Cyclerion Therapeutics (CYCN) 10-Q 3 Aug 20 2020 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Jul. 29, 2020
Document and Entity Information
Entity Registrant Name	CYCLERION THERAPEUTICS, INC.
Document Type	10-Q
Document Period End Date	Jun. 30, 2020
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		33,920,210
Entity Central Index Key	0001755237
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 56,462	$ 94,895
Related party accounts receivable	751	1,474
Prepaid expenses	2,260	1,966
Other current assets	89	2,862
Total current assets	59,562	101,197
Restricted cash, net of current portion	4,991	4,991
Property and equipment, net	10,787	11,613
Operating lease right-of-use asset	51,306	68,137
Other assets	1,392	540
Total assets	128,038	186,478
Current liabilities:
Accounts payable	2,213	3,230
Related party accounts payable	375	81
Accrued research and development costs	1,648	2,198
Accrued expenses and other current liabilities	5,113	9,320
Short-term note payable	3,509
Current portion of operating lease liabilities	2,787	3,420
Total current liabilities	15,645	18,249
Operating lease liabilities, net of current portion	46,292	70,500
Commitments and contingencies
Stockholders' equity
Common stock, no par value, 400,000,000 shares authorized and 27,857,710 issued and outstanding at June 30, 2020 and 400,000,000 shares authorized and 27,598,113 issued and outstanding at December 31, 2019
Accumulated deficit	(125,389)	(85,627)
Paid-in capital	191,520	183,376
Accumulated other comprehensive loss	(30)	(20)
Total stockholders' equity	66,101	97,729
Total liabilities and stockholders' equity	$ 128,038	$ 186,478

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
Condensed Consolidated 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 issued	27,857,710	27,598,113
Common stock, shares outstanding	27,857,710	27,598,113

Condensed Consolidated and Comb

Condensed Consolidated and Combined Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Condensed Consolidated and Combined Statements of Operations and Comprehensive Loss
Revenue from related party	$ 749	$ 1,628	$ 1,763	$ 1,628
Cost and expenses:
Research and development	13,794	25,759	30,619	52,163
General and administrative	6,627	8,923	13,518	19,900
Gain on lease modification			(2,113)
Total cost and expenses	20,421	34,682	42,024	72,063
Loss from operations	(19,672)	(33,054)	(40,261)	(70,435)
Interest and other income, net	138	800	499	800
Net loss	$ (19,534)	$ (32,254)	$ (39,762)	$ (69,635)
Net loss per share:
Basic and diluted net loss per share (in dollars per share)	$ (0.70)	$ (1.18)	$ (1.43)	$ (2.54)
Weighted average shares used in calculating:
Basic and diluted net loss per share (in shares)	27,791	27,393	27,730	27,380
Other comprehensive loss:
Net loss	$ (19,534)	$ (32,254)	$ (39,762)	$ (69,635)
Other comprehensive loss:
Foreign currency translation adjustment	(12)	(4)	(10)	(4)
Total other comprehensive loss	(12)	(4)	(10)	(4)
Comprehensive loss	$ (19,546)	$ (32,258)	$ (39,772)	$ (69,639)

Condensed Consolidated and Co_2

Condensed Consolidated and Combined Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Common stock	Net Parent Investment	Paid-in capital	Accumulated deficit	Accumulated other comprehensive loss	Total
Beginning balance at Dec. 31, 2018	$ 0	$ (10,445)	$ 0	$ 0	$ 0	$ (10,445)
Beginning balance (in shares) at Dec. 31, 2018	0
Change in Stockholders' Equity (Deficit)
Net loss		(37,381)				(37,381)
Net transfers from Ironwood		36,085				36,085
Ironwood allocation - share-based compensation		3,989				3,989
Ending balance at Mar. 31, 2019		(7,752)				$ (7,752)
Ending balance (in shares) at Mar. 31, 2019						0
Beginning balance at Dec. 31, 2018	$ 0	(10,445)	0	0	0	$ (10,445)
Beginning balance (in shares) at Dec. 31, 2018	0
Change in Stockholders' Equity (Deficit)
Net loss						(69,635)
Foreign currency translation adjustment						(4)
Ending balance at Jun. 30, 2019	$ 0	0	173,448	(32,254)	(4)	141,190
Ending balance (in shares) at Jun. 30, 2019	27,411,189
Beginning balance at Mar. 31, 2019		(7,752)				$ (7,752)
Beginning balance (in shares) at Mar. 31, 2019						0
Change in Stockholders' Equity (Deficit)
Net loss				(32,254)		$ (32,254)
Net transfers from Ironwood		2,602				2,602
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)	15,562,555
Issuance of common stock - private placement, net of fees			164,622			164,622
Number of shares issued in private placement	11,817,165
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan (in shares)	9,527
Issuance of common stock awards (in shares)	21,942
Share-based compensation expense related to issuance of stock options and RSUs to employees and employee stock purchase plan			6,224			6,224
Foreign currency translation adjustment					(4)	(4)
Ending balance at Jun. 30, 2019	$ 0	0	173,448	(32,254)	(4)	141,190
Ending balance (in shares) at Jun. 30, 2019	27,411,189
Beginning balance at Dec. 31, 2019	$ 0	0	183,376	(85,627)	(20)	$ 97,729
Beginning balance (in shares) at Dec. 31, 2019	27,598,133					27,598,113
Change in Stockholders' Equity (Deficit)
Net loss				(20,228)		$ (20,228)
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan			1			1
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan (in shares)	156,761
Share-based compensation expense related to issuance of stock options and RSUs to employees and employee stock purchase plan			4,036			4,036
Foreign currency translation adjustment					2	2
Ending balance at Mar. 31, 2020			187,413	(105,855)	(18)	81,540
Ending balance (in shares) at Mar. 31, 2020	27,754,894
Beginning balance at Dec. 31, 2019	$ 0	0	183,376	(85,627)	(20)	$ 97,729
Beginning balance (in shares) at Dec. 31, 2019	27,598,133					27,598,113
Change in Stockholders' Equity (Deficit)
Net loss						$ (39,762)
Foreign currency translation adjustment						(10)
Ending balance at Jun. 30, 2020	$ 0	0	191,520	(125,389)	(30)	$ 66,101
Ending balance (in shares) at Jun. 30, 2020	27,857,710					27,857,710
Beginning balance at Mar. 31, 2020			187,413	(105,855)	(18)	$ 81,540
Beginning balance (in shares) at Mar. 31, 2020	27,754,894
Change in Stockholders' Equity (Deficit)
Net loss				(19,534)		(19,534)
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan			155			155
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan (in shares)	102,816
Share-based compensation expense related to issuance of stock options and RSUs to employees and employee stock purchase plan			3,952			3,952
Foreign currency translation adjustment					(12)	(12)
Ending balance at Jun. 30, 2020	$ 0	$ 0	$ 191,520	$ (125,389)	$ (30)	$ 66,101
Ending balance (in shares) at Jun. 30, 2020	27,857,710					27,857,710

Condensed Consolidated and Co_3

Condensed Consolidated and Combined Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (39,762)	$ (69,635)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Depreciation and amortization	1,239	1,350
Net loss on disposal of property and equipment	(194)
Gain on lease modification	(2,113)
Share-based compensation expense	7,989	10,213
Changes in operating assets and liabilities:
Related party accounts receivable	723	(1,857)
Prepaid expenses	(294)	(911)
Other current assets	38	(17)
Operating lease assets	(4,555)	1,073
Other assets	(851)	25
Accounts payable	(246)	3,566
Related party accounts payable	294	1,920
Accrued research and development costs	(549)	(11)
Operating lease liabilities	(1,342)	1,860
Accrued expenses and other current liabilities	(4,166)	(3,816)
Net cash (used in) operating activities	(43,401)	(56,240)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(1,480)	(6,061)
Proceeds from sale of property and equipment	59
Net cash (used in) investing activities	(1,421)	(6,061)
CASH FLOWS FROM FINANCING ACTIVITIES:
Gross proceeds from private placement		175,000
Costs associated with private placement		(10,378)
Proceeds from exercises of stock options and ESPP	155
Proceeds from short-term note payable	3,509
Transfers from Ironwood		46,439
Net cash provided by financing activities	3,664	211,061
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(10)	(4)
Net decrease in cash, cash equivalents and restricted cash	(41,168)	148,756
Cash, cash equivalents and restricted cash, beginning of period	102,621	0
Cash, cash equivalents and restricted cash, end of period	61,453	148,756
Supplemental cash flow disclosure:
Cash paid for initial direct costs of lease modification	6,507
Non-cash investing activities
Fixed asset purchases in accounts payable and accrued expenses	$ 9	$ 516

Condensed Consolidated and Co_4

Condensed Consolidated and Combined Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2020	Jun. 30, 2019
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated and combined balance sheets
Cash and cash equivalents	$ 56,462	$ 141,030
Restricted cash	4,991	7,726
Total cash, cash equivalents and restricted cash	$ 61,453	$ 148,756

Nature of Business

Nature of Business	6 Months Ended
	Jun. 30, 2020
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. Company Overview The Company is executing its corporate priorities, including advancing its ongoing olinciguat and IW-6463 clinical programs and seeking the out-licensing of praliciguat: Olinciguat is a once-daily, orally administered vascular sGC stimulator that is well suited for the potential treatment of sickle cell disease, or SCD that was granted Orphan Drug Designation by the FDA in June 2018. Olinciguat has the potential to address multiple clinical domains important in SCD by improving local blood flow, decreasing vascular inflammation, reducing anemia, and improving chronic symptoms. The ongoing olinciguat STRONG-SCD study is a randomized, placebo-controlled, dose-ranging Phase 2 study designed to evaluate safety, tolerability, and pharmacokinetics, as well as to explore effects on daily symptoms and biomarkers of disease activity when dosed over a 12-week treatment period. In April 2020, the study enrollment closed with a total of 70 participants randomized. All follow up visits are now complete, and we are conducting study closeout activities. The Company expects to obtain topline data from this study in late Q3 2020. IW-6463 is an orally administered, once-daily central nervous system, or CNS-penetrant sGC stimulator for the treatment of serious CNS diseases. The nitric oxide pathway and sGC stimulation have long been known as central physiological regulators in the CNS, affecting cerebrovascular blood flow, neuroinflammation, neuronal function and cellular bioenergetics. In January 2020, the Company reported positive Phase 1 healthy volunteer study results for IW-6463. An ongoing translational pharmacology clinical study has enrolled 24 elderly subjects and will evaluate safety and biomarker measures of CNS activity. Dosing has been completed in this study and topline data is expected in mid-Q3 2020. The Company anticipates initiating two parallel exploratory Phase 2 studies of IW-6463 to evaluate safety and a variety of efficacy measures, including engagement of CNS biomarkers using novel trial designs in Mitochondrial Encephalomyopathy, Lactic Acidosis and Stroke-like Episodes (MELAS) and Alzheimer's disease with vascular features (ADv). These studies are designed to de-risk and direct future development in CNS diseases. Praliciguat is an orally administered, once-daily systemic sGC stimulator that was evaluated in two Phase 2 proof-of-concept studies: a dose-ranging study in 156 adult patients with diabetic nephropathy, and a study in 196 adult patients with heart failure with preserved ejection fraction (HfpEF), CAPACITY-HfpEF. On October 30, 2019, we released topline results from these studies. The Company’s efforts to out-license rights to praliciguat have expanded to discussions beyond treatment of cardiometabolic disorders to include additional indications where sGC stimulators have demonstrated efficacy. 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 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 in a private placement (the “Private Placement”) of common stock to accredited investors for gross proceeds of $175 million (net proceeds of approximately $165 million). Basis of Presentation The Company did not operate as a separate, stand-alone entity for the prior interim period covered by the interim condensed consolidated and combined financial statements. The Company’s condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019, condensed consolidated and combined statements of operations and comprehensive loss and statements of cash flows for the three and six months ended June 30, 2020 and combined statements of operations and comprehensive loss for the three months ended June 30, 2019 consist of the condensed consolidated balances and activity of Cyclerion as prepared on a stand-alone basis. The Company’s condensed consolidated and combined statements of operations and comprehensive loss and statements of cash flows for the six months ended June 30, 2019 have been prepared on a “carve out” basis. 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 condensed consolidated and combined financial position and condensed 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. For periods prior to the Separation, the 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 expenses, deemed necessary to fairly present the 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 years presented. 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 condensed 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. The Company expects these losses to continue into the foreseeable future as the Company continues the development and clinical testing of the product candidates, olinciguat and IW-6463, and its discovery research programs. On April 2, 2019, the Company received gross proceeds of $175 million (net proceeds of approximately $165 million) from the Private Placement. On July 29, 2020, the Company received proceeds of approximately $24.3 million from an equity private placement (See Note 13, Subsequent Events ). 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, 2020, the Company did not identify conditions or events that would 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, 2020
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies The accounting policies of the Company are set forth in Note 2. Summary of Significant Accounting Policies to the consolidated and combined financial statements contained in the Company’s 2019 annual report on Form 10-K. The Company includes herein certain updates to those policies. Leases The Company has a property lease for its headquarters location at 301 Binney Street, Cambridge, MA (the “Master Lease”). 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 (“ROU”) 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 consolidated balance sheets. ROU 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. Variable lease costs that do not depend on an index or rate are recognized as incurred. ROU assets and operating lease liabilities are remeasured upon certain modifications to leases using the present value of remaining lease payments and estimated incremental borrowing rate upon lease modification. The difference between the remeasured ROU assets and the operating lease liabilities are recognized as a gain or loss in operating expenses. The Company reviews any changes to its lease agreements for potential modifications and/or indicators of impairment of the respective ROU asset. On October 18, 2019, the Company entered into an agreement to sublease 15,700 rentable square feet of its Master Lease to a subtenant. Sublease income is recognized on straight-line basis over the term of the sublease agreement and is recorded net of the related rent expense from the Master Lease within interest and other income, net in the condensed consolidated and combined statements of operations and comprehensive loss. In sublease agreements that contain non-monetary consideration, the Company estimates the fair market value of the non-monetary consideration received using market data and recognizes it on a straight-line basis over the sublease term. Variable lease consideration that does not depend on an index or rate is allocated to a non-lease component and is recognized over time in accordance with the pattern of transfer. No modification or impairment was deemed to have occurred by entering into the sublease agreement because the Company was not released, either fully or in part, from its obligations under the Master Lease. See Note 8, Leases . On February 28, 2020 the Company entered into an amendment to its Master Lease at 301 Binney Street in Cambridge, Massachusetts (the “Lease Amendment”). The Lease Amendment provided for the partial termination of the Company's rights and obligations with respect to a portion of the leased premises of approximately 40,000 rentable square feet. The Company will continue to lease approximately 74,000 rentable square feet under terms of the amended lease. The Lease Amendment was determined to be a lease modification that qualified as a change of accounting on the existing lease and not a separate contract. As such, the ROU assets and operating lease liabilities were remeasured using an incremental borrowing rate at the date of modification and the Company recorded a gain of approximately $2.1 million as a component of operating expenses for the three months ended March 31, 2020. No impairment of the ROU asset was deemed to have occurred. See Note 8, Leases . Paycheck Protection Program Loan On April 21, 2020, the Company received loan proceeds in the amount of approximately $3.5 million pursuant to a promissory note agreement (the “Promissory Note”) with a bank under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The Promissory Note has a loan maturity of April 20, 2022, a stated interest rate of 1.0% per annum, and has payments of principal and interest that are due monthly after an initial six-month deferral period where interest accrues, but no payments are due. The Promissory Note provides for customary events of default, including, among others, those relating to failure to make payment when due and breaches of representations. The Company may prepay the principal of the Promissory Note at any time without incurring any prepayment charges. The loan is subject to all the terms and conditions applicable under the PPP and is subject to review by the Small Business Association (the “SBA”) for compliance with program requirements, including the Company’s certification that the current economic uncertainty made the PPP loan request nescessary to support ongoing operations and the Company’s obtaining approval from the SBA for the private placement equity transaction (See Note 13, Subsequent Events ). In June 2020, the Payroll Protection Program Flexibility Act (“PPPFA”) was signed into law adjusting certain key terms of loans issued under the PPP. In accordance with the PPPFA, the initial deferral period may be extended from six to up to ten months and the loan maturity may be extended from two to five years. The PPPFA also provided for certain other changes, including the extent to which the loan may be forgiven. The loan’s principal and accrued interest are forgivable to the extent that the proceeds are used for eligible purposes, subject to certain limitations, and that the Company maintains its payroll levels over a twenty-four-week period following the loan date. The loan forgiveness amount may be reduced if the Company terminates employees or reduces salaries during the twenty-four-week period. The Company intends to use the proceeds for eligible purposes consistent with the provisions of the PPPFA. However, there can be no assurance that any portion of the loan will be forgiven and that we will not have to repay the loan in full. As the legal form of the Promissory Note is a debt obligation, the Company is accounting for it as debt under Accounting Standards Codification (ASC) 470, Debt and recorded an initial short-term liability of $3.5 million in the condensed consolidated balance sheet upon receipt of the loan proceeds. The Company is accruing interest over the term of the loan and is not imputing additional interest at a market rate because the guidance on imputing interest in ASC 835-30, Interest excludes transactions where interest rates are prescribed by a government agency. A de minimis amount of interest expense has been recognized within interest and other income, net in the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2020 and a de minimis amount of interest expense has been accrued within accrued expenses and other current liabilities on the condensed consolidated balance sheet as of June 30, 2020. If any amount of the loan is ultimately forgiven, income from the extinguishment of debt would be recognized as a gain on loan extinguishment in the consolidated statement of operations and comprehensive loss. 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 condensed consolidated and combined financial statements, the Company did not adopt any new accounting pronouncements during the six months ended June 30, 2020 that had a material effect on its condensed consolidated and combined financial statements. 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”), 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 No. 2019-10, Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) (“ASU 2019-10”), ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments-Credit Losses (“ASU 2019-11”) and ASU No. 2020-02, Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842)("ASU 2020-02”) . 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 2019-10 aligned the effective dates of certain major updates not yet effective to conform to the FASB’s new philosophy of staggering major updates between large public companies and all other entities. ASU 2019-11’s major provisions included additional clarifications and practical expedients related to expected recoveries for purchased assets with credit deterioration, troubled debt restructuring, accrued interest receivables, and other areas when adopting ASU 2016-13. ASU 2020-02 provided amendments to the Topic 326 including a new section related to credit losses measured at amortized cost and a clarification to Topic 842 and is effective when adopting other areas of Financial Instruments-Credit Losses Topic 326. As a public business entity that qualifies as a smaller reporting company, ASU 2016-13, ASU 2019-04 and ASU 2019-05 are effective for fiscal years beginning after December 15, 2022, 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 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 adopted ASU 2018-13 in the first quarter of 2020 and the 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. 2018-15, 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 adopted ASU 2018-15 in the first quarter of 2020 and the adoption of this standard did not have a material impact on the Company’s financial position or 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 condensed consolidated and combined financial statements upon adoption.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jun. 30, 2020
Related Party Transactions
Related Party Transactions	3. Related Party Transactions Relationship with Ironwood Prior to April 1, 2019, the Company was managed and operated in the normal course of business under 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. Certain shared costs were allocated to the Company and reflected as expenses in the Company’s stand-alone combined financial statements for periods prior to the Separation. The expenses reflected in the condensed combined financial statements for periods prior to the Separation may not be indicative of expenses that will be incurred by the Company in the future. (a) Corporate costs 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, facilities and Separation-related costs. 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. The corporate costs allocated to Cyclerion, prior to the Separation, and included in the combined statements of operations was approximately $6.8 million for the three months ended March 31, 2019 and was included in general and administrative expenses. (b) Cash Management and Financing 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 up 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. All services provided to and from the Company under the Transition Services Agreements were completed as of March 31, 2020 and the agreements were terminated. The net charge to operating expenses for the Transition Services Agreements was de minimis for the six months ended June 30, 2020 and was $0.1 million for the three and six 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 composed of representatives of both Ironwood and the Company. Ironwood has informed Cyclerion that it will not renew the Development Agreement beyond its initial term which ends on March 31, 2021. The Company recorded approximately $0.8 and $1.8 million in revenue from related party for services provided under the Development Agreement for the three and six months ended June 30, 2020, respectively, and recorded $1.6 million for the three and six 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, 2020 and December 31, 2019 was approximately $0.8 million and $1.5 million, respectively, primarily from the Development Agreement, and is reflected as related party accounts receivable. There was approximately $0.1 million due to Ironwood at June 30, 2020 and December 31, 2019. 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. Other Related Party Transactions During the three and six months ended June 30, 2020, the Company recorded approximately $0.5 million and $0.6 million, respectively, of research and development costs to a related party which it engaged to provide research and development transaction support services. The entity became a related party when Mark Currie, the Company’s President, joined its board in January 2020. There was approximately $0.3 million and a de minimis amount due to the related party at June 30, 2020 and December 31, 2019, respectively.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	6 Months Ended
	Jun. 30, 2020
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 tables 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 as of June 30, 2020 and December 31, 2019 (in thousands): Fair Value Measurements as of June 30, 2020 Using: Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ $ — $ — $ Cash equivalents $ $ — $ — $ Fair Value Measurements as of December 31, 2019 Using: Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 93,859 $ — $ — $ 93,859 Cash equivalents $ 93,859 $ — $ — $ 93,859

Property and Equipment

Property and Equipment	6 Months Ended
	Jun. 30, 2020
Property and Equipment
Property and Equipment	5. Property and Equipment Property and equipment, net consisted of the following (in thousands): June 30, December 31, 2020 2019 Laboratory equipment $ $ 14,505 Software 2,232 Construction in progress — 915 Computer and office equipment 1,890 Leasehold improvements 13,673 Property and equipment, gross 33,215 Less: accumulated depreciation and amortization (21,602) Property and equipment, net $ $ 11,613 As of June 30, 2020, and December 31, 2019, the Company’s property and equipment was primarily located in Cambridge, Massachusetts. Depreciation and amortization expense of the Company’s property and equipment was approximately $0.6 million and $0.8 million for the three months ended June 30, 2020 and 2019, respectively, and approximately $1.2 million and $1.4 million for the six months ended June 30, 2020 and 2019, respectively. The Company recorded a loss on disposal of property and equipment of $0.2 million for the three and six months ended June 30, 2020 recognized within operating expenses in the condensed consolidated and combined statements of operations and comprehensive loss. Leasehold improvements of $1.5 million were put into service in the six months ended June 30, 2020, of which $0.9 million was included in construction in progress as of December 31, 2019.

Accrued Expenses and Other Curr

Accrued Expenses and Other Current Liabilities	6 Months Ended
	Jun. 30, 2020
Accrued Expenses and Other Current Liabilities
Accrued Expenses and Other Current Liabilities	6. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): June 30, December 31, 2020 2019 Accrued incentive compensation $ $ 3,767 Salaries 1,730 Accrued vacation 969 Professional fees 441 Accrued severance and benefit costs 2,009 Other 404 Accrued expenses and other current liabilities $ $ 9,320

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2020
Commitments and Contingencies
Commitments and Contingencies	7 . Commitments and Contingencies Other Funding Commitments As of June 30, 2020 and December 31, 2019, the Company had 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, 2020 and December 31, 2019.

Leases

Leases	6 Months Ended
	Jun. 30, 2020
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 the Master Lease, a direct operating 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 Master Lease is for a term of 123 months with two five-year extension options and certain expansion rights. The Master Lease includes a letter of credit, initially in the amount of $7.7 million, posted with the landlord as a security deposit, which is collateralized by a money market account recorded as restricted cash on the Company’s condensed consolidated balance sheets. 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 Master 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 Master Lease at the present value of the lease payments not yet paid, discounted using the discount rate for the Master Lease established at the commencement date. As the Master 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% at the time of the agreement, 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. The Company had 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 consolidated balance sheets as of June 30, 2020 and December 31, 2019 and are depreciated over the shorter of their useful life or the related lease term. The Company received the payment for the tenant allowance in the third quarter of 2019. On April 1, 2019, the Company recorded a right-of-use asset in the amount $71.3 million. The right-of-use asset is being 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. On February 28, 2020 the Company entered into an amendment to our Master Lease at 301 Binney Street in Cambridge, Massachusetts. The Lease Amendment provides for the partial termination of the Company’s rights and obligations with respect to a portion of the leased premises of approximately 40,000 rentable square feet. The Company will continue to lease approximately 74,000 square feet including the area covered by the subleased premise, discussed below. The Company reduced its remaining lease payments through June 2029 by approximately $41.9 million. In connection with the Lease Amendment, the Company paid $6.3 million for a termination fee and $0.2 million for other initial direct costs, which will be deferred and recognized over the remaining lease term. The Company’s security deposit was reduced by approximately $2.7 million to approximately $5.0 million, which is classified as restricted cash on the Company’s condensed consolidated balance sheet as of June 30, 2020. The Lease Amendment was determined to be a lease modification that qualified as a change of accounting on the existing lease and not a separate contract. As such, the ROU assets and operating lease liabilities were remeasured using an incremental borrowing rate at the date of modification of 9.7%, which resulted in a reduction of the ROU asset of $21.4 million and a reduction in the operating lease liabilities of $23.5 million. The Company recorded the resulting gain of approximately $2.1 million as a component of operating expenses in the condensed consolidated statement of operations and comprehensive loss for the six months ended June 30, 2020. The Company has an operating lease right-of-use asset of approximately $51.3 million and $68.1 million related to the amended Master Lease recorded in its condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019, respectively. The Company has current operating lease liabilities of approximately $2.8 million and $3.4 million, and noncurrent operating lease liabilities of approximately $46.3 million and $70.5 million, related to the amended Master Lease recorded in its condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019, respectively. Lease cost is recognized on a straight-line basis over the lease term. For the three and six months ended June 30, 2020, the Company recognized a total of approximately $2.2 million and $4.9 million, respectively, of total lease costs. Variable lease costs not subject to an index or rate are recognized as incurred. For the three and six months ended June 30, 2020, the Company recognized a total of approximately $0.5 million and $1.5 million, respectively, of variable lease costs related to the Master Lease, as amended. Supplemental cash flow information related to leases for the six months ended June 30, 2020 is as follows: Six Months Ended June 30, 2020 Decrease in right-of-use assets related to lease modification $ Decrease in operating lease liabilities due to lease modification $ Cash paid for amounts included in the measurement of lease liabilities (in thousands) $ Weighted-average remaining lease term of operating leases (in years) Weighted-average discount rate of operating leases % 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 $0.2 million in rent expense related to the sub-lease for the three and six months ended June 30, 2019. On October 18, 2019, the Company entered into an agreement with a third party to sublease 15,700 rentable square feet of its current lease premises under the Master Lease. The sublease will expire on June 30, 2029, unless earlier terminated in accordance with the sublease agreement, and has no extension options. The sublease provides for annual base rent of approximately $1.5 million in the first year, which increases on a yearly basis by 3.0% (subject to an abatement of base rent of approximately $0.7 million for the first six months of the sublease). The sublessee is responsible for its pro rata share of certain costs, taxes and operating expenses related to the subleased space, the consideration for which is variable and is based on the actual operating costs of the lessor. The variable consideration relates exclusively to non-lease components representing such services and will be recognized as incurred. The sublease includes an initial security deposit of $0.5 million, which was provided by the sublessee in the form of a letter of credit, and an additional security deposit of $0.4 million within nine months of the sublease commencement. As part of the consideration for the sublease, the sublessee will provide licensed rooms within the sublease premises and licensed services to the Company over the sublease term free of charge. The licensed rooms have been excluded from the measurement of the sublease as control of the rooms reverts to the Company. The Company expects to receive the benefit of the licensed rooms and services beginning in late 2020. The Company estimated the fair value of the services to be approximately $4.2 million, which will be recorded on a gross basis as the services are received as a component of research and development costs in the condensed consolidated and combined statements of operations and comprehensive loss. The Company allocated the consideration in the sublease agreement between the lease and non-lease components based on their relative standalone prices. For the three and six months ended June 30, 2020, gross sublease income of $0.5 million and $1.1 million, respectively, was recorded. Net sublease income of approximately $0.1 million and $0.2 million was recorded in interest and other income, net in the condensed consolidated and combined statements of operations and comprehensive loss for the three and six months ended June 30, 2020. Future minimum lease payments under non-cancelable operating leases under ASC 842 as well as the total future minimum lease payments to be received under the sublease agreement as of June 30, 2020 are as follows: Operating Sublease Lease Payments to be Payments Received 2020 (remaining nine months) $ $ 2021 2022 2023 2024 2025 and thereafter Total future minimum lease payments (receipts) $ Less: present value adjustment Operating lease liabilities at June 30, 2020 Less: current portion of operating lease liabilities Operating lease liabilities, net of current portion $

Share-based Compensation Plans

Share-based Compensation Plans	6 Months Ended
	Jun. 30, 2020
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 2010 Employee, Director 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 pro-rata 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, 2020 and 2019 (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Research and development $ $ 2,787 $ $ 4,582 General and administrative 3,437 5,631 $ $ 6,224 $ $ 10,213 For the three and six months ended June 30, 2020, the Company granted stock options to purchase an aggregate of 105,000 shares and 270,846 shares, respectively, at weighted average grant date fair values per option share of $2.84 and $2.15, respectively. As of June 30, 2020, the unrecognized share-based compensation expense, net of estimated forfeitures, related to all unvested time-based stock options held by Cyclerion’s employees is $19.2 million and the weighted average period over which that expense is expected to be recognized is 3.6 years. As of June 30, 2020, the unrecognized share-based compensation expense related to stock options containing market conditions held by Cyclerion’s employees is $0.3 million, which is expected to be recognized over a weighted-average period of 3.8 years. As of June 30, 2020, the unrecognized share-based compensation expense, net of estimated forfeitures, related to all unvested RSUs held by the Company’s employees is $4.5 million and the weighted-average period over which that expense is expected to be recognized is 2.3 years.

Loss per share

Loss per share	6 Months Ended
	Jun. 30, 2020
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 as follows: Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Numerator: Net loss (in thousands) $ $ (32,254) $ $ (69,635) Denominator: Weighted average shares used in calculating net loss per share - basic and diluted (in thousands) 27,393 27,380 Net loss per share - basic and diluted $ $ (1.18) $ $ (2.54) For both the three and six months ended June 30, 2020 there were 7,717,184 shares of common stock related to stock options and 474,923 shares of common stock related to RSUs were excluded from the calculation of diluted net loss per share since the inclusion of such shares would be anti-dilutive. Prior to April 1, 2019, there were no Cyclerion shares outstanding, as such, the shares outstanding immediately after the distribution and the Private Placement were used to calculate the basic and diluted net loss per share for the six months ended June 30, 2019.

Defined Contribution Plan

Defined Contribution Plan	6 Months Ended
	Jun. 30, 2020
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 is approximately $0.1 million and $0.4 million related to the defined contribution 401(k) Savings Plan for the three and six months ended June 30, 2020, respectively. Included in compensation expense for employees that are directly attributable to Cyclerion is approximately $0.1 million and $0.5 million for the three and six months ended June 30, 2019, respectively.

Workforce Reduction

Workforce Reduction	6 Months Ended
	Jun. 30, 2020
Workforce Reduction
Workforce Reduction	12. Workforce Reduction On October 30, 2019, the Company began a reduction of its current workforce by approximately thirty (30) full-time employees in order to align its resources with its ongoing clinical and preclinical programs, innovation strategy and partnering work. The total one-time costs related to the workforce reduction were approximately $3.0 million. The workforce reduction was substantially completed during the year ended December 31, 2019, in which the Company recorded approximately $2.8 million of severance and benefits costs. The workforce reduction was finalized during the three months ended March 31, 2020, in which the Company recorded approximately $0.2 million in additional severance and benefits costs. The following table summarizes the accrued liabilities activity recorded in connection with the reduction in workforce for the six months ended June 30, 2020 (in thousands): Amounts Amounts accrued at accrued at December 31, 2019 Charges Amount paid Adjustments June 30, 2020 October 2019 workforce reduction $ 2,009 $ $ $ $ Total $ 2,009 $ $ $ $

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2020
Subsequent Events
Subsequent Events	13. Subsequent Events On July 29, 2020, the Company closed on a private placement of 6,062,500 shares of the Company’s common stock at a purchase price of $4.00 per share pursuant to a Common Stock Purchase Agreement for total proceeds of approximately $24.3 million.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2020
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The Company did not operate as a separate, stand-alone entity for the prior interim period covered by the interim condensed consolidated and combined financial statements. The Company’s condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019, condensed consolidated and combined statements of operations and comprehensive loss and statements of cash flows for the three and six months ended June 30, 2020 and combined statements of operations and comprehensive loss for the three months ended June 30, 2019 consist of the condensed consolidated balances and activity of Cyclerion as prepared on a stand-alone basis. The Company’s condensed consolidated and combined statements of operations and comprehensive loss and statements of cash flows for the six months ended June 30, 2019 have been prepared on a “carve out” basis. 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 condensed consolidated and combined financial position and condensed 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. For periods prior to the Separation, the 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 expenses, deemed necessary to fairly present the 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 years presented. 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 condensed 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.
Leases	Leases The Company has a property lease for its headquarters location at 301 Binney Street, Cambridge, MA (the “Master Lease”). 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 (“ROU”) 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 consolidated balance sheets. ROU 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. Variable lease costs that do not depend on an index or rate are recognized as incurred. ROU assets and operating lease liabilities are remeasured upon certain modifications to leases using the present value of remaining lease payments and estimated incremental borrowing rate upon lease modification. The difference between the remeasured ROU assets and the operating lease liabilities are recognized as a gain or loss in operating expenses. The Company reviews any changes to its lease agreements for potential modifications and/or indicators of impairment of the respective ROU asset. On October 18, 2019, the Company entered into an agreement to sublease 15,700 rentable square feet of its Master Lease to a subtenant. Sublease income is recognized on straight-line basis over the term of the sublease agreement and is recorded net of the related rent expense from the Master Lease within interest and other income, net in the condensed consolidated and combined statements of operations and comprehensive loss. In sublease agreements that contain non-monetary consideration, the Company estimates the fair market value of the non-monetary consideration received using market data and recognizes it on a straight-line basis over the sublease term. Variable lease consideration that does not depend on an index or rate is allocated to a non-lease component and is recognized over time in accordance with the pattern of transfer. No modification or impairment was deemed to have occurred by entering into the sublease agreement because the Company was not released, either fully or in part, from its obligations under the Master Lease. See Note 8, Leases . On February 28, 2020 the Company entered into an amendment to its Master Lease at 301 Binney Street in Cambridge, Massachusetts (the “Lease Amendment”). The Lease Amendment provided for the partial termination of the Company's rights and obligations with respect to a portion of the leased premises of approximately 40,000 rentable square feet. The Company will continue to lease approximately 74,000 rentable square feet under terms of the amended lease. The Lease Amendment was determined to be a lease modification that qualified as a change of accounting on the existing lease and not a separate contract. As such, the ROU assets and operating lease liabilities were remeasured using an incremental borrowing rate at the date of modification and the Company recorded a gain of approximately $2.1 million as a component of operating expenses for the three months ended March 31, 2020. No impairment of the ROU asset was deemed to have occurred. See Note 8, Leases .
Paycheck Protection Program Loan	Paycheck Protection Program Loan On April 21, 2020, the Company received loan proceeds in the amount of approximately $3.5 million pursuant to a promissory note agreement (the “Promissory Note”) with a bank under the Paycheck Protection Program (“PPP”). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The Promissory Note has a loan maturity of April 20, 2022, a stated interest rate of 1.0% per annum, and has payments of principal and interest that are due monthly after an initial six-month deferral period where interest accrues, but no payments are due. The Promissory Note provides for customary events of default, including, among others, those relating to failure to make payment when due and breaches of representations. The Company may prepay the principal of the Promissory Note at any time without incurring any prepayment charges. The loan is subject to all the terms and conditions applicable under the PPP and is subject to review by the Small Business Association (the “SBA”) for compliance with program requirements, including the Company’s certification that the current economic uncertainty made the PPP loan request nescessary to support ongoing operations and the Company’s obtaining approval from the SBA for the private placement equity transaction (See Note 13, Subsequent Events ). In June 2020, the Payroll Protection Program Flexibility Act (“PPPFA”) was signed into law adjusting certain key terms of loans issued under the PPP. In accordance with the PPPFA, the initial deferral period may be extended from six to up to ten months and the loan maturity may be extended from two to five years. The PPPFA also provided for certain other changes, including the extent to which the loan may be forgiven. The loan’s principal and accrued interest are forgivable to the extent that the proceeds are used for eligible purposes, subject to certain limitations, and that the Company maintains its payroll levels over a twenty-four-week period following the loan date. The loan forgiveness amount may be reduced if the Company terminates employees or reduces salaries during the twenty-four-week period. The Company intends to use the proceeds for eligible purposes consistent with the provisions of the PPPFA. However, there can be no assurance that any portion of the loan will be forgiven and that we will not have to repay the loan in full. As the legal form of the Promissory Note is a debt obligation, the Company is accounting for it as debt under Accounting Standards Codification (ASC) 470, Debt and recorded an initial short-term liability of $3.5 million in the condensed consolidated balance sheet upon receipt of the loan proceeds. The Company is accruing interest over the term of the loan and is not imputing additional interest at a market rate because the guidance on imputing interest in ASC 835-30, Interest excludes transactions where interest rates are prescribed by a government agency. A de minimis amount of interest expense has been recognized within interest and other income, net in the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2020 and a de minimis amount of interest expense has been accrued within accrued expenses and other current liabilities on the condensed consolidated balance sheet as of June 30, 2020. If any amount of the loan is ultimately forgiven, income from the extinguishment of debt would be recognized as a gain on loan extinguishment in the consolidated statement of operations and comprehensive loss.
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 condensed consolidated and combined financial statements, the Company did not adopt any new accounting pronouncements during the six months ended June 30, 2020 that had a material effect on its condensed consolidated and combined financial statements. 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”), 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 No. 2019-10, Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) (“ASU 2019-10”), ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments-Credit Losses (“ASU 2019-11”) and ASU No. 2020-02, Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842)("ASU 2020-02”) . 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 2019-10 aligned the effective dates of certain major updates not yet effective to conform to the FASB’s new philosophy of staggering major updates between large public companies and all other entities. ASU 2019-11’s major provisions included additional clarifications and practical expedients related to expected recoveries for purchased assets with credit deterioration, troubled debt restructuring, accrued interest receivables, and other areas when adopting ASU 2016-13. ASU 2020-02 provided amendments to the Topic 326 including a new section related to credit losses measured at amortized cost and a clarification to Topic 842 and is effective when adopting other areas of Financial Instruments-Credit Losses Topic 326. As a public business entity that qualifies as a smaller reporting company, ASU 2016-13, ASU 2019-04 and ASU 2019-05 are effective for fiscal years beginning after December 15, 2022, 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 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 adopted ASU 2018-13 in the first quarter of 2020 and the 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. 2018-15, 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 adopted ASU 2018-15 in the first quarter of 2020 and the adoption of this standard did not have a material impact on the Company’s financial position or 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 condensed consolidated and combined financial statements upon adoption.

Fair Value of Financial Instr_2

Fair Value of Financial Instruments (Tables)	6 Months Ended
	Jun. 30, 2020
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	The Company’s cash equivalents are generally classified within Level 1 of the fair value hierarchy. The following tables 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 as of June 30, 2020 and December 31, 2019 (in thousands): Fair Value Measurements as of June 30, 2020 Using: Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ $ — $ — $ Cash equivalents $ $ — $ — $ Fair Value Measurements as of December 31, 2019 Using: Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 93,859 $ — $ — $ 93,859 Cash equivalents $ 93,859 $ — $ — $ 93,859

Property and Equipment (Tables)

Property and Equipment (Tables)	6 Months Ended
	Jun. 30, 2020
Property and Equipment
Schedule of property and equipment, net	Property and equipment, net consisted of the following (in thousands): June 30, December 31, 2020 2019 Laboratory equipment $ $ 14,505 Software 2,232 Construction in progress — 915 Computer and office equipment 1,890 Leasehold improvements 13,673 Property and equipment, gross 33,215 Less: accumulated depreciation and amortization (21,602) Property and equipment, net $ $ 11,613

Accrued Expenses and Other Cu_2

Accrued Expenses and Other Current Liabilities (Tables)	6 Months Ended
	Jun. 30, 2020
Accrued Expenses and Other Current Liabilities
Schedule of accrued expenses and other current liabilities	Accrued expenses and other current liabilities consisted of the following (in thousands): June 30, December 31, 2020 2019 Accrued incentive compensation $ $ 3,767 Salaries 1,730 Accrued vacation 969 Professional fees 441 Accrued severance and benefit costs 2,009 Other 404 Accrued expenses and other current liabilities $ $ 9,320

Leases (Tables)

Leases (Tables)	6 Months Ended
	Jun. 30, 2020
Leases
Schedule of supplemental cash flow information related to leases	Supplemental cash flow information related to leases for the six months ended June 30, 2020 is as follows: Six Months Ended June 30, 2020 Decrease in right-of-use assets related to lease modification $ Decrease in operating lease liabilities due to lease modification $ Cash paid for amounts included in the measurement of lease liabilities (in thousands) $ Weighted-average remaining lease term of operating leases (in years) Weighted-average discount rate of operating leases %
Future minimum lease payments under non-cancelable operating leases under ASC 842 as well as the total future minimum lease payments to be received under the sublease agreement	Future minimum lease payments under non-cancelable operating leases under ASC 842 as well as the total future minimum lease payments to be received under the sublease agreement as of June 30, 2020 are as follows: Operating Sublease Lease Payments to be Payments Received 2020 (remaining nine months) $ $ 2021 2022 2023 2024 2025 and thereafter Total future minimum lease payments (receipts) $ Less: present value adjustment Operating lease liabilities at June 30, 2020 Less: current portion of operating lease liabilities Operating lease liabilities, net of current portion $

Share-based Compensation Plans

Share-based Compensation Plans (Tables)	6 Months Ended
	Jun. 30, 2020
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, 2020 and 2019 (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Research and development $ $ 2,787 $ $ 4,582 General and administrative 3,437 5,631 $ $ 6,224 $ $ 10,213

Loss per share (Tables)

Loss per share (Tables)	6 Months Ended
	Jun. 30, 2020
Loss per share
Schedule of basic and diluted earnings per share	Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Numerator: Net loss (in thousands) $ $ (32,254) $ $ (69,635) Denominator: Weighted average shares used in calculating net loss per share - basic and diluted (in thousands) 27,393 27,380 Net loss per share - basic and diluted $ $ (1.18) $ $ (2.54)

Workforce Reduction (Tables)

Workforce Reduction (Tables)	6 Months Ended
	Jun. 30, 2020
Workforce Reduction
Schedule of accrued liabilities activity allocated to Cyclerion in connection with the reduction in workforce	The following table summarizes the accrued liabilities activity recorded in connection with the reduction in workforce for the six months ended June 30, 2020 (in thousands): Amounts Amounts accrued at accrued at December 31, 2019 Charges Amount paid Adjustments June 30, 2020 October 2019 workforce reduction $ 2,009 $ $ $ $ Total $ 2,009 $ $ $ $

Nature of Business (Details)

Nature of Business (Details) $ in Thousands	Jul. 29, 2020USD ($)shares	Apr. 02, 2019USD ($)shares	Apr. 01, 2019	Jun. 30, 2019USD ($)	May 03, 2019employee
Nature of Business
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
Cyclerion GmbH
Nature of Business
Number of employees | employee					1
Private Placement
Nature of Business
Number of shares issued in private placement | 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
Private Placement | Subsequent Event
Nature of Business
Number of shares issued in private placement | shares	6,062,500
Gross proceeds from issuance of shares to accredited investors	$ 24,300

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Details) $ in Thousands	Apr. 21, 2020USD ($)	Feb. 28, 2020USD ($)ft²	Mar. 31, 2020USD ($)	Jun. 30, 2020USD ($)	Oct. 18, 2019ft²	Apr. 01, 2019ft²
Leases
Gain on lease modification				$ 2,113
Proceeds from notes				3,509
PPP Loan
Leases
Proceeds from notes	$ 3,500
Short-term liability				3,500
Master Lease
Leases
Space subleased to third party (in square feet) | ft²					15,700
Rented space (in square feet) | ft²						114,000
Lease Amendment
Leases
Rented space (in square feet) | ft²		74,000
Gain on lease modification			$ 2,100	$ 2,100
ROU asset, impairment loss		$ 0
Rentable space terminated from lease agreement (in square feet) | ft²		40,000

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($) $ in Thousands, shares in Millions	Apr. 02, 2019	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Related Party Transactions
Revenue from related party		$ 749	$ 1,628		$ 1,763	$ 1,628
Other Related Party Transactions
Related Party Transactions
Amounts due to related party		300			300		$ 300
Payments to provide research and development transaction support services		500			600
Ironwood | Separation agreement
Related Party Transactions
Amounts due to related party		100			100		100
Ironwood | Transition services agreements
Related Party Transactions
Related party expense			100			100
Ironwood | Development agreement
Related Party Transactions
Revenue from related party		800	$ 1,600		1,800	$ 1,600
Amounts due from related party		$ 800			$ 800		$ 1,500
Ironwood | Corporate costs
Related Party Transactions
Related party expense				$ 6,800
Peter Hecht | Private Placement
Related Party Transactions
Number of shares of Ironwood common stock donated to American Endowment Foundation	2.5
American Endowment Foundation | Private Placement
Related Party Transactions
Investment in common stock by related party	$ 34,000
Mark Currie | Private Placement
Related Party Transactions
Investment in common stock by related party	$ 4,000

Fair Value of Financial Instr_3

Fair Value of Financial Instruments (Details) - Recurring - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Cash equivalents:
Total cash equivalents	$ 55,447	$ 93,859
Money market funds
Cash equivalents:
Total cash equivalents	55,447	93,859
Level 1
Cash equivalents:
Total cash equivalents	55,447	93,859
Level 1 | Money market funds
Cash equivalents:
Total cash equivalents	$ 55,447	$ 93,859

Property and Equipment (Details

Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Property and Equipment
Property and equipment. gross	$ 31,875		$ 31,875		$ 33,215
Less: accumulated depreciation and amortization	(21,088)		(21,088)		(21,602)
Property and equipment, net	10,787		10,787		11,613
Depreciation and amortization	600	$ 800	1,239	$ 1,350
Loss on disposal of property and equipment			(194)
Operating expenses
Property and Equipment
Loss on disposal of property and equipment	200		200
Laboratory equipment
Property and Equipment
Property and equipment. gross	12,850		12,850		14,505
Software
Property and Equipment
Property and equipment. gross	2,261		2,261		2,232
Construction in progress
Property and Equipment
Property and equipment. gross					915
Leasehold improvements					900
Computer and office equipment
Property and Equipment
Property and equipment. gross	1,547		1,547		1,890
Leasehold improvements
Property and Equipment
Property and equipment. gross	$ 15,217		15,217		$ 13,673
Fixed assets put into service during the period			$ 1,500

Accrued Expenses and Other Cu_3

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Accrued Expenses and Other Current Liabilities
Accrued incentive compensation	$ 1,924	$ 3,767
Salaries	1,106	1,730
Accrued vacation	834	969
Professional fees	617	441
Accrued severance and benefit costs	53	2,009
Other	579	404
Accrued expenses and other current liabilities	$ 5,113	$ 9,320

Leases - Summary (Details)

Leases - Summary (Details) $ in Thousands	Feb. 28, 2020USD ($)ft²	Apr. 01, 2019USD ($)ft²item	Jun. 30, 2020USD ($)	Mar. 31, 2020USD ($)	Jun. 30, 2020USD ($)	Dec. 31, 2019USD ($)
Leases
Lease liability			$ 49,079		$ 49,079
Current portion of operating lease liabilities			2,787		2,787	$ 3,420
Noncurrent lease liability			46,292		46,292	70,500
Right-of-use asset			51,306		51,306	68,137
Total lease costs			$ 2,200		4,900
Decrease in right-of-use assets related to lease modification					21,386
Decrease in operating lease liabilities due to lease modification					23,499
Cash paid for amounts included in the measurement of lease liabilities (in thousands)					$ 4,249
Weighted-average remaining lease term of operating leases (in years)			9 years		9 years
Weighted-average discount rate of operating leases			9.70%		9.70%
Gain on lease modification					$ 2,113
Master Lease
Leases
Rented space (in square feet) | ft²		114,000
Term of lease		123 months
Number of extension option | item		2
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
Incremental borrowing rate (as a percent)		10.90%
Lease liability		$ 71,300
Tenant improvement allowance		2,300
Right-of-use asset		$ 71,300
Master Lease | Property, plant and equipment
Leases
Tenant improvement allowance			$ 2,300		2,300	2,300
Lease Amendment
Leases
Rentable space terminated from lease agreement (in square feet) | ft²	40,000
Rented space (in square feet) | ft²	74,000
Decrease in security deposit	$ 2,700
Letter of credit posted with the landlord as a security deposit	$ 5,000
Incremental borrowing rate (as a percent)	9.70%
Current portion of operating lease liabilities			2,800		2,800	3,400
Noncurrent lease liability			46,300		46,300	70,500
Right-of-use asset			51,300		51,300	$ 68,100
Variable lease costs			$ 500		1,500
Decrease in remaining operating lease payments	$ 41,900
Cash paid for lease termination fees	6,300
Cash paid for initial direct costs of lease modification	200
Decrease in right-of-use assets related to lease modification	21,400
Decrease in operating lease liabilities due to lease modification	$ 23,500
Gain on lease modification				$ 2,100	$ 2,100

Leases - Sublease as Lessee (De

Leases - Sublease as Lessee (Details) $ in Millions	Mar. 31, 2019ft²	Jun. 30, 2019USD ($)	Jun. 30, 2019USD ($)
Sublease as lessee
Rent expense related to sublease | $		$ 0.2	$ 0.2
Ironwood
Sublease as lessee
Rentable square feet | ft²	24,000
Sublease initial term	1 month
Operating sublease, option to extend	true
Subleased term	1 month 15 days

Leases - Sublease as Lessor (De

Leases - Sublease as Lessor (Details) - Master Lease $ in Millions	Oct. 18, 2019USD ($)ft²item	Jun. 30, 2020USD ($)	Jun. 30, 2020USD ($)
Sublease as lessor
Space subleased to third party (in square feet) | ft²	15,700
Sublease, Annual base rent	$ 1.5
Sublease, Increase in base rent over the term of the lease (as a percent)	3.00%
Sublease, Abatement of base rent	$ 0.7
Sublease, Abatement period	6 months
Sublease, Number of extension options | item	0
Sublease, Initial security deposit received	$ 0.5
Sublease, Additional security deposit to be received	$ 0.4
Sublease, additional security deposit period	9 months
Estimated fair value of services to be received under the sublease agreement	$ 4.2
Gross sublease income, net of rent expense		$ 0.5	$ 1.1
Interest and other income
Sublease as lessor
Net sublease income		$ 0.1	$ 0.2

Leases - Future minimum lease o

Leases - Future minimum lease operating payments and sublease payments to be received (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Future minimum lease payments under non-cancelable operating leases under ASC 842
2020 (remaining nine months)	$ 3,656
2021	7,469
2022	7,686
2023	7,909
2024	8,139
2025 and hereafter	39,658
Total future minimum lease payments	74,517
Less: present value adjustment	25,438
Operating lease liabilities	49,079
Less: current portion of operating lease liabilities	2,787	$ 3,420
Operating lease liabilities, net of current portion	46,292	$ 70,500
Future minimum lease payments to be received under the sublease agreement
2020 (remaining nine months)	(800)
2021	(1,636)
2022	(1,683)
2023	(1,733)
2024	(1,783)
2025 and thereafter	(8,694)
Total future minimum lease payments receipts	$ (16,329)

Share-based Compensation Plan_2

Share-based Compensation Plans (Details) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020USD ($)$ / sharesshares	Jun. 30, 2019USD ($)	Jun. 30, 2020USD ($)employee$ / sharesshares	Jun. 30, 2019USD ($)
Share-based Compensation Plans
Number of employees impacted | employee			143
Share-based compensation	$ 3,953	$ 6,224	$ 7,989	$ 10,213
Research and development
Share-based Compensation Plans
Share-based compensation	1,880	2,787	3,801	4,582
General and administrative
Share-based Compensation Plans
Share-based compensation	2,073	$ 3,437	4,188	$ 5,631
Restricted Stock Units
Share-based Compensation Plans
Incremental compensation expense due to modification			0
Unrecognized share-based compensation expense	$ 4,500		$ 4,500
Expected period to recognize the expense			2 years 3 months 18 days
Restricted Stock Awards
Share-based Compensation Plans
Incremental compensation expense due to modification			$ 0
Stock options
Share-based Compensation Plans
Granted (in shares) | shares	105,000		270,846
Weighted average grant date fair value per option share | $ / shares	$ 2.84		$ 2.15
Unrecognized share-based compensation expense	$ 19,200		$ 19,200
Expected period to recognize the expense			3 years 7 months 6 days
Vested stock options
Share-based Compensation Plans
Incremental compensation expense due to modification			$ 300
Unvested stock options
Share-based Compensation Plans
Incremental compensation expense due to modification			7,500
Performance stock options
Share-based Compensation Plans
Unrecognized share-based compensation expense	$ 300		$ 300
Expected period to recognize the expense			3 years 9 months 18 days

Loss per share (Details)

Loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Numerator:
Net loss	$ (19,534)	$ (20,228)	$ (32,254)	$ (37,381)	$ (39,762)	$ (69,635)
Denominator:
Weighted average shares used in calculating net loss per share - basic and diluted	27,791,000		27,393,000		27,730,000	27,380,000
Net loss per share - basic and diluted	$ (0.70)		$ (1.18)		$ (1.43)	$ (2.54)
Common stock, shares outstanding	27,857,710			0	27,857,710		27,598,113
Stock options
Denominator:
Anti-dilutive securities excluded from the calculation of diluted loss per share	7,717,184				7,717,184
Restricted Stock Units
Denominator:
Anti-dilutive securities excluded from the calculation of diluted loss per share	474,923				474,923

Defined Contribution Plan (Deta

Defined Contribution Plan (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
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
Compensation expense related to the defined contribution 401(k) Savings Plan	$ 100,000	$ 100,000	$ 400,000	$ 500,000
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%

Workforce Reduction (Details)

Workforce Reduction (Details) $ in Thousands	Oct. 30, 2019USD ($)employee	Jun. 30, 2020USD ($)	Dec. 31, 2019USD ($)
Summary of accrued liabilities activity related to workforce reductions
Beginning of period		$ 2,009
Charges		158
Amount paid		2,085
Adjustments		(30)
End of period		52	$ 2,009
October 2019 Reduction
Summary of accrued liabilities activity related to workforce reductions
Beginning of period		2,009
Charges		158
Amount paid		2,085
Adjustments		(30)
End of period		52	2,009
Current workforce reductions | October 2019 Reduction
Workforce Reduction
Reduction in workforce, number of employees | employee	30
Restructuring Costs	$ 3,000
Severance and benefits costs		$ 200	$ 2,800

Subsequent Events (Details)

Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands	Jul. 29, 2020	Apr. 02, 2019	Jun. 30, 2019	Jun. 30, 2019
Subsequent Events
Gross proceeds from private placement				$ 175,000
Total amount raise			$ 164,622
Private Placement
Subsequent Events
Gross proceeds from private placement		$ 175,000
Number of shares issued in private placement		11,817,165
Subsequent Event | Private Placement
Subsequent Events
Gross proceeds from private placement	$ 24,300
Number of shares issued in private placement	6,062,500
Subsequent Event | Common Stock Purchase Agreement
Subsequent Events
Gross proceeds from private placement	$ 24,300
Purchase price	$ 4