics Limited for all periods prior to the corporate reorganization. In connection with the corporate reorganization, outstanding share option awards of Orchard Therapeutics Limited were exchanged for share awards and option grants of Orchard Therapeutics plc with identical restrictions. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s technology will be obtained, that any products developed will obtain necessary government regulatory approval or that any products, if approved, will be commercially viable. The Company operates in an environment of rapid technological innovation and substantial competition from pharmaceutical and biotechnological companies. In addition, the Company is dependent upon the services of its employees, consultants and service providers. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. Through December 31, 2018, the Company funded its operations primarily with proceeds from the sale of convertible preferred shares and ADSs in the IPO. The Company has incurred recurring losses since its inception, including net losses of $230.5 million, $39.7 million, and $19.1 for the years ended December 31, 2018, 2017, and 2016, respectively. As of December 31, 2018, the Company had an accumulated deficit of $290.2 million. The Company expects to continue to generate operating losses for the foreseeable future. The viability of the Company is dependent on its ability to raise additional capital to finance its operations. If the Company is unable to obtain funding, the Company will be forced to delay, reduce or eliminate some or all of its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects, or the Company may be unable to continue operations. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all. The Company expects that its cash on hand as of December 31, 2018 of $335.8 million, will be sufficient to fund its operations and capital expenditure requirements through at least the next twelve months. Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company and its wholly owned subsidiaries, Orchard Therapeutics (Europe) Limited, Orchard Therapeutics North America, and Orchard Therapeutics (Netherlands) B.V., after elimination of all intercompany accounts and transactions. Research and development tax credit receivable as of December 31, 2017 previously included in prepaid and other current assets has been presented as a separate line item on the consolidated balance sheet to conform to current period presentation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual for research and development expenses, the research and development tax credit receivable, the Stimvelis loss provision, the fair values of ordinary and convertible preferred shares, the fair value of tranche obligations, share-based compensation and income taxes. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ materially from those estimates. Concentration of credit risk The Company has no significant off-balance sheet risk, such as foreign currency contracts, options contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and other receivables. Periodically, the Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company deposits its cash in financial institutions that it believes have high credit quality and has not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships or entities for which it has a receivable. Foreign currency translation The reporting currency of the Company is the U.S. dollar. The Company has determined the functional currency of the parent company, Orchard Therapeutics plc, is U.S. dollars because it predominantly raises finance and expends cash in U.S. dollars. The functional currency of our subsidiary operations is the applicable local currency. Transactions in foreign currencies are translated into the functional currency of the subsidiary in which they occur at the foreign exchange rate in effect on at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated into the functional currency of the relevant subsidiary at the foreign exchange rate in effect on the balance sheet date. The results of operations for subsidiaries, whose functional currency is not the U.S. dollar, are translated at an average rate for the period where this rate approximates to the foreign exchange rates ruling at the dates of the transactions and the balance sheet of these subsidiaries are translated at foreign exchange rates prevailing at the balance sheet date. Exchange differences arising from this translation of foreign operations are reported as an item of other comprehensive loss. Cash and cash equivalents The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents. In 2018 and 2017, the Company did not have any cash equivalents. Restricted Cash Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements are recorded as Restricted cash on our consolidated balance sheet. The Company has entered into a lease transaction (Note 12) that requires a letter of credit of $3.0 million at December 31, 2018. The Company is also contractually required to maintain a cash collateral account associated with corporate credit card accounts in the amount of $0.9 million at December 31, 2018. The Company had no restricted cash at December 31, 2017. The Company includes the restricted cash balance in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the consolidated statements of cash flows. Property and equipment Property and equipment are recorded at cost and depreciated or amortized using the straight-line method over the following estimated useful lives. Property and equipment: Estimated useful life Lab equipment 5-10 years Leasehold improvements Shorter of lease term or estimated useful life Furniture and fixtures 4 years Office and computer equipment 3-5 years As of December 31, 2018, and 2017, the Company’s property and equipment consisted of furniture and fixtures, office and computer equipment, lab equipment and leasehold improvements. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in the statement of operations and other comprehensive loss. Repairs and maintenance expenditures, which are not considered improvements and do not extend the useful life of property and equipment, are expensed as incurred. Impairment of long-lived assets Long-lived assets consist of property and equipment. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset group over its fair value, as determined in accordance with the related accounting literature. To date, the Company has not recorded any impairment losses on long-lived assets. Fair value measurements Certain assets and liabilities of the Company are carried at fair value under U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in 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. The carrying values of the Company’s other receivable, accounts payable, accrued expenses and other current liabilities approximate their fair values due to the short-term nature of these assets and liabilities. Tranche obligations In 2016, Series A convertible preferred shares (the “Series A convertible preferred shares”) were issued in three tranches. The Company was obligated to issue second and third tranches of Series A convertible preferred shares once certain business milestones were met; these tranches were recognized as tranche obligations, which are subject to revaluation at each balance sheet date. Changes in fair value were recorded as a component of other income (expense) until the settlement of the tranche obligation. The tranche obligations settled in 2017, and no such obligations existed in 2018. The fair values of the tranche obligations are based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The tranche obligations are valued as a forward contract, and the values are determined using a probability-weighted present value calculation. In determining the fair values of the tranche obligations, estimates and assumptions impacting fair value included the fair value of the Company’s convertible preferred shares, risk-free interest rates, the probability and estimated timing of the tranche closings, expected dividend yield and expected volatility of the price of the underlying convertible preferred shares. The Company determines the per share fair value of the underlying convertible preferred shares using the option pricing model (“OPM”), which considers the preferred share price paid by investors, the time to liquidity and volatility. In the OPM, the timing of the liquidity event determines the assumed life in the Black-Scholes calculation. The Company estimates a time to liquidity taking into account the future tranche funding. If the future tranche is not expected to be funded, a liquidity event will be assumed to have occurred. If the tranche is expected to be funded, a longer-term liquidity event is assumed to have occurred. Volatility is estimated based on the daily trading histories of comparable public companies. The risk-free interest rate is determined by reference to the United States Treasury yield curve. The Company estimated a 0% dividend yield based on the expected dividend yield and the fact that it has never paid or declared a dividend. Segment information Operating segments are defined as components of an enterprise for which separate discrete information is available for evaluation by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company and the Company’s chief operating decision maker, the Company’s Chief Executive Officer, views the Company’s operations and manages its business as a single operating segment, which is focused on discovering, acquiring, developing and commercializing gene therapies for patients with rare disorders. The Company operates in three geographic regions: the United Kingdom, European Union, and United States. The Company had fixed assets of $1.7 million and $3.8 million located in the United Kingdom and United States, respectively, as of December 31, 2018, and $0.5 million and $2.2 million located in the United Kingdom and United States, respectively, as of December 31, 2017. Research and development costs Research and development costs are expensed as incurred. Research and development expenses consist of costs incurred in performing research and development activities, including salaries, share-based compensation and benefits, facilities costs, depreciation, third-party license fees, and external costs of outside vendors engaged to conduct clinical development activities and clinical trials, as well as to manufacture clinical trial materials. Non-refundable prepayments for goods or services that will be used or rendered for future research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered, or the services rendered. In addition, funding from research grants is recognized as an offset to research and development expense on the basis of costs incurred on the research program. Royalties associated with our research grants will be accrued when they become probable. Research contract costs and accruals The Company has entered into various research and development-related contracts. These agreements are cancelable, and related costs are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing research costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs. Share-based compensation The Company measures share-based awards granted to employees and directors based on the fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which is the vesting period of the respective award. Forfeitures are accounted for as they occur. Prior to the adoption of Accounting Standards Update (“ASU”) No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting After adoption of ASU 2018-07, the measurement date for non-employee awards is the date of the grant. The compensation expense for non-employees is recognized, without changes in the fair value of the award, over the requisite service period, which is the vesting period of the respective award. The Company classifies share-based compensation expense in its consolidated statement of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified. Valuation of Stock Options The fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model. Assumptions used in the option pricing model include the following: Expected volatility. The Company estimates its expected share price volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until it has adequate historical data regarding the volatility of its own traded share price. Expected term. The expected term of the Company’s share options has been determined utilizing the “simplified method” for awards that qualify as “plain-vanilla” options. Risk-free interest rate. The risk-free interest rate is determined by reference to the United States Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend. Expected dividend yield is based on the Company’s history of not paying cash dividends on ordinary shares. The Company does not expect to pay any cash dividends in the foreseeable future. Fair value of ordinary shares. Options granted subsequent to the Company’s IPO are issued at the fair market value of the Company’s ADS at the date of grant as approved by the board. Prior to the IPO, given the absence of an active market for the Company’s ordinary shares, the board of directors, the members of which the Company believes have extensive business, finance, and venture capital experience, was required to estimate the fair value of the Company’s ordinary share at the time of each grant of a share-based award. The board of directors determined the estimated fair value of the Company’s equity instruments based on a number of objective and subjective factors, including external market conditions affecting the biotechnology industry sector. The Company and the board of directors utilized various valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants’ Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation Ordinary share valuations were prepared using the OPM to estimate the Company’s enterprise value. The OPM treats ordinary and convertible preferred shares as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company’s securities changes. Under this method, the ordinary shares have value only if the funds available for distribution to shareholders exceeded the value of the convertible preferred shares liquidation preferences at the time of the liquidity event, such as a strategic sale or a merger. A discount for lack of marketability of the ordinary shares is then applied to arrive at an indication of value for the ordinary shares. The hybrid method is a probability weighted expected return method, PWERM, where the equity value in one or more scenarios is calculated using an OPM. The PWERM is a scenario-based methodology that estimates the fair value of ordinary shares based upon an analysis of future values for the company, assuming various outcomes. The ordinary shares’ value is based on the probability-weighted present value of expected future investment returns considering each of the possible outcomes available as well as the rights of each share class. The future value of the ordinary shares under each outcome is discounted back to the valuation date at an appropriate risk-adjusted discount rate and probability weighted to arrive at an indication of value for the ordinary shares. Valuation of RSUs We estimate the fair value of our performance-based restricted stock unit (“RSUs”) awards or components of RSU awards whose vesting is contingent upon market conditions, such as volume weighted-average price (“VWAP”), Comprehensive loss Comprehensive loss includes net loss as well as other changes in shareholders’ equity (deficit) that result from transactions and economic events other than those with shareholders. For the years ended December 31, 2018, 2017 and 2016, other comprehensive loss included a loss of $1.0 million, a gain of $4.4 million, and a loss of $0.3 million and, respectively, related to foreign currency translation adjustments. Strimvelis loss provision As part of the GSK transaction, the Company is required to maintain commercial availability of Strimvelis in the European Union until such time that an alternative gene therapy is available (Note 9). Strimvelis is not currently expected to generate sufficient cash flows to overcome the costs of maintaining the product and certain regulatory commitments; therefore, the Company recorded a liability associated with the loss contract of $18.4 million. The Company recognizes the amortization of the loss provision on a diminishing balance basis based on the actual net loss incurred associated with Strimvelis and the expected future net losses to be generated until such time as Strimvelis is no longer commercially available. The amortization of the provision is recorded as a credit to research and development expense. We have made an estimate of the expected future losses associated with Strimvelis and adjust this estimate as facts and circumstances change regarding the commercial availability and costs of maintaining and selling Strimvelis. As of December 31, 2018, the total Strimvelis loss provision liability was $10.3 million. During the year-ended December 31, 2018 the Company amortized $6.3 million as a credit to research and development expense. The effects of foreign currency translation for the year-ended December 31, 2018 reduced the liability by $1.7 million. Research and development income tax credit As a company that carries out extensive research and development activities, the Company seeks to benefit from one of two U.K. research and development tax relief programs, the Small and Medium-sized Enterprises R&D Tax Credit Program (“SME Program”) and the Research and Development Expenditure program (“RDEC Program”). Qualifying expenditures largely comprise employment costs for research staff, consumables and certain internal overhead costs incurred as part of research projects for which the Company does not receive income. Such credits are accounted for as reductions in research and development expense in the period in which the expenditures were incurred. Based on criteria established by HM Revenue and Customs (“HMRC”), management of the Company expects a proportion of expenditures being carried in relation to its pipeline research, clinical trials management and manufacturing development activities to be eligible for the RDEC Program for the years ended December 31, 2018, 2017 and 2016. The Company has qualified under the more favorable SME regime for the year ended December 31, 2018. The RDEC and SME credits are not dependent on the Company generating future taxable income or on the ongoing tax status or tax position of the Company. As such the Company has recorded a United Kingdom research and development tax credit as an offset to research and development expense in the consolidated statements of operations and comprehensive loss of $10.2 million, $0.7 million, and $0.2 million for the years ended December 31, 2018, 2017, and 2016, respectively. As of December 31, 2018, and 2017, the Company’s tax incentive receivable from the United Kingdom government was $10.6 million and $0.9 million, respectively. The effects of foreign currency translation for the year-ended December 31, 2018 reduced the receivable by $0.5 million. These amounts have not yet been paid to the Company by HMRC. Income taxes The Company is subject to United Kingdom corporate taxation. Due to the nature of its business, the Company has generated losses since inception and has therefore not paid United Kingdom corporation tax. The Company’s income tax credit recognized represents the sum of the research and development tax credits recoverable in the United Kingdom and income tax payable in the United States. Unsurrendered United Kingdom losses may be carried forward indefinitely to be offset against future taxable profits, subject to numerous utilization criteria and restrictions. The amount that can be offset each year is limited to £5.0 million plus an incremental 50% of United Kingdom taxable profits. Value Added Tax (“VAT”), is broadly charged on all taxable supplies of goods and services by VAT-registered businesses, and is generally applicable to our operations in the United Kingdom and European Union. Under current rates, an amount of 20% of the value, as determined for VAT purposes, of the goods or services supplied is added to all sales invoices and is payable to HMRC. Similarly, VAT paid on purchase invoices associated with our U.K. subsidiary is generally reclaimable from HMRC. The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using substantively enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered in the future and, to the extent the Company believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company is subject to corporation taxes in the United Kingdom and the United States. The calculation of the Company’s tax provision involves the application of both United Kingdom or United States tax law and requires judgement and estimates. The Company accounts for uncertainty in income taxes by recognizing in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed as the amount of benefit to recognize in the consolidated financial statements. The amount of benefits that may be used is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate, as well as the related net interest and penalties. Net product sales During the year, the Company made its first sales of Strimvelis, which is currently distributed exclusively at the San Raffaele Hospital in Milan, Italy. Strimvelis sales are currently under a buy-and-bill model where the treatment center purchases and pays for the product and submits a claim to the payer. The Company evaluated the variable consideration under Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers The Company’s net product sales represent total gross product sales of Strimvelis. All sales are recognized when control is transferred, which occurs upon the completion of the scheduled Strimvelis treatment. Transduction costs associated with administering the therapy are included in cost of product sales. As the product is sold in direct relation to a scheduled treatment, the Company estimates that there is minimal risk of product return, including the risk of product expiration. Net income (loss) per share The Company follows the two-class method when computing net income (loss) per share as the Company has issued shares that meet the definition of participating securities. The two-class method determines net income (loss) per share for each class of ordinary and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to ordinary shareholders for the period to be allocated between ordinary and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Basic net income (loss) per share attributable to ordinary shareholders is computed by dividing the net income (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the period. Diluted net income (loss) attributable to ordinary shareholders is computed by adjusting net income (loss) attributable to ordinary shareholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net income (loss) per share attributable to ordinary shareholders is computed by dividing the diluted net income (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the period, including potential dilutive ordinary shares. For purpose of this calculation, outstanding options and convertible preferred shares are considered potential dilutive ordinary shares. The Company’s convertible preferred shares contractually entitle the holders of such shares to participate in dividends but do not contractually require the holders of such shares to participate in losses of the Company. Accordingly, in periods in which the Company reports a net loss attributable to ordinary shareholders, such losses are not allocated to such participating securities. In periods in which the Company reports a net loss attributable to ordinary shareholders, diluted net loss per share attributable to ordinary shareholders is the same as basic net loss per share attributable to ordinary shareholders, since dilutive ordinary shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss attributable to ordinary shareholders for the years ended December 31, 2018, 2017, and 2016. Recently adopted accounting pronouncements In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2018-07 (“ASU 2018-07”). ASU 2018-07 expands the scope of Topic 718, Compensation—Stock Compensation Equity—Equity-Based Payments to Non-Employees In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting In January 2017, the FASB issued ASU No. 2017-01 , Business Combinations (Topic 805) Clarifying the Definition of a Business In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In August 2016, the FASB issued Accounting Standards Update No 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740) Intra-Entity Transfer of Assets Other than Inventory In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes In November 2014, the FASB issued ASU No. 2014-16, Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, Recently issued accounting pronouncements not yet adopted In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815) (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception In February 2016, the FASB issued ASU No. 2016-02 , Leases (Topic 842) Leases (Topic 842) The Company has considered other recent accounting pronouncements and concluded that they are either not applicable to the business, or that the effect is not expected to be material to the financial statements as a result of future adoption. |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value of Financial Assets and Liabilities | 3. Fair value of Financial Assets and Liabilities The Company had no financial assets measured at fair value on a recurring basis at December 31, 2018 or 2017. The following table presents information about the Company’s financial liabilities that have been measured at fair value on a recurring basis as of December 31, 2016 (there were no financial liabilities measured at fair value on a recurring basis as of December 31, 2018 or 2017): Fair Value Measurements as of December 31, 2016 Using: Level 1 Level 2 Level 3 Total (in thousands) Liabilities: Tranche obligations $ — $ — $ 1,402 $ 1,402 $ — $ — $ 1,402 $ 1,402 The tranche obligations in the table above represents the Company’s obligation to issue for sale Series A convertible preferred shares once certain business milestones were met. The fair value of the tranche obligations was based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The tranche obligations are valued as a forward contract as described in Note 2. The Company assessed these assumptions and estimates on a quarterly basis as additional information impacting the assumptions was obtained. The Company recognized changes in fair value of these tranche obligations as a component of other income (expense) in its consolidated statement of operations and comprehensive loss. Estimates and assumptions impacting the fair value measurement included the fair value of the Company’s convertible preferred shares, risk-free interest rate, the probability and estimated timing of each tranche closing, expected dividend yield and expected volatility of the price of the underlying convertible preferred shares (Note 2). Significant changes to the fair value of the underlying shares would have resulted in a significant change in the fair value measurements. The tranche obligations were settled when the respective second and third tranches of Series A convertible preferred shares were issued in July 2016 and January 2017. The following assumptions were used in valuing the tranche obligations: Year Ended December 31, 2016 Risk-free interest rate 0.00 - 0.53% Expected dividend yield 0.00% Expected term (in years) 0.00 - 0.92 Expected volatility 75.5 - 89.9% Fair value of convertible preferred shares $1.00 - $1.58 The following table provides a summary of the changes in fair value of the tranche obligation liability measured at fair value on a recurring basis using significant unobservable inputs during the years ended December 31, 2016 and 2017 (in thousands): Tranche Obligations (in thousands) Balance at December 31, 2015 $ — Issuance of tranche obligations to purchase convertible preferred shares 2,459 Change in fair value of second tranche obligation (424 ) Settlement of second tranche obligation upon issuance of convertible preferred shares (451 ) Change in fair value of third tranche obligation 135 Effect of exchange rate changes on tranche obligation (317 ) Balance at December 31, 2016 1,402 Settlement of third tranche obligation upon issuance of convertible preferred shares (1,402 ) Balance at December 31, 2017 $ — |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenue Recognition | 4. Revenue Recognition The Company adopted the new accounting guidance under ASC606 regarding recognition of revenue from customers as of January 1, 2018. Prior to 2018, the Company had no revenue, and the adoption of this guidance resulted in no cumulative adjustment to the Company’s consolidated financial statements. The Company currently has one commercial-stage therapy, Strimvelis, for the treatment of ADA-SCID. During the year, the Company made its first sales of Strimvelis, which is currently distributed exclusively at the San Raffaele Hospital in Milan, Italy. Strimvelis sales are currently under a buy-and-bill model where the treatment center purchases and pays the Company for the product and submits a claim to the payer. The Company’s net product sales represent total gross product sales of Strimvelis, less any allowances based on contractual terms or the arrangement with the treatment center. All sales are recognized when control is transferred, which follows the Company’s verification of a scheduled Strimvelis treatment. Transduction costs associated with administering the therapy are included in cost of product sales. As the product is sold in direct relation to a scheduled treatment, the Company estimates that there is minimal risk of product return, including the risk of product expiration. The Company excludes from measurement of the transaction price all taxes assessed by a governmental authority that are both imposed concurrent with the specific revenue-producing transaction and collected by the Company from a customer. Payment terms and conditions generally require payment for Strimvelis sales within 60 days of treatment. Strimvelis is currently distributed exclusively at the San Rafaelle Hospital, and there is currently no variable consideration included in the transaction price of Strimvelis. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 5. Property and Equipment Property and equipment consist of the following: December 31, 2018 2017 (in thousands) Property and equipment: Lab equipment $ 4,930 $ 2,708 Leasehold improvements 1,487 244 Furniture and fixtures 403 59 Office and IT equipment 152 12 Property and equipment $ 6,972 3,023 Less: accumulated depreciation (1,496 ) (310 ) Property and equipment, net $ 5,476 $ 2,713 Depreciation expense for the years ended December 31, 2018 and 2017 was $1.2 million and $0.3 million, respectively. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities And Other Liabilities [Abstract] | |
Accrued Expenses and Other Liabilities | 6. Accrued Expenses and Other Liabilities Accrued expenses and other current liabilities consisted of the following: December 31, 2018 2017 (in thousands) Accrued external research and development expenses $ 12,738 $ 1,834 Accrued payroll and related expenses 7,372 2,090 Accrued professional fees 1,186 394 Accrued other 2,762 279 Strimvelis liability - current portion 4,170 — Deferred UCLA reimbursement — 2,267 Due to UCLA 1,552 — Total accrued expenses and other current liabilities $ 29,780 $ 6,864 |
Shareholders' Equity and Conver
Shareholders' Equity and Convertible Preferred Shares | 12 Months Ended |
Dec. 31, 2018 | |
Shareholders Equity And Convertible Preferred Shares [Abstract] | |
Shareholders’ Equity and Convertible Preferred Shares | 7. Shareholders’ Equity and Convertible Preferred Shares Ordinary shares As of December 31, 2018, each holder of ordinary shares is entitled to one vote per ordinary share and to receive dividends when and if such dividends are recommended by the board of directors and declared by the shareholders. As of December 31, 2018, the Company has not declared any dividends. As of December 31, 2018, the Company had authority to allot ordinary shares up to a maximum nominal value of £13,023,851.50 with a nominal value of £0.10 per share. As of December 31, 2017, the voting, dividend and liquidation rights of the holders of the Company’s ordinary shares are subject to and qualified by the rights, powers and preferences of the holders of the Convertible Preferred Shares. Each ordinary share entitles the holder to one vote, together with the holders of Convertible Preferred Shares, on all matters submitted to the shareholders for a vote. The holders of Convertible Preferred Shares are entitled to elect a total of three directors of the Company. The holders of ordinary shares are entitled to elect the remaining directors of the Company by vote of a majority of such shares. Ordinary shareholders are entitled to receive dividends, as may be declared by the board of directors, if any, subject to Liquidation Preferences. Through December 31, 2017, no cash dividends have been declared or paid. As of December 31, 2017, the Company had authority to allot ordinary shares up to a maximum nominal value of £675,413, with a nominal value of £0.00001 per share. The authority has taken into consideration the conversion of outstanding Convertible Preferred Shares of 33,277,678 as of December 31, 2017; 500,596 ordinary shares the Company committed to issue as part of its license and research agreements as of December 31, 2017; 4,153,196 for the exercise of outstanding share options, as of December 31, 2017; and 2,354,595 shares remaining available for future issuance under the 2016 Share Option Plan as of December 31, 2017. Initial Public Offering and Corporate Reorganization On November 2, 2018, the Company closed its IPO of ADSs. In the IPO, the Company sold an aggregate of 16,103,572 ADSs representing the same number of ordinary shares at a public offering price of $14.00 per ADS, including a partial exercise by the underwriters of their option to purchase additional ADSs. Net proceeds were $205.5 million, after deducting underwriting discounts, and commissions and offering expenses paid by the Company of $4.2 million. Immediately prior to the completion of the IPO, all outstanding Convertible Preferred Shares of Orchard Therapeutics plc were converted into their respective class of preferred shares of Orchard Therapeutics plc on a one-for-0.8003 basis. All ordinary shares were consolidated on a one-for-0.8003 basis. Following completion of these steps, and immediately prior to the completion of the IPO, each share outstanding was re-designated as an ordinary share on a one-for-one basis. Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse split. In addition, all share options for all periods presented have been adjusted retroactively to reflect this reverse split. Additionally, as part of the corporate reorganization associated with our IPO, each ordinary share with a nominal value of £ 0.00001 was redenominated as an ordinary share with a nominal value of £ 0.10 Other ordinary share issuances In November 2016, as amended in September 2018, the Company entered into a license and development agreement with Oxford BioMedica U.K. Limited (“Oxford BioMedica”). As consideration for the rights and licenses granted to Orchard under the license and development agreement, the Company issued 588,220 ordinary shares to Oxford BioMedica in December 2016. The Company also agreed to grant additional ordinary shares upon achievement of specified milestones. In November 2017, the first milestone was achieved and the Company was obligated to issue an additional 150,826 shares. The shares issued in 2016 and 2017 were recorded based on their fair values as of the time the agreement was executed of $0.5 million and $0.1 million, respectively. In August 2018, the terms of the arrangement were modified to extend milestone agreements under the plan, and the second milestone was met and the company issued an additional 150,826 shares. The shares issued in 2018 were recorded based on their fair value at the time the agreement was modified of $1.4 million. The amounts were recorded to research and development expense in the years ended December 31, 2018, 2017, and 2016, respectively. In February 2016, and amended in July 2017, the Company entered into a license agreement (the “UCLB/UCLA License Agreement”) with UCL Business PLC (“UCLB”), which is the commercialization company of University College London, and The Regents of the University of California (“UCLA”), pursuant to which the Company issued nil, 1,224,094, and 3,441,290 ordinary shares in 2018, 2017 and 2016, respectively, to UCLB. The shares were recorded at their fair values as of the time the agreement was executed or modified, which was an aggregate of $3.8 million. Amounts totaling $1.7 million and $2.1 million were recorded to research and development expense for the years ended December 31, 2017 and 2016, respectively. In 2016 and 2017, the Company entered into several license agreements with various academic and health care institutions to in-license certain intellectual property rights and know-how relevant to its programs. Pursuant to these agreements, the Company issued 800,380 and 256,096 ordinary shares in 2016 and 2017, respectively. The share commitments were recorded to research and development expense based on their fair values as of the time the respective agreement was executed or modified. The amounts were $1.4 million and $0.5 million in 2017 and 2016, respectively. As of December 31, 2018, and 2017, the Company had outstanding 85,865,557 and 8,927,121 ordinary shares, respectively. Convertible preferred shares As of December 31, 2018, there were no Convertible Preferred Shares outstanding due to our corporate reorganization and IPO. As of December 31, 2017, the Articles, as further amended and restated (the “Amended Articles”), authorized a total of 33,771,174 convertible preferred shares with a par value of £0.00001 per share, of which 16,806,299 shares have been designated as Series A convertible preferred shares and 16,964,875 shares have been designated as Series B convertible preferred shares (the “Series B convertible preferred shares”). Until September 2017, the Series A and Series B convertible preferred shares (collectively, the “Convertible Preferred Shares”) were classified in temporary equity as the Convertible Preferred Shares were contingently redeemable. A contingent redemption feature, which is at the option of the Company, could have been exercised by a holder of the Convertible Preferred Shares while that holder controlled a majority of the Company’s board of directors. The Convertible Preferred Shares did not become redeemable as the contingency had not been met or determined to be probable. In September 2017, the Company’s board of directors was expanded so that the holder of the Convertible Preferred Shares no longer controlled the Company’s board of directors through a majority of seats. Based on this change, the redemption feature from September 2017 onward is exercisable only in an event that is within the control of the Company. At that date, the Convertible Preferred Shares were reclassified to permanent equity within shareholders’ equity on the Company’s consolidated balance sheets. In August 2018, the Company issued Series C convertible preferred shares, which were classified as permanent equity within shareholders’ equity on the Company’s consolidated balance sheets. Preferred share financings In February 2016, the Company issued 5,335,333 Series A convertible preferred shares at a price of £1.25 per share (the “Series A Original Issue Price”) of which 4,811,937 Series A convertible preferred shares were issued for net proceeds of $8.5 million and 523,396 Series A convertible preferred shares were issued in settlement of the Notes. In May 2016, the Company issued and sold 266,767 Series A convertible preferred shares at a price of £1.25 per share for net proceeds of $0.4 million. In July 2016, the Company issued and sold 5,335,333 Series A convertible preferred shares at a price of £1.25 per share for net proceeds of $8.7 million. In August 2016, the Company issued and sold 266,766 Series A convertible preferred shares at a price of £1.25 per share for net proceeds of $0.4 million. In January 2017, the Company issued and sold 5,335,333 Series A convertible preferred shares at a price of £1.25 per share for net proceeds of $8.2 million. In February 2017, the Company issued and sold 266,766 Series A convertible preferred shares at a price of £1.25 per share for net proceeds of $0.4 million. In March 2017, the Company issued and sold 5,805,376 Series B convertible preferred shares at a price of £5.022 per share (the “Series B Original Issue Price”) for net proceeds of $36.0 million. In August 2017, the Company issued and sold 3,285,731 Series B convertible preferred shares at a price of £5.022 per share for net proceeds of $21.0 million. In October 2017, the Company issued and sold 4,655,985 Series B convertible preferred shares at a price of £5.022 per share for net proceeds of $30.8 million. In December 2017, the Company issued and sold 2,724,288 Series B convertible preferred shares at a price of £5.022 per share for net proceeds of $18.3 million. In December 2017, the Company received proceeds of $1.0 million for 150,706 Series B convertible preferred shares, which were subsequently issued in January 2018. In August 2018, the Company issued and sold 13,942,474 Series C convertible preferred shares at a price of $10.76 per share for net proceeds of $147.1 million. As of December 31, 2018, there were no Convertible Preferred Shares outstanding due to our corporate reorganization and IPO. As of December 31, 2017, Convertible Preferred Shares consisted of the following: December 31, 2017 (in thousands, except share amounts) Shares Authorized Shares Issued and Outstanding Carrying Value Liquidation Preference(a) Ordinary shares Issuable Upon Conversion Series A convertible preferred shares 16,806,298 16,806,298 $ 26,994 $ 28,337 16,806,298 Series B convertible preferred shares 16,964,876 16,471,380 107,075 111,617 16,471,380 33,771,174 33,277,678 $ 134,069 $ 139,954 33,277,678 (a) Amounts were translated into United States dollars using the spot rate as of December 31, 2017. There were no Convertible Preferred Shares outstanding as of December 31, 2018. The holders of the Convertible Preferred Shares have the following rights and preferences as of December 31, 2017: Voting Each Series A and Series B preferred share shall confer one right to vote at all general meetings and to receive and vote on proposed written resolutions of the Company. Conversion Each Series A and Series B preferred share was convertible, at the option of the holder, at any time and from time to time, and without the payment of additional consideration, into an ordinary share as is determined by dividing the applicable Series A or Series B Original Issue Price by the respective Series A or Series B Conversion Price. The Series A Conversion Prices were equal to each applicable Series A Original Issue Price as noted above. The Series B Conversion Prices were equal to each applicable Series B Original Issue Price as noted above. As of December 31, 2017, each Preferred Share was convertible into one ordinary share. As set forth in the Amended Articles, the Series A and B Conversion Prices were adjusted when there is a deemed issuance of additional convertible preferred shares issued at a price lower than Series A and Series B Original Issue Prices or issuance of an instrument with rights that could dilute the interest of Series A and B holders. In addition, each Preferred Share would be automatically converted into an ordinary share at the applicable conversion ratio then in effect for each series of Convertible Preferred Shares upon the earlier of (i) the closing of a firm commitment underwritten public offering of its ordinary shares with gross proceeds to the Company of at least $50.0 million and at a price per share of not less than £6.0262, subject to appropriate adjustment in the event of any share split, share dividend, combination or other similar recapitalization, or (ii) a date specified vote or written consent of the holders of a majority of Convertible Preferred Shares, voting together as a single class on an as-if-converted to ordinary shares basis. Dividends The holders of the Series A convertible preferred shares, Series B convertible preferred shares, and ordinary shares were entitled to receive non-cumulative dividends, if and when declared by the Company’s board of directors, subject to shareholder consent. The Series A convertible preferred shares, Series B convertible preferred shares and ordinary shares ranked equally in all respects (on an as converted basis) for the purpose of any dividend that is declared or paid. On a distribution of assets on a liquidation, share sale, asset sale or IPO, the holders of Series A convertible preferred shares, and Series B convertible preferred shares were entitled to receive any declared but unpaid dividend, in the order of the priority set out in Liquidation Preference above, on each outstanding Series A convertible preferred share and Series B convertible preferred share. No dividends were declared or paid during the year ended December 31, 2017 and 2018. Liquidation preference In the event of a distribution of assets on liquidation or a return of capital (other than a conversion, redemption or purchase of shares), the surplus remaining after settling the Company’s assets and liabilities will be distributed to the individuals holding ordinary shares, Series A and Series B convertible preferred shares on a pro rata basis (as if the ordinary shares and the Convertible Preferred Shares constituted one class) as described in the Amended Articles, except if the per share amount for Series A and Series B convertible preferred shares results in a price per share less than its original issue price. If the price per share is less than the original issue price for preferred shareholders, the shareholders will be paid an amount equal to the subscription price and the remainder of the assets will be distributed on a pro rata basis to the remaining ordinary shareholders. Redemption The Amended Articles do not provide redemption rights to the holders of Convertible Preferred Shares. Deferred shares Deferred shares are a unit of equity in the Company. All deferred shares can be repurchased at any time by the Company at a purchase price of £0.00001 per share. Deferred shares have no rights attached to them, are not convertible to any other class of shares and are not redeemable. The entire class of deferred shares is entitled to a total of £1.25 from the distribution of assets on a liquidation or return of capital event. In 2016, the Company converted 80,030 ordinary shares of an investor to deferred shares. In March 2017, the Company repurchased 80,030 deferred shares at £0.00001 per share and simultaneously cancelled them. There were no deferred shares outstanding as of December 31, 2017 and 2018. |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-based Compensation | 8. Share-based Compensation In September 2016, the Company adopted the Orchard Therapeutics Limited Employee Share Option Plan with Non-Employee Sub-Plan and U.S. Sub-Plan (the “2016 Plan”). The 2016 Plan provided for the Company to grant incentive and non-qualified options to officers, directors, consultants, and advisors to purchase the Company’s ordinary shares prior to the IPO. The board of directors has determined not to make any further awards under the 2016 plan following the Company’s IPO. In October 2018, as part of the Company’s reorganization and IPO, the Company adopted the Orchard Therapeutics plc 2018 Share Option and Incentive Plan (the “2018 Plan”). The 2018 Plan provides for grants in the form of incentive and non-qualified options, share appreciation rights, restricted shares, and restricted share units. The Company issues new ordinary shares upon exercise of share options. The Company has initially reserved 4,254,741 ordinary shares, or the initial limit, for the issuance of awards under the 2018 Plan. As of December 31, 2018, 3,953,726 shares remained available for future grant under the plan. The number of ordinary shares reserved for issuance will automatically increase each January 1, beginning January 1, 2019, by 5% of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by the board of directors. In October 2018, the Company adopted the 2018 Employee Share Purchase Plan (the “ESPP”) under which eligible employees may contribute up to 15% of their base compensation toward bi-annual purchases of the Company’s ordinary shares. The ESPP initially reserved and authorized the issuance of up to a total of 850,948 ordinary shares to participating employees. The number of ordinary shares reserved for issuance will automatically increase by the least of (i) 1% of the outstanding number of ordinary shares on the immediately preceding December 31; (ii) 1,500,000 shares or (iii) such number of shares as determined by the ESPP administrator. Prior to the Company’s IPO, the Company typically granted options to United States employees and non-employees at exercise prices deemed by the board of directors to be equal to the fair value of the ordinary share at the time of grant, and grant options to United Kingdom employees at an exercise price equal to the par value of the ordinary shares of £0.00001. After the IPO, options are typically granted at exercise prices equal to the fair value of the Company’s ordinary shares on the grant date. The vesting period is determined by the board of directors, which is generally four years. An option’s maximum term is ten years. Option valuation The assumptions used in the Black-Scholes option pricing model to determine the fair value of the share options granted to employees, non-employees, and directors during the year ended December 31, 2018, 2017, and 2016 were as follows: Year Ended December 31, 2018 2017 2016 Risk-free interest rate% - % 2.66% - 3.03% 1.52% - 2.30% 1.52% - 2.40% Expected term (in years) 5.00 - 6.08 6.08 6.08 - 9.75 Expected volatility% - % 64.27 - 68.58% 77.80% - 80.00% 77.80% -79.70% Expected dividend rate% 0.00% 0.00% 0.00% Expected Term : The expected term for employees represents the period that the options granted are expected to be outstanding and is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term). The expected term is applied to the share option grant group as a whole, as the Company does not expect substantially different exercise or post-vesting termination behavior among its employee population. Prior to the adoption of ASU 2018-07, expected term for non-employee grants was the contractual term of the options. After the adoption of ASU 2018-07, the expected term of share options granted to non-employees is determined in the same manner as share options granted to employees. Expected Volatility : The Company used an average historical stock price volatility of comparable public companies within the biotechnology and pharmaceutical industry that were deemed to be representative of future share price trends as the Company does not have significant trading history for its ordinary shares. Risk-Free Interest Rate : The Company based the risk-free interest rate over the expected term of the options on the constant maturity rate of United States Treasury securities with similar maturities as of the date of the grant. Expected Dividend Rate : The Company has not paid and does not anticipate paying any dividends in the near future. Therefore, the expected dividend yield was zero. Fair value of underlying ordinary shares : Prior to the IPO, the Company determined the fair value of the underlying ordinary shares based on input from management and approved by the board of directors, as described in Note 2. Subsequent to the IPO, the Company determined the fair value of the underlying ordinary shares based on the close price of our ordinary shares on the grant date. Options The following table summarizes option activity under the plans for the year ended December 31, 2018: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (in thousands, except share and per share amounts) Options outstanding at December 31, 2017 4,153,196 $ 1.20 9.28 $ 10,483 Granted 6,303,465 4.23 Exercised (14,547 ) 1.96 Cancelled (238,682 ) 2.55 Options outstanding at December 31, 2018 10,203,432 3.04 8.97 129,551 Vested as of December 31, 2018 2,022,399 1.11 8.20 29,568 The weighted average exercise price of options granted to United Kingdom employees in 2018 was the nominal value of the underlying shares. The weighted average exercise price of options granted to United States employees in 2018 was $5.74. The aggregate intrinsic value of options is calculated as the difference between the exercise price of the options and the fair value of the Company’s ordinary shares for those options that had exercise prices lower than the fair value of the Company’s ordinary shares. During 2018, the total intrinsic value of share options exercised was not material. There were no share option exercises in 2017 or 2016. The weighted average grant date fair value of the options granted during the years ended December 31, 2018, 2017, and 2016 was $5.23 per share, $2.70 per share and $0.92 per share, respectively. Restricted Share Units In November 2018, the Company issued performance-based restricted share units (“RSUs”) to our Chief Executive Officer covering a maximum of 219,922 ordinary shares. The performance-based RSUs will vest, if at all, based upon the Company achieving three specific regulatory and research and development milestones, or one market condition based upon the volume weighted-average price (“VWAP”) of the Company’s ADSs for a certain period. Upon achievement of any of the aforementioned milestones, one third of the RSU’s will vest, and the award will become fully vested upon achievement of three of the four performance conditions. The maximum aggregate total fair value of the performance-based RSUs is $4.5 million. The fair value associated with the shares that could vest based on the market-based condition is being recognized as expense over the derived service period of 1.3 years. The fair value associated with the performance-based conditions will be recognized when achievement of the milestones becomes probable, if at all. The Company determined that, as of December 31, 2018, none of the regulatory and research development milestones were deemed probable. The following table summarizes RSU award activity for the year ended December 31, 2018: Shares Weighted Average Fair Value Unvested at December 31, 2017 — $ — Granted 219,922 15.48 Vested — — Forfeited — — Unvested at December 31, 2018 219,922 15.48 The amount of compensation cost recognized for the years ended December 31, 2018 and 2017 for the market condition associated with the performance-based RSUs was $0.1 million and nil, respectively. Share-based compensation Share-based compensation expense related to share options, restricted share unit awards, and the employee stock purchase plan was classified in the consolidated statements of operations and comprehensive loss as follows: Year Ended December 31, 2018 2017 2016 (in thousands) Research and development $ 2,740 $ 615 $ 181 Selling, general and administrative 4,026 404 23 Total $ 6,766 $ 1,019 $ 204 The Company had 8,181,033 unvested options outstanding as of December 31, 2018. As of December 31, 2018, total unrecognized compensation cost related to unvested stock option grants was approximately $33.3 million. This amount is expected to be recognized over a weighted average period of approximately 2.96 years. As of December 31, 2018, the total unrecognized compensation cost related to performance-based RSUs is a maximum of $4.5 million, depending upon achievement of the milestones. |
License and Research Arrangemen
License and Research Arrangements | 12 Months Ended |
Dec. 31, 2018 | |
License And Research Arrangements [Abstract] | |
License and Research Arrangements | 9. License and Research Arrangements GSK asset purchase and license agreement In April 2018, the Company entered into an asset purchase and license agreement (the “GSK Agreement”) with subsidiaries of GSK to acquire a portfolio of autologous ex vivo The portfolio of programs and options acquired consists of: • Two late-stage clinical gene therapy programs in ongoing registrational trials for MLD and WAS; • One earlier stage clinical gene therapy program for TDBT; • Strimvelis, the first autologous ex vivo • Option rights exercisable upon completion of clinical proof of concept studies for three additional earlier-stage development programs, which such option rights have lapsed as of the date of this Annual Report. The Company accounted for the GSK Agreement as an asset acquisition, since the asset purchase and licensing arrangement did not meet the definition of a business pursuant to ASC 805, Business Combinations. Total consideration of £94.2 million ($133.6 million as of date of acquisition), which includes an upfront payment of £10.0 million ($14.2 million at the acquisition date) and 12,455,252 Series B-2 convertible preferred shares of the Company issued to GSK at £65.8 million ($93.4 million at the acquisition date), an inventory purchase liability valued at £4.9 million ($6.9 million) and transaction costs of £0.6 million ($0.8 million). The Company allocated £94.2 million ($133.6 million) to in-process research and development expense (based on the fair value of the underlying programs in development). The Series B-2 convertible preferred shares were converted to ordinary shares as part of our IPO in November 2018. The Company is required to use commercially reasonable efforts to obtain a PRV from the United States Food and Drug Administration for each of the programs for MLD, WAS and TDBT, the first of which GSK retained beneficial ownership. GSK also has an option to acquire, at a price pursuant to an agreed upon formula, any PRV granted to the Company thereafter for MLD, WAS and TDBT. If GSK does not exercise this option to purchase any PRV, the Company may sell the PRV to a third party and must share any proceeds in excess of a specified sale price equally with GSK. For accounting purposes, as of December 31, 2018, the Company does not consider the attainment of a PRV from the United States Food and Drug Administration to be probable. As part of the GSK Agreement the Company is required to use its best endeavors to make Strimvelis commercially available in the European Union until such time as an alternative gene therapy, such as our OTL-101 product candidate, is commercially available for patients in Italy, and at all times at the San Raffaele Hospital in Milan, provided that a minimum number of patients continue to be treated at this site. Strimvelis is not currently expected to generate sufficient cash flows to overcome the costs of maintaining the product and certain regulatory commitments; therefore, the Company recorded a liability associated with the loss contract of £12.9 million ($18.4 million at the acquisition date) associated with the loss expected due to this obligation. This liability is being amortized over the remaining period of expected sales of Strimvelis as a credit to research and development expenses (Note 2). During the period ended December 31, 2018, the Company amortized $6.3 million as a credit to research and development expenses associated with the loss provision. The effects of foreign currency translation for the year-ended December 31, 2018 reduced the liability by $1.7 million. The balance of the liability as of December 31, 2018 was $10.3 million. Consideration (in thousands) Upfront cash paid for GSK Agreement $ 14,186 Series B-2 convertible preferred shares issued to GSK 93,391 Transaction costs 780 Liabilities: Strimvelis liability 18,351 Inventory purchase liability 6,893 Total consideration transferred: $ 133,601 The Company will pay GSK non-refundable royalties and milestone payments in relation to the gene therapy programs acquired and OTL-101. The Company will pay a flat mid-single digit percentage royalty on the combined annual net sales of ADA-SCID products, which includes Strimvelis and the Company-developed product candidate, OTL-101. The Company will also pay tiered royalty rates at a percentage beginning in the mid-teens up to twenty percent for the MLD and WAS products, upon marketing approval, calculated as percentages of aggregate cumulative net sales of the MLD and WAS products, respectively. The Company will pay a tiered royalty at percentage from the high single-digits to low double-digit for the TDBT product, upon marketing approval, calculated as percentages of aggregate annual net sales of the TDBT product. These royalties owed to GSK are in addition to any royalties owed to other third parties under various license agreements for the GSK programs. In aggregate, the Company may pay up to £90.0 million in milestone payments upon achievement of certain sales milestones applicable to GSK. The Company’s royalty obligations with respect to MLD and WAS may be deferred for a certain period in the interest of prioritizing available capital to develop each product. The Company’s royalty obligations are subject to reduction on a product-by-product basis in the event of market control by biosimilars and will expire in April 2048. Other than Strimvelis, these royalty and milestone payments were not determined to be probable and estimable at the date of the acquisition and are not included as part of consideration. The Company and GSK also separately executed a Transition Services Agreement (“TSA”) as well as an Inventory Sale Agreement, both effective April 11, 2018. The TSA outlines several activities that the Company has requested GSK to assist with during the transition period, including but not limited to utilizing GSK to sell, market and distribute Strimvelis, and assist with regulatory, clinical and non-clinical activities for the other non-commercialized products which were ongoing at the date of the GSK Agreement. The TSA expired in December 2018. In connection with the Company’s entering into the GSK Agreement, GSK assigned rights and obligations to certain contracts, which include among others, the original license agreement with Telethon/Ospedale San Raffaele and an ongoing manufacturing agreement. Telethon-OSR research and development collaboration and license agreement In connection with the Company’s entering into the GSK Agreement, the Company also acquired and assumed agreements with Telethon Foundation and San Raffaele Hospital, together referred to as Telethon-OSR, for the research, development and commercialization of autologous ex vivo As consideration for the licenses and options granted, the Company will be required to make payments to Telethon-OSR upon achievement of certain product development milestones and pay Telethon-OSR a fee in connection with the exercise of an option for each collaboration program. Additionally, the Company will be required to pay to Telethon-OSR a tiered mid-single to low-double digit royalty percentage on annual sales of licensed products covered by patent rights on a country-by-country basis, as well as a low double-digit percentage of sublicense income received from any certain third-party sublicenses of the collaboration programs. These royalties are in addition to those payable to GSK under the GSK Agreement. The Company may pay up to and aggregate of approximately €31.0 million in milestone payments upon achievement of certain product development milestones and exercises of options under the Telethon-OSR agreements. UCLB/UCLA License Agreement In February 2016, and amended in July 2017, the Company entered into the UCLB/UCLA License Agreement, under which the Company has been granted exclusive and non-exclusive, sublicensable licenses under certain intellectual property rights controlled by UCLB and UCLA to develop and commercialize gene therapy products in certain fields and territories. In exchange for these rights, in 2016, the Company made upfront cash payments consisting of $0.8 million for the license to the joint UCLB/UCLA technology and $1.1 million for the license to the UCLB technology and manufacturing technology. The Company also issued an aggregate of 4,665,384 ordinary shares to UCLB, of which 1,224,094, and 3,441,290 ordinary shares were issued in 2017 and 2016, respectively. The Company recorded research and development expense based on the fair value of the ordinary shares as of the time the agreement was executed or modified. The Company was also obligated to make an additional cash payment for clinical data. In 2017, the Company paid $0.8 million in relation to clinical data acquired. The Company recorded the payments to research and development expense. The Company recorded $0.2 million, $1.8 million, and $4.6 million of research and development costs in respect of UCLB, which comprise the upfront payments, issuance of ordinary shares and payments for clinical data, for the years ended December 31, 2018, 2017, and 2016, respectively. Under the UCLB/UCLA License Agreement, the Company is also obligated to pay an annual administration fee of $0.1 million on the first, second and third anniversary of the agreement date. Additionally, the Company is obligated to make payments to the parties of up to an aggregate of $38.9 million upon the achievement of specified regulatory milestones as well as royalties ranging from low to mid-single-digit percentage on net sales of the applicable gene therapy product. In connection with the UCLB/UCLA License Agreement, in February 2016 the Company sold an aggregate of 800,298 Series A convertible preferred shares at a price of £1.25 per share (Note 14). Unless terminated earlier by either party, the UCLB/UCLA License Agreement will expire on the 25 th Oxford BioMedica license, development and supply agreement In November 2016, and amended in September 2018, the Company entered into an arrangement with Oxford BioMedica whereby Oxford BioMedica granted an exclusive intellectual property license to the Company for the purposes of research, development, and commercialization of collaboration products, and will provide process development services, and manufacture clinical and commercial GMP-grade lentiviral vectors for the Company (“Oxford BioMedica Agreement”). As part of the consideration to rights and licenses granted under the Oxford BioMedica Agreement, the Company issued 588,220 ordinary shares to Oxford BioMedica. The Company is also obligated to make certain development milestone payments in the form of issuance of additional ordinary shares if the milestones are achieved. In November 2017, the first milestone was achieved and the Company was committed to issue 150,826 ordinary shares, and issued these shares in 2018. In September 2018, the second and third milestones were achieved, and the Company issued 150,826 ordinary shares. If future milestones are met, the Company may become obligated to issue more ordinary shares. The Company recorded $0.5 million to research and development expense upon execution of the Oxford BioMedica Agreement in 2016 and $0.1 million upon achievement of the first development milestone in 2017. The Company recorded $1.4 million upon achievement of the second and third development milestones in 2018. The expense recognized in 2016 and 2017 was determined based on the ordinary shares’ fair value as of the time the agreement was executed. The expense recognized in 2018 was determined based on the ordinary shares’ fair value as of the time the agreement was modified in September 2018. The Company may also pay low single-digit percentage royalties on net sales of collaborated product generated under the Oxford BioMedica Agreement. UCLA/CIRM research agreement In January 2017, the Company and UCLA executed a subcontract agreement (“UCLA Research Agreement”), whereby the Company would provide UCLA certain research and development services related to autologous lentiviral gene therapy in ADA-SCID as part of UCLA’s existing ADA-SCID research program that is being funded by the California Institute for Regenerative Medicine (“CIRM”). The original amount of total reimbursement the Company could have received under the UCLA Research Agreement was $10.4 million. Through June 30, 2018, the Company received and recognized $7.3 million from this agreement. In July 2018, a transfer of the sponsorship took place and the Company became the awardee under the program funded by CIRM, and the Company received an award that superseded the previous award noted above. The total reimbursement the Company may receive under the new award is $8.5 million, of which we may be obligated to reimburse UCLA for up to $5.5 million for research activities upon achievement of certain milestones. Reimbursement may be received from CIRM during the period from January 2017 to December 2021. Under the terms of the CIRM grants, the Company is obligated to pay royalties based on a low single digit royalty percentage on net sales of CIRM-funded product candidates or CIRM-funded technology. The Company has the option to decline any and all amounts awarded by CIRM. As an alternative to revenue sharing, the Company has the option to elect to convert the award to a loan, payable within 10 days of election. No such election has been made as of the date of this Annual Report. The reimbursements are recognized as a reduction in research and development expense for research activities that have taken place. In the event the reimbursement is received in advance of research activities, it is recognized within other liabilities. The Company accrues the sales-based royalties associated with CIRM-funded products when payment becomes probable. To date, no royalties have been accrued. For the year ended December 31, 2018 and 2017, the Company recorded $3.0 million and $5.0 million as a reduction of research and development expenses related to the UCLA Research Agreement. As of December 31, 2018, the Company recorded $1.6 million in accrued expenses for amounts which it is obligated to reimburse to UCLA under the July 2018 grant. As of December 31, 2017, the Company recorded $2.3 million within accrued expense and other liabilities on the Company’s consolidated balance sheet related to the advance of reimbursements for research activities. Other license and research agreements In 2016 and 2017, the Company entered into several license agreements with various academic and health care institutions to in-license certain intellectual property rights and know-how relevant to its programs. As part of the consideration related to these license agreements, the total share commitment was 1,030,786 and 375,380 ordinary shares, respectively. The Company made cash payments of nil, $2.7 million and $0.4 million 2018, 2017, and 2016, respectively. The share commitments were recorded to research and development expense based on their fair values as of the time the respective agreement was executed or modified. The amounts were nil, $1.4 million and $0.5 million in 2018, 2017 and 2016, respectively. In addition, the Company also committed to make certain clinical and regulatory milestone payments in the aggregate of $31.8 million as well as single-digit percentage royalties on net sales of products and services associated with the in-licensed technology. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes The components of loss from operations before income taxes for the years ended December 31, 2018, 2017, and 2016 are as follows: December 31, 2018 2017 2016 (in thousands) U.K. (230,543 ) (39,422 ) (19,105 ) Non-U.K. 1,018 (269 ) 40 Loss before taxes $ (229,525 ) $ (39,691 ) $ (19,065 ) The provision for income taxes for the years ended December 31, 2018, 2017, and 2016 was computed at the United Kingdom statutory income tax rate. The income tax provision for the years then ended comprised: December 31, 2018 2017 2016 (in thousands) Current provision expense Federal—United States $ 607 $ — $ — State—United States 444 16 17 United Kingdom — — — Total current provision expense 1,051 16 17 Deferred provision expense Federal—United States (31 ) — — State—United States (50 ) 37 3 United Kingdom — — — Total deferred provision expense (81 ) 37 3 Total provision for income taxes $ 970 $ 53 $ 20 A reconciliation of income tax expense computed at the United Kingdom statutory income tax rate to income taxes as reflected in the consolidated financial statements is as follows: December 31, 2018 2017 2016 (in thousands) Income taxes at United Kingdom statutory rate $ (43,526 ) $ (7,640 ) $ (3,831 ) State income taxes 370 41 14 Permanent differences 293 115 75 Tax credits — (286 ) (99 ) Foreign rate differential 20 (40 ) 6 Change in valuation allowance 43,562 7,827 3,855 Impact of United States tax reform 159 36 — Other 92 — — Total provision expense for income taxes $ 970 $ 53 $ 20 Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2018 and 2017 consist of the following: December 31, 2018 2017 (in thousands) Deferred tax assets Net operating loss carryforwards $ 29,436 $ 9,483 Research and development credits — 356 Share-based compensation 1,297 147 Amortization 19,451 2,156 Accruals 184 28 Other 1,946 — Total deferred tax assets $ 52,314 $ 12,170 Valuation allowance (51,281 ) (11,882 ) Net deferred tax assets $ 1,033 $ 288 Deferred tax liabilities Depreciation $ (991 ) $ (328 ) Other non-current liabilities (net deferred tax assets and liabilities) $ 42 $ (40 ) As of December 31, 2018, the Company had approximately $155.2 million of United Kingdom net operating loss carryforwards. As of December 31, 2017, the Company has approximately $48.4 million of United Kingdom net operating loss carryforwards with an indefinite life (but may be subject to certain utilization restrictions). The Company has evaluated the positive and negative evidence bearing upon its ability to realize its deferred tax assets, which primarily comprise net operating loss carryforwards and research and development credits. Management has considered the Company’s history of cumulative net losses in the United Kingdom, estimated future taxable income and prudent and feasible tax planning strategies and has concluded that it is more likely than not that the Company will not realize the benefits of its United Kingdom deferred tax assets. Accordingly, a full valuation allowance has been established against these net deferred tax assets as of December 31, 2018 and 2017, respectively. The Company reevaluates the positive and negative evidence at each reporting period. Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2018, 2017, and 2016 related primarily to the increase in net operating loss carryforwards and were as follows: December 31, 2018 2017 2016 (in thousands) Valuation allowance as of beginning of year $ (11,882 ) $ (3,503 ) — Decreases recorded as benefit to income tax provision 604 — — Increases recorded to income tax provision (44,166 ) (7,827 ) (3,855 ) Effect of foreign currency translation 4,163 (552 ) 352 Valuation allowance as of end of year $ (51,281 ) $ (11,882 ) $ (3,503 ) The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending tax examinations. The Company's tax years are still open under statute from December 31, 2015, to the present. The resolution of tax matters is not expected to have a material effect on the Company's consolidated financial statements. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 11. Net Loss Per Share The following table sets forth the computation of basic and diluted net loss per share: Year Ended December 31 2018 2017 2016 (In thousands, except per share and share amounts) Net loss $ (230,495 ) $ (39,744 ) $ (19,085 ) Net loss attributable to ordinary shareholders $ (230,495 ) $ (39,744 ) $ (19,085 ) Weighted average ordinary shares outstanding, basic and diluted 22,559,389 8,872,768 7,100,528 Net loss per share attributable to ordinary shareholders, basic and diluted $ (10.22 ) $ (4.48 ) $ (2.69 ) Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods as the inclusion of all shares convertible into ordinary shares outstanding would have been anti-dilutive. The following securities, presented based on amounts outstanding at each period end, are considered to be ordinary share equivalents, but were not included in the computation of diluted net loss per ordinary share because to do so would have been anti-dilutive: December 31, 2018 2017 2016 Convertible preferred shares — 33,277,678 11,204,199 Share options 9,179,247 3,612,288 1,809,442 Unvested performance-based restricted share units 219,922 — — 9,399,169 36,889,966 13,013,641 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Operating lease agreements In October 2016, the Company entered into a lease agreement for laboratory space in Foster City, California, United States. The lease has a term of 5 years and expires in October 2021. The annual rental expense approximates $0.2 million. The Company was provided with one month of free rent. In November 2017, the Company entered into a lease agreement for laboratory space in Menlo Park, California, United States. The lease expires in November 2020. The annual rental expense approximates $0.8 million. The Company was provided with one month of free rent. In January 2018, the Company entered into a lease agreement for additional office space in London, United Kingdom. The lease has a term of five years and terminates in January 2023. The annual rental expense approximates $0.8 million. In March 2018, the Company entered into a lease agreement for office space in Boston, Massachusetts, United States, which terminates in September 2022. The annual rental expense approximates $0.3 million. In December 2018, the Company leased additional office space in London, United Kingdom. The lease commenced on December 7, 2018 and terminates on January 7, 2023. The annual rental expense approximates $0.1 million. Fremont lease agreement In December 2018, the Company leased manufacturing and office space in Fremont, California, which terminates in May 2030. The annual rent expense approximates $2.4 million. The Company was provided with 8 months of free rent. Subject to the terms of the lease agreement, the Company executed a $3.0 million letter of credit upon signing the lease, which may be reduced by 25% subject to reduction requirements specified therein. This amount is classified as restricted cash on the consolidated balance sheet. The Company intends to perform non-normal tenant improvements to the property to customize the facility to suit the Company’s unique manufacturing needs. The Company is responsible for paying directly the costs associated with the construction project and as such the Company will be deemed for accounting purposes only to be the owner of the construction project, even though it is not the legal owner. As of December 31, 2018, no construction has begun related to the facility. The lease provides for approximately $5.0 million in tenant improvement allowances to be reimbursed to the Company by the landlord, which will be amortized into rental expense over the term of the lease. Upon the start of construction, the Company is required to deposit $10.0 million in an escrow account. Subject to the terms of the lease and reduction provisions, this amount may be decreased to nil over time. Future minimum lease payments The following table summarizes the future minimum lease payments due under all operating leases as of December 31, 2018: Due in: (in thousands) 2019 $ 3,303 2020 4,910 2021 4,135 2022 3,921 2023 2,844 Thereafter 20,386 Total $ 39,499 The Company recognizes rent expense on a straight-line basis over the respective lease period and has recorded deferred rent for rent expense incurred but not yet paid. The Company recorded rent expense of $2.4 million, $0.7 million and $0.2 million for the years ended December 31, 2018, 2017 and 2016, respectively. Other funding commitments The Company has entered into several license agreements (Note 9). In connection with these agreements the Company is required to make milestone payments and annual license maintenance payments not met at December 31, 2018 and 2017 or royalties on future sales of specified products. The Company determined that no milestone payments that have not already been accrued were probable as of December 31, 2018. Commitment with contract manufacturing organization The Company has entered into agreements with contract manufacturing organizations relating to the provision of manufacturing services and purchase of clinical material to be used in clinical trials that include minimum purchase commitments. As of December 31, 2018, and December 31, 2017, there was $0.8 million and $nil included within prepayments relates to prepaid instalments against these minimum commitments. The Company is committed to make further payments totaling $10.1 million between January 2019 and March 2021 . Legal proceedings The Company is not a party to any litigation and does not have contingency reserves established for any litigation liabilities. |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Benefit Plans | 13. Benefit Plans The Company makes contributions to private defined contribution pension plans on behalf of its employees. The Company matches its employee contributions up to five percent of each employee’s annual salary based on the jurisdiction the employees are located. The Company paid $0.6 million, $0.2 million, and $31,000 in matching contributions for the years ended December 31, 2018, 2017 and 2016, respectively. |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 14. Related-party Transactions UCLB Subsequent to our Series C preferred share financing in August 2018, UCLB is no longer a principal shareholder, and is no longer considered an affiliated entity of the Company as of December 31, 2018. UCL Technology Fund LP (“UCLTF”) is affiliated with UCLB. On February 6, 2016, UCLB through its associate UCLTF, entered into a Subscription and Shareholders’ Agreement with the Company to purchase an aggregate of 800,298 Series A shares (Note 9). At the same time, UCLB also entered into the UCLB/UCLA License Agreement (Note 9), through which the Company was granted licenses to certain intellectual property rights controlled by UCLB and UCLA to develop and commercialize gene therapy products in certain fields and territories. In 2016, the Company also agreed to sponsor a short-term research program with UCLB with total program costs of $0.5 million. In 2018, 2017, and 2016 the Company incurred $0.2 million, $0.2 million, and $0.4 million of consulting fees, with an affiliate of UCLB, respectively. GSK In April 2018, the Company entered into the GSK Agreement with subsidiaries of GSK to acquire a portfolio of autologous ex vivo gene therapy assets and licenses, for rare diseases and option rights on three additional programs in preclinical development from Telethon-OSR (See Note 9). As consideration for the license the Company paid an upfront fee of $14.1 million, incurred an inventory purchase liability of $6.9 million, and issued 12,455,252 Series B convertible preferred shares valued at $93.4 million. Additionally, as part of the GSK agreement, the Company obtained, and is responsible for maintaining the commercial availability of Strimvelis. The Company recorded a loss provision of $18.4 million associated with the contract, as the costs to maintain Strimvelis are expected to significantly exceed revenues. The issuance of the convertible preferred shares made GSK a principal shareholder in the Company. The Company and GSK have also separately executed a Transition Services Agreement (“TSA”) as well as an Inventory Sale Agreement, both effective April 11, 2018. The TSA outlined several activities that the Company requested GSK to assist with during the transition period, including but not limited to utilizing GSK to sell, market and distribute Strimvelis, and assist with regulatory, clinical and non-clinical activities for the other non-commercialized products which were ongoing at the date of the GSK Agreement. The TSA is expired in December 2018. In 2018 the Company paid $14.0 million in pass-through research and development and royalty costs with GSK associated with the TSA. As of December 31, 2018, the company had $6.0 million in accrued expenses and accounts payable associated with the GSK TSA. Convertible preferred shares In February 2016, entities affiliated with F-Prime Capital purchased 16,006,000 Series A convertible preferred shares. In December 2017, entities affiliated with F-Prime Capital and Scottish Investment Trust purchased 2,400,900 and 3,201,200 Series B convertible preferred shares. In December 2017, the Company sold to its Chief Executive Officer, Chief Medical Officer and Senior Vice President of Business Development and Alliance Management 39,825, 9,955 and 3,982 Series B convertible preferred shares. In August 2018, entities affiliated with Deerfield Management Company and Scottish Mortgage Investment Trust purchased 4,647,500 and 697,125 Series C convertible preferred shares at a price of In August 2018, the Company sold to its Chief Executive Officer, Chief Financial Officer, and various members of its board of directors 24,979, 9,294, and 90,158 Series C convertible preferred shares. All convertible preferred shares were converted to ordinary shares as part of the Company’s IPO. Initial public offering In November 2018, entities affiliated with Deerfield Management Company, RA Capital Management LLC, Temasek Holdings (Private) Limited, and Scottish Mortgage Investment Trust purchased 3,376,100, 2,057,432, 1,000,000 and 925,000 ADSs, respectively, in the IPO. Subsequent to the IPO and as of December 31, 2018, each of these entities holds more than 5% of the Company’s share capital. In November 2018, our Chief Executive Officer, Chief Financial Officer, and members of the board of directors purchased 18,500, 5,000, and 13,000 ADRs, respectively, in the IPO. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events Grants of share options and performance-based restricted share units under the 2018 Plan On January 2, 2019, the Company granted options to employees for the purchase of an aggregate of 117,280 ordinary shares, at a weighted average exercise price of $14.98 per share. The aggregate grant-date fair value of these options was $1.1 million, which will be recognized as share-based compensation expense over the vesting period of four years. On January 16, 2019, the Company granted options to senior management and employees for the purchase of an aggregate of 2,470,423 ordinary shares, at a weighted average exercise price of $12.54 per share. The aggregate grant-date fair value of these options was $19.8 million, which will be recognized as share-based compensation expense over the vesting period of approximately four years. The Company also granted performance-based RSUs to certain of its executives covering a maximum of 219,500 ordinary shares. These performance-based RSUs will vest, if at all, based upon attainment of certain regulatory and market-based milestones, but must vest by December 31, 2021 or else be forfeited. The maximum aggregate total fair value of these RSUs that could be recognized over this period is $3.3 million. On February 1, 2019, the Company granted options to employees for the purchase of an aggregate of 95,800 ordinary shares, at a weighted averaged exercise price of $12.86 per share. The aggregate grant-date fair value of these options was $0.8 million, which will be recognized as share-based compensation expense over the vesting period of four years. On March 1, 2019, the Company granted options to employees for the purchase of an aggregate of 24,700 ordinary shares, at a weighted averaged exercise price of $16.89 per share. The aggregate grant-date fair value of these options was $0.3 million, which will be recognized as share-based compensation expense over the vesting period of four years. On March 13, 2019, the Company granted performance-based RSUs to certain members of its senior management covering 108,000 ordinary shares. These performance-based RSUs will vest, if at all, based upon attainment of certain regulatory and market-based milestones, but must vest by December 31, 2021 or else be forfeited. The maximum aggregate total fair value of these RSUs that could be recognized over this period is estimated to be $1.9 million. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Use of estimates | Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual for research and development expenses, the research and development tax credit receivable, the Stimvelis loss provision, the fair values of ordinary and convertible preferred shares, the fair value of tranche obligations, share-based compensation and income taxes. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ materially from those estimates. |
Concentration of credit risk | Concentration of credit risk The Company has no significant off-balance sheet risk, such as foreign currency contracts, options contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and other receivables. Periodically, the Company maintains deposits in accredited financial institutions in excess of federally insured limits. The Company deposits its cash in financial institutions that it believes have high credit quality and has not experienced any losses on such accounts and does not believe it is exposed to any unusual credit risk beyond the normal credit risk associated with commercial banking relationships or entities for which it has a receivable. |
Foreign currency translation | Foreign currency translation The reporting currency of the Company is the U.S. dollar. The Company has determined the functional currency of the parent company, Orchard Therapeutics plc, is U.S. dollars because it predominantly raises finance and expends cash in U.S. dollars. The functional currency of our subsidiary operations is the applicable local currency. Transactions in foreign currencies are translated into the functional currency of the subsidiary in which they occur at the foreign exchange rate in effect on at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated into the functional currency of the relevant subsidiary at the foreign exchange rate in effect on the balance sheet date. The results of operations for subsidiaries, whose functional currency is not the U.S. dollar, are translated at an average rate for the period where this rate approximates to the foreign exchange rates ruling at the dates of the transactions and the balance sheet of these subsidiaries are translated at foreign exchange rates prevailing at the balance sheet date. Exchange differences arising from this translation of foreign operations are reported as an item of other comprehensive loss. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents. In 2018 and 2017, the Company did not have any cash equivalents. |
Restricted cash | Restricted Cash Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements are recorded as Restricted cash on our consolidated balance sheet. The Company has entered into a lease transaction (Note 12) that requires a letter of credit of $3.0 million at December 31, 2018. The Company is also contractually required to maintain a cash collateral account associated with corporate credit card accounts in the amount of $0.9 million at December 31, 2018. The Company had no restricted cash at December 31, 2017. The Company includes the restricted cash balance in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the consolidated statements of cash flows. |
Property and equipment | Property and equipment Property and equipment are recorded at cost and depreciated or amortized using the straight-line method over the following estimated useful lives. Property and equipment: Estimated useful life Lab equipment 5-10 years Leasehold improvements Shorter of lease term or estimated useful life Furniture and fixtures 4 years Office and computer equipment 3-5 years As of December 31, 2018, and 2017, the Company’s property and equipment consisted of furniture and fixtures, office and computer equipment, lab equipment and leasehold improvements. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in the statement of operations and other comprehensive loss. Repairs and maintenance expenditures, which are not considered improvements and do not extend the useful life of property and equipment, are expensed as incurred. |
Impairment of long-lived assets | Impairment of long-lived assets Long-lived assets consist of property and equipment. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset group for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset group to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset group are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset group over its fair value, as determined in accordance with the related accounting literature. To date, the Company has not recorded any impairment losses on long-lived assets. |
Fair value measurements | Fair value measurements Certain assets and liabilities of the Company are carried at fair value under U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in 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. The carrying values of the Company’s other receivable, accounts payable, accrued expenses and other current liabilities approximate their fair values due to the short-term nature of these assets and liabilities. |
Tranche obligations | Tranche obligations In 2016, Series A convertible preferred shares (the “Series A convertible preferred shares”) were issued in three tranches. The Company was obligated to issue second and third tranches of Series A convertible preferred shares once certain business milestones were met; these tranches were recognized as tranche obligations, which are subject to revaluation at each balance sheet date. Changes in fair value were recorded as a component of other income (expense) until the settlement of the tranche obligation. The tranche obligations settled in 2017, and no such obligations existed in 2018. The fair values of the tranche obligations are based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The tranche obligations are valued as a forward contract, and the values are determined using a probability-weighted present value calculation. In determining the fair values of the tranche obligations, estimates and assumptions impacting fair value included the fair value of the Company’s convertible preferred shares, risk-free interest rates, the probability and estimated timing of the tranche closings, expected dividend yield and expected volatility of the price of the underlying convertible preferred shares. The Company determines the per share fair value of the underlying convertible preferred shares using the option pricing model (“OPM”), which considers the preferred share price paid by investors, the time to liquidity and volatility. In the OPM, the timing of the liquidity event determines the assumed life in the Black-Scholes calculation. The Company estimates a time to liquidity taking into account the future tranche funding. If the future tranche is not expected to be funded, a liquidity event will be assumed to have occurred. If the tranche is expected to be funded, a longer-term liquidity event is assumed to have occurred. Volatility is estimated based on the daily trading histories of comparable public companies. The risk-free interest rate is determined by reference to the United States Treasury yield curve. The Company estimated a 0% dividend yield based on the expected dividend yield and the fact that it has never paid or declared a dividend. |
Segment information | Segment information Operating segments are defined as components of an enterprise for which separate discrete information is available for evaluation by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company and the Company’s chief operating decision maker, the Company’s Chief Executive Officer, views the Company’s operations and manages its business as a single operating segment, which is focused on discovering, acquiring, developing and commercializing gene therapies for patients with rare disorders. The Company operates in three geographic regions: the United Kingdom, European Union, and United States. The Company had fixed assets of $1.7 million and $3.8 million located in the United Kingdom and United States, respectively, as of December 31, 2018, and $0.5 million and $2.2 million located in the United Kingdom and United States, respectively, as of December 31, 2017. |
Research and development costs | Research and development costs Research and development costs are expensed as incurred. Research and development expenses consist of costs incurred in performing research and development activities, including salaries, share-based compensation and benefits, facilities costs, depreciation, third-party license fees, and external costs of outside vendors engaged to conduct clinical development activities and clinical trials, as well as to manufacture clinical trial materials. Non-refundable prepayments for goods or services that will be used or rendered for future research and development activities are recorded as prepaid expenses. Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered, or the services rendered. In addition, funding from research grants is recognized as an offset to research and development expense on the basis of costs incurred on the research program. Royalties associated with our research grants will be accrued when they become probable. |
Research contract costs and accruals | Research contract costs and accruals The Company has entered into various research and development-related contracts. These agreements are cancelable, and related costs are recorded as research and development expenses as incurred. The Company records accruals for estimated ongoing research costs. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or clinical trials, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs. |
Share-based compensation | Share-based compensation The Company measures share-based awards granted to employees and directors based on the fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which is the vesting period of the respective award. Forfeitures are accounted for as they occur. Prior to the adoption of Accounting Standards Update (“ASU”) No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting After adoption of ASU 2018-07, the measurement date for non-employee awards is the date of the grant. The compensation expense for non-employees is recognized, without changes in the fair value of the award, over the requisite service period, which is the vesting period of the respective award. The Company classifies share-based compensation expense in its consolidated statement of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified. Valuation of Stock Options The fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model. Assumptions used in the option pricing model include the following: Expected volatility. The Company estimates its expected share price volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until it has adequate historical data regarding the volatility of its own traded share price. Expected term. The expected term of the Company’s share options has been determined utilizing the “simplified method” for awards that qualify as “plain-vanilla” options. Risk-free interest rate. The risk-free interest rate is determined by reference to the United States Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend. Expected dividend yield is based on the Company’s history of not paying cash dividends on ordinary shares. The Company does not expect to pay any cash dividends in the foreseeable future. Fair value of ordinary shares. Options granted subsequent to the Company’s IPO are issued at the fair market value of the Company’s ADS at the date of grant as approved by the board. Prior to the IPO, given the absence of an active market for the Company’s ordinary shares, the board of directors, the members of which the Company believes have extensive business, finance, and venture capital experience, was required to estimate the fair value of the Company’s ordinary share at the time of each grant of a share-based award. The board of directors determined the estimated fair value of the Company’s equity instruments based on a number of objective and subjective factors, including external market conditions affecting the biotechnology industry sector. The Company and the board of directors utilized various valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants’ Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation Ordinary share valuations were prepared using the OPM to estimate the Company’s enterprise value. The OPM treats ordinary and convertible preferred shares as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company’s securities changes. Under this method, the ordinary shares have value only if the funds available for distribution to shareholders exceeded the value of the convertible preferred shares liquidation preferences at the time of the liquidity event, such as a strategic sale or a merger. A discount for lack of marketability of the ordinary shares is then applied to arrive at an indication of value for the ordinary shares. The hybrid method is a probability weighted expected return method, PWERM, where the equity value in one or more scenarios is calculated using an OPM. The PWERM is a scenario-based methodology that estimates the fair value of ordinary shares based upon an analysis of future values for the company, assuming various outcomes. The ordinary shares’ value is based on the probability-weighted present value of expected future investment returns considering each of the possible outcomes available as well as the rights of each share class. The future value of the ordinary shares under each outcome is discounted back to the valuation date at an appropriate risk-adjusted discount rate and probability weighted to arrive at an indication of value for the ordinary shares. Valuation of RSUs We estimate the fair value of our performance-based restricted stock unit (“RSUs”) awards or components of RSU awards whose vesting is contingent upon market conditions, such as volume weighted-average price (“VWAP”), |
Comprehensive loss | Comprehensive loss Comprehensive loss includes net loss as well as other changes in shareholders’ equity (deficit) that result from transactions and economic events other than those with shareholders. For the years ended December 31, 2018, 2017 and 2016, other comprehensive loss included a loss of $1.0 million, a gain of $4.4 million, and a loss of $0.3 million and, respectively, related to foreign currency translation adjustments. |
Strimvelis loss provision | Strimvelis loss provision As part of the GSK transaction, the Company is required to maintain commercial availability of Strimvelis in the European Union until such time that an alternative gene therapy is available (Note 9). Strimvelis is not currently expected to generate sufficient cash flows to overcome the costs of maintaining the product and certain regulatory commitments; therefore, the Company recorded a liability associated with the loss contract of $18.4 million. The Company recognizes the amortization of the loss provision on a diminishing balance basis based on the actual net loss incurred associated with Strimvelis and the expected future net losses to be generated until such time as Strimvelis is no longer commercially available. The amortization of the provision is recorded as a credit to research and development expense. We have made an estimate of the expected future losses associated with Strimvelis and adjust this estimate as facts and circumstances change regarding the commercial availability and costs of maintaining and selling Strimvelis. As of December 31, 2018, the total Strimvelis loss provision liability was $10.3 million. During the year-ended December 31, 2018 the Company amortized $6.3 million as a credit to research and development expense. The effects of foreign currency translation for the year-ended December 31, 2018 reduced the liability by $1.7 million. |
Research and development income tax credit | Research and development income tax credit As a company that carries out extensive research and development activities, the Company seeks to benefit from one of two U.K. research and development tax relief programs, the Small and Medium-sized Enterprises R&D Tax Credit Program (“SME Program”) and the Research and Development Expenditure program (“RDEC Program”). Qualifying expenditures largely comprise employment costs for research staff, consumables and certain internal overhead costs incurred as part of research projects for which the Company does not receive income. Such credits are accounted for as reductions in research and development expense in the period in which the expenditures were incurred. Based on criteria established by HM Revenue and Customs (“HMRC”), management of the Company expects a proportion of expenditures being carried in relation to its pipeline research, clinical trials management and manufacturing development activities to be eligible for the RDEC Program for the years ended December 31, 2018, 2017 and 2016. The Company has qualified under the more favorable SME regime for the year ended December 31, 2018. The RDEC and SME credits are not dependent on the Company generating future taxable income or on the ongoing tax status or tax position of the Company. As such the Company has recorded a United Kingdom research and development tax credit as an offset to research and development expense in the consolidated statements of operations and comprehensive loss of $10.2 million, $0.7 million, and $0.2 million for the years ended December 31, 2018, 2017, and 2016, respectively. As of December 31, 2018, and 2017, the Company’s tax incentive receivable from the United Kingdom government was $10.6 million and $0.9 million, respectively. The effects of foreign currency translation for the year-ended December 31, 2018 reduced the receivable by $0.5 million. These amounts have not yet been paid to the Company by HMRC. |
Income taxes | Income taxes The Company is subject to United Kingdom corporate taxation. Due to the nature of its business, the Company has generated losses since inception and has therefore not paid United Kingdom corporation tax. The Company’s income tax credit recognized represents the sum of the research and development tax credits recoverable in the United Kingdom and income tax payable in the United States. Unsurrendered United Kingdom losses may be carried forward indefinitely to be offset against future taxable profits, subject to numerous utilization criteria and restrictions. The amount that can be offset each year is limited to £5.0 million plus an incremental 50% of United Kingdom taxable profits. Value Added Tax (“VAT”), is broadly charged on all taxable supplies of goods and services by VAT-registered businesses, and is generally applicable to our operations in the United Kingdom and European Union. Under current rates, an amount of 20% of the value, as determined for VAT purposes, of the goods or services supplied is added to all sales invoices and is payable to HMRC. Similarly, VAT paid on purchase invoices associated with our U.K. subsidiary is generally reclaimable from HMRC. The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred tax assets and liabilities are determined on the basis of the differences between the consolidated financial statements and tax basis of assets and liabilities using substantively enacted tax rates in effect for the year in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered in the future and, to the extent the Company believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company is subject to corporation taxes in the United Kingdom and the United States. The calculation of the Company’s tax provision involves the application of both United Kingdom or United States tax law and requires judgement and estimates. The Company accounts for uncertainty in income taxes by recognizing in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed as the amount of benefit to recognize in the consolidated financial statements. The amount of benefits that may be used is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate, as well as the related net interest and penalties. |
Net product sales | Net product sales During the year, the Company made its first sales of Strimvelis, which is currently distributed exclusively at the San Raffaele Hospital in Milan, Italy. Strimvelis sales are currently under a buy-and-bill model where the treatment center purchases and pays for the product and submits a claim to the payer. The Company evaluated the variable consideration under Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers The Company’s net product sales represent total gross product sales of Strimvelis. All sales are recognized when control is transferred, which occurs upon the completion of the scheduled Strimvelis treatment. Transduction costs associated with administering the therapy are included in cost of product sales. As the product is sold in direct relation to a scheduled treatment, the Company estimates that there is minimal risk of product return, including the risk of product expiration. |
Net income (loss) per share | Net income (loss) per share The Company follows the two-class method when computing net income (loss) per share as the Company has issued shares that meet the definition of participating securities. The two-class method determines net income (loss) per share for each class of ordinary and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to ordinary shareholders for the period to be allocated between ordinary and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Basic net income (loss) per share attributable to ordinary shareholders is computed by dividing the net income (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the period. Diluted net income (loss) attributable to ordinary shareholders is computed by adjusting net income (loss) attributable to ordinary shareholders to reallocate undistributed earnings based on the potential impact of dilutive securities. Diluted net income (loss) per share attributable to ordinary shareholders is computed by dividing the diluted net income (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the period, including potential dilutive ordinary shares. For purpose of this calculation, outstanding options and convertible preferred shares are considered potential dilutive ordinary shares. The Company’s convertible preferred shares contractually entitle the holders of such shares to participate in dividends but do not contractually require the holders of such shares to participate in losses of the Company. Accordingly, in periods in which the Company reports a net loss attributable to ordinary shareholders, such losses are not allocated to such participating securities. In periods in which the Company reports a net loss attributable to ordinary shareholders, diluted net loss per share attributable to ordinary shareholders is the same as basic net loss per share attributable to ordinary shareholders, since dilutive ordinary shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss attributable to ordinary shareholders for the years ended December 31, 2018, 2017, and 2016. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2018-07 (“ASU 2018-07”). ASU 2018-07 expands the scope of Topic 718, Compensation—Stock Compensation Equity—Equity-Based Payments to Non-Employees In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting In January 2017, the FASB issued ASU No. 2017-01 , Business Combinations (Topic 805) Clarifying the Definition of a Business In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In August 2016, the FASB issued Accounting Standards Update No 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740) Intra-Entity Transfer of Assets Other than Inventory In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes In November 2014, the FASB issued ASU No. 2014-16, Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, |
Recently issued accounting pronouncements not yet adopted | Recently issued accounting pronouncements not yet adopted In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815) (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception In February 2016, the FASB issued ASU No. 2016-02 , Leases (Topic 842) Leases (Topic 842) The Company has considered other recent accounting pronouncements and concluded that they are either not applicable to the business, or that the effect is not expected to be material to the financial statements as a result of future adoption. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of Property and Equipment | Property and equipment are recorded at cost and depreciated or amortized using the straight-line method over the following estimated useful lives. Property and equipment: Estimated useful life Lab equipment 5-10 years Leasehold improvements Shorter of lease term or estimated useful life Furniture and fixtures 4 years Office and computer equipment 3-5 years |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Abstract] | |
Schedule of Financial Liabilities Measured at Fair Value on Recurring Basis | The following table presents information about the Company’s financial liabilities that have been measured at fair value on a recurring basis as of December 31, 2016 (there were no financial liabilities measured at fair value on a recurring basis as of December 31, 2018 or 2017): Fair Value Measurements as of December 31, 2016 Using: Level 1 Level 2 Level 3 Total (in thousands) Liabilities: Tranche obligations $ — $ — $ 1,402 $ 1,402 $ — $ — $ 1,402 $ 1,402 |
Schedule of Assumptions Used in Valuing of Tranche Obligations | The following assumptions were used in valuing the tranche obligations: Year Ended December 31, 2016 Risk-free interest rate 0.00 - 0.53% Expected dividend yield 0.00% Expected term (in years) 0.00 - 0.92 Expected volatility 75.5 - 89.9% Fair value of convertible preferred shares $1.00 - $1.58 |
Schedule of Changes in Fair Value of Tranche Obligation Liability Measured at Fair Value on Recurring Basis using Significant Unobservable Inputs | The following table provides a summary of the changes in fair value of the tranche obligation liability measured at fair value on a recurring basis using significant unobservable inputs during the years ended December 31, 2016 and 2017 (in thousands): Tranche Obligations (in thousands) Balance at December 31, 2015 $ — Issuance of tranche obligations to purchase convertible preferred shares 2,459 Change in fair value of second tranche obligation (424 ) Settlement of second tranche obligation upon issuance of convertible preferred shares (451 ) Change in fair value of third tranche obligation 135 Effect of exchange rate changes on tranche obligation (317 ) Balance at December 31, 2016 1,402 Settlement of third tranche obligation upon issuance of convertible preferred shares (1,402 ) Balance at December 31, 2017 $ — |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following: December 31, 2018 2017 (in thousands) Property and equipment: Lab equipment $ 4,930 $ 2,708 Leasehold improvements 1,487 244 Furniture and fixtures 403 59 Office and IT equipment 152 12 Property and equipment $ 6,972 3,023 Less: accumulated depreciation (1,496 ) (310 ) Property and equipment, net $ 5,476 $ 2,713 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities And Other Liabilities [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other current liabilities consisted of the following: December 31, 2018 2017 (in thousands) Accrued external research and development expenses $ 12,738 $ 1,834 Accrued payroll and related expenses 7,372 2,090 Accrued professional fees 1,186 394 Accrued other 2,762 279 Strimvelis liability - current portion 4,170 — Deferred UCLA reimbursement — 2,267 Due to UCLA 1,552 — Total accrued expenses and other current liabilities $ 29,780 $ 6,864 |
Shareholders_ Equity and Conver
Shareholders’ Equity and Convertible Preferred Shares (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Shareholders Equity And Convertible Preferred Shares [Abstract] | |
Schedule of Convertible Preferred Shares | As of December 31, 2017, Convertible Preferred Shares consisted of the following: December 31, 2017 (in thousands, except share amounts) Shares Authorized Shares Issued and Outstanding Carrying Value Liquidation Preference(a) Ordinary shares Issuable Upon Conversion Series A convertible preferred shares 16,806,298 16,806,298 $ 26,994 $ 28,337 16,806,298 Series B convertible preferred shares 16,964,876 16,471,380 107,075 111,617 16,471,380 33,771,174 33,277,678 $ 134,069 $ 139,954 33,277,678 (a) Amounts were translated into United States dollars using the spot rate as of December 31, 2017. |
Share-based Compensation (Table
Share-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Assumptions Used in Black-Scholes Option Pricing Model | The assumptions used in the Black-Scholes option pricing model to determine the fair value of the share options granted to employees, non-employees, and directors during the year ended December 31, 2018, 2017, and 2016 were as follows: Year Ended December 31, 2018 2017 2016 Risk-free interest rate% - % 2.66% - 3.03% 1.52% - 2.30% 1.52% - 2.40% Expected term (in years) 5.00 - 6.08 6.08 6.08 - 9.75 Expected volatility% - % 64.27 - 68.58% 77.80% - 80.00% 77.80% -79.70% Expected dividend rate% 0.00% 0.00% 0.00% |
Summary of Option Activity | The following table summarizes option activity under the plans for the year ended December 31, 2018: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (in thousands, except share and per share amounts) Options outstanding at December 31, 2017 4,153,196 $ 1.20 9.28 $ 10,483 Granted 6,303,465 4.23 Exercised (14,547 ) 1.96 Cancelled (238,682 ) 2.55 Options outstanding at December 31, 2018 10,203,432 3.04 8.97 129,551 Vested as of December 31, 2018 2,022,399 1.11 8.20 29,568 |
Summary of RSU Award Activity | The following table summarizes RSU award activity for the year ended December 31, 2018: Shares Weighted Average Fair Value Unvested at December 31, 2017 — $ — Granted 219,922 15.48 Vested — — Forfeited — — Unvested at December 31, 2018 219,922 15.48 |
Share-based Compensation Expense | Share-based compensation expense related to share options, restricted share unit awards, and the employee stock purchase plan was classified in the consolidated statements of operations and comprehensive loss as follows: Year Ended December 31, 2018 2017 2016 (in thousands) Research and development $ 2,740 $ 615 $ 181 Selling, general and administrative 4,026 404 23 Total $ 6,766 $ 1,019 $ 204 |
License and Research Arrangem_2
License and Research Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
License And Research Arrangements [Abstract] | |
Summary of Consideration in Asset Acquisition | The consideration transferred in the asset acquisition was measured at cost, including transaction costs, assets and equity interests transferred by the acquirer, and liabilities incurred by the acquirer as noted below: Consideration (in thousands) Upfront cash paid for GSK Agreement $ 14,186 Series B-2 convertible preferred shares issued to GSK 93,391 Transaction costs 780 Liabilities: Strimvelis liability 18,351 Inventory purchase liability 6,893 Total consideration transferred: $ 133,601 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax | The components of loss from operations before income taxes for the years ended December 31, 2018, 2017, and 2016 are as follows: December 31, 2018 2017 2016 (in thousands) U.K. (230,543 ) (39,422 ) (19,105 ) Non-U.K. 1,018 (269 ) 40 Loss before taxes $ (229,525 ) $ (39,691 ) $ (19,065 ) |
Schedule of Provision for Income Taxes | The provision for income taxes for the years ended December 31, 2018, 2017, and 2016 was computed at the United Kingdom statutory income tax rate. The income tax provision for the years then ended comprised: December 31, 2018 2017 2016 (in thousands) Current provision expense Federal—United States $ 607 $ — $ — State—United States 444 16 17 United Kingdom — — — Total current provision expense 1,051 16 17 Deferred provision expense Federal—United States (31 ) — — State—United States (50 ) 37 3 United Kingdom — — — Total deferred provision expense (81 ) 37 3 Total provision for income taxes $ 970 $ 53 $ 20 |
Schedule of Reconciliation of Income Tax Expense | A reconciliation of income tax expense computed at the United Kingdom statutory income tax rate to income taxes as reflected in the consolidated financial statements is as follows: December 31, 2018 2017 2016 (in thousands) Income taxes at United Kingdom statutory rate $ (43,526 ) $ (7,640 ) $ (3,831 ) State income taxes 370 41 14 Permanent differences 293 115 75 Tax credits — (286 ) (99 ) Foreign rate differential 20 (40 ) 6 Change in valuation allowance 43,562 7,827 3,855 Impact of United States tax reform 159 36 — Other 92 — — Total provision expense for income taxes $ 970 $ 53 $ 20 |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2018 and 2017 consist of the following: December 31, 2018 2017 (in thousands) Deferred tax assets Net operating loss carryforwards $ 29,436 $ 9,483 Research and development credits — 356 Share-based compensation 1,297 147 Amortization 19,451 2,156 Accruals 184 28 Other 1,946 — Total deferred tax assets $ 52,314 $ 12,170 Valuation allowance (51,281 ) (11,882 ) Net deferred tax assets $ 1,033 $ 288 Deferred tax liabilities Depreciation $ (991 ) $ (328 ) Other non-current liabilities (net deferred tax assets and liabilities) $ 42 $ (40 ) |
Schedule of Changes in Valuation Allowance for Deferred Tax Assets Related Primarily to Increase in Net Operating Loss Carryforwards | Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2018, 2017, and 2016 related primarily to the increase in net operating loss carryforwards and were as follows: December 31, 2018 2017 2016 (in thousands) Valuation allowance as of beginning of year $ (11,882 ) $ (3,503 ) — Decreases recorded as benefit to income tax provision 604 — — Increases recorded to income tax provision (44,166 ) (7,827 ) (3,855 ) Effect of foreign currency translation 4,163 (552 ) 352 Valuation allowance as of end of year $ (51,281 ) $ (11,882 ) $ (3,503 ) |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share: Year Ended December 31 2018 2017 2016 (In thousands, except per share and share amounts) Net loss $ (230,495 ) $ (39,744 ) $ (19,085 ) Net loss attributable to ordinary shareholders $ (230,495 ) $ (39,744 ) $ (19,085 ) Weighted average ordinary shares outstanding, basic and diluted 22,559,389 8,872,768 7,100,528 Net loss per share attributable to ordinary shareholders, basic and diluted $ (10.22 ) $ (4.48 ) $ (2.69 ) |
Securities Excluded in the Computation of Diluted Net Loss Per Ordinary Share | The following securities, presented based on amounts outstanding at each period end, are considered to be ordinary share equivalents, but were not included in the computation of diluted net loss per ordinary share because to do so would have been anti-dilutive: December 31, 2018 2017 2016 Convertible preferred shares — 33,277,678 11,204,199 Share options 9,179,247 3,612,288 1,809,442 Unvested performance-based restricted share units 219,922 — — 9,399,169 36,889,966 13,013,641 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments Due Under Operating Leases | Future minimum lease payments The following table summarizes the future minimum lease payments due under all operating leases as of December 31, 2018: Due in: (in thousands) 2019 $ 3,303 2020 4,910 2021 4,135 2022 3,921 2023 2,844 Thereafter 20,386 Total $ 39,499 |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation - Additional Information (Details) $ / shares in Units, $ in Thousands | Nov. 02, 2018USD ($)shares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Nov. 02, 2018£ / shares | Nov. 02, 2018$ / shares |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||||
Reverse stock split | one-for-0.8003 | |||||
Payments of stock issuance costs | $ 4,200 | |||||
Net Loss | 230,500 | $ 39,700 | $ 19,100 | |||
Accumulated deficit | 290,239 | 59,744 | ||||
Cash | $ 335,844 | $ 89,856 | ||||
American Depositary Shares | Initial Public Offering | ||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||||
Shares issued | shares | 16,103,572 | |||||
Issue price per share | $ / shares | $ 14 | |||||
Proceeds from shares issued | $ 205,500 | |||||
Payments of stock issuance costs | 4,200 | |||||
Nominal value per share | £ / shares | £ 0.00001 | |||||
Redenomination of Nominal value per share | £ / shares | £ 0.10 | |||||
American Depositary Shares | Underwriter Discounts and Commissions | ||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||||
Payments of stock issuance costs | $ 15,800 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) £ in Millions | 12 Months Ended | |||
Dec. 31, 2018USD ($)Segment | Dec. 31, 2018GBP (£)Segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)Tranche | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Description of significant off-balance sheet risk | The Company has no significant off-balance sheet risk, such as foreign currency contracts, options contracts, or other foreign hedging arrangements. | The Company has no significant off-balance sheet risk, such as foreign currency contracts, options contracts, or other foreign hedging arrangements. | ||
Foreign currency transaction gain (loss) | $ 4,400,000 | $ (1,200,000) | $ (200,000) | |
Proceeds from lines of credit | 3,000,000 | |||
Restricted cash, related to lease transaction's letter of credit | 3,837,000 | 0 | ||
Cash collateral associated with corporate credit card accounts | $ 900,000 | 0 | ||
Expected dividend yield | 0.00% | 0.00% | ||
Fixed assets | $ 5,476,000 | 2,713,000 | ||
Other comprehensive income (loss) related to foreign currency translation adjustments | (964,000) | 4,398,000 | (271,000) | |
Tax credit | 286,000 | 99,000 | ||
Tax incentive receivable | 10,585,000 | 871,000 | ||
Increase (decrease) in tax receivable | $ (500,000) | |||
Value added tax percentage | 20.00% | 20.00% | ||
GSK Asset Purchase and License Agreement | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Liability associated with the loss contract | $ 18,400,000 | |||
Remaining liability | 10,300,000 | |||
Amortization as credit to research and development expense | 6,300,000 | |||
Decrease in liability in effect of foreign exchange translation | $ 1,700,000 | |||
United Kingdom | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of operating segments | Segment | 3 | 3 | ||
Fixed assets | $ 1,700,000 | 500,000 | ||
Tax incentive receivable | $ 10,600,000 | 900,000 | ||
Amount that will be offset against future taxable profits | £ | £ 5 | |||
Incremental percentage of taxable profits | 50.00% | 50.00% | ||
United Kingdom | Research and Development Expense | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Tax credit | $ 10,200,000 | 700,000 | $ 200,000 | |
European Union | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of operating segments | Segment | 3 | 3 | ||
United States | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of operating segments | Segment | 3 | 3 | ||
Fixed assets | $ 3,800,000 | $ 2,200,000 | ||
Series A Convertible Preferred Shares | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of Tranches | Tranche | 3 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Property and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
Leasehold Improvements | |
Property Plant And Equipment [Line Items] | |
Property plant and equipment useful life, term | Shorter of lease term or estimated useful life |
Furniture and Fixtures | |
Property Plant And Equipment [Line Items] | |
Property plant and equipment useful life | 4 years |
Minimum | Lab Equipment | |
Property Plant And Equipment [Line Items] | |
Property plant and equipment useful life | 5 years |
Minimum | Office and Computer Equipment | |
Property Plant And Equipment [Line Items] | |
Property plant and equipment useful life | 3 years |
Maximum | Lab Equipment | |
Property Plant And Equipment [Line Items] | |
Property plant and equipment useful life | 10 years |
Maximum | Office and Computer Equipment | |
Property Plant And Equipment [Line Items] | |
Property plant and equipment useful life | 5 years |
Fair Values of Assets and Liabi
Fair Values of Assets and Liabilities - Additional Information (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Assets, fair value | $ 0 | $ 0 |
Liabilities, fair value | $ 0 | $ 0 |
Fair Values of Assets and Lia_2
Fair Values of Assets and Liabilities - Schedule of Financial Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Liabilities: | |||
Liabilities, fair value | $ 0 | $ 0 | |
Fair Value, Measurements, Recurring | |||
Liabilities: | |||
Liabilities, fair value | $ 1,402,000 | ||
Fair Value, Measurements, Recurring | Tranche Obligations | |||
Liabilities: | |||
Liabilities, fair value | 1,402,000 | ||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | |||
Liabilities: | |||
Liabilities, fair value | 1,402,000 | ||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Tranche Obligations | |||
Liabilities: | |||
Liabilities, fair value | $ 1,402,000 |
Fair Value of Financial Asset_3
Fair Value of Financial Assets And Liabilities - Schedule of Assumptions Used in Valuing of Tranche Obligations (Details) - Tranche Obligations | 12 Months Ended |
Dec. 31, 2016 | |
Risk Free Interest Rate | Minimum | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Fair value assumptions of tranche obligations | 0 |
Risk Free Interest Rate | Maximum | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Fair value assumptions of tranche obligations | 0.53 |
Expected Dividend Yield | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Fair value assumptions of tranche obligations | 0 |
Expected Term | Minimum | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Fair value assumptions of tranche obligations term | 0 years |
Expected Term | Maximum | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Fair value assumptions of tranche obligations term | 11 months 1 day |
Expected Volatility | Minimum | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Fair value assumptions of tranche obligations | 75.5 |
Expected Volatility | Maximum | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Fair value assumptions of tranche obligations | 89.9 |
Fair Value of Convertible Preferred Shares | Minimum | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Fair value assumptions of tranche obligations | 1 |
Fair Value of Convertible Preferred Shares | Maximum | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Fair value assumptions of tranche obligations | 1.58 |
Fair Value of Financial Asset_4
Fair Value of Financial Assets and Liabilities - Schedule of Changes in Fair Value of Tranche Obligation Liability Measured at Fair Value on Recurring Basis using Significant Unobservable Inputs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Balance at beginning of period | $ 1,402 | |
Issuance of tranche obligations to purchase convertible preferred shares | $ 2,459 | |
Settlement obligation upon issuance of convertible preferred shares | (1,402) | (451) |
Effect of exchange rate changes on tranche obligation | (317) | |
Balance at end of period | 1,402 | |
Second Tranche Obligation | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Change in fair value obligation | (424) | |
Settlement obligation upon issuance of convertible preferred shares | (451) | |
Third Tranche Obligation | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Change in fair value obligation | $ 135 | |
Settlement obligation upon issuance of convertible preferred shares | $ (1,402) |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue From Contract With Customer [Abstract] | ||
Revenue | $ 0 | |
Cumulative adjustment | $ 0 | |
General payment terms, maximum | 60 days |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property Plant And Equipment [Line Items] | ||
Property and equipment | $ 6,972 | $ 3,023 |
Less: accumulated depreciation | (1,496) | (310) |
Property and equipment, net | 5,476 | 2,713 |
Lab Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 4,930 | 2,708 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 1,487 | 244 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 403 | 59 |
Office and IT Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | $ 152 | $ 12 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | |||
Depreciation expense | $ 1,199 | $ 302 | $ 6 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued Liabilities And Other Liabilities [Abstract] | ||
Accrued external research and development expenses | $ 12,738 | $ 1,834 |
Accrued payroll and related expenses | 7,372 | 2,090 |
Accrued professional fees | 1,186 | 394 |
Accrued other | 2,762 | 279 |
Strimvelis liability - current portion | 4,170 | |
Deferred UCLA reimbursement | 2,267 | |
Due to UCLA | 1,552 | |
Total accrued expenses and other current liabilities | $ 29,780 | $ 6,864 |
Shareholders' Equity and Conv_2
Shareholders' Equity and Convertible Preferred Shares - Additional Information (Details) | Nov. 02, 2018USD ($)$ / sharesshares | Aug. 31, 2018USD ($)$ / sharesshares | Jan. 31, 2018USD ($)shares | Dec. 31, 2017USD ($) | Oct. 31, 2017USD ($) | Aug. 31, 2017USD ($) | Jul. 31, 2017USD ($) | Mar. 31, 2017USD ($)shares | Feb. 28, 2017USD ($) | Jan. 31, 2017USD ($) | Aug. 31, 2016USD ($) | Jul. 31, 2016USD ($) | May 31, 2016USD ($) | Dec. 31, 2018USD ($)VotingRightRightshares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)shares | Dec. 31, 2018GBP (£)£ / sharesshares | Dec. 31, 2018$ / shares | Dec. 31, 2017GBP (£)£ / sharesshares | Dec. 31, 2017$ / shares | Nov. 30, 2017shares | Oct. 31, 2017£ / sharesshares | Aug. 31, 2017£ / sharesshares | Mar. 31, 2017£ / sharesshares | Mar. 31, 2017$ / sharesshares | Feb. 28, 2017£ / sharesshares | Jan. 31, 2017£ / sharesshares | Aug. 31, 2016£ / sharesshares | Jul. 31, 2016£ / sharesshares | May 31, 2016£ / sharesshares | Feb. 29, 2016£ / sharesshares |
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Ordinary shares voting rights description | each holder of ordinary shares is entitled to one vote per ordinary share | ||||||||||||||||||||||||||||||
Ordinary shares dividends declared | $ | $ 0 | ||||||||||||||||||||||||||||||
Number of ordinary voting rights | VotingRight | 1 | ||||||||||||||||||||||||||||||
Ordinary Shares, Par Value | £ / shares | £ 0.10 | £ 0.10 | |||||||||||||||||||||||||||||
Ordinary shares cash dividends declared or paid | $ | $ 0 | ||||||||||||||||||||||||||||||
Ordinary Shares, Issued | 85,865,557 | 8,927,121 | |||||||||||||||||||||||||||||
Outstanding share options | 10,203,432 | 4,153,196 | |||||||||||||||||||||||||||||
Issuance of ADRs in initial public offering, net of issuance costs | $ | $ 205,469,000 | ||||||||||||||||||||||||||||||
Payment of offering expenses | $ | $ 4,200,000 | ||||||||||||||||||||||||||||||
Common Stock, Conversion Basis | one-for-0.8003 | ||||||||||||||||||||||||||||||
Research and development | $ | $ 205,319,000 | 32,527,000 | $ 16,206,000 | ||||||||||||||||||||||||||||
Ordinary Shares, Outstanding | 85,865,557 | 8,927,121 | |||||||||||||||||||||||||||||
Deferred shares par value per share | $ / shares | $ 0.00001 | ||||||||||||||||||||||||||||||
Deferred shares rights | Right | 0 | ||||||||||||||||||||||||||||||
Deferred share price per share from distribution of assets on liquidation or return of capital | $ / shares | $ 1.25 | ||||||||||||||||||||||||||||||
Deferred shares repurchased | 80,030 | ||||||||||||||||||||||||||||||
Deferred shares repurchased price per share | $ / shares | $ 0.00001 | ||||||||||||||||||||||||||||||
Deferred shares outstanding | 0 | 0 | |||||||||||||||||||||||||||||
Ordinary Shares | |||||||||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Issuance of ordinary shares in initial public offering net of issuance, Shares | 16,103,572 | ||||||||||||||||||||||||||||||
Conversion of investor ordinary stock to deferred shares | 80,030 | ||||||||||||||||||||||||||||||
2016 Share Option Plan | |||||||||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Outstanding share options | 4,153,196 | ||||||||||||||||||||||||||||||
Shares remaining available for future issuance | 2,354,595 | ||||||||||||||||||||||||||||||
License and Research Agreement | |||||||||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Ordinary Shares, Issued | 500,596 | ||||||||||||||||||||||||||||||
License and Development Agreement | Oxford BioMedica | |||||||||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Ordinary Shares, Issued | 588,220 | ||||||||||||||||||||||||||||||
License and Development Agreement | Oxford BioMedica | Research and Development Expense | |||||||||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Fair value of shares issued | $ | $ 1,400,000 | 100,000 | $ 500,000 | ||||||||||||||||||||||||||||
License and Development Agreement | Oxford BioMedica | Achievement of First Milestone | |||||||||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Ordinary Shares, Issued | 150,826 | ||||||||||||||||||||||||||||||
License and Development Agreement | Oxford BioMedica | Achievement of Second Milestone | |||||||||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Ordinary Shares, Issued | 150,826 | ||||||||||||||||||||||||||||||
License Agreement | UCL Business PLC | |||||||||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Ordinary Shares, Issued | 3,441,290 | 0 | 1,224,094 | ||||||||||||||||||||||||||||
Fair value of shares issued | $ | $ 3,800,000 | ||||||||||||||||||||||||||||||
Research and development | $ | 1,700,000 | $ 2,100,000 | |||||||||||||||||||||||||||||
License Agreement with Academic and Health Care Institutions | |||||||||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Ordinary Shares, Issued | 800,380 | 256,096 | |||||||||||||||||||||||||||||
Research and development | $ | 1,400,000 | $ 500,000 | |||||||||||||||||||||||||||||
Corporate Reorganization | |||||||||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Ordinary Shares, Par Value | (per share) | $ 0.10 | £ 0.00001 | |||||||||||||||||||||||||||||
Redesignation | |||||||||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Common Stock, Conversion Basis | one-for-one | ||||||||||||||||||||||||||||||
Convertible Preferred Shares | |||||||||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Convertible Preferred Shares, Outstanding | 0 | 33,277,678 | |||||||||||||||||||||||||||||
Issuance of ADRs in initial public offering, net of issuance costs | $ | $ 50,000,000 | ||||||||||||||||||||||||||||||
Preferred stock conversion basis | one-for-0.8003 | ||||||||||||||||||||||||||||||
Convertible Preferred Shares, Authorized | 33,771,174 | ||||||||||||||||||||||||||||||
Convertible Preferred Shares, Par Value | (per share) | £ 0.00001 | $ 0.00001 | |||||||||||||||||||||||||||||
Convertible Preferred Shares, Issued | 33,277,678 | ||||||||||||||||||||||||||||||
Preferred stock dividend declared or paid | $ | $ 0 | $ 0 | |||||||||||||||||||||||||||||
American Depositary Shares | Initial Public Offering | |||||||||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Issuance of ordinary shares in initial public offering net of issuance, Shares | 16,103,572 | ||||||||||||||||||||||||||||||
Issue price per share | $ / shares | $ 14 | ||||||||||||||||||||||||||||||
Issuance of ADRs in initial public offering, net of issuance costs | $ | $ 205,500,000 | ||||||||||||||||||||||||||||||
Payment of offering expenses | $ | 4,200,000 | ||||||||||||||||||||||||||||||
Proceeds from shares issued | $ | $ 205,500,000 | ||||||||||||||||||||||||||||||
Series A Convertible Preferred Shares | |||||||||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Convertible Preferred Shares, Authorized | 16,806,299 | ||||||||||||||||||||||||||||||
Convertible Preferred Shares, Par Value | £ / shares | £ 1.25 | £ 1.25 | £ 1.25 | £ 1.25 | £ 1.25 | £ 1.25 | |||||||||||||||||||||||||
Convertible Preferred Shares, Issued | 266,766 | 5,335,333 | 266,766 | 5,335,333 | 266,767 | 5,335,333 | |||||||||||||||||||||||||
Preferred stock shares issued for net proceeds | 4,811,937 | ||||||||||||||||||||||||||||||
Proceeds from shares issued | $ | $ 400,000 | $ 8,200,000 | $ 400,000 | $ 8,700,000 | $ 400,000 | $ 8,500,000 | |||||||||||||||||||||||||
Preferred stock issued in settlement of debt | 523,396 | ||||||||||||||||||||||||||||||
Series B Convertible Preferred Shares | |||||||||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Convertible Preferred Shares, Authorized | 16,964,875 | ||||||||||||||||||||||||||||||
Convertible Preferred Shares, Par Value | £ / shares | £ 5.022 | £ 5.022 | £ 5.022 | £ 5.022 | |||||||||||||||||||||||||||
Convertible Preferred Shares, Issued | 150,706 | 2,724,288 | 4,655,985 | 3,285,731 | 5,805,376 | 5,805,376 | |||||||||||||||||||||||||
Proceeds from shares issued | $ | $ 1,000,000 | $ 18,300,000 | $ 30,800,000 | $ 21,000,000 | $ 36,000,000 | ||||||||||||||||||||||||||
Series C Convertible Preferred Shares | |||||||||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Convertible Preferred Shares, Par Value | $ / shares | $ 10.76 | ||||||||||||||||||||||||||||||
Convertible Preferred Shares, Issued | 13,942,474 | ||||||||||||||||||||||||||||||
Proceeds from shares issued | $ | $ 147,100,000 | ||||||||||||||||||||||||||||||
Series A and Series B Convertible Preferred Stock | |||||||||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Preferred stock conversion basis | each Preferred Share was convertible into one ordinary share | ||||||||||||||||||||||||||||||
Preferred stock voting rights | Each Series A and Series B preferred share shall confer one right to vote at all general meetings and to receive and vote on proposed written resolutions of the Company | ||||||||||||||||||||||||||||||
Maximum | |||||||||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Ordinary shares maximum nominal value | £ | £ 13,023,851.50 | £ 675,413 | |||||||||||||||||||||||||||||
Maximum | Convertible Preferred Shares | |||||||||||||||||||||||||||||||
Class Of Stock [Line Items] | |||||||||||||||||||||||||||||||
Issue price per share | £ / shares | £ 6.0262 |
Shareholders' Equity and Conv_3
Shareholders' Equity and Convertible Preferred Shares - Schedule of Convertible Preferred Shares (Details) | Dec. 31, 2017USD ($)shares | |
Class Of Stock [Line Items] | ||
Shares Authorized | 33,771,174 | |
Shares Issued | 33,277,678 | |
Shares Outstanding | 33,277,678 | |
Carrying Value | $ | $ 134,069 | |
Liquidation Preference | $ | $ 139,954 | [1] |
Ordinary shares Issuable Upon Conversion | 33,277,678 | |
Series A Convertible Preferred Shares | ||
Class Of Stock [Line Items] | ||
Shares Authorized | 16,806,298 | |
Shares Issued | 16,806,298 | |
Shares Outstanding | 16,806,298 | |
Carrying Value | $ | $ 26,994 | |
Liquidation Preference | $ | $ 28,337 | [1] |
Ordinary shares Issuable Upon Conversion | 16,806,298 | |
Series B Convertible Preferred Shares | ||
Class Of Stock [Line Items] | ||
Shares Authorized | 16,964,876 | |
Shares Issued | 16,471,380 | |
Shares Outstanding | 16,471,380 | |
Carrying Value | $ | $ 107,075 | |
Liquidation Preference | $ | $ 111,617 | [1] |
Ordinary shares Issuable Upon Conversion | 16,471,380 | |
[1] | Amounts were translated into United States dollars using the spot rate as of December 31, 2017 |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Nov. 30, 2018shares | Oct. 31, 2018shares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2018£ / shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share-based compensation expense | $ | $ 6,766 | $ 1,019 | $ 204 | |||
Exercise price of option | £ / shares | £ 0.00001 | |||||
Award vesting period | 4 years | |||||
Maximum term of option | 10 years | |||||
Expected dividend rate% | 0.00% | 0.00% | 0.00% | |||
Weighted Average Exercise Price, Granted | $ / shares | $ 4.23 | |||||
Exercise of share options, Shares | 14,547 | 0 | 0 | |||
Weighted average grant date fair value of options granted | $ / shares | $ 5.23 | $ 2.70 | $ 0.92 | |||
Compensation cost recognized | $ | $ 4,500 | |||||
Unvested options outstanding | 8,181,033 | |||||
Total unrecognized compensation cost of stock option | $ | $ 33,300 | |||||
Compensation cost expected to be recognized weighted average period | 2 years 11 months 15 days | |||||
Performance-based Restricted Share Units ("RSUs") | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Award vesting period | 1 year 3 months 18 days | |||||
Restricted share units issued | 219,922 | |||||
Aggregate fair value of RSUs | $ | $ 4,500 | |||||
Compensation cost recognized | $ | $ 100 | $ 0 | ||||
Performance-based Restricted Share Units ("RSUs") | Chief Executive Officer | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Restricted share units issued | 219,922 | |||||
United States | Employee | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Weighted Average Exercise Price, Granted | $ / shares | $ 5.74 | |||||
2018 Plan | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Shares remaining available for future issuance | 4,254,741 | |||||
Shares available for future grant | 3,953,726 | |||||
Percentage of increase in number of ordinary shares reserved for issuance | 5.00% | |||||
2018 ESPP | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Percentage of increase in number of ordinary shares reserved for issuance | 1.00% | |||||
Number of shares increased in plan | 1,500,000 | |||||
Percentage of purchase price for each ordinary share | 85.00% | |||||
Share-based compensation expense | $ | $ 100 | |||||
2018 ESPP | Maximum | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Employee contribution percentage to base compensation for purchase of ordinary shares | 15.00% | |||||
Ordinary shares reserved for future issuance | 850,948 |
Share-based Compensation - Assu
Share-based Compensation - Assumptions Used in Black-Scholes Option Pricing Model (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Risk-free interest rate% - %, minimum | 2.66% | 1.52% | 1.52% |
Risk-free interest rate% - %, maximum | 3.03% | 2.30% | 2.40% |
Expected term (in years) | 6 years 29 days | ||
Expected volatility% - %, minimum | 64.27% | 77.80% | 77.80% |
Expected volatility% - %, maximum | 68.58% | 80.00% | 79.70% |
Expected dividend rate% | 0.00% | 0.00% | 0.00% |
Minimum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected term (in years) | 5 years | 6 years 29 days | |
Maximum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected term (in years) | 6 years 29 days | 9 years 9 months |
Share-based Compensation - Summ
Share-based Compensation - Summary of Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Shares, Options outstanding at December 31, 2017 | 4,153,196 | ||
Shares, Granted | 6,303,465 | ||
Shares, Exercised | (14,547) | 0 | 0 |
Shares, Cancelled | (238,682) | ||
Shares, Options outstanding at December 31, 2018 | 10,203,432 | 4,153,196 | |
Shares, Vested as of December 31, 2018 | 2,022,399 | ||
Weighted Average Exercise Price, Options outstanding at December 31, 2017 | $ 1.20 | ||
Weighted Average Exercise Price, Granted | 4.23 | ||
Weighted Average Exercise Price, Exercised | 1.96 | ||
Weighted Average Exercise Price, Cancelled | 2.55 | ||
Weighted Average Exercise Price, Options outstanding at December 31, 2018 | 3.04 | $ 1.20 | |
Weighted Average Exercise Price, Vested as of December 31, 2018 | $ 1.11 | ||
Weighted Average Remaining Contractual Life, Options outstanding at December 31, 2017 | 8 years 11 months 19 days | 9 years 3 months 10 days | |
Weighted Average Remaining Contractual Life, Vested as of December 31, 2018 | 8 years 2 months 12 days | ||
Aggregate Intrinsic Value, Options outstanding | $ 129,551 | $ 10,483 | |
Aggregate Intrinsic Value, Vested as of December 31, 2018 | $ 29,568 |
Share-based Compensation - Su_2
Share-based Compensation - Summary of RSU Award Activity (Details) - RSU | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Shares, Granted | shares | 219,922 |
Shares, Unvested at December 31, 2018 | shares | 219,922 |
Weighted Average Fair Value, Unvested at December 31, 2017 | |
Weighted Average Fair Value, Granted | 15.48 |
Weighted Average Fair Value, Unvested at December 31, 2018 | $ 15.48 |
Share-based Compensation - Shar
Share-based Compensation - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total share-based compensation expense | $ 6,766 | $ 1,019 | $ 204 |
Research and Development | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total share-based compensation expense | 2,740 | 615 | 181 |
Selling, General and Administrative | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Total share-based compensation expense | $ 4,026 | $ 404 | $ 23 |
License and Research Arrangem_3
License and Research Arrangements - Additional Information (Details) £ / shares in Units, € in Millions, £ in Millions | 1 Months Ended | 12 Months Ended | ||||||||||||||||
Jul. 31, 2018USD ($) | Jun. 30, 2018USD ($) | Apr. 30, 2018USD ($)shares | Apr. 30, 2018GBP (£)shares | Jan. 31, 2017USD ($) | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($)shares | Nov. 30, 2018shares | Sep. 30, 2018shares | Apr. 30, 2018GBP (£) | Apr. 30, 2018EUR (€) | Feb. 28, 2017£ / sharesshares | Jan. 31, 2017£ / sharesshares | Aug. 31, 2016£ / sharesshares | Jul. 31, 2016£ / sharesshares | May 31, 2016£ / sharesshares | Feb. 29, 2016£ / sharesshares | |
Collaborative Arrangements and Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||||
Ordinary shares issued | shares | 85,865,557 | 8,927,121 | ||||||||||||||||
Research and development | $ 205,319,000 | $ 32,527,000 | $ 16,206,000 | |||||||||||||||
Series A Convertible Preferred Shares | ||||||||||||||||||
Collaborative Arrangements and Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||||
Preferred stock shares issued | shares | 266,766 | 5,335,333 | 266,766 | 5,335,333 | 266,767 | 5,335,333 | ||||||||||||
Preferred stock par value per share | £ / shares | £ 1.25 | £ 1.25 | £ 1.25 | £ 1.25 | £ 1.25 | £ 1.25 | ||||||||||||
GSK Asset Purchase and License Agreement | ||||||||||||||||||
Collaborative Arrangements and Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||||
Total consideration | $ 133,601,000 | £ 94.2 | ||||||||||||||||
Upfront payment | 14,186,000 | 10 | ||||||||||||||||
Inventory purchase liability | 6,893,000 | £ 4.9 | ||||||||||||||||
Transaction costs | 780,000 | 0.6 | ||||||||||||||||
In-process research and development expense | 133,600,000 | 94.2 | ||||||||||||||||
Strimveils liability recorded | $ 18,351,000 | £ 12.9 | ||||||||||||||||
Amortization as credit to research and development expense | 6,300,000 | |||||||||||||||||
Remaining liability | 10,300,000 | |||||||||||||||||
Decrease in liability in effect of foreign exchange translation | $ 1,700,000 | |||||||||||||||||
Payment of tiered royalty, maximum percentage | 20.00% | 20.00% | 20.00% | |||||||||||||||
Milestone payments payable upon achievement of certain sales milestones | £ 90 | € 31 | ||||||||||||||||
GSK Asset Purchase and License Agreement | Series B-2 Convertible Preferred Shares | ||||||||||||||||||
Collaborative Arrangements and Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||||
Shares issued for asset acquisition | shares | 12,455,252 | 12,455,252 | ||||||||||||||||
Value of shares issued for asset acquisition | $ 93,391,000 | £ 65.8 | ||||||||||||||||
UCLB/UCLA Technology | ||||||||||||||||||
Collaborative Arrangements and Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||||
Upfront cash payments | 800,000 | |||||||||||||||||
UCLB Technology and Manufacturing Technology | ||||||||||||||||||
Collaborative Arrangements and Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||||
Upfront cash payments | $ 1,100,000 | |||||||||||||||||
UCLB License Agreement | ||||||||||||||||||
Collaborative Arrangements and Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||||
Ordinary shares issued | shares | 4,665,384 | 1,224,094 | 3,441,290 | |||||||||||||||
Research and development | $ 200,000 | $ 1,800,000 | $ 4,600,000 | |||||||||||||||
UCLB/UCLA License Agreement | ||||||||||||||||||
Collaborative Arrangements and Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||||
Payments to acquire clinical data | 800,000 | |||||||||||||||||
Annual administration fee | 100,000 | |||||||||||||||||
Payments upon achievement of specified regulatory milestones | $ 38,900,000 | |||||||||||||||||
UCLB/UCLA License Agreement | Series A Convertible Preferred Shares | ||||||||||||||||||
Collaborative Arrangements and Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||||
Preferred stock shares issued | shares | 800,298 | |||||||||||||||||
Preferred stock par value per share | £ / shares | £ 1.25 | |||||||||||||||||
Oxford BioMedica License, Development and Supply Agreement | ||||||||||||||||||
Collaborative Arrangements and Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||||
Ordinary shares issued | shares | 588,220 | 150,826 | 150,826 | |||||||||||||||
Research and development | 500,000 | |||||||||||||||||
Oxford BioMedica License, Development and Supply Agreement | Achievement Of Second And Third Milestone | ||||||||||||||||||
Collaborative Arrangements and Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||||
Research and development | $ 1,400,000 | |||||||||||||||||
Oxford BioMedica License, Development and Supply Agreement | Achievement of First Milestone | ||||||||||||||||||
Collaborative Arrangements and Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||||
Research and development | 100,000 | |||||||||||||||||
UCLA/CIRM Research Agreement | ||||||||||||||||||
Collaborative Arrangements and Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||||
Research and development | 3,000,000 | 5,000,000 | ||||||||||||||||
Total Reimbursements | $ 10,400,000 | |||||||||||||||||
Reimbursements received | $ 7,300,000 | |||||||||||||||||
Total reimbursement under new award | $ 8,500,000 | |||||||||||||||||
Loan payable term period | 10 days | |||||||||||||||||
Accrued royalties | 0 | |||||||||||||||||
Accrued expense and other liabilities | 1,600,000 | 2,300,000 | ||||||||||||||||
UCLA/CIRM Research Agreement | Maximum | ||||||||||||||||||
Collaborative Arrangements and Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||||
Obligation to reimburse research activities upon achievement of certain milestones | $ 5,500,000 | |||||||||||||||||
Other License and Research Agreements | ||||||||||||||||||
Collaborative Arrangements and Noncollaborative Arrangement Transactions [Line Items] | ||||||||||||||||||
Upfront cash payments | $ 2,700,000 | $ 400,000 | ||||||||||||||||
Ordinary shares issued | shares | 1,030,786 | 375,380 | ||||||||||||||||
Research and development | $ 1,400,000 | $ 500,000 | ||||||||||||||||
Clinical and regulatory milestone payments | $ 31,800,000 |
License and Research Arrangem_4
License and Research Arrangements - Summary of Consideration Transferred in Asset Acquisition (Details) - 1 months ended Apr. 30, 2018 - GSK Asset Purchase and License Agreement $ in Thousands, £ in Millions | USD ($) | GBP (£) | GBP (£) |
Collaborative Arrangements and Noncollaborative Arrangement Transactions [Line Items] | |||
Upfront cash paid for GSK Agreement | $ 14,186 | £ 10 | |
Transaction costs | 780 | 0.6 | |
Liabilities: | |||
Strimvelis liability | 18,351 | 12.9 | |
Inventory purchase liability | 6,893 | £ 4.9 | |
Total consideration transferred: | 133,601 | £ 94.2 | |
Series B-2 Convertible Preferred Shares | |||
Collaborative Arrangements and Noncollaborative Arrangement Transactions [Line Items] | |||
Value of shares issued to GSK | $ 93,391 | £ 65.8 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Loss from Operations Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
U.K. | $ (230,543) | $ (39,422) | $ (19,105) |
Non-U.K. | 1,018 | (269) | 40 |
Net loss before income tax | $ (229,525) | $ (39,691) | $ (19,065) |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current provision expense | |||
Federal—United States | $ 607 | ||
State—United States | 444 | $ 16 | $ 17 |
Total current provision expense | 1,051 | 16 | 17 |
Deferred provision expense | |||
Federal—United States | (31) | ||
State—United States | (50) | 37 | 3 |
Total deferred provision expense | (81) | 37 | 3 |
Total provision for income taxes | $ 970 | $ 53 | $ 20 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Income taxes at United Kingdom statutory rate | $ (43,526) | $ (7,640) | $ (3,831) |
State income taxes | 370 | 41 | 14 |
Permanent differences | 293 | 115 | 75 |
Tax credits | (286) | (99) | |
Foreign rate differential | 20 | (40) | 6 |
Change in valuation allowance | 43,562 | 7,827 | 3,855 |
Impact of United States tax reform | 159 | 36 | |
Other | 92 | ||
Total provision for income taxes | $ 970 | $ 53 | $ 20 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets | |||
Net operating loss carryforwards | $ 29,436 | $ 9,483 | |
Research and development credits | 356 | ||
Share-based compensation | 1,297 | 147 | |
Amortization | 19,451 | 2,156 | |
Accruals | 184 | 28 | |
Other | 1,946 | ||
Total deferred tax assets | 52,314 | 12,170 | |
Valuation allowance | (51,281) | (11,882) | $ (3,503) |
Net deferred tax assets | 1,033 | 288 | |
Deferred tax liabilities | |||
Depreciation | (991) | (328) | |
Other non-current liabilities (net deferred tax assets and liabilities) | $ 42 | ||
Other non-current liabilities (net deferred tax assets and liabilities) | $ (40) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
United Kingdom | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 155.2 | $ 48.4 |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Changes in Valuation Allowance for Deferred Tax Assets Related Primarily to Increase in Net Operating Loss Carryforwards (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Valuation allowance as of beginning of year | $ (11,882) | $ (3,503) | |
Decreases recorded as benefit to income tax provision | 604 | ||
Increases recorded to income tax provision | (44,166) | (7,827) | $ (3,855) |
Effect of foreign currency translation | 4,163 | (552) | 352 |
Valuation allowance as of end of year | $ (51,281) | $ (11,882) | $ (3,503) |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of basic and diluted net loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||
Net loss | $ (230,495) | $ (39,744) | $ (19,085) |
Net loss attributable to ordinary shareholders | $ (230,495) | $ (39,744) | $ (19,085) |
Weighted average number of ordinary shares outstanding, basic and diluted | 22,559,389 | 8,872,768 | 7,100,528 |
Net loss per share attributable to ordinary shareholders, basic and diluted | $ (10.22) | $ (4.48) | $ (2.69) |
Net Loss Per Share - Securities
Net Loss Per Share - Securities Excluded in the Computation of Diluted Net Loss Per Ordinary Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Common shares attributable to anti-dilutive shares | 9,399,169 | 36,889,966 | 13,013,641 |
Share options | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Common shares attributable to anti-dilutive shares | 9,179,247 | 3,612,288 | 1,809,442 |
Performance-based Restricted Share Units ("RSUs") | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Common shares attributable to anti-dilutive shares | 219,922 | ||
Convertible Preferred Shares | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Common shares attributable to anti-dilutive shares | 33,277,678 | 11,204,199 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | 27 Months Ended | ||||||
Dec. 31, 2018 | Mar. 31, 2018 | Jan. 31, 2018 | Nov. 30, 2017 | Oct. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2021 | |
Operating Leased Assets [Line Items] | |||||||||
Operating lease, term of contract | 5 years | 5 years | |||||||
Operating leases expiration term | Jan. 7, 2023 | Sep. 30, 2022 | Nov. 30, 2020 | Oct. 31, 2021 | May 31, 2030 | ||||
Annual rental expense | $ 100,000 | $ 300,000 | $ 800,000 | $ 200,000 | $ 2,400,000 | ||||
Operating lease duration for free rent | 1 month | 1 month | 8 months | ||||||
Operating leases commenced term | Dec. 7, 2018 | ||||||||
Proceeds from lines of credit | $ 3,000,000 | ||||||||
Reduction of standby letter of credit amount percentage | 25.00% | ||||||||
Rent expense | $ 2,400,000 | $ 700,000 | $ 200,000 | ||||||
Prepayments | $ 800,000 | 800,000 | $ 0 | ||||||
Scenario, Forecast [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Further payments | $ 10,100,000 | ||||||||
Five Years Lease Term Terminates In January 2023 [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Operating leases expiration term | Jan. 31, 2023 | ||||||||
Annual rental expense | $ 800,000 | ||||||||
Fremont Lease Agreement [Member] | |||||||||
Operating Leased Assets [Line Items] | |||||||||
Amortization of tenant improvements allowance | 5,000,000 | ||||||||
Escrow deposit | $ 10,000,000 | 10,000,000 | |||||||
Increase decrease in escrow deposit | $ 0 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Lease Payments Due Under Operating Leases (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Due in: | |
2019 | $ 3,303 |
2020 | 4,910 |
2021 | 4,135 |
2022 | 3,921 |
2023 | 2,844 |
Thereafter | 20,386 |
Total | $ 39,499 |
Benefit Plans - Additional Info
Benefit Plans - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |||
Contribution expenses | $ 600,000 | $ 200,000 | $ 31,000 |
Maximum annual contribution employer matches per employee, percent | 5.00% |
Related-Party Transactions - Ad
Related-Party Transactions - Additional Information (Details) $ in Thousands, £ in Millions | Nov. 02, 2018shares | Apr. 30, 2018GBP (£) | Feb. 06, 2016shares | Dec. 31, 2018USD ($) | Nov. 30, 2018shares | Aug. 31, 2018shares | Dec. 31, 2017shares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) | Apr. 30, 2018USD ($)shares | Feb. 29, 2016shares |
Related Party Transaction [Line Items] | ||||||||||||
Ordinary shares Issuable Upon Conversion | 33,277,678 | 33,277,678 | ||||||||||
Research and development expense | $ | $ 205,319 | $ 32,527 | $ 16,206 | |||||||||
Chief Executive Officer | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued | 24,979 | |||||||||||
Chief Financial Officer | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued | 9,294 | |||||||||||
Members of Board of Directors | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued | 90,158 | |||||||||||
GSK | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
License upfront fee | £ | £ 14.1 | |||||||||||
Inventory purchase liability | $ | $ 6,900 | |||||||||||
Series A Shares | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Ordinary shares Issuable Upon Conversion | 16,806,298 | 16,806,298 | ||||||||||
Series B Preferred Stock | GSK | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Ordinary shares Issuable Upon Conversion | 12,455,252 | |||||||||||
Preferred stock, Value | $ | $ 93,400 | |||||||||||
Loss provision associated with contract | $ | $ 18,400 | |||||||||||
Series A Convertible Preferred Shares | F-Prime Capital | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Ordinary shares Issuable Upon Conversion | 16,006,000 | |||||||||||
Series B Convertible Preferred Shares | F-Prime Capital | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued | 2,400,900 | |||||||||||
Series B Convertible Preferred Shares | Scottish Mortgage Investment Trust | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued | 3,201,200 | |||||||||||
Series B Convertible Preferred Shares | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Ordinary shares Issuable Upon Conversion | 16,471,380 | 16,471,380 | ||||||||||
Series B Convertible Preferred Shares | Chief Executive Officer | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued | 39,825 | |||||||||||
Series B Convertible Preferred Shares | Chief Medical Officer | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued | 9,955 | |||||||||||
Series B Convertible Preferred Shares | Senior Vice President | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued | 3,982 | |||||||||||
American Depositary Shares | Initial Public Offering | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued | 16,103,572 | |||||||||||
American Depositary Receipts | Chief Executive Officer | Initial Public Offering | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued | 18,500 | |||||||||||
American Depositary Receipts | Chief Financial Officer | Initial Public Offering | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued | 5,000 | |||||||||||
American Depositary Receipts | Members of Board of Directors | Initial Public Offering | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued | 13,000 | |||||||||||
UCL Business PLC | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Total program costs | $ | 500 | |||||||||||
Costs and expenses | $ | 200 | $ 200 | $ 400 | |||||||||
UCL Business PLC | Series A Shares | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Related party transactions shares purchased | 800,298 | |||||||||||
G S K | Transition Services Agreement | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Research and development expense | $ | $ 14,000 | |||||||||||
Royalty costs | $ | 14,000 | |||||||||||
Accrued expenses and accounts payable | $ | $ 6,000 | $ 6,000 | ||||||||||
Deerfield Management Company | Minimum | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Percentage of share capital | 5.00% | 5.00% | ||||||||||
Deerfield Management Company | Series C Convertible Preferred Shares | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued | 4,647,500 | |||||||||||
Deerfield Management Company | American Depositary Shares | Initial Public Offering | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued | 3,376,100 | |||||||||||
Scottish Mortgage Investment Trust | Series C Convertible Preferred Shares | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued | 697,125 | |||||||||||
RA Capital Management Limited Liability Company | Minimum | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Percentage of share capital | 5.00% | 5.00% | ||||||||||
RA Capital Management Limited Liability Company | American Depositary Shares | Initial Public Offering | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued | 2,057,432 | |||||||||||
Temasek Holdings (Private) Limited | Minimum | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Percentage of share capital | 5.00% | 5.00% | ||||||||||
Temasek Holdings (Private) Limited | American Depositary Shares | Initial Public Offering | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued | 1,000,000 | |||||||||||
Scottish Mortgage Investment Trust | Minimum | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Percentage of share capital | 5.00% | 5.00% | ||||||||||
Scottish Mortgage Investment Trust | American Depositary Shares | Initial Public Offering | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Shares issued | 925,000 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 13, 2019 | Mar. 01, 2019 | Feb. 01, 2019 | Jan. 16, 2019 | Jan. 02, 2019 | Dec. 31, 2018 | Dec. 31, 2021 |
Subsequent Event [Line Items] | |||||||
Shares, Granted | 6,303,465 | ||||||
Weighted Average Exercise Price, Granted | $ 4.23 | ||||||
Award vesting period | 4 years | ||||||
Performance-based Restricted Share Units ("RSUs") | |||||||
Subsequent Event [Line Items] | |||||||
Award vesting period | 1 year 3 months 18 days | ||||||
Shares, Granted | 219,922 | ||||||
Aggregate fair value of RSUs | $ 4.5 | ||||||
Subsequent Event | Share Options and Performance-Based Restricted Share Units | 2018 Plan | |||||||
Subsequent Event [Line Items] | |||||||
Shares, Granted | 24,700 | 95,800 | 2,470,423 | 117,280 | |||
Weighted Average Exercise Price, Granted | $ 16.89 | $ 12.86 | $ 12.54 | $ 14.98 | |||
Aggregate grant-date fair value of the options | $ 0.3 | $ 0.8 | $ 19.8 | $ 1.1 | |||
Award vesting period | 4 years | 4 years | 4 years | 4 years | |||
Subsequent Event | Performance-based Restricted Share Units ("RSUs") | 2018 Plan | |||||||
Subsequent Event [Line Items] | |||||||
Shares, Granted | 108,000 | 219,500 | |||||
Vesting date | Dec. 31, 2021 | Dec. 31, 2021 | |||||
Aggregate fair value of RSUs | $ 1.9 | $ 3.3 |