Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 13, 2020 | Jun. 28, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | KRTX | ||
Entity Registrant Name | Karuna Therapeutics, Inc. | ||
Entity Central Index Key | 0001771917 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-38958 | ||
Entity Tax Identification Number | 27-0605902 | ||
Entity Address, Address Line One | 33 Arch Street | ||
Entity Address, Address Line Two | Suite 3110 | ||
Entity Address, City or Town | Boston | ||
Entity Address, State or Province | MA | ||
Entity Address, Postal Zip Code | 02110 | ||
City Area Code | 857 | ||
Local Phone Number | 449-2244 | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Common Stock, Shares Outstanding | 26,082,710 | ||
Entity Shell Company | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Interactive Data Current | Yes | ||
Title of 12(b) Security | Common Stock, $0.0001 Par Value | ||
Security Exchange Name | NASDAQ | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 197 | ||
Documents Incorporated by Reference | Portions of the registrant’s Proxy Statement for its 2020 Annual Meeting of Stockholders, which the registrant intends to file with the Securities and Exchange Commission not later than 120 days after the registrant’s fiscal year ended December 31, 2019, are incorporated by reference into Part III of this Annual Report on Form 10-K. |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 208,929,000 | $ 8,904,000 |
Short-term investments | 180,468,000 | 4,983,000 |
Prepaid expenses and other current assets | 3,309,000 | 1,709,000 |
Total current assets | 392,706,000 | 15,596,000 |
Restricted cash | 123,000 | 123,000 |
Property and equipment, net | 195,000 | 138,000 |
Total assets | 393,024,000 | 15,857,000 |
Current liabilities: | ||
Accounts payable (includes $51 and $112 at December 31, 2019 and 2018, respectively, due to related parties) | 547,000 | 269,000 |
Accrued expenses | 2,353,000 | 538,000 |
Deferred lease obligation, short term portion | 58,000 | |
Derivative liability | 0 | 389,000 |
Total current liabilities | 2,958,000 | 1,196,000 |
Non-current convertible notes, net of discount | 0 | 2,516,000 |
Deferred lease obligation, long term portion | 150,000 | 102,000 |
Total liabilities | 3,108,000 | 3,814,000 |
Commitments and Contingencies (Note 11) | ||
Redeemable convertible preferred stock, (Series Seed, A and B) $0.0001 par value; 0 and 7,539,200 shares authorized and outstanding at December 31, 2019 and 2018, respectively | 41,965,000 | |
Stockholders’ equity (deficit): | ||
Preferred stock, $0.0001 par value; 10,000,000 and 0 shares authorized as of December 31, 2019 and 2018, respectively; 0 shares outstanding at December 31, 2019 and 2018 | ||
Common stock, $0.0001 par value; 150,000,000 and 12,337,650 shares authorized at December 31, 2019 and 2018, respectively; 26,012,754 and 12 shares issued and outstanding at December 31, 2019 and 2018, respectively | 3,000 | |
Additional paid-in capital | 465,420,000 | 1,633,000 |
Accumulated deficit | (75,512,000) | (31,555,000) |
Accumulated other comprehensive income | 5,000 | |
Total stockholders’ equity (deficit) | 389,916,000 | (29,922,000) |
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit) | $ 393,024,000 | $ 15,857,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts payable to related party | $ 51 | $ 112 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 12,337,650 |
Common stock, shares issued | 26,012,754 | 12 |
Common stock, shares outstanding | 26,012,754 | 12 |
Series Seed, A and B Redeemable Convertible Preferred Stock | ||
Temporary Equity, par value | $ 0.0001 | $ 0.0001 |
Temporary Equity, shares authorized | 0 | 7,539,200 |
Temporary Equity, shares outstanding | 0 | 7,539,200 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating expenses: | ||
Research and development | $ 24,536 | $ 11,536 |
General and administrative | 20,869 | 2,974 |
Total operating expenses | 45,405 | 14,510 |
Loss from operations | (45,405) | (14,510) |
Other income (expense): | ||
Interest income (expense) (Note 5) | 11 | (407) |
Interest income | 2,517 | 25 |
Accretion of debt discount | (945) | (2,176) |
Change in fair value of derivative | (135) | (444) |
Total other income (expense), net | 1,448 | (3,002) |
Net loss before income taxes | (43,957) | (17,512) |
Income tax provision | 0 | 0 |
Net loss attributable to common stockholders | $ (43,957) | $ (17,512) |
Net loss per share, basic and diluted (Note 8) | $ (3.68) | $ (4,378,000) |
Weighted average common shares outstanding used in computing net loss per share, basic and diluted | 11,958,152 | 4 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net loss | $ (43,957) | $ (17,512) |
Other comprehensive income: | ||
Unrealized gains on short-term investments | 5 | |
Comprehensive loss | $ (43,952) | $ (17,512) |
CONSOLIDATED STATEMENTS OF REDE
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Initial Public Offering | Secondary Public Offering | Common Stock | Common StockInitial Public Offering | Common StockSecondary Public Offering | Additional Paid In Capital | Additional Paid In CapitalInitial Public Offering | Additional Paid In CapitalSecondary Public Offering | Accumulated Deficit | Accumulated Other Comprehensive Income | Series Seed, A and B Redeemable Convertible Preferred Stock |
Temporary Equity, beginning balance at Dec. 31, 2017 | $ 1 | |||||||||||
Temporary Equity, beginning balance, shares at Dec. 31, 2017 | 4,412,500 | |||||||||||
Beginning balance at Dec. 31, 2017 | $ (13,368) | $ 675 | $ (14,043) | |||||||||
Temporary Equity, Issuance of redeemable convertible preferred stock, net of issuance costs | $ 41,964 | |||||||||||
Temporary Equity, Issuance of redeemable convertible preferred stock, net of issuance costs, shares | 3,126,700 | |||||||||||
Stock-based compensation expense | 958 | 958 | ||||||||||
Exercise of common warrants, shares | 12 | |||||||||||
Net loss | (17,512) | (17,512) | ||||||||||
Temporary Equity, ending balance at Dec. 31, 2018 | 41,965 | $ 41,965 | ||||||||||
Temporary Equity, ending balance, shares at Dec. 31, 2018 | 7,539,200 | |||||||||||
Ending balance at Dec. 31, 2018 | (29,922) | 1,633 | (31,555) | |||||||||
Ending balance, shares at Dec. 31, 2018 | 12 | |||||||||||
Temporary Equity, Issuance of redeemable convertible preferred stock, net of issuance costs | $ 81,927 | |||||||||||
Temporary Equity, Issuance of redeemable convertible preferred stock, net of issuance costs, shares | 5,422,845 | |||||||||||
Issuance of common stock | $ 93,044 | $ 234,224 | $ 1 | $ 93,043 | $ 234,224 | |||||||
Issuance of common stock, shares | 6,414,842 | 2,600,000 | ||||||||||
Temporary Equity, Automatic conversion of preferred stock | $ (123,892) | |||||||||||
Temporary Equity, Automatic conversion of preferred stock, shares | (12,962,045) | |||||||||||
Automatic conversion of preferred stock | 123,892 | $ 2 | 123,890 | |||||||||
Automatic conversion of preferred stock, shares | 16,833,790 | |||||||||||
Stock-based compensation expense | 12,568 | 12,568 | ||||||||||
Exercise of common warrants | 58 | 58 | ||||||||||
Exercise of common warrants, shares | 19,986 | |||||||||||
Exercise of common options | $ 4 | 4 | ||||||||||
Exercise of common options, shares | 38,961 | 38,961 | ||||||||||
Vesting of restricted stock units, shares | 105,163 | |||||||||||
Other comprehensive income | $ 5 | $ 5 | ||||||||||
Net loss | (43,957) | (43,957) | ||||||||||
Temporary Equity, ending balance, shares at Dec. 31, 2019 | 0 | |||||||||||
Ending balance at Dec. 31, 2019 | $ 389,916 | $ 3 | $ 465,420 | $ (75,512) | $ 5 | |||||||
Ending balance, shares at Dec. 31, 2019 | 26,012,754 |
CONSOLIDATED STATEMENTS OF RE_2
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Initial Public Offering | ||
Underwriting discounts and commissions | $ 7,285 | |
Offering cost | 2,409 | |
Secondary Public Offering | ||
Underwriting discounts and commissions | 14,976 | |
Offering cost | 400 | |
Series A Redeemable Convertible Preferred Stock | ||
Issuance of redeemable convertible preferred stock, net of issuance costs | $ 120 | |
Series B Redeemable Convertible Preferred Stock | ||
Issuance of redeemable convertible preferred stock, net of issuance costs | $ 175 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | ||
Net loss | $ (43,957) | $ (17,512) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 12,568 | 958 |
Accretion of debt discount | 945 | 2,176 |
Non-cash interest income | (1,260) | |
Change in fair value of derivative liability | 135 | 444 |
Depreciation and amortization expense | 58 | 6 |
Non-cash interest (income) expense | (11) | 407 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (1,600) | (1,534) |
Accounts payable | 278 | (529) |
Accrued expenses | 1,815 | 105 |
Deferred lease obligation | 106 | 102 |
Net cash used in operating activities | (30,923) | (15,377) |
Cash flows from investing activities | ||
Purchases of short-term investments | (231,718) | (4,983) |
Sales of short-term investments | 7,498 | |
Maturities of short-term investments | 50,000 | |
Acquisition of property and equipment | (115) | (132) |
Net cash used in investing activities | (174,335) | (5,115) |
Cash flows from financing activities | ||
Proceeds from secondary public offering, net of underwriting discounts and commissions | 234,624 | |
Payment of secondary public offering costs | (400) | |
Proceeds from initial public offering, net of underwriting discounts and commissions | 95,453 | |
Payment of initial public offering costs | (2,409) | |
Proceeds from issuance of convertible notes | 3,128 | 11,700 |
Proceeds from exercise of warrant | 58 | |
Proceeds from exercise of stock options | 4 | |
Net cash provided by financing activities | 405,283 | 27,577 |
Net increase in cash, cash equivalents and restricted cash | 200,025 | 7,085 |
Cash, cash equivalents and restricted cash at beginning of period | 9,027 | 1,942 |
Cash, cash equivalents and restricted cash at end of period | 209,052 | 9,027 |
Supplemental disclosures of cash flows information | ||
Conversion of redeemable convertible preferred stock into common stock | 123,892 | |
Conversion of convertible notes, accrued interest and discount upon conversion to preferred stock | 7,102 | 26,087 |
Series B Redeemable Convertible Preferred Stock | ||
Cash flows from financing activities | ||
Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs | $ 74,825 | |
Series A Redeemable Convertible Preferred Stock | ||
Cash flows from financing activities | ||
Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs | $ 15,877 |
Nature of the Business
Nature of the Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of the Business | Note 1. Nature of the Business Karuna Therapeutics, Inc. (the “Company”) was incorporated under the laws of the State of Delaware in July 2009 as Karuna Pharmaceuticals, Inc. and is headquartered in Boston, Massachusetts. In March 2019, the Company changed its name to Karuna Therapeutics, Inc. The Company is focused on developing novel therapies with the potential to transform the lives of people with disabling and potentially fatal neuropsychiatric disorders and pain. Since the Company’s inception, it has focused substantially all of its efforts and financial resources on organizing and staffing the Company, acquiring and developing its technology, raising capital, building its intellectual property portfolio, undertaking preclinical studies and clinical trials and providing general and administrative support for these activities. The Company has not generated any product revenue related to its primary business purpose to date and is subject to a number of risks similar to those of other early stage companies, including dependence on key individuals, regulatory approval of products, uncertainty of market acceptance of products, competition from substitute products and larger companies, compliance with government regulations, protection of proprietary technology, dependence on third parties, product liability and the need to obtain adequate additional financing to fund the development of its product candidates. Forward Stock Split On June 14, 2019, the Company effected a one-for-1.2987 stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company’s redeemable convertible preferred stock (see Note 6). Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this stock split and adjustment of the redeemable convertible preferred stock conversion ratios. Initial Public Offering On June 27, 2019, the Company’s registration statement on Form S-1 relating to its initial public offering of its common stock (“IPO”) was declared effective by the Securities and Exchange Commission (“SEC”). In the IPO, which closed on July 2, 2019, the Company issued and sold 6,414,842 shares of common stock, including full exercise of the underwriters’ over-allotment option to purchase an additional 836,718 shares, at a public offering price of $16.00 per share. The aggregate net proceeds to the Company from the IPO, inclusive of proceeds from the over-allotment exercise, were approximately $93.0 million after deducting underwriting discounts and commissions of $7.2 million and offering expenses of $2.4 million. Upon closing of the IPO, all 12,962,045 shares of the Company’s redeemable convertible preferred stock then outstanding converted into an aggregate of 16,833,790 shares of common stock. Secondary Public Offering On November 20, 2019, the Company’s registration statement on Form S-1 relating to its secondary public offering of its common stock was declared effective by the SEC. In this offering, which closed on November 25, 2019, the Company issued and sold 2,600,000 shares of common stock at a public offering price of $96.00 per share. The aggregate net proceeds were approximately $234.2 million after deducting underwriting discounts and commissions of $15.0 million and offering expenses of $0.4 million. Liquidity The Company’s financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business. The Company experienced negative operating cash flows of $30.9 million for the year ended December 31, 2019 and had an accumulated deficit of $75.5 million as of December 31, 2019. The Company expects to continue to generate operating losses for the foreseeable future. The Company expects that its cash and cash equivalents and short-term investments of $389.4 million as of December 31, 2019 will be sufficient to fund its operating expenses and capital expenditure requirements through at least 12 months from the date of issuance of these consolidated financial statements. The future viability of the Company beyond that point is dependent on its ability to raise additional capital to fund its operations. If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate some or all of its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects, or the Company may be unable to continue operations. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company to fund continuing operations, if at all. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Presentation and Use of Estimates The accompanying consolidated The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated The consolidated financial statements include the accounts of Karuna Therapeutics, Inc. and its wholly owned subsidiary, Karuna Securities Corporation. All inter-company transactions and balances have been eliminated in consolidation. Cash and Cash Equivalents The Company considers all short-term, highly liquid investments with maturities of 90 days or less at acquisition date to be cash equivalents. Short-term Investments The Company’s short-term investments are classified as available-for-sale and are carried at fair value with the unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Realized gains and losses and declines in value judged to be other than temporary are included as a component of other income (expense), net based on the specific identification method. Concentration of Manufacturing Risk The Company is dependent on third-party manufacturers to supply products for research and development activities in its programs. In particular, the Company relies and expects to continue to rely on a small number of manufacturers to supply it with its requirements for the active pharmaceutical ingredients and formulated drugs related to these programs. These programs could be adversely affected by a significant interruption in the supply of active pharmaceutical ingredients and formulated drugs. Deferred Offering Costs The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders’ equity (deficit) as a reduction of additional paid-in capital generated as a result of the offering. Should the in-process equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the statements of operations. As of December 31, 2019 and 2018, there were no deferred offering costs outstanding. All deferred offering costs accumulated during 2019 and associated with the Company’s IPO and secondary public offering were recorded as a reduction of additional paid-in capital upon the close of the Company’s public offerings on July 2, 2019 and November 25, 2019, respectively. Fair Value of Financial Instruments The Company’s financial instruments consist of cash equivalents, short-term investments, accounts payable, accrued expenses, convertible notes and derivatives embedded within the convertible notes. The carrying amount of accounts payable, accrued expenses and convertible notes are considered a reasonable estimate of their fair value, due to the short-term maturity of these instruments. The Company’s cash equivalents, short-term investments and derivative liabilities are carried at fair value, determined according to the fair value hierarchy described below (see Note 10). The Company follows the guidance in FASB ASC 820, Fair Value Measurements and Disclosures Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2: Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3: Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company’s own assumptions reflect those that market participants would use in pricing the asset or liability at the measurement date. The Company uses prices and inputs that are current as of the measurement date, including during periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from Level 1 to Level 2 or Level 2 to Level 3. Convertible Notes and Derivative Liabilities In connection with the issuance of the Wellcome Trust Convertible Notes and the Convertible Notes (see Note 5), the Company had identified embedded derivatives, which were recorded as liabilities on the Company’s balance sheet and were remeasured to fair value at each reporting date until the derivative was settled. Changes in the fair value of the derivative liabilities were recognized as change in fair value of derivative in the statements of operations. The fair value of the derivative liabilities were determined at each period end using a with and without method, which assesses the likelihood and timing of events that would result in either a conversion or change-of-control feature being triggered, as well as changes in the market conditions. Upon issuance of the notes, each note was recorded at cost, net of the derivative liability. The discount on each note was amortized as interest expense to the date such note was expected to convert using the effective interest rate method and was reflected in the statements of operations as accretion of debt discount. The Company classified its derivative liabilities in the balance sheet as current or non-current based on its expectation of when the derivative will be settled, consistent with the assumptions used when determining the fair value of the derivative liabilities. In 2019, all notes were converted into redeemable convertible preferred stock and the associated derivative liabilities were settled in connection with the Company’s issuance of Series B redeemable convertible preferred stock. There were no convertible notes or derivative liabilities outstanding as of December 31, 2019. Redeemable Convertible Preferred Stock Prior to the IPO, the Company recorded all shares of redeemable convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The redeemable convertible preferred stock was recorded outside of permanent equity because upon the occurrence of certain deemed liquidation events, the majority of the holders could opt to redeem the shares at the liquidation preference and these events, including a merger, acquisition or sale of substantially all of the assets, was considered not solely within the Company’s control. Prior to the IPO, the Company had not adjusted the carrying values of the redeemable convertible preferred stock to its redemption value because it was uncertain whether or when a deemed liquidation event would occur. Upon closing of the IPO, all 12,962,045 shares of the Company’s redeemable convertible preferred stock then outstanding converted into an aggregate of 16,833,790 shares of common stock. Leases Leases are classified at their inception as either operating or capital leases based on the economic substance of the agreement. The Company recognizes rent expense for its operating leases, inclusive of rent escalation provisions and rent holidays, on a straight-line basis over the respective lease term. Additionally, the Company recognizes tenant improvement allowances under the operating leases as a deferred lease obligation and amortizes the tenant improvement allowances as a reduction to rent expense on a straight-line basis over the respective lease term. At December 31, 2019 and 2018, no capital leases were recorded in the balance sheets. Research and Development Costs Research and development costs are expensed as incurred. Research and development costs include salaries and bonuses, stock compensation, employee benefits, consulting costs and external contract research and development and manufacturing expenses. Upfront payments and milestone payments made for the licensing of technology are expensed as research and development in the period in which they are incurred. Advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed. Research Contract Costs and Accruals The Company accrues for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of preclinical studies and clinical trials, and contract manufacturing activities. The Company records the estimated costs of research and development activities based upon the estimated amount of services provided and includes these costs in accrued liabilities in the balance sheets and within research and development expense in the statements of operations. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the research studies or clinical trials and manufacturing activities, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates may be made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs. Stock-Based Compensation The Company measures all stock options and other stock-based awards to employees, directors and non-employees based on the fair value on the date of the grant and recognizes compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award. The Company has mainly issued stock options with service-based vesting conditions and records the expense for these awards using the straight-line method. The Company has also issued stock options with performance-based vesting conditions and records the expense for these awards at the time that the achievement of the performance becomes highly probable or complete. The Company recognizes adjustments to stock-based compensation expense for forfeitures as they occur. The Company classifies stock-based compensation expense in its statements of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipients’ service payments are classified. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company has historically been a private company and lacks company-specific historical and implied volatility information. Therefore, expected stock volatility has been calculated based on the historical volatility of a publicly traded set of peer companies. The Company expects to continue to use such methodology until such time as it has adequate historical data regarding the volatility of its own publicly traded stock price. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The fair value for each restricted common stock award is estimated on the date of grant based on the fair value of the Company’s common stock on that same date. Net Loss Per Share In July 2019, upon closing of the IPO, all outstanding shares of the Company’s redeemable convertible preferred stock automatically converted to common stock. Prior to this conversion, the Company followed the two-class method when computing net income (loss) per share, as the Company had issued shares that met the definition of participating securities. The two-class method determines net income (loss) per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted net income (loss) attributable to common stockholders is computed by adjusting income (loss) attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities, including outstanding stock options. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the diluted net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period, including potential dilutive common shares assuming the dilutive effect of outstanding stock options. Prior to the IPO, the Company’s outstanding redeemable convertible preferred stock contractually entitled the holders of such shares to participate in distributions but contractually did not require the holders of such shares to participate in losses of the Company. Accordingly, in periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss attributable to common stockholders for the years ended December 31, 2019 and 2018. Comprehensive Income (Loss) Comprehensive income (loss) includes net loss as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders. For the year ended December 31, 2019, the Company’s only element of other comprehensive income (loss) was unrealized gains on short-term investments. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) consolidated Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases Leases (Topic 842): Targeted Improvements Leases (Topic 842): Codification Improvements In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | Note 3. Property and Equipment, Net Property and equipment, net, consisted of the following (in thousands): December 31, 2019 December 31, 2018 Leasehold improvements $ 115 $ 106 Computer equipment 87 $ 8 Software 38 — Furniture and fixtures 10 — Office equipment 2 — Laboratory equipment — 31 Total property and equipment 252 145 Less: accumulated depreciation (57 ) (7 ) Property and equipment, net $ 195 $ 138 Depreciation expense was less than $0.1 million for the years ended December 31, 2019 and 2018. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets and Accrued Expenses | 12 Months Ended |
Dec. 31, 2019 | |
Prepaid Expenses And Other Current Assets And Accrued Expenses [Abstract] | |
Prepaid Expenses and Other Current Assets and Accrued Expenses | Note 4. Prepaid Expenses and Other Current Assets and Accrued Expenses Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2019 December 31, 2018 Prepaid insurance $ 2,130 $ 23 Prepaid research and development expenses 694 1,686 Other 485 — Total prepaid expenses and other current assets $ 3,309 $ 1,709 Accrued expenses consisted of the following (in thousands): December 31, 2019 December 31, 2018 Accrued payroll and related expenses $ 1,823 $ 311 Accrued research and development expenses 344 100 Professional fees 142 75 Other 44 52 Total accrued expenses $ 2,353 $ 538 |
Convertible Notes Payable
Convertible Notes Payable | 12 Months Ended |
Dec. 31, 2019 | |
Convertible Debt Disclosure [Abstract] | |
Convertible Notes Payable | Note 5. Convertible Notes Payable Wellcome Trust Convertible Notes In June 2018, the Company entered into a second Company Funding Agreement with Wellcome Trust to receive up to $8.0 million in gross proceeds from the issuance of a convertible note (the “2018 Convertible Note”). The Company received $2.0 million of proceeds in July 2018, $2.7 million in November 2018, $1.6 million in March 2019, and $1.6 million in April 2019. The 2018 Convertible Note had a stated interest rate of 2% per annum above the three-month Dollar LIBOR rate, which was not payable until settlement of the principal. The notes were subject to redemption upon written demand by Wellcome Trust any time after the fifth anniversary of the effective date, resulting in their classification as long-term liabilities as of December 31, 2018. The principal due under the 2018 Convertible Note converts into the class of the Company’s stock issued in the Company’s next qualified financing or upon event of default at a discounted conversion price between 0% and 25% of the purchase price per share of such securities issued. The accrued interest in such a circumstance would be forgiven. At inception, the Company concluded that the Wellcome Trust Notes contained a conversion option at a significant discount that was deemed to be an embedded derivative, which is required to be bifurcated and accounted for separately from the debt host. There were no debt issuance costs associated with the 2018 Convertible Note. The Company recognized the following changes in the debt related to the 2018 Convertible Note during the years ended December 31, 2019 and 2018 (in thousands): Financial statement impacted Balance, December 31, 2017 $ 3,985 Issuance of 2018 Convertible Note 2,000 Balance sheet Accretion to settlement value 51 Statement of operations Accrued interest 102 Statement of operations Interest forgiven upon conversion (289 ) Statement of operations Conversion of Wellcome Trust Convertible Notes to redeemable convertible preferred stock (5,849 ) Balance sheet Balance, August 1, 2018 (date of conversion) — Issuance of 2018 Convertible Note 2,700 Balance sheet Allocation of proceeds to derivative liability (375 ) Balance sheet Accretion to settlement value 180 Statement of operations Accrued interest 11 Statement of operations Balance, December 31, 2018 2,516 Issuance of 2018 Convertible Note 3,128 Balance sheet Allocation of proceeds to derivative liability (750 ) Balance sheet Accretion to settlement value 945 Statement of operations Accrued interest 29 Statement of operations Interest forgiven upon conversion (40 ) Statement of operations Conversion of Wellcome Trust Convertible Notes to redeemable convertible preferred stock (5,828 ) Balance sheet Balance, December 31, 2019 $ — Convertible Notes Since inception, the Company has issued $14.0 million of convertible notes (the “Convertible Notes”), of which $13.5 million were issued to PureTech Health LLC (“PureTech Health”), a related party (see Note 13). During the year ended December 31, 2018, the Company issued Convertible Notes to PureTech Health with principal totaling $7.0 million. There were no debt issuance costs associated with the Convertible Notes. The Company concluded that the Convertible Notes contained a conversion option at a significant premium that was deemed to be an embedded derivative, which is required to be bifurcated and accounted for separately from the debt host. In August 2018, the outstanding Convertible Notes were converted to Series A Preferred Stock. The Company recognized the following changes in the debt related to the Convertible Notes during the year ended December 31, 2018 (in thousands): Financial statement impacted Balance, December 31, 2017 $ 7,674 Issuance of new notes 7,000 Balance sheet Allocation of proceeds to derivative liability (1,418 ) Balance sheet Accretion to settlement value 1,945 Statement of operations Accrued interest 630 Statement of operations Interest forgiven upon conversion (47 ) Statement of operations Conversion of Convertible Notes to redeemable convertible preferred stock (15,784 ) Balance sheet Balance, December 31, 2018 $ — There were no Convertible Notes outstanding as of December 31, 2018 or issued during the year ended December 31, 2019. |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2019 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Convertible Preferred Stock | Note 6. Redeemable Convertible Preferred Stock Series Seed Redeemable Convertible Preferred Stock Between 2009 and 2011, the Company authorized and issued 4,412,500 shares of Series Seed Preferred Stock at an issuance price of $0.0001 per share, for total proceeds of less than $0.1 million. There were no issuance costs in connection with the Series Seed Preferred Stock issuance. Series A Redeemable Convertible Preferred Stock In August 2018, the Company authorized 3,126,700 shares of Series A Preferred Stock. The Company then issued 1,188,707 shares of Series A Preferred Stock at an issuance price of $13.46 per share resulting in gross proceeds of approximately $16.0 million. There were $0.1 million of issuance costs associated with the Series A Preferred Stock. In conjunction with the August 2018 issuance of Series A Preferred Stock, all outstanding principal and accrued interest under the Wellcome Trust Notes and Convertible Notes converted to 1,937,993 shares of Series A Preferred Stock. Series B Redeemable Convertible Preferred Stock In March 2019, the Company authorized 5,422,845 shares of Series B Preferred Stock. The Company then issued 4,953,758 shares of Series B Preferred Stock at an issuance price of $15.14 per share resulting in gross proceeds of approximately $75.0 million. There were $0.2 million of issuance costs associated with the Series B Preferred Stock. In conjunction with the March 2019 issuance of Series B Preferred Stock, all outstanding principal and accrued interest under the Wellcome Trust Notes converted to 331,344 shares of Series B Preferred Stock. In April 2019, the Company received $1.6 million from the issuance of the Wellcome Trust Notes, which were subsequently converted into 137,743 shares of Series B redeemable convertible preferred stock. Upon closing of the Company’s IPO, the then-outstanding shares of the Series Seed, Series A and Series B redeemable convertible preferred stock converted into common stock. As of December 31, 2019, there were no shares of redeemable convertible preferred stock authorized, issued or outstanding. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | Note 7. Stockholders’ Equity (Deficit) Preferred Stock On July 2, 2019, in connection with the closing of the Company’s IPO, the Company filed its restated Certificate of Incorporation, which authorizes the Company to issue up to 10,000,000 shares of preferred stock, $0.0001 par value per share. There are no shares of preferred stock outstanding as of December 31, 2019. Common Stock As of December 31, 2019, the Company’s Certificate of Incorporation authorized the Company to issue 150,000,000 shares of common stock, $0.0001 par value per share. Holders of the common stock are entitled to one vote for each share of common stock held at all meetings of stockholders and written actions in lieu of meetings. The holders of common stock shall be entitled to receive dividends out of funds legally available, as declared by the board of directors. These dividends are subject to the preferential dividend rights of the holders of the Company’s preferred stock. Through December 31, 2019 and 2018, no cash dividends have been declared or paid. Upon completion of the Company’s IPO on July 2, 2019, all outstanding shares of Series Seed, Series A, and Series B Redeemable Convertible Preferred Stock converted to common stock. As of December 31, 2019, there were 26,012,754 shares of common stock outstanding. |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Note 8. Net Loss per Share Net Loss per Share The following table sets forth the computation of basic and diluted net loss per share of common stock for the year ended December 31, 2019 (in thousands, except share and per share data): Year Ended December 31, 2019 2018 Net Loss $ (43,957 ) $ (17,512 ) Weighted-average shares used in computing net loss per share 11,958,152 4 Net loss per share, basic and diluted $ (3.68 ) $ (4,378,000 ) The Company’s potentially dilutive securities, which include stock options and convertible preferred stock, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. Prior to the IPO, the Company’s outstanding shares of Preferred Stock contractually entitled the holders of such shares to participate in distributions but contractually did not require the holders of such shares to participate in losses of the Company. Accordingly, these shares have not been included in the denominator used to calculate net loss per share. Common Stock Equivalents The following common stock equivalents presented based on amounts outstanding at each period end, have been excluded from the calculation of diluted net loss per share because including them would have had an anti-dilutive impact: December 31, 2019 2018 Redeemable convertible preferred stock (as converted to common stock) — 9,791,151 Stock options to purchase common stock 4,614,544 2,310,369 Warrants to purchase common stock — 19,986 4,614,544 12,121,506 |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-based Compensation | Note 9. Stock-based Compensation Stock Options In September 2009, the Company’s board of directors approved the 2009 Stock Incentive Plan (the “2009 Plan”) which provides for the grant of incentive In May 2019, the board of directors approved the 2019 Stock Option and Incentive Plan (the “2019 Plan”) which became effective on June 26, 2019, the date immediately prior to the date on which the registration statement related to the IPO was declared effective by the SEC. The 2019 Plan will expire in May 2029. Under the 2019 Plan, the Company may grant incentive stock options, non-statutory stock options, restricted stock awards, RSUs and other stock-based awards. There were 1,709,832 shares of the Company’s common stock initially reserved for issuance under the 2019 Plan. The number of shares of common stock underlying awards that expire, or are terminated, surrendered, canceled or forfeited without having been fully exercised under the 2009 Plan will be added to the shares of common stock available for issuance under the 2019 Plan. In addition, the number of shares available for issuance automatically increase on January 1, 2020 and each January 1 thereafter by 4% of the number of shares of common stock outstanding on the immediately preceding December 31, subject to limitation. As of December 31, 2019, there were 829,670 common shares available for issuance and 1,016,524 options outstanding under the 2019 Plan. Options under the 2019 Plan generally vest based on the grantee’s continued service with the Company during a specified period following a grant as determined by the board of directors and expire ten years from the grant date. In general, awards typically vest in four years, but vesting conditions can vary based on the discretion of the Company’s board of directors. A summary of the Company’s stock option activity and related information is as follows: Number of Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2018 2,310,369 $ 4.49 7.1 $ 6,420 Granted 2,633,146 12.03 Exercised (38,961 ) 0.11 Forfeited (290,010 ) 2.70 Outstanding as of December 31, 2019 4,614,544 $ 8.94 8.3 $ 306,395 Options vested and expected to vest as of December 31, 2019 4,614,544 $ 8.94 8.3 $ 306,395 Options exercisable as of December 31, 2019 3,123,519 $ 8.39 7.9 $ 209,130 The aggregate intrinsic values of options outstanding, exercisable, vested and expected to vest were calculated as the difference between the exercise price of the options and the publicly traded stock price of the Company’s common stock as of December 31, 2019. As of December 31, 2019, there was $6.0 million of unrecognized compensation cost, which is expected to be recognized over a weighted-average period of 2.6 years. The fair value of all option activity was estimated at the date of grant using the Black-Scholes model with the following assumptions: Year Ended December 31, 2019 Fair value of options $ 3.84 - 8.05 Fair value of common stock $ 9.20 - 20.02 Expected term (in years) 5.02 - 6.16 Expected volatility 43.54% - 48.22% Risk-free interest rate 1.59% - 2.44% Expected dividend yield 0.00 % On May 16, 2019, the Company issued 105,163 fully vested restricted common stock units. The average grant date fair value was $10.97 per share. As of December 31, 2019, there was no unrecognized compensation expense related to unvested RSUs. Warrants In October 2016, PureTech Health, a related party, agreed to provide management services to the Company in exchange for a warrant to purchase up to 19,998 shares of the Company’s common stock. The warrant vested monthly as services were performed over a 24-month period and had a purchase price of $2.92 per share. The total expense for the years ended December 31, 2019 and 2018 for the warrant was less than $0.1 million. The warrant was fully vested as of October 2018. There was no unrecognized compensation cost related to the warrants as of December 31, 2019 and 2018. In August 2018, PureTech Health exercised the warrant to purchase 12 shares resulting in a nominal amount of proceeds to the Company. In March 2019, PureTech Health exercised the warrant to purchase the remaining 19,986 shares resulting in proceeds to the Company of $0.1 million. There are no outstanding warrants as of December 31, 2019. Stock-based Compensation Expense Stock-based compensation expense is classified in the statements of operations for the years ended December 31, 2019 and 2018 as follows (in thousands): Year Ended December 31, 2019 2018 Research and development $ 580 $ 107 General and administrative 11,988 851 Total stock based compensation expense $ 12,568 $ 958 |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Abstract] | |
Fair Value of Financial Assets and Liabilities | Note 10. Fair Value of Financial Assets and Liabilities The following table presents information about the Company’s assets and liabilities as of December 31, 2019 and 2018 that are measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values (in thousands): Fair Value Measurement at December 31, 2019 Using Level 1 Level 2 Level 3 Total Assets: Cash equivalents (Money Market Fund) $ 197,303 $ — $ — $ 197,303 Short-term investments (US Treasuries) 180,468 — — 180,468 Total $ 377,771 $ — $ — $ 377,771 Fair Value Measurement at December 31, 2018 Using Level 1 Level 2 Level 3 Total Assets: Cash equivalents (US Treasuries) $ 5,042 $ — $ — $ 5,042 Short-term investments (US Treasuries) 4,983 — — 4,983 Total $ 10,025 $ — $ — $ 10,025 Liabilities: Derivative instrument $ — $ — $ 389 $ 389 Total $ — $ — $ 389 $ 389 During the years ended December 31, 2019 and 2018, there were no transfers between Level 1, Level 2 and Level 3. The estimated fair value and amortized cost of the Company’s short-term investments by contractual maturity are summarized as follows (in thousands): December 31, 2019 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Due in one year or less $ 180,463 $ 5 $ — $ 180,468 Total $ 180,463 $ 5 $ — $ 180,468 December 31, 2018 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Due in one year or less $ 4,984 $ — $ (1 ) $ 4,983 Total $ 4,984 $ — $ (1 ) $ 4,983 The derivative liability was considered a Level 3 liability because its fair value measurement was based, in part, on significant inputs not observed in the market. The Company determined the fair value of the liability as described in Note 5. Any reasonable changes in the assumptions used in the valuation could materially affect the financial results of the Company. The Company recognized the following changes in the fair value of derivative liabilities during the years ended December 31, 2019 and 2018 (in thousands): Balance, December 31, 2017 $ 2,606 Allocation of note issuance proceeds to derivative 1,418 Change in fair value of derivative 430 Conversion of convertible debt to Series A preferred stock (4,454 ) Balance, August 1, 2018 (date of conversion) — Allocation of note issuance proceeds to derivative 375 Change in fair value of derivative 14 Balance, December 31, 2018 389 Allocation of note issuance proceeds to derivative 750 Change in fair value of derivative 135 Conversion of convertible debt to Series B preferred stock (1,274 ) Balance, December 31, 2019 $ — |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11. Commitments and Contingencies Leases The Company entered into a 51-month lease for office space in Boston, Massachusetts that began in December 2018 and expires in February 2023. The Company is required to maintain a cash balance of $0.1 million to secure a letter of credit associated with this lease. The amount was classified as restricted cash in the consolidated balance sheets at December 31, 2019 and 2018. The Company recorded rent expense of $0.4 million and less than $0.1 million during the years ended December 31, 2019 and 2018, respectively. Future minimum lease payments under non-cancelable operating lease agreements as of December 31, 2019, are as follows (in thousands): As of December 31, Minimum Lease Payments 2020 $ 499 2021 506 2022 514 2023 86 2024 and thereafter — Total $ 1,605 Intellectual Property License with Eli Lilly and Company In May 2012, the Company entered into an exclusive license agreement (the “Lilly License Agreement”) with Eli Lilly, pursuant to which Eli Lilly assigned to us all of its rights to certain patents (now expired), regulatory documentation, data records and materials related to xanomeline. The Company is also entitled to sublicense or otherwise transfer the rights granted in connection with the Lilly License Agreement. Under the Lilly License Agreement, the Company is obligated to use commercially reasonable efforts to develop, manufacture, commercialize and seek and maintain regulatory approval for xanomeline, in any formulation, for use in humans. The Company paid Eli Lilly an upfront payment of $0.1 million and has agreed to make milestone payments to Eli Lilly of up to an aggregate of $16 million upon the achievement of specified regulatory milestones and up to an aggregate of $54 million in commercial milestones. In addition, the Company is obligated to pay Eli Lilly tiered royalties, at rates in the low to mid single-digit percentages, on the worldwide net sales of any commercialized product on a country-by-country basis until the expiration of the applicable royalty term, which is the longer of six years from the date of first commercial sale of each licensed product within a country or data exclusivity in such country. During the royalty term, Eli Lilly is prohibited from granting any third-party rights to the patents, regulatory documentation, data records and materials that have been licensed to us under the Lilly License Agreement. The Lilly License Agreement will expire on the later of (i) the expiration of the last-to-expire royalty term on a licensed product-by-licensed product basis or (ii) the date on which the Company has made all milestone payments pursuant to the terms of the Lilly License Agreement, unless terminated earlier by the parties. In no event will the term of the Lilly License Agreement exceed 15 years past the anniversary of the first commercial sale of a xanomeline product. The Company may terminate the Lilly License Agreement for any reason with proper prior notice to Eli Lilly. Either party may terminate the Lilly License Agreement upon an uncured material breach by the other party. The initial upfront payment of $0.1 million was expensed when incurred in May 2012. As of December 31, 2019, no milestones have been reached, and accordingly, no milestone payments have been made. Intellectual Property License with PureTech Health In March 2011, the Company entered into an exclusive license agreement (the “Patent License Agreement”) with PureTech Health, pursuant to which PureTech Health granted us an exclusive license to patent rights relating to combinations of a muscarinic activator with a muscarinic inhibitor for the treatment of central nervous system disorders. In connection with the Patent License Agreement, the Company has agreed to make milestone payments to PureTech Health of up to an aggregate of $10 million upon the achievement of specified development and regulatory milestones. In addition, the Company is obligated to pay PureTech Health low single-digit royalties on the worldwide net sales of any commercialized product covered by the licenses granted under the Patent License Agreement. In the event that the Company sublicenses any of the patent rights granted under the Patent License Agreement, the Company will be obligated to pay PureTech Health royalties within the range of 15% to 25% on any income we receive from the sublicensee, excluding royalties. The Company may terminate the Patent License Agreement for any reason with proper prior notice to PureTech Health. Either party may terminate the Patent License Agreement upon an uncured material breach by the other party. The Company incurred no expenses related to the Patent License provided by PureTech Health during the years ended December 31, 2019 and 2018. The Company had no outstanding liabilities to PureTech Health related to the Patent License at December 31, 2019 and 2018. Indemnification In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future but have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may incur charges in the future as a result of these indemnification obligations. Contingencies From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. Litigation The Company is not a party to any litigation and does not have contingency reserves established for any litigation liabilities as of December 31, 2019. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12. Income Taxes A reconciliation of the differences between the effective tax rates of the Company and the U.S. federal statutory tax rate are as follows: Year Ended December 31, 2019 2018 Statutory tax rate 21.0 % 21.0 % State taxes, net of federal benefit 6.7 % 5.0 % Share-based compensation 0.0 % -1.0 % Change in derivative liability -0.1 % -0.5 % Non-deductible interest expense -0.4 % -3.1 % Other 0.3 % 0.0 % Tax credits 4.9 % 3.0 % Change in valuation allowance -32.4 % -24.4 % Impact of 2018 tax rate changes on temporary differences 0.0 % 0.0 % Effective Income tax rate 0.0 % 0.0 % During the years ended December 31, 2019 and 2018, the Company recorded no income tax benefit for the net operating losses incurred or for the research and development tax credits generated in each year, due to the full valuation allowance maintained against the Company’s net deferred tax assets. Significant components of the Company’s deferred tax assets and liabilities at December 31, 2019 and December 31, 2018 are as follows: December 31, 2019 2018 Deferred tax assets: Operating tax losses 14,145 6,288 Tax Credit Carryforwards 3,028 537 Accrued expenses 580 134 Share-based compensation 3,613 166 Deferred tax assets 21,366 7,125 Valuation allowance (21,339 ) (7,122 ) Deferred tax liabilities: Depreciation (27 ) (3 ) Deferred tax liabilities (27 ) (3 ) Net Deferred Tax Asset / (Liability) - - Deferred income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amount used for income tax purposes. The Company applied the separate return method for allocation of current and deferred tax expense. As of August 1, 2018, PureTech no longer held 80% of the outstanding shares of the Company and therefore, beginning on this date, we filed a separate U.S. federal income tax return. As of July 2, 2019, PureTech no longer held 50% of the outstanding shares of the Company and therefore, beginning on this date, we will file separate state income tax returns. At December 31, 2019, on a separate return method, the Company has federal net operating loss carryforwards totaling $51.8 million of which $9.7 million begin to expire in 2029 and $42.1 million can be carried forward indefinitely. In addition, we had state net operating loss carryforwards totaling $51.6 million which begin to expire in 2030 ur net operating loss and tax credit carryforwards could, in whole or in part, expire unused and be unavailable to offset future income tax liabilities. Management has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, which are comprised principally of net operating loss carryforwards and tax credit carryforwards. Under the applicable accounting standards, management has considered the Company's history of losses and concluded that it is more likely than not that the Company will not recognize the benefits of deferred tax assets. Accordingly, a full valuation allowance has been established against the net deferred tax assets at December 31, 2019. The valuation allowance increased by $14.2 million during the year ended December 31, 2019 which primarily relates to the current year operating loss and tax credits generated. Under the provisions of the Internal Revenue Code, the net operating loss and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Net operating loss and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code, respectively, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has completed financings since its inception which may have resulted in a change in control as defined by Section 382 and 383 of the Internal Revenue Code, and it may complete future financings that could result in a change in control in the future which may limit the amount of tax attributes available to offset future tax liabilities. The Company accounts for uncertain tax positions pursuant to ASC 740 which prescribes a recognition threshold and measurement process for financial statement recognition of uncertain tax positions taken or expected to be taken in a tax return. If the tax position meets this threshold, the benefit to be recognized is measured as the tax benefit having the highest likelihood of being realized upon ultimate settlement with the taxing authority. As of December 31, 2019, the Company has not recorded any unrecognized tax benefits. The Company has not, as yet, completed a study of research and development tax credit carryforwards. This study may result in an adjustment to the Company’s research and development credit carryforwards; however, until a study is completed, and any adjustment is known, no amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against the Company’s research and development tax credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the balance sheets or statements of operations and comprehensive loss if an adjustment was required. The Company does not expect any material change in unrecognized tax benefits within the next twelve months. The Company’s policy is to record interest and penalties as a component of income tax expense. As of December 31, 2019, the Company has not accrued interest or penalties related to any uncertain tax positions. We are subject to taxation in the United States federal and certain state jurisdictions. The Company has incurred operating losses since inception, and therefore, the losses in all periods may be adjusted by taxing jurisdictions in future periods in which they are utilized. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 13. Related Party Transactions PureTech Health Management Consulting Services and Overhead Agreement The Company engages PureTech Health, a related party, to provide, among other things, management expertise, strategic advice, administrative support, computer and telecommunications services and office infrastructure. In exchange for providing such services, the Company pays PureTech Health a monthly fee. In addition, PureTech Health periodically invoices the Company for out-of-pocket expenses reasonably incurred in connection with providing such business services. The Company incurred general and administrative costs for management services provided by PureTech Health totaling less than $0.1 million and $0.2 million in the years ended December 31, 2019 and 2018, respectively. The Company had outstanding current liabilities to PureTech Health of less than $0.1 million at December 31, 2019 and 2018, which are recorded as accounts payable in the consolidated balance sheets. |
401(k) Savings Plan
401(k) Savings Plan | 12 Months Ended |
Dec. 31, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
401(k) Savings Plan | Note 14. 401(k) Savings Plan The Company has a 401(k) retirement plan in which substantially all U.S. employees are eligible to participate. Eligible employees may elect to contribute up to the maximum limits, as set by the Internal Revenue Service, of their eligible compensation. The total contribution matching expense for the Company was less than $0.1 million for each of the years ended December 31, 2019 and 2018. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 15. Subsequent Events In January 2020, the Company amended its current lease for office space in Boston, Massachusetts to acquire approximately 4,175 in additional square feet and to extend the original lease term through December 2023. Annual base rent under the amended lease is approximately $0.8 million and will be subject to annual increases in accordance with the terms of the lease agreement through 2023. In February 2020, the Company entered into an agreement to lease approximately 5,050 square feet of office space in Carmel, Indiana. The term of the lease will commence in June 2020 and expires in July 2023, with the option to renew for an additional three-year term. Annual base rent under the lease is approximately $0.2 million and is subject to annual increases in accordance with the terms of the lease agreement through July 2023. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates The accompanying consolidated The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated The consolidated financial statements include the accounts of Karuna Therapeutics, Inc. and its wholly owned subsidiary, Karuna Securities Corporation. All inter-company transactions and balances have been eliminated in consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term, highly liquid investments with maturities of 90 days or less at acquisition date to be cash equivalents. |
Short-term Investments | Short-term Investments The Company’s short-term investments are classified as available-for-sale and are carried at fair value with the unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Realized gains and losses and declines in value judged to be other than temporary are included as a component of other income (expense), net based on the specific identification method. |
Concentration of Manufacturing Risk | Concentration of Manufacturing Risk The Company is dependent on third-party manufacturers to supply products for research and development activities in its programs. In particular, the Company relies and expects to continue to rely on a small number of manufacturers to supply it with its requirements for the active pharmaceutical ingredients and formulated drugs related to these programs. These programs could be adversely affected by a significant interruption in the supply of active pharmaceutical ingredients and formulated drugs. |
Deferred Offering Costs | Deferred Offering Costs The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded in stockholders’ equity (deficit) as a reduction of additional paid-in capital generated as a result of the offering. Should the in-process equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the statements of operations. As of December 31, 2019 and 2018, there were no deferred offering costs outstanding. All deferred offering costs accumulated during 2019 and associated with the Company’s IPO and secondary public offering were recorded as a reduction of additional paid-in capital upon the close of the Company’s public offerings on July 2, 2019 and November 25, 2019, respectively. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist of cash equivalents, short-term investments, accounts payable, accrued expenses, convertible notes and derivatives embedded within the convertible notes. The carrying amount of accounts payable, accrued expenses and convertible notes are considered a reasonable estimate of their fair value, due to the short-term maturity of these instruments. The Company’s cash equivalents, short-term investments and derivative liabilities are carried at fair value, determined according to the fair value hierarchy described below (see Note 10). The Company follows the guidance in FASB ASC 820, Fair Value Measurements and Disclosures Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2: Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3: Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company’s own assumptions reflect those that market participants would use in pricing the asset or liability at the measurement date. The Company uses prices and inputs that are current as of the measurement date, including during periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from Level 1 to Level 2 or Level 2 to Level 3. |
Convertible Notes and Derivative Liabilities | Convertible Notes and Derivative Liabilities In connection with the issuance of the Wellcome Trust Convertible Notes and the Convertible Notes (see Note 5), the Company had identified embedded derivatives, which were recorded as liabilities on the Company’s balance sheet and were remeasured to fair value at each reporting date until the derivative was settled. Changes in the fair value of the derivative liabilities were recognized as change in fair value of derivative in the statements of operations. The fair value of the derivative liabilities were determined at each period end using a with and without method, which assesses the likelihood and timing of events that would result in either a conversion or change-of-control feature being triggered, as well as changes in the market conditions. Upon issuance of the notes, each note was recorded at cost, net of the derivative liability. The discount on each note was amortized as interest expense to the date such note was expected to convert using the effective interest rate method and was reflected in the statements of operations as accretion of debt discount. The Company classified its derivative liabilities in the balance sheet as current or non-current based on its expectation of when the derivative will be settled, consistent with the assumptions used when determining the fair value of the derivative liabilities. In 2019, all notes were converted into redeemable convertible preferred stock and the associated derivative liabilities were settled in connection with the Company’s issuance of Series B redeemable convertible preferred stock. There were no convertible notes or derivative liabilities outstanding as of December 31, 2019. |
Redeemable Convertible Preferred Stock | Redeemable Convertible Preferred Stock Prior to the IPO, the Company recorded all shares of redeemable convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The redeemable convertible preferred stock was recorded outside of permanent equity because upon the occurrence of certain deemed liquidation events, the majority of the holders could opt to redeem the shares at the liquidation preference and these events, including a merger, acquisition or sale of substantially all of the assets, was considered not solely within the Company’s control. Prior to the IPO, the Company had not adjusted the carrying values of the redeemable convertible preferred stock to its redemption value because it was uncertain whether or when a deemed liquidation event would occur. Upon closing of the IPO, all 12,962,045 shares of the Company’s redeemable convertible preferred stock then outstanding converted into an aggregate of 16,833,790 shares of common stock. |
Leases | Leases Leases are classified at their inception as either operating or capital leases based on the economic substance of the agreement. The Company recognizes rent expense for its operating leases, inclusive of rent escalation provisions and rent holidays, on a straight-line basis over the respective lease term. Additionally, the Company recognizes tenant improvement allowances under the operating leases as a deferred lease obligation and amortizes the tenant improvement allowances as a reduction to rent expense on a straight-line basis over the respective lease term. At December 31, 2019 and 2018, no capital leases were recorded in the balance sheets. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. Research and development costs include salaries and bonuses, stock compensation, employee benefits, consulting costs and external contract research and development and manufacturing expenses. Upfront payments and milestone payments made for the licensing of technology are expensed as research and development in the period in which they are incurred. Advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. The prepaid amounts are expensed as the related goods are delivered or the services are performed. |
Research Contract Costs and Accruals | Research Contract Costs and Accruals The Company accrues for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of preclinical studies and clinical trials, and contract manufacturing activities. The Company records the estimated costs of research and development activities based upon the estimated amount of services provided and includes these costs in accrued liabilities in the balance sheets and within research and development expense in the statements of operations. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the research studies or clinical trials and manufacturing activities, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates may be made in determining the accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. The Company’s historical accrual estimates have not been materially different from the actual costs. |
Share-Based Compensation | Stock-Based Compensation The Company measures all stock options and other stock-based awards to employees, directors and non-employees based on the fair value on the date of the grant and recognizes compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award. The Company has mainly issued stock options with service-based vesting conditions and records the expense for these awards using the straight-line method. The Company has also issued stock options with performance-based vesting conditions and records the expense for these awards at the time that the achievement of the performance becomes highly probable or complete. The Company recognizes adjustments to stock-based compensation expense for forfeitures as they occur. The Company classifies stock-based compensation expense in its statements of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipients’ service payments are classified. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company has historically been a private company and lacks company-specific historical and implied volatility information. Therefore, expected stock volatility has been calculated based on the historical volatility of a publicly traded set of peer companies. The Company expects to continue to use such methodology until such time as it has adequate historical data regarding the volatility of its own publicly traded stock price. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The fair value for each restricted common stock award is estimated on the date of grant based on the fair value of the Company’s common stock on that same date. |
Net Loss Per Share | Net Loss Per Share In July 2019, upon closing of the IPO, all outstanding shares of the Company’s redeemable convertible preferred stock automatically converted to common stock. Prior to this conversion, the Company followed the two-class method when computing net income (loss) per share, as the Company had issued shares that met the definition of participating securities. The two-class method determines net income (loss) per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted net income (loss) attributable to common stockholders is computed by adjusting income (loss) attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities, including outstanding stock options. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the diluted net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding for the period, including potential dilutive common shares assuming the dilutive effect of outstanding stock options. Prior to the IPO, the Company’s outstanding redeemable convertible preferred stock contractually entitled the holders of such shares to participate in distributions but contractually did not require the holders of such shares to participate in losses of the Company. Accordingly, in periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. The Company reported a net loss attributable to common stockholders for the years ended December 31, 2019 and 2018. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) includes net loss as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders. For the year ended December 31, 2019, the Company’s only element of other comprehensive income (loss) was unrealized gains on short-term investments. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) consolidated Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases Leases (Topic 842): Targeted Improvements Leases (Topic 842): Codification Improvements In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property Plant And Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment, net, consisted of the following (in thousands): December 31, 2019 December 31, 2018 Leasehold improvements $ 115 $ 106 Computer equipment 87 $ 8 Software 38 — Furniture and fixtures 10 — Office equipment 2 — Laboratory equipment — 31 Total property and equipment 252 145 Less: accumulated depreciation (57 ) (7 ) Property and equipment, net $ 195 $ 138 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Prepaid Expenses And Other Current Assets And Accrued Expenses [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2019 December 31, 2018 Prepaid insurance $ 2,130 $ 23 Prepaid research and development expenses 694 1,686 Other 485 — Total prepaid expenses and other current assets $ 3,309 $ 1,709 |
Schedule of Accrued Expenses | Accrued expenses consisted of the following (in thousands): December 31, 2019 December 31, 2018 Accrued payroll and related expenses $ 1,823 $ 311 Accrued research and development expenses 344 100 Professional fees 142 75 Other 44 52 Total accrued expenses $ 2,353 $ 538 |
Convertible Notes Payable (Tabl
Convertible Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Convertible Notes Payable [Line Items] | |
Schedule of Changes in Convertible Debt | The Company recognized the following changes in the debt related to the Convertible Notes during the year ended December 31, 2018 (in thousands): Financial statement impacted Balance, December 31, 2017 $ 7,674 Issuance of new notes 7,000 Balance sheet Allocation of proceeds to derivative liability (1,418 ) Balance sheet Accretion to settlement value 1,945 Statement of operations Accrued interest 630 Statement of operations Interest forgiven upon conversion (47 ) Statement of operations Conversion of Convertible Notes to redeemable convertible preferred stock (15,784 ) Balance sheet Balance, December 31, 2018 $ — |
2018 Convertible Note | |
Convertible Notes Payable [Line Items] | |
Schedule of Changes in Convertible Debt | The Company recognized the following changes in the debt related to the 2018 Convertible Note during the years ended December 31, 2019 and 2018 (in thousands): Financial statement impacted Balance, December 31, 2017 $ 3,985 Issuance of 2018 Convertible Note 2,000 Balance sheet Accretion to settlement value 51 Statement of operations Accrued interest 102 Statement of operations Interest forgiven upon conversion (289 ) Statement of operations Conversion of Wellcome Trust Convertible Notes to redeemable convertible preferred stock (5,849 ) Balance sheet Balance, August 1, 2018 (date of conversion) — Issuance of 2018 Convertible Note 2,700 Balance sheet Allocation of proceeds to derivative liability (375 ) Balance sheet Accretion to settlement value 180 Statement of operations Accrued interest 11 Statement of operations Balance, December 31, 2018 2,516 Issuance of 2018 Convertible Note 3,128 Balance sheet Allocation of proceeds to derivative liability (750 ) Balance sheet Accretion to settlement value 945 Statement of operations Accrued interest 29 Statement of operations Interest forgiven upon conversion (40 ) Statement of operations Conversion of Wellcome Trust Convertible Notes to redeemable convertible preferred stock (5,828 ) Balance sheet Balance, December 31, 2019 $ — |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Loss Per Share of Common Stock | The following table sets forth the computation of basic and diluted net loss per share of common stock for the year ended December 31, 2019 (in thousands, except share and per share data): Year Ended December 31, 2019 2018 Net Loss $ (43,957 ) $ (17,512 ) Weighted-average shares used in computing net loss per share 11,958,152 4 Net loss per share, basic and diluted $ (3.68 ) $ (4,378,000 ) |
Schedule of Anti-Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share | The following common stock equivalents presented based on amounts outstanding at each period end, have been excluded from the calculation of diluted net loss per share because including them would have had an anti-dilutive impact: December 31, 2019 2018 Redeemable convertible preferred stock (as converted to common stock) — 9,791,151 Stock options to purchase common stock 4,614,544 2,310,369 Warrants to purchase common stock — 19,986 4,614,544 12,121,506 |
Stock-based Compensation (Tabl
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Option Activity | A summary of the Company’s stock option activity and related information is as follows: Number of Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2018 2,310,369 $ 4.49 7.1 $ 6,420 Granted 2,633,146 12.03 Exercised (38,961 ) 0.11 Forfeited (290,010 ) 2.70 Outstanding as of December 31, 2019 4,614,544 $ 8.94 8.3 $ 306,395 Options vested and expected to vest as of December 31, 2019 4,614,544 $ 8.94 8.3 $ 306,395 Options exercisable as of December 31, 2019 3,123,519 $ 8.39 7.9 $ 209,130 |
Summary of Fair Value of Option Activity Estimated at Date of Grant Using Black-Scholes Model | The fair value of all option activity was estimated at the date of grant using the Black-Scholes model with the following assumptions: Year Ended December 31, 2019 Fair value of options $ 3.84 - 8.05 Fair value of common stock $ 9.20 - 20.02 Expected term (in years) 5.02 - 6.16 Expected volatility 43.54% - 48.22% Risk-free interest rate 1.59% - 2.44% Expected dividend yield 0.00 % |
Summary of Stock-based Compensation Expense | Stock-based compensation expense is classified in the statements of operations for the years ended December 31, 2019 and 2018 as follows (in thousands): Year Ended December 31, 2019 2018 Research and development $ 580 $ 107 General and administrative 11,988 851 Total stock based compensation expense $ 12,568 $ 958 |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Abstract] | |
Schedule of Fair Value Measurement on Recurring Basis and Indicates the level of Fair Value Hierarchy Utilized | The following table presents information about the Company’s assets and liabilities as of December 31, 2019 and 2018 that are measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values (in thousands): Fair Value Measurement at December 31, 2019 Using Level 1 Level 2 Level 3 Total Assets: Cash equivalents (Money Market Fund) $ 197,303 $ — $ — $ 197,303 Short-term investments (US Treasuries) 180,468 — — 180,468 Total $ 377,771 $ — $ — $ 377,771 Fair Value Measurement at December 31, 2018 Using Level 1 Level 2 Level 3 Total Assets: Cash equivalents (US Treasuries) $ 5,042 $ — $ — $ 5,042 Short-term investments (US Treasuries) 4,983 — — 4,983 Total $ 10,025 $ — $ — $ 10,025 Liabilities: Derivative instrument $ — $ — $ 389 $ 389 Total $ — $ — $ 389 $ 389 |
Summary of Estimated Fair Value and Amortized Cost of Short term Investments by Contractual Maturity | The estimated fair value and amortized cost of the Company’s short-term investments by contractual maturity are summarized as follows (in thousands): December 31, 2019 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Due in one year or less $ 180,463 $ 5 $ — $ 180,468 Total $ 180,463 $ 5 $ — $ 180,468 December 31, 2018 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Due in one year or less $ 4,984 $ — $ (1 ) $ 4,983 Total $ 4,984 $ — $ (1 ) $ 4,983 |
Schedule of Changes in Fair Value Derivative Liabilities | The derivative liability was considered a Level 3 liability because its fair value measurement was based, in part, on significant inputs not observed in the market. The Company determined the fair value of the liability as described in Note 5. Any reasonable changes in the assumptions used in the valuation could materially affect the financial results of the Company. The Company recognized the following changes in the fair value of derivative liabilities during the years ended December 31, 2019 and 2018 (in thousands): Balance, December 31, 2017 $ 2,606 Allocation of note issuance proceeds to derivative 1,418 Change in fair value of derivative 430 Conversion of convertible debt to Series A preferred stock (4,454 ) Balance, August 1, 2018 (date of conversion) — Allocation of note issuance proceeds to derivative 375 Change in fair value of derivative 14 Balance, December 31, 2018 389 Allocation of note issuance proceeds to derivative 750 Change in fair value of derivative 135 Conversion of convertible debt to Series B preferred stock (1,274 ) Balance, December 31, 2019 $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments Under Non-Cancelable Operating Lease Agreements | Future minimum lease payments under non-cancelable operating lease agreements as of December 31, 2019, are as follows (in thousands): As of December 31, Minimum Lease Payments 2020 $ 499 2021 506 2022 514 2023 86 2024 and thereafter — Total $ 1,605 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconciliation of Effective Tax Rate and Federal Statutory Tax Rate | A reconciliation of the differences between the effective tax rates of the Company and the U.S. federal statutory tax rate are as follows: Year Ended December 31, 2019 2018 Statutory tax rate 21.0 % 21.0 % State taxes, net of federal benefit 6.7 % 5.0 % Share-based compensation 0.0 % -1.0 % Change in derivative liability -0.1 % -0.5 % Non-deductible interest expense -0.4 % -3.1 % Other 0.3 % 0.0 % Tax credits 4.9 % 3.0 % Change in valuation allowance -32.4 % -24.4 % Impact of 2018 tax rate changes on temporary differences 0.0 % 0.0 % Effective Income tax rate 0.0 % 0.0 % |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities at December 31, 2019 and December 31, 2018 are as follows: December 31, 2019 2018 Deferred tax assets: Operating tax losses 14,145 6,288 Tax Credit Carryforwards 3,028 537 Accrued expenses 580 134 Share-based compensation 3,613 166 Deferred tax assets 21,366 7,125 Valuation allowance (21,339 ) (7,122 ) Deferred tax liabilities: Depreciation (27 ) (3 ) Deferred tax liabilities (27 ) (3 ) Net Deferred Tax Asset / (Liability) - - |
Nature of the Business - Additi
Nature of the Business - Additional Information (Details) $ / shares in Units, $ in Thousands | Nov. 25, 2019USD ($)$ / sharesshares | Jul. 02, 2019USD ($)$ / sharesshares | Jun. 14, 2019 | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($) |
Subsidiary Sale Of Stock [Line Items] | |||||
Stock split ratio, description | one-for-1.2987 | ||||
Stock split, conversion ratio | 1.2987 | ||||
Offering expenses related to initial public offering | $ 2,409 | ||||
Offering expenses related to secondary public offering | 400 | ||||
Cash flows from operating activities | 30,923 | $ 15,377 | |||
Accumulated deficit | 75,512 | $ 31,555 | |||
Cash and cash equivalents and short-term | $ 389,400 | ||||
Redeemable Convertible Preferred Stock | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Temporary Equity, shares outstanding | shares | 12,962,045 | ||||
Redeemable Convertible Preferred Stock | Common Stock | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Conversion of stock, shares issued | shares | 16,833,790 | ||||
Initial Public Offering | Common Stock | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Shares issued and sold | shares | 6,414,842 | 6,414,842 | |||
Public offering price pre share | $ / shares | $ 16 | ||||
Net proceeds from initial public offering | $ 93,000 | ||||
Underwriting discounts and commissions | 7,200 | ||||
Offering expenses related to initial public offering | $ 2,400 | ||||
'Underwriters' Over-Allotment Option | Common Stock | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Shares issued and sold | shares | 836,718 | ||||
Secondary Public Offering | Common Stock | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Shares issued and sold | shares | 2,600,000 | 2,600,000 | |||
Public offering price pre share | $ / shares | $ 96 | ||||
Underwriting discounts and commissions | $ 15,000 | ||||
Net proceeds from secondary public offering | 234,200 | ||||
Offering expenses related to secondary public offering | $ 400 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | Jul. 02, 2019 | Jan. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Summary Of Significant Accounting Policies [Line Items] | ||||
Convertible notes outstanding | $ 0 | $ 2,516,000 | ||
Derivative liabilities outstanding | 0 | 389,000 | ||
Capital leases | 0 | 0 | ||
ASU 2016-02 | Subsequent Event | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Total lease liabilities | $ 1,500,000 | |||
Total right-of-use assets | $ 1,200,000 | |||
Redeemable Convertible Preferred Stock | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Temporary Equity, shares outstanding | 12,962,045 | |||
Redeemable Convertible Preferred Stock | Common Stock | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Conversion of stock, shares issued | 16,833,790 | |||
Initial Public Offering | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Deferred offering costs | $ 0 | $ 0 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 252 | $ 145 |
Less: accumulated depreciation | (57) | (7) |
Property and equipment, net | 195 | 138 |
Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 115 | 106 |
Computer Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 87 | 8 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 38 | |
Furniture and Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 10 | |
Office Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2 | |
Laboratory Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 31 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | ||
Depreciation expense | $ 0.1 | $ 0.1 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets and Accrued Expenses - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | ||
Prepaid insurance | $ 2,130 | $ 23 |
Prepaid research and development expenses | 694 | 1,686 |
Other | 485 | |
Total prepaid expenses and other current assets | $ 3,309 | $ 1,709 |
Prepaid Expenses and Other Cu_4
Prepaid Expenses and Other Current Assets and Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Payables And Accruals [Abstract] | ||
Accrued payroll and related expenses | $ 1,823 | $ 311 |
Accrued research and development expenses | 344 | 100 |
Professional fees | 142 | 75 |
Other | 44 | 52 |
Total accrued expenses | $ 2,353 | $ 538 |
Convertible Notes Payable - Add
Convertible Notes Payable - Additional Information (Details) - USD ($) | 1 Months Ended | 5 Months Ended | 7 Months Ended | 12 Months Ended | 126 Months Ended | |||||
Apr. 30, 2019 | Mar. 31, 2019 | Nov. 30, 2018 | Jul. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | Jul. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||||||||||
Proceeds from issuance of convertible notes | $ 3,128,000 | $ 11,700,000 | ||||||||
2018 Convertible Note | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Gross proceeds from the issuance of a convertible note | $ 2,700,000 | $ 2,000,000 | $ 3,128,000 | |||||||
Interest on unpaid principal balance of convertible notes | 2.00% | 2.00% | ||||||||
Debt issuance cost | $ 0 | $ 0 | ||||||||
2018 Convertible Note | Wellcome Trust | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Gross proceeds from the issuance of a convertible note | $ 1,600,000 | $ 1,600,000 | $ 2,700,000 | $ 2,000,000 | ||||||
Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from issuance of convertible notes | $ 0 | 7,000,000 | 14,000,000 | |||||||
Convertible notes outstanding | 0 | 0 | ||||||||
Convertible Notes | PureTech Health | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt issuance cost | $ 0 | 0 | ||||||||
Proceeds from issuance of convertible notes | $ 7,000,000 | $ 13,500,000 | ||||||||
Maximum | 2018 Convertible Note | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of debt discount conversion price | 25.00% | |||||||||
Maximum | 2018 Convertible Note | Wellcome Trust | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Gross proceeds from the issuance of a convertible note | $ 8,000,000 | |||||||||
Minimum | 2018 Convertible Note | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Percentage of debt discount conversion price | 0.00% |
Convertible Notes Payable - Sch
Convertible Notes Payable - Schedule of Changes in Convertible Debt (Details) - USD ($) | 5 Months Ended | 7 Months Ended | 12 Months Ended | 126 Months Ended | |
Dec. 31, 2018 | Jul. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||||
Beginning balance | $ 2,516,000 | ||||
Issuance of new notes | 3,128,000 | $ 11,700,000 | |||
Conversion of Wellcome Trust Convertible Notes to redeemable convertible preferred stock | (7,102,000) | (26,087,000) | |||
Ending balance | $ 2,516,000 | 0 | 2,516,000 | $ 0 | |
2018 Convertible Note | |||||
Debt Instrument [Line Items] | |||||
Beginning balance | $ 3,985,000 | 2,516,000 | 3,985,000 | ||
Issuance of 2018 Convertible Note | 2,700,000 | 2,000,000 | 3,128,000 | ||
Allocation of proceeds to derivative liability | (375,000) | (750,000) | |||
Accretion to settlement value | 180,000 | 51,000 | 945,000 | ||
Accrued interest | 11,000 | 102,000 | 29,000 | ||
Interest forgiven upon conversion | (289,000) | (40,000) | |||
Conversion of Wellcome Trust Convertible Notes to redeemable convertible preferred stock | (5,849,000) | (5,828,000) | |||
Ending balance | $ 2,516,000 | 2,516,000 | |||
Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Beginning balance | $ 7,674,000 | 7,674,000 | |||
Issuance of new notes | $ 0 | 7,000,000 | $ 14,000,000 | ||
Allocation of proceeds to derivative liability | (1,418,000) | ||||
Accretion to settlement value | 1,945,000 | ||||
Accrued interest | 630,000 | ||||
Interest forgiven upon conversion | (47,000) | ||||
Conversion of Wellcome Trust Convertible Notes to redeemable convertible preferred stock | $ (15,784,000) |
Redeemable Convertible Prefer_2
Redeemable Convertible Preferred Stock - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | 36 Months Ended | ||||
Apr. 30, 2019 | Mar. 31, 2019 | Aug. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2011 | Dec. 31, 2017 | |
Temporary Equity [Line Items] | |||||||
Payments of stock issuance costs | $ 2,409,000 | ||||||
Proceeds from issuance of convertible notes | $ 3,128,000 | $ 11,700,000 | |||||
Wellcome Trust Notes | |||||||
Temporary Equity [Line Items] | |||||||
Proceeds from issuance of convertible notes | $ 1,600,000 | ||||||
Series Seed Redeemable Convertible Preferred Stock | |||||||
Temporary Equity [Line Items] | |||||||
Redeemable convertible preferred stock, shares authorized | 4,412,500 | ||||||
Redeemable convertible preferred stock, shares issued | 4,412,500 | ||||||
Stock issuance price per share | $ 0.0001 | ||||||
Payments of stock issuance costs | $ 0 | ||||||
Series Seed Redeemable Convertible Preferred Stock | Maximum | |||||||
Temporary Equity [Line Items] | |||||||
Proceeds from issuance of redeemable convertible preferred stock | $ 100,000 | ||||||
Series A Redeemable Convertible Preferred Stock | |||||||
Temporary Equity [Line Items] | |||||||
Redeemable convertible preferred stock, shares authorized | 3,126,700 | ||||||
Redeemable convertible preferred stock, shares issued | 1,188,707 | ||||||
Stock issuance price per share | $ 13.46 | ||||||
Proceeds from issuance of redeemable convertible preferred stock | $ 16,000,000 | ||||||
Payments of stock issuance costs | $ 100,000 | ||||||
Number of shares issued upon conversion of debt | 1,937,993 | ||||||
Series B Redeemable Convertible Preferred Stock | |||||||
Temporary Equity [Line Items] | |||||||
Redeemable convertible preferred stock, shares authorized | 5,422,845 | ||||||
Redeemable convertible preferred stock, shares issued | 4,953,758 | ||||||
Stock issuance price per share | $ 15.14 | ||||||
Proceeds from issuance of redeemable convertible preferred stock | $ 75,000,000 | ||||||
Payments of stock issuance costs | $ 200,000 | ||||||
Number of shares issued upon conversion of debt | 137,743 | 331,344 | |||||
Series Seed, Series A and Series B Redeemable Convertible Preferred Stock | |||||||
Temporary Equity [Line Items] | |||||||
Redeemable convertible preferred stock, shares authorized | 0 | 7,539,200 | |||||
Redeemable convertible preferred stock, shares issued | 0 | ||||||
Redeemable convertible preferred stock, shares outstanding | 0 | 7,539,200 | 4,412,500 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Jul. 02, 2019 | |
Class Of Stock [Line Items] | |||
Preferred stock, shares authorized | 10,000,000 | 0 | |
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |
Preferred stock, shares outstanding | 0 | 0 | |
Common stock, shares authorized | 150,000,000 | 12,337,650 | |
Common stock, par value | $ 0.0001 | $ 0.0001 | |
Dividends declared | $ 0 | $ 0 | |
Common stock, shares outstanding | 26,012,754 | 12 | |
Initial Public Offering | |||
Class Of Stock [Line Items] | |||
Preferred stock, shares authorized | 10,000,000 | ||
Preferred stock, par value | $ 0.0001 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Computation of Basic and Diluted Net Loss Per Share of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share Basic And Diluted [Abstract] | ||
Net Loss | $ (43,957) | $ (17,512) |
Weighted average common shares outstanding used in computing net loss per share, basic and diluted | 11,958,152 | 4 |
Net loss per share, basic and diluted | $ (3.68) | $ (4,378,000) |
Net Loss Per Share - Schedule_2
Net Loss Per Share - Schedule of Anti-Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earnings per share, amount | 4,614,544 | 12,121,506 |
Redeemable convertible preferred stock (as converted to common stock) | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earnings per share, amount | 9,791,151 | |
Stock Options to Purchase Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earnings per share, amount | 4,614,544 | 2,310,369 |
Warrants to Purchase Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earnings per share, amount | 0 | 19,986 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Details) - USD ($) | May 16, 2019 | Mar. 31, 2019 | Aug. 31, 2018 | Oct. 31, 2016 | Sep. 30, 2009 | Dec. 31, 2019 | Dec. 31, 2018 | May 30, 2019 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Number of shares outstanding | 4,614,544 | 2,310,369 | ||||||
Unrecognized compensation cost | $ 6,000,000 | |||||||
Unrecognized compensation costs, weighted average recognition period | 2 years 7 months 6 days | |||||||
Proceeds from exercise of warrant | $ 58,000 | |||||||
PureTech Health | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Exchange for a warrant to purchase shares of common stock | 19,998 | |||||||
Warrant vested monthly as service performance, period | 24 months | |||||||
Warrant purchase price, per share | $ 2.92 | |||||||
Exercise of warrant to purchase shares of common stock | 19,986 | 12 | ||||||
Proceeds from exercise of warrant | $ 100,000 | |||||||
Outstanding warrants | 0 | |||||||
PureTech Health | Maximum | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Total expense of warrant | $ 100,000 | $ 100,000 | ||||||
PureTech Health | Warrants to Purchase Common Stock | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Unrecognized compensation expense | 0 | $ 0 | ||||||
Restricted Stock Units | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Average grant date fair value, per share | $ 10.97 | |||||||
Unrecognized compensation expense related to unvested RSUs | $ 0 | |||||||
Restricted Stock Units | Common Stock | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Restricted stock units, shares vested with respective common stock | 105,163 | |||||||
2009 Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Aggregate common shares issuable | 3,911,138 | |||||||
Share based compensation arrangement by share based payment award termination date | Jul. 31, 2019 | |||||||
2009 Plan | Options and Restricted Stock Units | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Number of shares outstanding | 3,703,183 | |||||||
2019 Plan | ||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||
Aggregate common shares issuable | 829,670 | |||||||
Number of shares outstanding | 1,016,524 | |||||||
Common stock reserved for future issuance | 1,709,832 | |||||||
Automatic increase in stock issuance as percentage on outstanding stock | 4.00% | |||||||
Stock option and incentive plan expiration date | May 31, 2029 | |||||||
Expiration period | 10 years | |||||||
Vesting period | 4 years |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Compensation Related Costs [Abstract] | ||
Number of Shares, Outstanding, beginning of period | 2,310,369 | |
Number of Shares, Granted | 2,633,146 | |
Number of Shares, Exercised | (38,961) | |
Number of Shares, Forfeited | (290,010) | |
Number of Shares, Outstanding, end of period | 4,614,544 | 2,310,369 |
Number of Shares, Options vested and expected to vest | 4,614,544 | |
Number of Shares, Options exercisable | 3,123,519 | |
Weighted-Average Exercise Price Per Share, Outstanding, beginning of period | $ 4.49 | |
Weighted-Average Exercise Price Per Share, Outstanding, Granted | 12.03 | |
Weighted-Average Exercise Price Per Share, Outstanding, Exercised | 0.11 | |
Weighted-Average Exercise Price Per Share, Outstanding, Forfeited | 2.70 | |
Weighted-Average Exercise Price Per Share, Outstanding, end of period | 8.94 | $ 4.49 |
Weighted-Average Exercise Price Per Share, Options vested and expected to vest | 8.94 | |
Weighted-Average Exercise Price Per Share, Options exercisable | $ 8.39 | |
Weighted-Average Remaining Contractual Term, Outstanding (Years) | 8 years 3 months 18 days | 7 years 1 month 6 days |
Weighted-Average Remaining Contractual Term, Options vested and expected to vest | 8 years 3 months 18 days | |
Weighted-Average Remaining Contractual Term, Options exercisable | 7 years 10 months 24 days | |
Aggregate Intrinsic Value, Outstanding | $ 306,395 | $ 6,420 |
Aggregate Intrinsic Value, Options vested and expected to vest | 306,395 | |
Aggregate Intrinsic Value, Options exercisable | $ 209,130 |
Stock-based Compensation - Su_2
Stock-based Compensation - Summary of Fair Value of Option Activity Estimated at Date of Grant Using Black-Scholes Model (Details) | 12 Months Ended |
Dec. 31, 2019$ / shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Expected volatility, minimum | 43.54% |
Expected volatility, maximum | 48.22% |
Risk-free interest rate, minimum | 1.59% |
Risk-free interest rate, maximum | 2.44% |
Expected dividend yield | 0.00% |
Maximum | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Fair value of options | $ 8.05 |
Fair value of common stock | $ 20.02 |
Expected term (in years) | 6 years 1 month 28 days |
Minimum | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Fair value of options | $ 3.84 |
Fair value of common stock | $ 9.20 |
Expected term (in years) | 5 years 7 days |
Stock-based Compensation - Su_3
Stock-based Compensation - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock based compensation expense | $ 12,568 | $ 958 |
Research and Development | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock based compensation expense | 580 | 107 |
General and Administrative | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total stock based compensation expense | $ 11,988 | $ 851 |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities - Schedule of Fair Value Measurement on Recurring Basis and Indicates the level of Fair Value Hierarchy Utilized (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets: | ||
Short-term investments | $ 180,468 | $ 4,983 |
Recurring | ||
Assets: | ||
Total fair value assets | 377,771 | 10,025 |
Liabilities: | ||
Derivative instrument | 389 | |
Total fair value liabilities | 389 | |
Recurring | US Treasuries | ||
Assets: | ||
Short-term investments | 180,468 | 4,983 |
Recurring | Money Market Fund | ||
Assets: | ||
Cash equivalents | 197,303 | |
Recurring | US Treasuries | ||
Assets: | ||
Cash equivalents | 5,042 | |
Recurring | Level 1 | ||
Assets: | ||
Total fair value assets | 377,771 | 10,025 |
Recurring | Level 1 | US Treasuries | ||
Assets: | ||
Short-term investments | 180,468 | 4,983 |
Recurring | Level 1 | Money Market Fund | ||
Assets: | ||
Cash equivalents | $ 197,303 | |
Recurring | Level 1 | US Treasuries | ||
Assets: | ||
Cash equivalents | 5,042 | |
Recurring | Level 3 | ||
Liabilities: | ||
Derivative instrument | 389 | |
Total fair value liabilities | $ 389 |
Fair Value of Financial Asset_4
Fair Value of Financial Assets and Liabilities - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Available-for-sale Investments [Abstract] | ||
Asset transfers Level 1 to Level 2 | $ 0 | $ 0 |
Asset transfers Level 2 to Level 1 | 0 | 0 |
Asset transfers into Level 3 | 0 | 0 |
Asset transfers out of Level 3 | 0 | 0 |
Liabilities: | ||
Liabilities transfers Level 1 to Level 2 | 0 | 0 |
Liabilities transfers Level 2 to Level 1 | 0 | 0 |
Liability transfers into Level 3 | 0 | 0 |
Liability transfers out of Level 3 | $ 0 | $ 0 |
Fair Value of Financial Asset_5
Fair Value of Financial Assets and Liabilities - Summary of Estimated Fair Value and Amortized Cost of Short term Investments by Contractual Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Abstract] | ||
Due in one year or less, Amortized cost | $ 180,463 | $ 4,984 |
Due in one year or less, Unrealized gains | 5 | |
Due in one year or less, Unrealized losses | (1) | |
Due in one year or less, Fair value | 180,468 | 4,983 |
Amortized Cost | 180,463 | 4,984 |
Unrealized Gains | 5 | |
Unrealized Losses | (1) | |
Fair Value | $ 180,468 | $ 4,983 |
Fair Value of Financial Asset_6
Fair Value of Financial Assets and Liabilities - Schedule of Changes in Fair Value Derivative Liabilities (Details) - Derivative Financial Instruments, Liabilities - USD ($) $ in Thousands | 5 Months Ended | 7 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Jul. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2017 | |
Derivatives Fair Value [Line Items] | ||||
Balance | $ 389 | $ 0 | $ 2,606 | |
Allocation of note issuance proceeds to derivative | 375 | $ 1,418 | 750 | |
Change in fair value of derivative | $ 14 | 430 | 135 | |
Series A Preferred Stock | ||||
Derivatives Fair Value [Line Items] | ||||
Conversion of convertible debt | $ (4,454) | |||
Series B Preferred Stock | ||||
Derivatives Fair Value [Line Items] | ||||
Conversion of convertible debt | $ (1,274) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||
May 31, 2012USD ($) | Mar. 31, 2011USD ($) | Dec. 31, 2019USD ($)Milestone | Dec. 31, 2018USD ($) | |
Commitments And Contingencies [Line Items] | ||||
Rent expense | $ 400,000 | $ 100,000 | ||
Contingency reserves for litigation | $ 0 | |||
Intellectual Property License Agreement | Eli Lilly and Company | ||||
Commitments And Contingencies [Line Items] | ||||
Upfront payment | $ 100,000 | |||
Royalty expiration term | 6 years | |||
License agreement term | 15 years | |||
Number of milestones reached | Milestone | 0 | |||
Milestone payments | $ 0 | |||
Intellectual Property License Agreement | Eli Lilly and Company | Maximum | ||||
Commitments And Contingencies [Line Items] | ||||
Contingent milestone payments payable | $ 16,000,000 | |||
Commercial milestone payments payable | $ 54,000,000 | |||
Patent License | PureTech Health | ||||
Commitments And Contingencies [Line Items] | ||||
Expenses incurred | 0 | 0 | ||
Outstanding liabilities | $ 0 | 0 | ||
Patent License | Maximum | PureTech Health | ||||
Commitments And Contingencies [Line Items] | ||||
Contingent milestone payments payable | $ 10,000,000 | |||
Percentage of royalties payable on income from sublicensee, excluding royalties | 25.00% | |||
Patent License | Minimum | PureTech Health | ||||
Commitments And Contingencies [Line Items] | ||||
Percentage of royalties payable on income from sublicensee, excluding royalties | 15.00% | |||
Office Space | Boston, Massachusetts | ||||
Commitments And Contingencies [Line Items] | ||||
Lease term | 51 months | |||
Lease commencement period | 2018-12 | |||
Lease expiration period | 2023-02 | |||
Restricted cash | $ 100,000 | $ 100,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under Non-Cancelable Operating Lease Agreements (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2020 | $ 499 |
2021 | 506 |
2022 | 514 |
2023 | 86 |
Total | $ 1,605 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Effective Tax Rate and Federal Statutory Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Statutory tax rate | 21.00% | 21.00% |
State taxes, net of federal benefit | 6.70% | 5.00% |
Share-based compensation | 0.00% | (1.00%) |
Change in derivative liability | (0.10%) | (0.50%) |
Non-deductible interest expense | (0.40%) | (3.10%) |
Other | 0.30% | 0.00% |
Tax credits | 4.90% | 3.00% |
Change in valuation allowance | (32.40%) | (24.40%) |
Impact of 2018 tax rate changes on temporary differences | 0.00% | 0.00% |
Effective Income tax rate | 0.00% | 0.00% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Jul. 02, 2019 | Aug. 01, 2018 | |
Income tax provision | $ 0 | $ 0 | ||
Valuation allowance increase related to current year operating loss and tax credits | $ 14,200 | |||
Period of cumulative changes in ownership interests | 3 years | |||
Minimum | ||||
Ownership interest of significant shareholders | 50.00% | |||
Domestic Tax Authority | ||||
Net operating loss carryforwards | $ 51,800 | |||
Future offset taxable due | 2,700 | |||
Domestic Tax Authority | Research Tax Credit Carryforward | ||||
Research credits carryforwards | $ 2,800 | |||
Research credits carryforwards, expiration year | 2035 | |||
Domestic Tax Authority | Begin to expire in 2029 | ||||
Net operating loss carryforwards | $ 9,700 | |||
Domestic Tax Authority | Indefinite Carryforward | ||||
Net operating loss carryforwards | 42,100 | |||
State and Local Jurisdiction | ||||
Future offset taxable due | 300 | |||
State and Local Jurisdiction | Research Tax Credit Carryforward | ||||
Research credits carryforwards | $ 300 | |||
Research credits carryforwards, expiration year | 2031 | |||
State and Local Jurisdiction | Begin to expire in 2030 | ||||
Net operating loss carryforwards | $ 51,600 | |||
PureTech Health | ||||
Percentage of outstanding shares, no longer held | 50.00% | 80.00% | ||
PureTech Health | Domestic Tax Authority | ||||
Future offset taxable income | 51,400 | |||
PureTech Health | State and Local Jurisdiction | ||||
Future offset taxable income | $ 16,700 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets | ||
Operating tax losses | $ 14,145 | $ 6,288 |
Tax Credit Carryforwards | 3,028 | 537 |
Accrued expenses | 580 | 134 |
Share-based compensation | 3,613 | 166 |
Deferred tax assets | 21,366 | 7,125 |
Valuation allowance | (21,339) | (7,122) |
Deferred tax liabilities: | ||
Depreciation | (27) | (3) |
Deferred tax liabilities | $ (27) | $ (3) |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - PureTech Health - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | ||
General and administrative expenses incurred | $ 200,000 | |
Maximum | ||
Related Party Transaction [Line Items] | ||
General and administrative expenses incurred | $ 100,000 | |
Outstanding current liabilities due to related party | $ 100,000 | $ 100,000 |
401(k) Savings Plan - Additiona
401(k) Savings Plan - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Defined contribution plan, plan name | 401(k) | |
Maximum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total contribution matching expense | $ 0.1 | $ 0.1 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Feb. 29, 2020USD ($)ft² | Jan. 31, 2020USD ($)ft² | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Subsequent Event [Line Items] | ||||
Annual base rent | $ 0.4 | $ 0.1 | ||
Office Space | Boston, Massachusetts | ||||
Subsequent Event [Line Items] | ||||
Lease commencement period | 2018-12 | |||
Lease expiration period | 2023-02 | |||
Office Space | Boston, Massachusetts | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
No. of square feet acquired | ft² | 4,175 | |||
Annual base rent | $ 0.8 | |||
Lease term extend through, period | 2023-12 | |||
Office Space | Carmel, Indiana | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
No. of square feet acquired | ft² | 5,050 | |||
Annual base rent | $ 0.2 | |||
Lease commencement period | 2020-06 | |||
Lease expiration period | 2023-07 |