Cyclerion Therapeutics (CYCN) 10-Q 12 Aug 19 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 12, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	CYCLERION THERAPEUTICS, INC.
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		27,420,858
Entity Central Index Key	0001755237
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated and Comb

Condensed Consolidated and Combined Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 141,030
Related party accounts receivable	1,857
Prepaid expenses	1,778	$ 867
Other current assets	28	12
Total current assets	144,693	879
Restricted cash	7,726
Property and equipment, net	12,754	6,497
Operating lease right-of-use asset	70,330
Other assets		25
Total assets	235,503	7,401
Current liabilities:
Accounts payable	6,863	2,781
Related party accounts payable	1,920
Accrued research and development costs	5,250	5,261
Accrued expenses and other current liabilities	7,017	9,804
Current portion of operating lease liabilities	866
Total current liabilities	21,916	17,846
Operating lease liabilities, net of current portion	72,397
Stockholders' equity (deficit)
Accumulated deficit	(32,254)
Net parent investment		(10,445)
Paid-in capital	173,448
Accumulated other comprehensive income (loss)	(4)
Total stockholders' equity (deficit)	141,190	(10,445)
Total liabilities and stockholders' equity (deficit)	$ 235,503	$ 7,401

Condensed Consolidated and Co_2

Condensed Consolidated and Combined Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Condensed Consolidated and Combined Balance Sheets
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares outstanding	27,411,189	0
Common stock, shares issued	27,411,189	0

Condensed Consolidated and Co_3

Condensed Consolidated and Combined Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Condensed Consolidated and Combined Statements of Operations and Comprehensive Loss
Revenue from related party	$ 1,628		$ 1,628
Cost and expenses:
Research and development	25,759	$ 22,251	52,163	$ 43,765
General and administrative	8,923	7,530	19,900	11,299
Total cost and expenses	34,682	29,781	72,063	55,064
Loss from operations	(33,054)	(29,781)	(70,435)	(55,064)
Interest and investment income	800		800
Net loss	$ (32,254)	$ (29,781)	$ (69,635)	$ (55,064)
Net loss per share:
Basic and diluted net loss per share (in dollars per share)	$ (1.18)	$ (1.09)	$ (2.54)	$ (2.01)
Weighted average shares used in calculating:
Basic and diluted net loss per share (in shares)	27,393	27,380	27,380	27,380
Other comprehensive loss:
Net loss	$ (32,254)	$ (29,781)	$ (69,635)	$ (55,064)
Other comprehensive loss:
Foreign currency translation adjustment	(4)		(4)
Total other comprehensive loss	(4)		(4)
Comprehensive loss	$ (32,258)	$ (29,781)	$ (69,639)	$ (55,064)

Condensed Consolidated and Co_4

Condensed Consolidated and Combined Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Common stock	Net parent company investment	Paid-in capital	Accumulated deficit	Accumulated other comprehensive loss	Total
Equity balance at the beginning of the period at Dec. 31, 2017	$ 0	$ (8,567)	$ 0	$ 0	$ 0	$ (8,567)
Equity balance at the beginning of the period (in shares) at Dec. 31, 2017	0
Change in Stockholders' Equity (Deficit)
Net loss		(55,064)				(55,064)
Net transfers from Ironwood		49,509				49,509
Ironwood allocation - share-based compensation		5,513				5,513
Equity balance at the end of the period at Jun. 30, 2018	$ 0	(8,609)	0	0	0	(8,609)
Equity balance at the end of the period (in shares) at Jun. 30, 2018	0
Equity balance at the beginning of the period at Dec. 31, 2018	$ 0	(10,445)	0	0	0	$ (10,445)
Equity balance at the beginning of the period (in shares) at Dec. 31, 2018	0					0
Change in Stockholders' Equity (Deficit)
Net loss		(37,381)		(32,254)		$ (69,635)
Net transfers from Ironwood		38,687				38,687
Ironwood allocation - share-based compensation		3,989				3,989
Separation-related adjustments		7,752				7,752
Reclassification of net parent company investment		(2,602)	2,602
Distribution of common stock by Ironwood upon separation (in shares)	15,562,000
Issuance of common stock - private placement, net of fees			164,622			164,622
Issuance of common stock - private placement, net of fees (in shares)	11,817,000
Issuance of common stock awards (in shares)	10,000
Issuance of common stock upon exercise of options and employee stock purchase plan (in shares)	22,000
Share-based compensation expense related to share-based awards to employees			6,224			6,224
Foreign currency translation adjustment					(4)	(4)
Equity balance at the end of the period at Jun. 30, 2019	$ 0	$ 0	$ 173,448	$ (32,254)	$ (4)	$ 141,190
Equity balance at the end of the period (in shares) at Jun. 30, 2019	27,411,000					27,411,189

Condensed Consolidated and Co_5

Condensed Consolidated and Combined Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (32,254)	$ (69,635)	$ (55,064)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Depreciation and amortization	800	1,350	722
Share-based compensation expense		10,213	5,513
Changes in operating assets and liabilities:
Related party accounts receivable		(1,857)
Prepaid expenses		(911)	249
Other current assets		(17)	(72)
Operating lease assets		1,073
Other assets		25	31
Accounts payable		3,566	1,338
Related party accounts payable		1,920
Accrued research and development costs		(11)	(2,148)
Operating lease liabilities		1,860
Accrued expenses and other current liabilities		(3,816)	384
Net cash (used in) operating activities		(56,240)	(49,047)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(6,061)	(462)
Net cash (used in) investing activities		(6,061)	(462)
CASH FLOWS FROM FINANCING ACTIVITIES:
Gross proceeds from private placement		175,000
Costs associated with private placement		(10,378)
Transfers from Ironwood		46,439	49,509
Net cash provided by financing activities		211,061	$ 49,509
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(4)
Net increase in cash, cash equivalents and restricted cash		148,756
Cash, cash equivalents and restricted cash, end of period	148,756	148,756
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated and combined balance sheets
Cash and cash equivalents				$ 141,030
Restricted cash				7,726
Total cash, cash equivalents and restricted cash	$ 148,756	$ 148,756		$ 148,756

Nature of Business

Nature of Business	6 Months Ended
	Jun. 30, 2019
Nature of Business
Nature of Business	1. Nature of Business Nature of Operations Cyclerion Therapeutics, Inc. (“Cyclerion” or the “Company”) is a clinical‑stage biopharmaceutical company harnessing the power of soluble guanylate cyclase (“sGC”) pharmacology to discover, develop and commercialize breakthrough treatments for serious and orphan diseases. Cyclerion’s focus is enabling the full therapeutic potential of next‑generation sGC stimulators. The Company’s strategy rests on a solid scientific foundation that is enabled by our people and capabilities, external collaborations, and a responsive capital allocation approach. Cyclerion GmbH, a wholly owned subsidiary, was incorporated in Zug, Switzerland on May 3, 2019. Cyclerion GmbH is an operational entity with one employee who is the Company's chief innovation officer. The functional currency is the Swiss franc. The Separation On April 1, 2019, Ironwood Pharmaceuticals, Inc. (“Ironwood”) completed the previously announced separation of its sGC business, and certain other assets and liabilities, into a separate, independent publicly traded company by way of a pro-rata distribution of all of the outstanding shares of common stock of Cyclerion Therapeutics, Inc. through a dividend distribution of one share of the Company’s common stock, with no par value per share, for every 10 shares of Ironwood common stock held by Ironwood stockholders as of the close of business on March 19, 2019, the record date for the Distribution (the entire transaction being the “Separation”). As a result of the Separation, the Company became an independent public company and commenced regular way trading under the symbol “CYCN” on the Nasdaq Global Select Market on April 2, 2019. In connection with the Separation, on March 30, 2019, the Company entered into certain agreements with Ironwood to provide a framework for the Company’s relationship with Ironwood following the Separation, including, among others, the Separation Agreement, Tax Matters Agreement, and Employee Matters Agreement ("EMA"). In addition, in connection with the Separation, on April 1, 2019, the Company entered into a Development Agreement, an Ironwood Transition Services Agreement, a Cyclerion Transition Services Agreement and an Intellectual Property License Agreement with Ironwood. On April 2, 2019, the Company issued 11,817,165 shares (‘‘Private Placement Shares’’) of its common stock to accredited investors for gross proceeds of $175 million (net proceeds of approximately $165 million) pursuant to the Amended and Restated Common Stock Purchase Agreement. The funds associated with the sale of Private Placement Shares were received by the Company on April 2, 2019. Basis of Presentation The Company did not operate as a separate, stand-alone entity for the full period covered by the interim consolidated and combined financial statements. The Company's consolidated balance sheet as of June 30, 2019 and consolidated statement of operations and comprehensive loss for the three months ended June 30, 2019 consist of the consolidated balances of Cyclerion as prepared on a stand-alone basis. The Company's combined balance sheet as of December 31, 2018 and consolidated and combined statements of operations and comprehensive loss for the six months ended June 30, 2019 and the three and six months ended June 30, 2018, as well as our statements of cash flows for the six months ended June 30, 2019 and 2018, respectively, have been prepared on a "carve out" basis for the periods and dates prior to the spin-off on April 1, 2019. The unaudited condensed consolidated and combined financial statements reflect the historical results of the operations, financial position and cash flows of Cyclerion, in conformity with United States generally accepted accounting principles (“U.S. GAAP”). The accompanying unaudited condensed consolidated and combined financial statements reflect the consolidated and combined financial position and consolidated and combined results of operations of the Company as an independent, publicly-traded company for the period after the Separation on April 1, 2019. The unaudited condensed consolidated and combined financial statements also reflect the financial position and results of operations of the Company as a combined reporting entity of Ironwood for periods prior to the Separation. These unaudited condensed consolidated and combined financial statements of Cyclerion reflect the assets, liabilities, and expenses directly attributable to Cyclerion, as well as allocations of certain corporate level assets, liabilities and expenses, deemed necessary to fairly present the financial position, results of operations and cash flows of Cyclerion, as discussed further below. As such, these allocations may not be indicative of the actual amounts that would have been recorded had Cyclerion operated as an independent, publicly traded company for the periods presented. During the six months ended June 30, 2019, the Company recorded approximately $7.8 million in Separation-related adjustments in its condensed consolidated and combined statements of stockholders' equity (deficit). The Separation-related adjustments primarily related to differences between assets and liabilities transferred to Cyclerion as a result of the Separation and assets and liabilities reported in the Company's combined balance sheet as of March 31, 2019. Prior to the Separation, Cyclerion was dependent upon Ironwood for all of its working capital and financing requirements, as Ironwood used a centralized approach to cash management and financing its operations. There were no cash amounts specifically attributable to Cyclerion for the historical periods presented; therefore, there is no cash reflected for historical periods in the consolidated and combined financial statements. Accordingly, cash and cash equivalents, debt or related interest expense have not been allocated to Cyclerion in the historical financial statements. Financing transactions related to Cyclerion are accounted for as a component of net parent investment in the historical combined balance sheets and as a financing activity on the accompanying combined statements of cash flows. Prior to the Separation, Cyclerion’s combined financial statements included an allocation of expenses related to certain Ironwood corporate functions, including senior management, legal, human resources, finance, information technology and quality assurance. These expenses were allocated to Cyclerion based on direct usage or benefit where identifiable, with the remainder allocated pro-rata based on project related costs, headcount or other measures. These allocations may not be indicative of the actual expense that would have been incurred had Cyclerion operated as an independent, publicly traded company for the periods presented. Prior to the Separation, the combined balance sheets of Cyclerion included assets and liabilities that were allocated principally on a specific identification basis and net parent investment was shown in lieu of stockholders’ equity. As a result of the Separation, the Company’s net parent investment balance was reclassified to paid-in capital. Going Concern At each reporting period, the Company evaluates whether there are conditions or events that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are issued. The Company’s evaluation entails analyzing prospective operating budgets and forecasts for expectations of the Company’s cash needs and comparing those needs to the current cash and cash equivalent balances. The Company is required to make certain additional disclosures if it concludes substantial doubt exists and it is not alleviated by the Company's plans or when its plans alleviate substantial doubt about the Company's ability to continue as a going concern. The Company has experienced negative operating cash flows for all historical periods presented and it expects these losses to continue into the foreseeable future as the Company continues the development and clinical testing of the product candidates, olinciguat, praliciguat and IW-6463, and its discovery research programs. On April 2, 2019, the Company issued the Private Placement Shares to accredited investors for gross proceeds of $175 million (net proceeds of approximately $165 million) pursuant to the Amended and Restated Common Stock Purchase Agreement. The funds associated with the sale of Private Placement Shares were received by the Company on April 2, 2019. After considering the Company's current research and development plans and the timing expectations related to the progress of its programs, and after considering its existing cash and cash equivalents as of June 30, 2019, the Company did not identify conditions or events that raise substantial doubt about the Company's ability to continue as a going concern within one year from the date these financial statements were issued.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2019
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Principles of Consolidation The accompanying condensed consolidated and combined financial statements include the accounts of Cyclerion and its wholly owned subsidiary as of June 30, 2019. Segment Information Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Company’s chief operating decision‑maker in deciding how to allocate resources and in assessing performance. The Company currently operates in one reportable business segment—human therapeutics. Use of Estimates The preparation of condensed consolidated and combined financial statements in accordance with U.S. GAAP requires the Company’s management to make estimates and judgments that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated and combined financial statements, and the amounts of expenses during the reported periods. On an ongoing basis, the Company’s management evaluates its estimates, judgments and methodologies. Significant estimates and assumptions in the condensed consolidated and combined financial statements include those related to allocations of expenses, assets and liabilities from Ironwood’s historical financials to the Company, impairment of long-lived assets, income taxes, including the valuation allowance for deferred tax assets, research and development expenses, contingencies and share-based compensation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ materially from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known. Fair Value of Investment Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:  Level 1 — Quoted prices in active markets for identical assets or liabilities.  Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.  Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. Foreign Currency Translation Adjustment The functional currency of the Company’s foreign subsidiary is its local currency, the Swiss franc. The assets and liabilities of the Company’s foreign subsidiary are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at the average exchange rates prevailing during the period. The cumulative translation effect for the Company’s foreign subsidiary is included as a foreign currency translation adjustment in stockholders’ equity (deficit) and as a component of comprehensive loss. The Company’s intercompany accounts are typically denominated in the functional currency of the foreign subsidiary. Gains and losses resulting from the remeasurement of intercompany balances are recorded in the consolidated statements of operations. Related Party Accounts Receivable The Company makes judgments as to its ability to collect outstanding receivables and provides an allowance for receivables when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices. The Company’s receivables primarily relate to amounts earned under a development agreement with Ironwood. The Company believes that credit risks associated with Ironwood are not significant. To date, the Company has not had any significant write-offs of bad debt and the Company did not have an allowance for doubtful accounts as of June 30, 2019. Impairment of Long‑Lived Assets The Company regularly reviews the carrying amount of its long‑lived assets to determine whether indicators of impairment may exist, which warrant adjustments to carrying values or estimated useful lives. If indications of impairment exist, projected future undiscounted cash flows associated with the asset are compared to the carrying amount to determine whether the asset’s value is recoverable. If the carrying value of the asset exceeds such projected undiscounted cash flows, the asset will be written down to its estimated fair value. Leases Effective January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC 842”) using the optional transition method. The adoption of ASC 842 represents a change in accounting principle that aims to increase transparency and comparability among organizations by requiring the recognition of right-of-use assets and lease liabilities on the balance sheet for both operating and finance leases. In addition, the standard requires enhanced disclosures that meet the objective of enabling financial statement users to assess the amount, timing, and uncertainty of cash flows arising from leases. The reported results for the six months ended June 30, 2019 reflect the application of ASC 842 guidance, while the reported results for prior periods were prepared in conjunction with ASC 840, Leases (“ASC 840”). The recognition of right-of-use assets and lease liabilities related to the Company’s operating leases under ASC 842 has had a material impact on the Company’s condensed consolidated and combined financial statements. As part of the ASC 842 adoption, the Company has used certain practical expedients outlined in the guidance. These practical expedients include: · Account policy election to use the short-term lease exception by asset class; · Election of the practical expedient package during transition, which includes: · An entity need not reassess whether any expired or existing contracts are or contain leases. · An entity need not reassess the classification for any expired or existing leases. As a result, all leases that were classified as operating leases in accordance with ASC 840 are classified as operating leases under ASC 842, and all leases that were classified as capital leases in accordance with ASC 840 are classified as finance leases under ASC 842. · An entity need not reassess initial direct costs for any existing leases. The Company’s lease portfolio includes a property lease for its headquarters location at 301 Binney Street, Cambridge, MA. The Company determines if an arrangement is a lease at the inception of the contract. The asset component of the Company’s operating leases is recorded as operating lease right-of-use assets, and the liability component is recorded as current portion of operating lease liabilities and operating lease liabilities, net of current portion, in the Company’s condensed consolidated balance sheets. Right-of-use assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at the commencement date. The Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments if an implicit rate of return is not provided with the lease contract. Operating lease right-of-use assets are adjusted for incentives received. Lease cost is recognized on a straight-line basis over the lease term, and includes amounts related to short-term leases. Revenue Upon executing a revenue generating arrangement, the Company assesses whether it is probable the Company will collect consideration in exchange for the good or service it transfers to the customer. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), it performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligations. The Company must develop assumptions that require significant judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The assumptions that are used to determine the stand-alone selling price may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. The Company generates revenue from a development agreement with Ironwood, pursuant to which the Company provides certain research and development services with respect to certain of Ironwood’s products and product candidates. Such research and development activities are governed by a joint steering committee comprised of representatives of both companies. Services performed are invoiced at a mutually agreed upon rate and the initial term of the agreement is two years from the date of Separation and automatically renews for one year unless either party notifies the other at least six months prior to the expiration. Research and Development Costs The Company expenses research and development costs to operations as incurred. The Company defers and capitalizes nonrefundable advance payments made by the Company for research and development activities until the related goods are received or the related services are performed. Research and development expenses are comprised of costs incurred in performing research and development activities, which may include salary, benefits and other employee‑related expenses; share‑based compensation expense; laboratory supplies and other direct expenses; facilities expenses; overhead expenses; third‑party contractual costs relating to nonclinical studies and clinical trial activities and related contract manufacturing expenses, development of manufacturing processes and regulatory registration of third‑party manufacturing facilities; and other outside expenses. General and Administrative Expenses The Company expenses general and administrative costs to operations as incurred. General and administrative expense consists of compensation, share‑based compensation, benefits and other employee‑related expenses for personnel in the Company’s administrative, finance, legal, information technology, business development and human resource functions. Other costs include the legal costs of pursuing patent protection of the Company’s intellectual property, general and administrative related facility costs, insurance costs and professional fees for accounting and legal services. Income taxes In accordance with ASC 270, Interim Reporting, and ASC 740, Income Taxes, the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. For the three and six months ended June 30, 2019 and 2018, the Company recorded no tax expense or benefit due to the expected current year loss and its historical losses. As of June 30, 2019 and December 31, 2018, the Company has concluded that a full valuation allowance is necessary for all of its net deferred tax assets. The Company had no amounts recorded for uncertain tax positions, interest or penalties in the accompanying consolidated financial statements. Prior to the Separation, income taxes included current and deferred income taxes of Ironwood allocated to the Company’s stand-alone financials. In accordance with the tax matters agreement with Ironwood, Cyclerion is responsible for its own portion of income taxes beginning after the Separation date. Subsequent Events The Company considers events or transactions that have occurred after the balance sheet date of June 30, 2019, but prior to the filing of the financial statements with the Securities and Exchange Commission, to provide additional evidence relative to certain estimates or to identify matters that require additional recognition or disclosure. Subsequent events have been evaluated through the filing of the financial statements accompanying this Quarterly Report on Form 10‑Q. New Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Except as discussed elsewhere in the notes to the consolidated and combined financial statements, the Company did not adopt any new accounting pronouncements during the six months ended June 30, 2019 and 2018, that had a material effect on its consolidated and combined financial statements. In February 2016, the FASB issued ASU No. 2016‑02, Leases (“ASU 2016‑02”), which supersedes the lease accounting requirements in ASC Topic 840, Leases, and most industry‑specific guidance with ASC Topic 842, Leases . ASU 2016‑02 requires the identification of arrangements that should be accounted for as leases by lessees. In general, for lease arrangements exceeding a 12‑month term, these arrangements must now be recognized as assets and liabilities on the balance sheet of the lessee. Under ASU 2016‑02, a right‑of‑use asset and lease obligation will be recorded for all leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization and interest expense for financing leases. The balance sheet amount recorded for existing leases at the date of adoption of ASU 2016‑02 must be calculated using the applicable incremental borrowing rate at the date of adoption. ASU 2016‑02 is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. In July 2018, the FASB issued ASU No. 2018‑10, Leases (Topic 842) (“ASU 2018‑10”), Codification Improvements and ASU No. 2018‑11, Leases (Topic 842) (“ASU 2018‑11”), to provide additional guidance for the adoption of Topic 842. ASU 2018‑10 clarifies certain provisions, and corrects unintended applications of the guidance, such as the rate implicit in a lease, impairment of the net investment in a lease, lessee reassessment of lease classifications, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments. The amendments in ASU 2018‑11 will allow for an additional transition method, whereby at the adoption date the entity recognizes a cumulative‑effect adjustment to the opening balance of retained earnings in the period of adoption, while the comparative period disclosures continue recognition under ASC Topic 840. Additionally, ASU 2018‑11 includes a practical expedient for separating contract components for lessors. In December 2018, the FASB issued ASU No. 2018‑20, Leases (Topic 842) (“ASU 2018‑20”), Narrow-Scope Improvements for Lessors , which provided clarification for lessors on how to apply the new leases standard when accounting for sales taxes, certain lessor costs, and certain requirements related to variable payments in contracts. In March 2019, the FASB issued ASU No. 2019‑01, Leases (Topic 842) (“ASU 2019‑01”), Codification Improvements , which aligned the new leases guidance with existing guidance for fair value of the underlying asset by lessors that are not manufacturers or dealers. It also clarified an exemption for lessors and lessees from a certain interim disclosure requirement associated with adopting the board’s new lease accounting standard. The Company’s analysis includes, but is not limited to, reviewing existing leases, reviewing other service agreements for embedded leases, establishing policies and procedures, assessing potential disclosures and evaluating the impact of adoption on the Company’s consolidated and combined financial statements. The Company adopted ASU 2016‑02, ASU 2018‑10, ASU 2018‑11, ASU 2018‑20, and ASU 2019‑01 in the first quarter of 2019. In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 will change how companies account for credit losses for most financial assets and certain other instruments. For trade receivables, loans and held-to-maturity debt securities, companies will be required to recognize an allowance for credit losses rather than reducing the carrying value of the asset. Subsequent to the issuance of ASU 2016-13, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”) and ASU No. 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief (“ASU 2019-05”) to provide additional guidance on the adoption of ASU 2016-13. ASU 2019-04 added Topic 326, Financial Instruments—Credit Losses, and made several amendments to the codification and also modified the accounting for available-for-sale debt securities. ASU 2019-05 provides targeted transition relief by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. ASU 2016-13, ASU 2019-04 and ASU 2019-05 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the potential impact that the adoption of these ASUs will have on the Company’s financial position and results of operations. In October 2016, the FASB issued ASU No. 2016‑16, Accounting for Income Taxes: Intra‑Entity Asset Transfers of Assets Other than Inventory (“ASU 2016‑16”). ASU 2016‑16 eliminates the ability to defer the tax expense related to intra‑entity asset transfers other than inventory. Under the new standard, entities should recognize the income tax consequences on an intra‑entity transfer of an asset other than inventory when the transfer occurs. ASU 2016‑16 is effective for fiscal periods beginning after December 15, 2018. The Company adopted this standard during the first quarter of 2019. Adoption of this standard did not have a material impact on the Company’s financial position or results of operations. In June 2018, the FASB issued ASU No. 2018‑07, Improvements to Nonemployee Share‑based Payments (“ASU 2018‑07”) . ASU 2018‑07 simplifies the accounting for share‑based payments to nonemployees by aligning with the accounting for share‑based payments to employees, with certain exceptions. Measurement of equity‑classified nonemployee awards issued in exchange for goods or services used or consumed in an entity’s own operations will be fixed at the grant date, which may lower the cost and reduce volatility in the income statement. Entities also may use the expected term to measure nonemployee options or elect to use the contractual term as the expected term, on an award‑by‑award basis. ASU 2018‑07 is effective for the fiscal periods beginning after December 15, 2018. The Company adopted this standard during the first quarter of 2019. Adoption of this standard did not have a material impact on the Company’s financial position or results of operations. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (“ASU 2018-13”): Disclosure Framework—Changes to the Disclosure Requirement for Fair Value Measurement (“ASU 2018-13”) which amends the disclosure requirements for fair value measurements. The amendments in ASU 2018-13 are effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the potential impact that the adoption of ASU 2018-13 may have on the Company’s financial position and results of operations. In August 2018, the FASB issued ASU No. 2018‑15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (“ASU 2018‑15”). ASU 2018‑15 requires a customer in a cloud computing arrangement that is a service contract to follow the internal‑use software guidance in ASC 350‑40, Intangibles—Goodwill and Other—Internal Use Software (ASC 350‑40), to determine which implementation costs to capitalize as assets or expense as incurred. The internal‑use software guidance in ASC 350‑40 requires that certain costs incurred during the application development stage be capitalized and other costs incurred during the preliminary project and post‑implementation stages be expensed as they are incurred. A customer’s accounting for the hosting component of the arrangement is not affected by this guidance. The amendments in ASU 2018‑15 are effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the potential impact that the adoption of ASU 2018‑15 may have on the Company’s financial position and results of operations. No other accounting standards known by the Company to be applicable to it that have been issued by the FASB or other standard‑setting bodies and that do not require adoption until a future date are expected to have a material impact on the Company’s consolidated and combined financial statements upon adoption.

Related Party - Agreements and

Related Party - Agreements and Transactions with Ironwood	6 Months Ended
	Jun. 30, 2019
Related Party - Agreements and Transactions with Ironwood
Related Party - Agreements and Transactions with Ironwood	3. Related Party - Agreements and Transactions with Ironwood Relationship with Ironwood Ironwood became a related party when Mark Currie, Ironwood’s former Chief Scientific Officer and the Company’s President, joined Ironwood’s board in April 2019 following the Separation. Prior to April 1, 2019, the Company was managed and operated in the normal course of business under Ironwood. Accordingly, certain shared costs were allocated to the Company and reflected as expenses in the Company’s stand-alone combined financial statements. The expenses reflected in the combined financial statements may not be indicative of expenses that will be incurred by the Company in the future. (a) Ironwood incurred significant corporate costs for services provided to Cyclerion. These costs included expenses for information systems, accounting, other financial services (such as treasury, audit and purchasing), human resources, legal, and facilities. A portion of these costs benefited Cyclerion and have been allocated to Cyclerion using a pro‑rata method based on project related costs, headcount, or other measures that management believes are consistent and reasonable. This methodology is applied consistently between periods, however the magnitude of the allocation will vary based on the relationship of Cyclerion costs compared to those of Ironwood’s other operations. The corporate costs allocated to Cyclerion, prior to the Separation, and included in the combined statements of operations were approximately $6.8 million and $3.6 million for the three months ended March 31, 2019 and 2018, respectively, and were included in general and administrative expenses for both periods. (b) Cyclerion participated in Ironwood’s centralized cash management and financing programs prior to the Separation. Disbursements were made through centralized accounts payable systems operated by Ironwood. Cash receipts were transferred to centralized accounts, also maintained by Ironwood. As cash is disbursed and received by Ironwood, it was accounted for by Cyclerion through net parent investment. All obligations were financed by Ironwood and financing decisions were determined by central Ironwood treasury operations until the Separation. Other Transactions with Ironwood As part of the Separation from Ironwood, the Company entered into transition services agreements and a development agreement with Ironwood. Under the transition services agreements, the Company provides certain services to Ironwood, and Ironwood provides certain services to the Company, each related to corporate functions such as finance, procurement, facilities and development for a period of one to two years from the date of the Separation, unless earlier terminated or extended by mutual agreement. These services are charged to and from Ironwood and are recorded as part of operating expenses. The Company recorded a net charge of approximately $0.1 million to operating expenses for activities related to the transition services agreements for the three months ended June 30, 2019. Under the development agreement, the Company provides certain research and development services to Ironwood at mutually agreed upon rates and the amounts earned are recorded as revenue from related party. Such research and development activities are governed by a joint steering committee comprised of representatives of both Ironwood and the Company. The Company recorded approximately $1.6 million in revenue from related party for services provided under the development agreement for the three months ended June 30, 2019. In accordance with the Separation agreement, there were certain other transactions and adjustments post-Separation between the Company and Ironwood. The total amount due from Ironwood at June 30, 2019 was approximately $1.9 million, including approximately $1.6 million from the development agreement, and is reflected as related party accounts receivable. The total amount due to Ironwood at June 30, 2019 was approximately $1.9 million, including approximately $1.3 million associated with tenant improvement reimbursement provisions in accordance with the separation agreement, and is reflected as related party accounts payable. Ironwood has obtained health insurance services for its employees, including employees of Ironwood who became employees of Cyclerion, from an insurance provider whose President and Chief Executive Officer became a member of Ironwood’s Board of Directors in April 2016. Prior to the Separation, expenses related to insurance premiums were allocated to Cyclerion using a pro‑rata method based on internal project assignments and headcount, that management believes are consistent and reasonable. Insurance premiums allocated to Cyclerion amounted to approximately $0.5 million and approximately $1.1 million for the three months ended March 31, 2019 and the six months ended June 30, 2018, respectively, and is reflected in the Company’s condensed consolidated and combined statements of operations. Accordingly, the amounts presented are not necessarily indicative of future expense and do not necessarily reflect the results that Cyclerion would have experienced as an independent company for the periods presented. Peter Hecht, Ironwood’s former Chief Executive Officer and the Chief Executive Officer and board member of Cyclerion, donated 2.5 million of his shares of Ironwood common stock to American Endowment Foundation for the creation of a donor advised fund that divested these shares to invest $34.0 million in Cyclerion as part of the financing transaction completed by Cyclerion on April 2, 2019. Mark Currie has invested $4.0 million in Cyclerion as part of this financing. Dr. Currie and certain other investors have funded a portion of their investment through sales of Ironwood common stock.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	6 Months Ended
	Jun. 30, 2019
Fair Value of Financial Instruments
Fair Value of Financial Instruments	4. Fair Value of Financial Instruments The Company’s cash equivalents are generally classified within Level 1 of the fair value hierarchy. The following table presents information about the Company’s financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values: Fair Value Measurements as of June 30, 2019 using: (in thousands) Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 137,785 $ — $ — $ Total cash equivalents $ 137,785 $ — $ — $

Property and Equipment

Property and Equipment	6 Months Ended
	Jun. 30, 2019
Property and Equipment
Property and Equipment	5. Property and Equipment Property and equipment, net consisted of the following (in thousands): June 30, December 31, 2019 2018 Laboratory equipment $ 16,424 $ 17,753 Software 2,295 2,593 Construction in progress 16 741 Computer and office equipment 2,354 901 Leasehold improvements 22,615 — Gross property and equipment 43,704 21,988 Less: accumulated depreciation and amortization (30,950) (15,491) Property and equipment, net $ 12,754 $ 6,497 As of June 30, 2019, and December 31, 2018, Company’s property and equipment was primarily located in Cambridge, Massachusetts. Depreciation and amortization expense of the Company’s property and equipment was approximately $0.8 million and $0.4 million for the three months ended June 30, 2019 and 2018, respectively, and $1.4 million and $0.7 million for the six months ended June 30, 2019 and 2018, respectively. Fixed asset purchases included in accounts payable and accrued expenses was approximately $0.5 million and $0.7 million at June 30, 2019 and 2018, respectively.

Accrued Expenses and Other Curr

Accrued Expenses and Other Current Liabilities	6 Months Ended
	Jun. 30, 2019
Accrued Expenses and Other Current Liabilities
Accrued Expenses and Other Current Liabilities	6. Accrued Expenses and Other Current Liabilities Accrued expenses consisted of the following (in thousands): June 30, December 31, 2019 2018 Accrued incentive compensation $ 2,524 $ 4,889 Salaries 1,592 1,513 Accrued vacation 1,345 1,048 Professional fees 1,441 1,019 Workforce reduction charges — 565 Other 115 770 $ 7,017 $ 9,804

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2019
Commitments and Contingencies
Commitments and Contingencies	7 . Commitments and Contingencies Other Funding Commitments As of June 30, 2019, the Company has several on-going studies in various clinical trial stages. The Company’s most significant clinical trial expenditures are related to contract research organizations. These contracts are generally cancellable, with notice, at the Company’s option and do not have any significant cancellation penalties. Guarantees On September 6, 2018, Cyclerion was incorporated in Massachusetts and its officers and directors are indemnified for certain events or occurrences while they are serving in such capacity. Prior to the Separation, the Company’s officers and directors were similarly indemnified under Delaware law. The Company enters into certain agreements with other parties in the ordinary course of business that contain indemnification provisions. These typically include agreements with directors and officers, business partners, contractors, clinical sites and customers. Under these provisions, the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities. These indemnification provisions generally survive termination of the underlying agreements. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. However, to date the Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the estimated fair value of these obligations is minimal. Accordingly, the Company did not have any liabilities recorded for these obligations as of June 30, 2019 or December 31, 2018.

Leases

Leases	6 Months Ended
	Jun. 30, 2019
Leases
Leases	8. Leases The FASB issued ASU 2016-02, or the leasing standard or ASC 842, in February 2016. ASU 2016-02 requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU 2016-02 also requires certain qualitative and quantitative disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. On April 1, 2019, the Company entered into a direct operating lease (the ‘‘HQ Lease’’) for its existing premises located at 301 Binney Street, Cambridge, MA consisting of approximately 114,000 rentable square feet of office and lab space on the first and second floors. The HQ Lease is for a term of 123 months with two five-year extension options and certain expansion rights. The HQ Lease includes a letter of credit of $7.7 million posted with the landlord as a security deposit. Cyclerion has also entered into customary non-disturbance arrangements with the building landlord’s mortgagee and with the property ground lessor recognizing Cyclerion’s leasehold interest in this property. The HQ Lease provides for annual base rent of approximately $11.0 million in the first year, which increases on a yearly basis by 3.0% (subject to an abatement of base rent of approximately $2.7 million in the first year of the lease). The Company is obligated to pay the landlord for certain costs, taxes and operating expenses related to the premises, subject to certain exclusions; however, the Company has concluded that these payments are not in-substance fixed payments and therefore are not included in the calculation of the related lease liability and asset under ASC 842. Additionally, the Company has made the policy election to adopt the practical expedient to not separate lease components from non-lease components for the right-to-use asset class of office and laboratory space. This policy election results in the Company accounting for the lease component, the use of the premises, and the non-lease components, which include a property management fee, as a single lease component. The Company recorded the liability associated with the HQ Lease at the present value of the lease payments not yet paid, discounted using the discount rate for the HQ Lease established at the commencement date. As the HQ Lease does not provide an implicit rate, the Company had to estimate the incremental borrowing rate, or IBR, as of the commencement date. The IBR is defined under ASC 842 as the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment. The Company determined its IBR to be 10.9%, which was used to discount the remaining lease payments over the remaining lease term and recorded a lease liability of $71.3 million on April 1, 2019. This lease liability will be amortized over the remaining lease term in an amount equal to the difference between the cash rent paid and the monthly interest calculated on the remaining lease liability. As of June 30, 2019, the Company had a current lease liability of $0.8 million and a noncurrent lease liability of $72.3 million recorded in its condensed consolidated balance sheets related to the HQ Lease. The Company has a tenant improvement allowance from the landlord of approximately $2.3 million for certain permitted costs related to the buildout of the premises. The Company is deemed to be the owner of these tenant improvements during the lease term. These $2.3 million of improvements are included in the Company’s property, plant and equipment balances in its condensed consolidated balance sheets as of June 30, 2019 and are depreciated over the shorter of their useful life or the related lease term. On April 1, 2019, the Company recorded a right-of-use asset in the amount $71.3 million. The right-of-use asset will be amortized over the remaining lease term in an amount equal to the difference between the calculated straight-line expense of the total lease payments less the monthly interest calculated on the remaining lease liability. As of June 30, 2019, the Company had a long-term lease asset of $70.2 million recorded in its condensed consolidated balance sheets related to the HQ Lease. Lease cost is recognized on a straight-line basis over the lease term. For the three months ended June 30, 2019, the Company recognized a total of approximately $3.2 million of lease cost. Supplemental cash flow information related to leases for the periods reported is as follows: Three Months ended June 30, 2019 Right-of-use assets obtained in exchange for new operating lease upon lease commencement (in thousands) $ 71,403 Cash paid for amounts included in the measurement of lease liabilities (in thousands) $ 101 Weighted-average remaining lease term of operating leases (in years) 10 Weighted-average discount rate of operating leases 10.9 % Future minimum lease payments under non-cancelable operating leases under ASC 842 as of June 30, 2019 are as follows (in thousands): Operating lease payments 2019 (remaining six months) $ 5,507 2020 11,253 2021 11,578 2022 11,913 2023 12,228 2024 and hereafter 73,847 Total future minimum lease payments 126,326 Less: tenant improvement allowance reimbursement 2,289 Less: present value adjustment 50,774 Operating lease liabilities at June 30, 2019 73,263 Less: current portion of operating lease liabilities 866 Operating lease liabilities, net of current portion $ 72,397 On March 31, 2019, the Company entered into a short-term sublease of approximately 24,000 rentable square feet with Ironwood to provide temporary working space for a portion of its workforce while the buildout of the Company’s new premises was being completed. The sublease was for an initial one-month term with several one-month extension options. The Company subleased the space for approximately 1.5 months, vacating the space and terminating the sublease in mid-May 2019. The Company incurred approximately $0.2 million in rent expense related to the sublease, which is included in the total lease cost of $3.2 million, for the three months ended June 30, 2019. At December 31, 2018, no leases were directly attributed to Cyclerion.

Share-based Compensation Plans

Share-based Compensation Plans	6 Months Ended
	Jun. 30, 2019
Share-based Compensation Plans
Share-based Compensation Plans	9. Share‑based Compensation Plans Prior to the Separation, share-based compensation expense was allocated to Cyclerion using a combined specific identification and pro-rata method based on internal project related costs and headcount that management believed were consistent and reasonable. In connection with the Separation, Cyclerion adopted its own share-based compensation plans. Specifically, Cyclerion adopted the 2019 Employee Stock Purchase Plan (“2019 ESPP”) and the 2019 Equity Incentive Plan (“2019 Equity Plan”). Under the 2019 ESPP, eligible employees may use payroll deductions to purchase shares of stock in offerings under the plan, and thereby acquire an interest in the future of the Company. Under the 2019 Equity Plan, new post-Separation awards, including stock options and restricted stock units (“RSUs”), may be granted to employees of the Company. Cyclerion also mirrored two of Ironwood’s existing plans, the Amended and Restated 2005 Stock Incentive Plan (“2005 Equity Plan”) and the Amended and Restated Director 2010 Employee and Consultant Equity Incentive Plan (“2010 Equity Plan). These mirror plans were adopted to facilitate the exchange of Ironwood equity awards for Cyclerion equity awards upon the Separation as part of the equity conversion. As a result of the Separation and in accordance with the EMA, employees of both companies retained their existing Ironwood vested options and received a prorata share of Cyclerion options, regardless of which company employed them post-Separation. For employees that were ultimately employed by Cyclerion, unvested Ironwood options and RSUs were converted to unvested Cyclerion options and RSUs. The conversion of equity awards resulting from the Separation impacted approximately 143 employees and was treated as a Type 1 modification under ASC Topic 718, Share Based Payments, as the awards are expected to vest under the original terms. Incremental compensation expense was measured as the excess, if any, of the fair value of the modified award over the fair value of the original award immediately before its terms were modified. The fair value of RSUs and restricted stock awards was measured using the fair value stock price immediately before and immediately after the modification date which resulted in no incremental compensation expense. The fair value of stock options was measured using the Black-Scholes option pricing method using the appropriate valuation assumptions immediately before and immediately after the modification date. As a result of the modification, Cyclerion recognized a one-time incremental expense of approximately $0.3 million for the vested stock options and will recognize an incremental expense of approximately $7.5 million for the unvested stock options over their remaining vesting period. The following table provides share-based compensation reflected in the Company’s condensed consolidated and combined statements of operations and comprehensive loss for the three and six months ended June 30, 2019 and 2018 (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Research and development $ 2,787 $ 1,889 $ 4,582 $ 3,554 General and administrative 3,437 1,116 5,631 1,959 $ 6,224 $ 3,005 $ 10,213 $ 5,513 Stock Options A summary of stock option activity for the six months ended June 30, 2019 is as follows: Weighted Weighted- Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Value Options Price Term (years) (in thousands) Outstanding as of December 31, 2018 — $ — — $ — Aggregate impact of conversion related to spin-off 6,456,982 14.90 — Granted 498,529 15.07 — — Exercised — — — — Cancelled or forfeited (132,606) 15.19 — — Outstanding as of June 30, 2019 6,822,905 $ 14.91 7.5 $ Exercisable at June 30, 2019 2,195,792 $ 14.71 4.7 $ During the three months ended June 30, 2019 the Company granted stock options to purchase an aggregate of 498,529 shares at weighted average grant date fair values per option share of $9.23. The total grant date fair value of options that vested during the three-month period ended June 30, 2019 was $4.6 million. As of June 30, 2019, the unrecognized share-based compensation expense, net of estimated forfeitures, related to all unvested stock options held by Cyclerion’s employees is $30.5 million and the weighted average period over which that expense is expected to be recognized is 2.8 years. The weighted-average Black-Scholes assumptions used in estimating the fair value of the stock options granted by Cyclerion following the Separation during the three months ended June 30, 2019, were as follows: Three Months Ended June 30, 2019 Weighted average risk-free interest rate 2.31 % Expected dividend yield 0.00 % Expected option term (in years) 6.25 Expected stock price volatility 65.23 % For the three months ended June 30, 2019, expected volatility was estimated using an average of the historical volatility of the common stock of a group of similar companies that were publicly traded. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. Restricted Stock Units The RSUs generally vest 25% per year on the approximate anniversary of the date of grant until fully vested, provided the employee remains continuously employed with the Company through each vesting date. Shares of the Company's common stock are delivered to the employee upon vesting, subject to payment of applicable withholding taxes. The fair value of all RSUs is based on the market value of the Company's common stock on the date of grant. Compensation expense, including the effect of estimated forfeitures, is recognized over the applicable service period. A summary of RSU activity for the six months ended June 30, 2019 is as follows: Weighted- Average Number Grant Date of Shares Fair Value Unvested as of December 31, 2018 — $ — Aggregate impact of conversion related to spin-off 932,469 $ 15.55 Granted 7,039 $ 15.20 Vested (9,527) $ 18.52 Forfeited (49,695) $ 16.00 Unvested as of June 30, 2019 880,286 $ 15.49 As of June 30, 2019, the unrecognized share-based compensation expense, net of estimated forfeitures, related to all unvested restricted stock units by the Company’s employees is $9.2 million and the weighted-average period over which that expense is expected to be recognized is 2.9 years. Restricted Stock Awards Any of the Company’s non-employee directors who served as non-employee directors of Ironwood received shares of the Company’s unvested restricted stock in respect of any outstanding unvested awards of Ironwood restricted stock they held. Such restricted stock awards were subject to the vesting schedule set forth in the original Ironwood restricted stock award. On April 1, 2019, the Company made grants of its restricted stock to its non-employee directors who did not hold Ironwood restricted stock prior to the distribution. Such restricted stock awards have an equivalent value to the shares of the Company’s restricted stock granted to its non-employee directors who held Ironwood restricted stock prior to the distribution, and have been pro-rated to reflect each non-employee director's period of service with the Company from the date of the distribution to the anticipated date of the first annual grant. These restricted stock awards fully vested on May 30, 2019. A summary of the restricted stock for the six months ended June 30, 2019 is as follows: Weighted- Average Number Grant Date of Shares Fair Value Unvested as of December 31, 2018 — $ — Granted 21,942 $ 14.81 Vested (21,942) $ 14.81 Unvested as of June 30, 2019 — $ —

Loss per share

Loss per share	6 Months Ended
	Jun. 30, 2019
Loss per share
Loss per share	10. Loss per share Basic and diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Prior to April 1, 2019, there were no Cyclerion shares outstanding, as such, the shares outstanding immediately after the distribution and the private placement was used to calculate the net loss per share for all pre-separation periods presented. Basic and diluted earnings per share are calculated as follows: Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Numerator: Net loss (in thousands) $ (32,254) $ (29,781) $ (69,635) $ (55,064) Denominator: Weighted average number of common shares outstanding (in thousands) 27,393 27,380 27,380 27,380 The following common stock equivalents were excluded from the calculation of diluted loss per share allocable to common stockholders because their inclusion would have been anti-dilutive (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Stock options 6,823 — — — Restricted stock units 880 — — — 7,703 — — —

Defined Contribution Plan

Defined Contribution Plan	6 Months Ended
	Jun. 30, 2019
Defined Contribution Plan
Defined Contribution Plan	11. Defined Contribution Plan Prior to the Separation, Ironwood maintained a defined contribution 401(k) Savings Plan in the form of a qualified 401(k) plan for the benefit of substantially all of its employees, which included Ironwood employees who became Cyclerion employees. Compensation expense related to the 401(k) match was allocated to Cyclerion using a pro-rata method based on project-related costs and headcount that management believes are consistent and reasonable. Subsequent to the Separation, Cyclerion adopted a defined contribution 401(k) Savings Plan similar to the plan in place at Ironwood. The plan assets under the Ironwood defined contribution 401(k) Savings Plan were transferred to the Cyclerion plan. Subject to certain IRS limits, eligible employees may elect to contribute from 1% to 100% of their compensation. Cyclerion contributions to the plan are at the sole discretion of the board of directors. Currently, Cyclerion provides a matching contribution of 75% of the employee’s contributions, up to $6,000 annually. Included in compensation expense for employees that are directly attributable to Cyclerion is approximately $0.1 million and $0.3 million for the three months ended June 30, 2019 and 2018, respectively, and $0.5 million and $0.6 million for the six months ended June 30, 2019 and 2018, respectively.

Ironwood Workforce Reduction

Ironwood Workforce Reduction	6 Months Ended
	Jun. 30, 2019
Ironwood Workforce Reduction
Ironwood Workforce Reduction	12. Ironwood Workforce Reduction On June 27, 2018, as part of its plans to separate its sGC business from its commercial and gastrointestinal business, Ironwood initiated a reduction in its headquarters-based workforce by approximately 40 employees and substantially completed the reduction in its workforce during the year ending December 31, 2018. On February 7, 2019, following further analysis of its strategy and core business needs, Ironwood commenced another reduction in its workforce by 35 employees, primarily based in its headquarters. Ironwood completed the reduction in its workforce during the first quarter of 2019. Even though employees expected to go to Cyclerion were excluded from the workforce reduction, certain charges associated with the reduction were allocated to Cyclerion. Prior to Separation, expenses related to these workforce reductions were allocated to Cyclerion using a pro rata method based on internal project assignments and headcount that management believes are consistent and reasonable. Pursuant to the terms of the Separation Agreement entered into between the Company and Ironwood on March 30, 2019, the accrued liability related to these workforce reductions remained with Ironwood. The following table summarizes the accrued liabilities activity recorded to Cyclerion in connection with the reduction in workforce for the three and six months ended June 30, 2019 (in thousands): Amounts Balance Amounts accrued at assumed accrued at December 31, 2018 Charges Amount paid by Ironwood June 30, 2019 June 2018 Reduction $ 565 $ — $ (268) $ (297) $ — February 2019 Reduction — 580 (90) $ (490) — Total $ 565 $ 580 $ (358) $ (787) $ —

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2019
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The Company did not operate as a separate, stand-alone entity for the full period covered by the interim consolidated and combined financial statements. The Company's consolidated balance sheet as of June 30, 2019 and consolidated statement of operations and comprehensive loss for the three months ended June 30, 2019 consist of the consolidated balances of Cyclerion as prepared on a stand-alone basis. The Company's combined balance sheet as of December 31, 2018 and consolidated and combined statements of operations and comprehensive loss for the six months ended June 30, 2019 and the three and six months ended June 30, 2018, as well as our statements of cash flows for the six months ended June 30, 2019 and 2018, respectively, have been prepared on a "carve out" basis for the periods and dates prior to the spin-off on April 1, 2019. The unaudited condensed consolidated and combined financial statements reflect the historical results of the operations, financial position and cash flows of Cyclerion, in conformity with United States generally accepted accounting principles (“U.S. GAAP”). The accompanying unaudited condensed consolidated and combined financial statements reflect the consolidated and combined financial position and consolidated and combined results of operations of the Company as an independent, publicly-traded company for the period after the Separation on April 1, 2019. The unaudited condensed consolidated and combined financial statements also reflect the financial position and results of operations of the Company as a combined reporting entity of Ironwood for periods prior to the Separation. These unaudited condensed consolidated and combined financial statements of Cyclerion reflect the assets, liabilities, and expenses directly attributable to Cyclerion, as well as allocations of certain corporate level assets, liabilities and expenses, deemed necessary to fairly present the financial position, results of operations and cash flows of Cyclerion, as discussed further below. As such, these allocations may not be indicative of the actual amounts that would have been recorded had Cyclerion operated as an independent, publicly traded company for the periods presented. During the six months ended June 30, 2019, the Company recorded approximately $7.8 million in Separation-related adjustments in its condensed consolidated and combined statements of stockholders' equity (deficit). The Separation-related adjustments primarily related to differences between assets and liabilities transferred to Cyclerion as a result of the Separation and assets and liabilities reported in the Company's combined balance sheet as of March 31, 2019. Prior to the Separation, Cyclerion was dependent upon Ironwood for all of its working capital and financing requirements, as Ironwood used a centralized approach to cash management and financing its operations. There were no cash amounts specifically attributable to Cyclerion for the historical periods presented; therefore, there is no cash reflected for historical periods in the consolidated and combined financial statements. Accordingly, cash and cash equivalents, debt or related interest expense have not been allocated to Cyclerion in the historical financial statements. Financing transactions related to Cyclerion are accounted for as a component of net parent investment in the historical combined balance sheets and as a financing activity on the accompanying combined statements of cash flows. Prior to the Separation, Cyclerion’s combined financial statements included an allocation of expenses related to certain Ironwood corporate functions, including senior management, legal, human resources, finance, information technology and quality assurance. These expenses were allocated to Cyclerion based on direct usage or benefit where identifiable, with the remainder allocated pro-rata based on project related costs, headcount or other measures. These allocations may not be indicative of the actual expense that would have been incurred had Cyclerion operated as an independent, publicly traded company for the periods presented. Prior to the Separation, the combined balance sheets of Cyclerion included assets and liabilities that were allocated principally on a specific identification basis and net parent investment was shown in lieu of stockholders’ equity. As a result of the Separation, the Company’s net parent investment balance was reclassified to paid-in capital.
Principles of Consolidation	Principles of Consolidation The accompanying condensed consolidated and combined financial statements include the accounts of Cyclerion and its wholly owned subsidiary as of June 30, 2019.
Segment Information	Segment Information Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Company’s chief operating decision‑maker in deciding how to allocate resources and in assessing performance. The Company currently operates in one reportable business segment—human therapeutics.
Use of Estimates	Use of Estimates The preparation of condensed consolidated and combined financial statements in accordance with U.S. GAAP requires the Company’s management to make estimates and judgments that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated and combined financial statements, and the amounts of expenses during the reported periods. On an ongoing basis, the Company’s management evaluates its estimates, judgments and methodologies. Significant estimates and assumptions in the condensed consolidated and combined financial statements include those related to allocations of expenses, assets and liabilities from Ironwood’s historical financials to the Company, impairment of long-lived assets, income taxes, including the valuation allowance for deferred tax assets, research and development expenses, contingencies and share-based compensation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ materially from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known.
Fair Value of Investment Instruments	Fair Value of Investment Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:  Level 1 — Quoted prices in active markets for identical assets or liabilities.  Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.  Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.
Foreign Currency Translation Adjustment	Foreign Currency Translation Adjustment The functional currency of the Company’s foreign subsidiary is its local currency, the Swiss franc. The assets and liabilities of the Company’s foreign subsidiary are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at the average exchange rates prevailing during the period. The cumulative translation effect for the Company’s foreign subsidiary is included as a foreign currency translation adjustment in stockholders’ equity (deficit) and as a component of comprehensive loss. The Company’s intercompany accounts are typically denominated in the functional currency of the foreign subsidiary. Gains and losses resulting from the remeasurement of intercompany balances are recorded in the consolidated statements of operations.
Related Party Accounts Receivable	Related Party Accounts Receivable The Company makes judgments as to its ability to collect outstanding receivables and provides an allowance for receivables when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices. The Company’s receivables primarily relate to amounts earned under a development agreement with Ironwood. The Company believes that credit risks associated with Ironwood are not significant. To date, the Company has not had any significant write-offs of bad debt and the Company did not have an allowance for doubtful accounts as of June 30, 2019.
Impairment of Long-Lived Assets	Impairment of Long‑Lived Assets The Company regularly reviews the carrying amount of its long‑lived assets to determine whether indicators of impairment may exist, which warrant adjustments to carrying values or estimated useful lives. If indications of impairment exist, projected future undiscounted cash flows associated with the asset are compared to the carrying amount to determine whether the asset’s value is recoverable. If the carrying value of the asset exceeds such projected undiscounted cash flows, the asset will be written down to its estimated fair value.
Leases	Leases Effective January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC 842”) using the optional transition method. The adoption of ASC 842 represents a change in accounting principle that aims to increase transparency and comparability among organizations by requiring the recognition of right-of-use assets and lease liabilities on the balance sheet for both operating and finance leases. In addition, the standard requires enhanced disclosures that meet the objective of enabling financial statement users to assess the amount, timing, and uncertainty of cash flows arising from leases. The reported results for the six months ended June 30, 2019 reflect the application of ASC 842 guidance, while the reported results for prior periods were prepared in conjunction with ASC 840, Leases (“ASC 840”). The recognition of right-of-use assets and lease liabilities related to the Company’s operating leases under ASC 842 has had a material impact on the Company’s condensed consolidated and combined financial statements. As part of the ASC 842 adoption, the Company has used certain practical expedients outlined in the guidance. These practical expedients include: · Account policy election to use the short-term lease exception by asset class; · Election of the practical expedient package during transition, which includes: · An entity need not reassess whether any expired or existing contracts are or contain leases. · An entity need not reassess the classification for any expired or existing leases. As a result, all leases that were classified as operating leases in accordance with ASC 840 are classified as operating leases under ASC 842, and all leases that were classified as capital leases in accordance with ASC 840 are classified as finance leases under ASC 842. · An entity need not reassess initial direct costs for any existing leases. The Company’s lease portfolio includes a property lease for its headquarters location at 301 Binney Street, Cambridge, MA. The Company determines if an arrangement is a lease at the inception of the contract. The asset component of the Company’s operating leases is recorded as operating lease right-of-use assets, and the liability component is recorded as current portion of operating lease liabilities and operating lease liabilities, net of current portion, in the Company’s condensed consolidated balance sheets. Right-of-use assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at the commencement date. The Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments if an implicit rate of return is not provided with the lease contract. Operating lease right-of-use assets are adjusted for incentives received. Lease cost is recognized on a straight-line basis over the lease term, and includes amounts related to short-term leases.
Revenue	Revenue Upon executing a revenue generating arrangement, the Company assesses whether it is probable the Company will collect consideration in exchange for the good or service it transfers to the customer. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), it performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligations. The Company must develop assumptions that require significant judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The assumptions that are used to determine the stand-alone selling price may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. The Company generates revenue from a development agreement with Ironwood, pursuant to which the Company provides certain research and development services with respect to certain of Ironwood’s products and product candidates. Such research and development activities are governed by a joint steering committee comprised of representatives of both companies. Services performed are invoiced at a mutually agreed upon rate and the initial term of the agreement is two years from the date of Separation and automatically renews for one year unless either party notifies the other at least six months prior to the expiration.
Research and Development Costs	Research and Development Costs The Company expenses research and development costs to operations as incurred. The Company defers and capitalizes nonrefundable advance payments made by the Company for research and development activities until the related goods are received or the related services are performed. Research and development expenses are comprised of costs incurred in performing research and development activities, which may include salary, benefits and other employee‑related expenses; share‑based compensation expense; laboratory supplies and other direct expenses; facilities expenses; overhead expenses; third‑party contractual costs relating to nonclinical studies and clinical trial activities and related contract manufacturing expenses, development of manufacturing processes and regulatory registration of third‑party manufacturing facilities; and other outside expenses.
General and Administrative Expenses	General and Administrative Expenses The Company expenses general and administrative costs to operations as incurred. General and administrative expense consists of compensation, share‑based compensation, benefits and other employee‑related expenses for personnel in the Company’s administrative, finance, legal, information technology, business development and human resource functions. Other costs include the legal costs of pursuing patent protection of the Company’s intellectual property, general and administrative related facility costs, insurance costs and professional fees for accounting and legal services.
Income taxes	Income taxes In accordance with ASC 270, Interim Reporting, and ASC 740, Income Taxes, the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and then apply that rate in providing for income taxes on a current year-to-date (interim period) basis. For the three and six months ended June 30, 2019 and 2018, the Company recorded no tax expense or benefit due to the expected current year loss and its historical losses. As of June 30, 2019 and December 31, 2018, the Company has concluded that a full valuation allowance is necessary for all of its net deferred tax assets. The Company had no amounts recorded for uncertain tax positions, interest or penalties in the accompanying consolidated financial statements. Prior to the Separation, income taxes included current and deferred income taxes of Ironwood allocated to the Company’s stand-alone financials. In accordance with the tax matters agreement with Ironwood, Cyclerion is responsible for its own portion of income taxes beginning after the Separation date.
Subsequent Events	Subsequent Events The Company considers events or transactions that have occurred after the balance sheet date of June 30, 2019, but prior to the filing of the financial statements with the Securities and Exchange Commission, to provide additional evidence relative to certain estimates or to identify matters that require additional recognition or disclosure. Subsequent events have been evaluated through the filing of the financial statements accompanying this Quarterly Report on Form 10‑Q.
New Accounting Pronouncements	New Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Except as discussed elsewhere in the notes to the consolidated and combined financial statements, the Company did not adopt any new accounting pronouncements during the six months ended June 30, 2019 and 2018, that had a material effect on its consolidated and combined financial statements. In February 2016, the FASB issued ASU No. 2016‑02, Leases (“ASU 2016‑02”), which supersedes the lease accounting requirements in ASC Topic 840, Leases, and most industry‑specific guidance with ASC Topic 842, Leases . ASU 2016‑02 requires the identification of arrangements that should be accounted for as leases by lessees. In general, for lease arrangements exceeding a 12‑month term, these arrangements must now be recognized as assets and liabilities on the balance sheet of the lessee. Under ASU 2016‑02, a right‑of‑use asset and lease obligation will be recorded for all leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization and interest expense for financing leases. The balance sheet amount recorded for existing leases at the date of adoption of ASU 2016‑02 must be calculated using the applicable incremental borrowing rate at the date of adoption. ASU 2016‑02 is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. In July 2018, the FASB issued ASU No. 2018‑10, Leases (Topic 842) (“ASU 2018‑10”), Codification Improvements and ASU No. 2018‑11, Leases (Topic 842) (“ASU 2018‑11”), to provide additional guidance for the adoption of Topic 842. ASU 2018‑10 clarifies certain provisions, and corrects unintended applications of the guidance, such as the rate implicit in a lease, impairment of the net investment in a lease, lessee reassessment of lease classifications, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments. The amendments in ASU 2018‑11 will allow for an additional transition method, whereby at the adoption date the entity recognizes a cumulative‑effect adjustment to the opening balance of retained earnings in the period of adoption, while the comparative period disclosures continue recognition under ASC Topic 840. Additionally, ASU 2018‑11 includes a practical expedient for separating contract components for lessors. In December 2018, the FASB issued ASU No. 2018‑20, Leases (Topic 842) (“ASU 2018‑20”), Narrow-Scope Improvements for Lessors , which provided clarification for lessors on how to apply the new leases standard when accounting for sales taxes, certain lessor costs, and certain requirements related to variable payments in contracts. In March 2019, the FASB issued ASU No. 2019‑01, Leases (Topic 842) (“ASU 2019‑01”), Codification Improvements , which aligned the new leases guidance with existing guidance for fair value of the underlying asset by lessors that are not manufacturers or dealers. It also clarified an exemption for lessors and lessees from a certain interim disclosure requirement associated with adopting the board’s new lease accounting standard. The Company’s analysis includes, but is not limited to, reviewing existing leases, reviewing other service agreements for embedded leases, establishing policies and procedures, assessing potential disclosures and evaluating the impact of adoption on the Company’s consolidated and combined financial statements. The Company adopted ASU 2016‑02, ASU 2018‑10, ASU 2018‑11, ASU 2018‑20, and ASU 2019‑01 in the first quarter of 2019. In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 will change how companies account for credit losses for most financial assets and certain other instruments. For trade receivables, loans and held-to-maturity debt securities, companies will be required to recognize an allowance for credit losses rather than reducing the carrying value of the asset. Subsequent to the issuance of ASU 2016-13, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”) and ASU No. 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief (“ASU 2019-05”) to provide additional guidance on the adoption of ASU 2016-13. ASU 2019-04 added Topic 326, Financial Instruments—Credit Losses, and made several amendments to the codification and also modified the accounting for available-for-sale debt securities. ASU 2019-05 provides targeted transition relief by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. ASU 2016-13, ASU 2019-04 and ASU 2019-05 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the potential impact that the adoption of these ASUs will have on the Company’s financial position and results of operations. In October 2016, the FASB issued ASU No. 2016‑16, Accounting for Income Taxes: Intra‑Entity Asset Transfers of Assets Other than Inventory (“ASU 2016‑16”). ASU 2016‑16 eliminates the ability to defer the tax expense related to intra‑entity asset transfers other than inventory. Under the new standard, entities should recognize the income tax consequences on an intra‑entity transfer of an asset other than inventory when the transfer occurs. ASU 2016‑16 is effective for fiscal periods beginning after December 15, 2018. The Company adopted this standard during the first quarter of 2019. Adoption of this standard did not have a material impact on the Company’s financial position or results of operations. In June 2018, the FASB issued ASU No. 2018‑07, Improvements to Nonemployee Share‑based Payments (“ASU 2018‑07”) . ASU 2018‑07 simplifies the accounting for share‑based payments to nonemployees by aligning with the accounting for share‑based payments to employees, with certain exceptions. Measurement of equity‑classified nonemployee awards issued in exchange for goods or services used or consumed in an entity’s own operations will be fixed at the grant date, which may lower the cost and reduce volatility in the income statement. Entities also may use the expected term to measure nonemployee options or elect to use the contractual term as the expected term, on an award‑by‑award basis. ASU 2018‑07 is effective for the fiscal periods beginning after December 15, 2018. The Company adopted this standard during the first quarter of 2019. Adoption of this standard did not have a material impact on the Company’s financial position or results of operations. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (“ASU 2018-13”): Disclosure Framework—Changes to the Disclosure Requirement for Fair Value Measurement (“ASU 2018-13”) which amends the disclosure requirements for fair value measurements. The amendments in ASU 2018-13 are effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the potential impact that the adoption of ASU 2018-13 may have on the Company’s financial position and results of operations. In August 2018, the FASB issued ASU No. 2018‑15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (“ASU 2018‑15”). ASU 2018‑15 requires a customer in a cloud computing arrangement that is a service contract to follow the internal‑use software guidance in ASC 350‑40, Intangibles—Goodwill and Other—Internal Use Software (ASC 350‑40), to determine which implementation costs to capitalize as assets or expense as incurred. The internal‑use software guidance in ASC 350‑40 requires that certain costs incurred during the application development stage be capitalized and other costs incurred during the preliminary project and post‑implementation stages be expensed as they are incurred. A customer’s accounting for the hosting component of the arrangement is not affected by this guidance. The amendments in ASU 2018‑15 are effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the potential impact that the adoption of ASU 2018‑15 may have on the Company’s financial position and results of operations. No other accounting standards known by the Company to be applicable to it that have been issued by the FASB or other standard‑setting bodies and that do not require adoption until a future date are expected to have a material impact on the Company’s consolidated and combined financial statements upon adoption.

Fair Value of Financial Instr_2

Fair Value of Financial Instruments (Tables)	6 Months Ended
	Jun. 30, 2019
Fair Value of Financial Instruments
Schedule of financial assets measured at fair value on a recurring basis and indicating the level of the fair value hierarchy	Fair Value Measurements as of June 30, 2019 using: (in thousands) Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 137,785 $ — $ — $ Total cash equivalents $ 137,785 $ — $ — $

Property and Equipment (Tables)

Property and Equipment (Tables)	6 Months Ended
	Jun. 30, 2019
Property and Equipment
Schedule of property and equipment, net	Property and equipment, net consisted of the following (in thousands): June 30, December 31, 2019 2018 Laboratory equipment $ 16,424 $ 17,753 Software 2,295 2,593 Construction in progress 16 741 Computer and office equipment 2,354 901 Leasehold improvements 22,615 — Gross property and equipment 43,704 21,988 Less: accumulated depreciation and amortization (30,950) (15,491) Property and equipment, net $ 12,754 $ 6,497

Accrued Expenses and Other Cu_2

Accrued Expenses and Other Current Liabilities (Tables)	6 Months Ended
	Jun. 30, 2019
Accrued Expenses and Other Current Liabilities
Schedule of accrued expenses and other current liabilities	Accrued expenses consisted of the following (in thousands): June 30, December 31, 2019 2018 Accrued incentive compensation $ 2,524 $ 4,889 Salaries 1,592 1,513 Accrued vacation 1,345 1,048 Professional fees 1,441 1,019 Workforce reduction charges — 565 Other 115 770 $ 7,017 $ 9,804

Leases (Tables)

Leases (Tables)	6 Months Ended
	Jun. 30, 2019
Leases
Summary of supplemental cash flow information related to leases	Three Months ended June 30, 2019 Right-of-use assets obtained in exchange for new operating lease upon lease commencement (in thousands) $ 71,403 Cash paid for amounts included in the measurement of lease liabilities (in thousands) $ 101 Weighted-average remaining lease term of operating leases (in years) 10 Weighted-average discount rate of operating leases 10.9 %
Summary of future minimum lease payments under non-cancelable operating leases	Future minimum lease payments under non-cancelable operating leases under ASC 842 as of June 30, 2019 are as follows (in thousands): Operating lease payments 2019 (remaining six months) $ 5,507 2020 11,253 2021 11,578 2022 11,913 2023 12,228 2024 and hereafter 73,847 Total future minimum lease payments 126,326 Less: tenant improvement allowance reimbursement 2,289 Less: present value adjustment 50,774 Operating lease liabilities at June 30, 2019 73,263 Less: current portion of operating lease liabilities 866 Operating lease liabilities, net of current portion $ 72,397

Share-based Compensation Plans

Share-based Compensation Plans (Tables)	6 Months Ended
	Jun. 30, 2019
Share-based Compensation Plans
Schedule of share-based compensation expense	The following table provides share-based compensation reflected in the Company’s condensed consolidated and combined statements of operations and comprehensive loss for the three and six months ended June 30, 2019 and 2018 (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Research and development $ 2,787 $ 1,889 $ 4,582 $ 3,554 General and administrative 3,437 1,116 5,631 1,959 $ 6,224 $ 3,005 $ 10,213 $ 5,513
Summary of stock option activity	Weighted Weighted- Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Value Options Price Term (years) (in thousands) Outstanding as of December 31, 2018 — $ — — $ — Aggregate impact of conversion related to spin-off 6,456,982 14.90 — Granted 498,529 15.07 — — Exercised — — — — Cancelled or forfeited (132,606) 15.19 — — Outstanding as of June 30, 2019 6,822,905 $ 14.91 7.5 $ Exercisable at June 30, 2019 2,195,792 $ 14.71 4.7 $
Schedule of weighted-average Black-Scholes assumptions used in estimating the fair value of the stock options	Three Months Ended June 30, 2019 Weighted average risk-free interest rate 2.31 % Expected dividend yield 0.00 % Expected option term (in years) 6.25 Expected stock price volatility 65.23 %
Summary of RSU activity	Weighted- Average Number Grant Date of Shares Fair Value Unvested as of December 31, 2018 — $ — Aggregate impact of conversion related to spin-off 932,469 $ 15.55 Granted 7,039 $ 15.20 Vested (9,527) $ 18.52 Forfeited (49,695) $ 16.00 Unvested as of June 30, 2019 880,286 $ 15.49
Summary of restricted stock	Weighted- Average Number Grant Date of Shares Fair Value Unvested as of December 31, 2018 — $ — Granted 21,942 $ 14.81 Vested (21,942) $ 14.81 Unvested as of June 30, 2019 — $ —

Loss per share (Tables)

Loss per share (Tables)	6 Months Ended
	Jun. 30, 2019
Loss per share
Schedule of basic and diluted earnings per share	Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Numerator: Net loss (in thousands) $ (32,254) $ (29,781) $ (69,635) $ (55,064) Denominator: Weighted average number of common shares outstanding (in thousands) 27,393 27,380 27,380 27,380
Schedule of anti-dilutive securities excluded from the calculation of diluted loss per share	Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 Stock options 6,823 — — — Restricted stock units 880 — — — 7,703 — — —

Ironwood Workforce Reduction (T

Ironwood Workforce Reduction (Tables)	6 Months Ended
	Jun. 30, 2019
Ironwood Workforce Reduction
Schedule of accrued liabilities activity recorded to Cyclerion in connection with the reduction in workforce	The following table summarizes the accrued liabilities activity recorded to Cyclerion in connection with the reduction in workforce for the three and six months ended June 30, 2019 (in thousands): Amounts Balance Amounts accrued at assumed accrued at December 31, 2018 Charges Amount paid by Ironwood June 30, 2019 June 2018 Reduction $ 565 $ — $ (268) $ (297) $ — February 2019 Reduction — 580 (90) $ (490) — Total $ 565 $ 580 $ (358) $ (787) $ —

Nature of Business (Details)

Nature of Business (Details) $ in Thousands	Apr. 02, 2019USD ($)shares	Apr. 01, 2019	Jun. 30, 2019USD ($)	May 03, 2019employee
The Separation
Common stock dividend issued (shares of Cyclerion per ten shares of Ironwood)		0.1
Gross proceeds from issuance of shares to accredited investors			$ 175,000
Basis of Presentation
Separation-related adjustments			$ 7,752
Cyclerion GmbH
Nature of Operations
Number of employees | employee				1
Private Placement
The Separation
Shares issued to accredited investors | shares	11,817,165
Gross proceeds from issuance of shares to accredited investors	$ 175,000
Net proceeds from issuance of shares to accredited investors	$ 165,000

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2019USD ($)	Jun. 30, 2018USD ($)	Jun. 30, 2019USD ($)segment	Jun. 30, 2018USD ($)
Summary of Significant Accounting Policies
Number of reportable business segment | segment			1
Election of practical expedients package			true
Initial term of agreement			2 years
Tax expense or benefit	$ 0	$ 0	$ 0	$ 0
Amounts accrued for uncertain tax positions, interest or penalties	$ 0	$ 0	$ 0	$ 0

Related Party - Agreements an_2

Related Party - Agreements and Transactions with Ironwood - Relationship and Other Transactions with Ironwood (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Related Party Transactions
Operating expense	$ 34,682		$ 29,781		$ 72,063	$ 55,064
Revenue	1,628				1,628
Tenant improvement allowance reimbursement	2,289				2,289
Ironwood
Related Party Transactions
Amounts due from related party	1,900				1,900
Ironwood | Separation agreement
Related Party Transactions
Amounts due to related party	1,900				1,900
Tenant improvement allowance reimbursement	1,300				1,300
Ironwood | Transition services agreements
Related Party Transactions
Operating expense	100
Ironwood | Development agreement
Related Party Transactions
Revenue	1,600
Amounts due from related party	$ 1,600				$ 1,600
Ironwood | Corporate costs
Related Party Transactions
Related party expense		$ 6,800		$ 3,600
Ironwood | Health insurance services
Related Party Transactions
Related party expense		$ 500				$ 1,100

Related Party - Agreements an_3

Related Party - Agreements and Transactions with Ironwood - Private Placement (Details) - Private Placement shares in Millions, $ in Millions	Apr. 02, 2019USD ($)shares
Peter Hecht
Related Party Transactions
Number of shares of Ironwood common stock donated to American Endowment Foundation | shares	2.5
American Endowment Foundation
Related Party Transactions
Investment in common stock by related party	$ 34
Mark Currie
Related Party Transactions
Investment in common stock by related party	$ 4

Fair Value of Financial Instr_3

Fair Value of Financial Instruments (Details) - Recurring $ in Thousands	Jun. 30, 2019USD ($)
Cash equivalents:
Total cash equivalents	$ 137,785
Money market funds
Cash equivalents:
Total cash equivalents	137,785
Level 1
Cash equivalents:
Total cash equivalents	137,785
Level 1 | Money market funds
Cash equivalents:
Total cash equivalents	$ 137,785

Property and Equipment (Details

Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Property and Equipment
Gross property and equipment	$ 43,704		$ 43,704		$ 21,988
Less: accumulated depreciation and amortization	(30,950)		(30,950)		(15,491)
Property and equipment, net	12,754		12,754		6,497
Depreciation and amortization	800	$ 400	1,350	$ 722
Accounts payable and accrued expenses
Property and Equipment
Property and equipment, net	500	$ 700	500	$ 700
Laboratory equipment
Property and Equipment
Gross property and equipment	16,424		16,424		17,753
Software
Property and Equipment
Gross property and equipment	2,295		2,295		2,593
Construction in progress
Property and Equipment
Gross property and equipment	16		16		741
Computer and office equipment
Property and Equipment
Gross property and equipment	2,354		2,354		$ 901
Leasehold improvements
Property and Equipment
Gross property and equipment	$ 22,615		$ 22,615

Accrued Expenses and Other Cu_3

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Accrued Expenses and Other Current Liabilities
Accrued incentive compensation	$ 2,524	$ 4,889
Salaries	1,592	1,513
Accrued vacation	1,345	1,048
Professional fees	1,441	1,019
Workforce reduction charges	0	565
Other	115	770
Total	$ 7,017	$ 9,804

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Commitments and Contingencies
No liabilities recorded	$ 0	$ 0

Leases - Summary (Details)

Leases - Summary (Details) $ in Thousands	Apr. 01, 2019USD ($)ft²item	Jun. 30, 2019USD ($)
Leases
Area of Land | ft²	114,000
Term of lease	123 months
Number of extension option | item	2
Existence of extension option	true
Renewal term	5 years
Letter of credit posted with the landlord as a security deposit	$ 7,700
Annual base rent		$ 11,000
Increase in base rent on a yearly basis (as a percent)		3.00%
Abatement of base rent		$ 2,700
Discount rate (as a percent)	10.90%
Lease liability	$ 71,300	73,263
Less: current portion of operating lease liabilities		866
Noncurrent lease liability		72,397
Tenant improvement allowance		2,300
Right-of-use asset	$ 71,300	$ 70,330

Leases - Supplemental cash flow

Leases - Supplemental cash flow information (Details) $ in Thousands	3 Months Ended
	Jun. 30, 2019USD ($)
Leases
Lease cost	$ 3,200
Right-of-use assets obtained in exchange for new operating lease upon lease commencement (in thousands)	71,403
Cash paid for amounts included in the measurement of lease liabilities (in thousands)	$ 101
Weighted-average remaining lease term of operating leases (in years)	10 years
Weighted-average discount rate of operating leases	10.90%

Leases - Future minimum lease p

Leases - Future minimum lease payments (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Apr. 01, 2019
Future minimum lease payments under non-cancelable operating leases
2019 (remaining six months)	$ 5,507
2020	11,253
2021	11,578
2022	11,913
2023	12,228
2024 and thereafter	73,847
Total future minimum lease payments	126,326
Less: tenant improvement allowance reimbursement	2,289
Less: present value adjustment	50,774
Operating lease liabilities at June 30, 2019	73,263	$ 71,300
Less: current portion of operating lease liabilities	866
Operating lease liabilities, net of current portion	$ 72,397

Leases - Sublease (Details)

Leases - Sublease (Details) $ in Millions	Mar. 31, 2019ft²	Jun. 30, 2019USD ($)
Leases
Rentable square feet | ft²	24,000
Sublease initial term	1 month
Lessee, Operating Sublease, Existence of Option to Extend [true false]	true
Subleased term	1 month 15 days
Lessee, Operating Sublease, Existence of Option to Terminate [true false]	true
Rent expense related to sublease		$ 0.2
Lease cost		$ 3.2

Share-based Compensation Plan_2

Share-based Compensation Plans - Summary (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019USD ($)	Jun. 30, 2018USD ($)	Jun. 30, 2019USD ($)employee	Jun. 30, 2018USD ($)
Share-based Compensation Plans
Number of employees impacted | employee			143
Share-based compensation	$ 6,224	$ 3,005	$ 10,213	$ 5,513
Restricted Stock Units
Share-based Compensation Plans
One time incremental expense due to modification			0
Restricted Stock Awards
Share-based Compensation Plans
One time incremental expense due to modification			0
Vested stock options
Share-based Compensation Plans
One time incremental expense due to modification			300
Unvested stock options
Share-based Compensation Plans
One time incremental expense due to modification			7,500
Research and development
Share-based Compensation Plans
Share-based compensation	2,787	1,889	4,582	3,554
General and administrative
Share-based Compensation Plans
Share-based compensation	$ 3,437	$ 1,116	$ 5,631	$ 1,959

Share-based Compensation Plan_3

Share-based Compensation Plans - Stock Options (Details) $ / shares in Units, $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019USD ($)$ / sharesshares	Jun. 30, 2019USD ($)$ / sharesshares
Number of Options
Aggregate impact of conversion related to spin-off (in shares) | shares		6,456,982
Granted (in shares) | shares		498,529
Forfeited (in shares) | shares		(132,606)
Outstanding at end of the period (in shares) | shares	6,822,905	6,822,905
Exercisable (in shares) | shares	2,195,792	2,195,792
Weighted Average Exercise Price
Aggregate impact of conversion related to spin-off (in shares)		$ 14.90
Granted (in dollars per share)		15.07
Forfeited (in dollars per share)		15.19
Outstanding at end of the period (in dollars per share)	$ 14.91	14.91
Exercisable (in dollars per share)	$ 14.71	$ 14.71
Weighted Average Remaining Contractual Term (years)
Weighted average remaining contractual term outstanding at the end of period (in years)		7 years 6 months
Weighted average remaining contractual term for Exercisable (in years)		4 years 8 months 12 days
Aggregate Intrinsic Value due to the impact of conversion related to spin-off | $	$ 902	$ 902
Aggregate intrinsic value | $	903	903
Aggregate intrinsic value of Exercisable | $	$ 221	221
weighted average grant date fair values per option share	$ 9.23
Total grant date fair value | $	$ 4,600
Unrecognized share-based compensation expense | $	$ 30,500	$ 30,500
Employee Stock Options
Weighted Average Remaining Contractual Term (years)
Expected period to recognize the expense		2 years 9 months 18 days
Summary of fair value of stock options
Weighted average risk-free interest rate		2.31%
Expected dividend yield		0.00%
Expected option term (in years)		6 years 3 months
Expected stock price volatility		65.23%

Share-based Compensation Plan_4

Share-based Compensation Plans - Restricted Stock Units and Restricted Stock Awards (Details) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2019USD ($)$ / sharesshares
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	25.00%
Number of Shares
Aggregate impact of conversion related to spin-off (in Shares) | shares	932,469
Granted (in shares) | shares	7,039
Vested (in shares) | shares	(9,527)
Forfeited (in shares) | shares	(49,695)
Unvested the end of the period (in shares) | shares	880,286
Weighted-Average Grant Date Fair Value
Aggregate impact of conversion related to spin-off (in dollars per share) | $ / shares	15.55
Granted (in dollars per share) | $ / shares	$ 15.20
Vested (in dollars per share) | $ / shares	18.52
Forfeited (in dollars per share) | $ / shares	16
Unvested restricted common stock at the end of the period (in dollars per share) | $ / shares	$ 15.49
unrecognized share-based compensation expense | $	$ 9.2
Expected period to recognize the expense	2 years 10 months 24 days
Restricted Stock Awards
Number of Shares
Granted (in shares) | shares	21,942
Vested (in shares) | shares	(21,942)
Weighted-Average Grant Date Fair Value
Granted (in dollars per share) | $ / shares	$ 14.81
Vested (in dollars per share) | $ / shares	$ 14.81

Loss per share (Details)

Loss per share (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Numerator:
Net loss	$ (32,254)	$ (29,781)	$ (69,635)	$ (55,064)
Denominator:
Weighted average number of common shares outstanding	27,393	27,380	27,380	27,380
Anti-dilutive securities excluded from the calculation of diluted loss per share	7,703
Stock options
Denominator:
Anti-dilutive securities excluded from the calculation of diluted loss per share	6,823
Restricted Stock Units
Denominator:
Anti-dilutive securities excluded from the calculation of diluted loss per share	880

Defined Contribution Plan (Deta

Defined Contribution Plan (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Defined Contribution Plan
401 (k) Savings Plan	us-gaap:QualifiedPlanMember		us-gaap:QualifiedPlanMember
Matching contribution (as a percent of employee's contributions)			75.00%
Maximum amount of employer matching contribution			$ 6,000
Defined contribution plan expense	$ 100,000	$ 300,000	$ 500,000	$ 600,000
Minimum
Defined Contribution Plan
Percent of compensation eligible employees may elect to contribute			1.00%
Maximum
Defined Contribution Plan
Percent of compensation eligible employees may elect to contribute			100.00%

Ironwood Workforce Reduction (D

Ironwood Workforce Reduction (Details) $ in Thousands	Feb. 07, 2019employee	Jun. 27, 2018employee	Jun. 30, 2019USD ($)
Summarizes the accrued liabilities activity allocated to Cyclerion in connection with the reduction in workforce
Amounts accrued, beginning of period			$ 565
Charges			580
Amount paid			(358)
Balance assumed by Ironwood			(787)
Amounts accrued, end of period			0
June 2018 Reduction
Summarizes the accrued liabilities activity allocated to Cyclerion in connection with the reduction in workforce
Amounts accrued, beginning of period			565
Charges			0
Amount paid			(268)
Balance assumed by Ironwood			(297)
Amounts accrued, end of period			0
February 2019 Reduction
Summarizes the accrued liabilities activity allocated to Cyclerion in connection with the reduction in workforce
Amounts accrued, beginning of period			0
Charges			580
Amount paid			(90)
Balance assumed by Ironwood			(490)
Amounts accrued, end of period			$ 0
Ironwood | June 2018 Reduction
Workforce Reduction
Reduction in workforce, number of employees | employee		40
Ironwood | February 2019 Reduction
Workforce Reduction
Reduction in workforce, number of employees | employee	35