(~~Address, including zip code, and~~Registrant’s telephone number, including area ~~code, of registrant’s principal executive offices)~~code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May ~~9, 2018,~~14, 2019, the registrant had ~~28,046,315~~35,743,278 shares of common stock, $0.0001 par value per share, outstanding.

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management and expected market growth are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q, particularly in the “Risk Factors” section, that could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments that we may make or enter into.

You should read this Quarterly Report on Form 10-Q and the documents that we reference herein and have filed or incorporated by reference as exhibits hereto completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

	March 31, 2018			December 31, 2017			March 31, 2019			December 31, 2018
Assets
Current assets:
Cash and cash equivalents	$	135,705		$	53,349		$	7,181		$	7,042
Marketable securities								135,910			100,986
Prepaid expenses		986			792			1,563			1,491
Deferred offering costs		—			929
Other current assets		154			84			24			15
Total current assets		136,845			55,154			144,678			109,534
Restricted cash		84			—			84			84
Property and equipment, net		316			39			318			321
Total assets	$	137,245		$	55,193		$	145,080		$	109,939
Liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable (including related party amounts of $37 and $32 as of March 31, 2018 and December 31, 2017, respectively)	$	1,480		$	1,515
Accounts payable							$	3,364		$	2,989
Accrued liabilities		4,854			3,987			1,245			2,727
Funding advance		500			—
Total current liabilities		6,834			5,502			4,609			5,716
Other liabilities		28			—			15			19
Total liabilities		6,862			5,502			4,624			5,735
Commitments and contingencies (see Note 9)
Redeemable convertible preferred stock:
Redeemable convertible preferred stock, Series A, $0.0001 par value, no and 15,527,951 shares authorized, issued and outstanding as of March 31, 2018 and December 31, 2017, respectively		—			41,674
Redeemable convertible preferred stock, Series B, $0.0001 par value, no and 4,792,716 shares authorized, issued and outstanding as of March 31, 2018 and December 31, 2017, respectively		—			39,946
Stockholders’ equity (deficit):
Preferred stock, $0.0001 par value, 10,000,000 and no shares authorized as of March 31, 2018 and December 31, 2017, respectively; no shares issued and outstanding as of March 31, 2018 and December 31, 2017		—			—
Common stock, $0.0001 par value, 150,000,000 and 30,000,000 shares authorized as of March 31, 2018 and December 31, 2017, respectively; 28,046,315 and 5,659,089 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively; 28,046,315 and 4,562,640 shares vested as of March 31, 2018 and December 31, 2017, respectively		3			1
Commitments and contingencies (see Note 10)
Stockholders’ equity:
Common stock, $0.0001 par value, 150,000,000 shares authorized as of March 31, 2019 and December 31, 2018; 35,255,344 and 28,055,344 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively; 35,254,844 and 28,054,344 shares vested as of March 31, 2019 and December 31, 2018, respectively								4			3
Additional paid-in capital		174,018			1,849			222,882			175,635
Accumulated deficit		(43,638	)		(33,779	)		(82,462	)		(71,393	)
Total stockholders’ equity (deficit)		130,383			(31,929	)
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)	$	137,245		$	55,193
Accumulated other comprehensive gain (loss)								32			(41	)
Total stockholders’ equity								140,456			104,204
Total liabilities and stockholders’ equity							$	145,080		$	109,939

	Three Months Ended March 31,						Three Months Ended March 31,
	2018			2017			2019			2018
Operating expenses:
Research and development	$	8,106		$	3,294		$	8,852		$	8,106
General and administrative		2,094			63			2,839			2,094
Total operating expenses		10,200			3,357			11,691			10,200
Loss from operations		(10,200	)		(3,357	)		(11,691	)		(10,200	)
Other income, net		341			—			631			341
Loss before income taxes		(9,859	)		(3,357	)		(11,060	)		(9,859	)
Income tax expense		—			—			9			—
Net loss	$	(9,859	)	$	(3,357	)	$	(11,069	)	$	(9,859	)
Net loss per share, basic and diluted	$	(0.46	)	$	(1.20	)	$	(0.38	)	$	(0.46	)
Weighted-average common shares used in computing net loss per share, basic and diluted		21,523,072			2,789,810			29,014,750			21,523,072
Other comprehensive gain (loss):
Net loss							$	(11,069	)	$	(9,859	)
Unrealized gains on marketable securities								73			—
Comprehensive loss							$	(10,996	)	$	(9,859	)

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

	Common Stock				Additional Paid In		Accumulated			Accumulated Other Comprensive			Shareholders Equity
	Shares		Amount		Capital		Deficit			Income(Loss)			(Deficit)
Balance at December 31, 2018		28,054,344	$	3	$	175,635	$	(71,393	)	$	(41	)	$	104,204
Issuance of common stock upon closing of public offering, net of issuance costs of $3,455		7,200,000		1		46,584		—			—			46,585
Vesting of restricted shares		500		—		1		—			—			1
Stock-based compensation expense		—		—		662		—			—			662
Net loss		—		—		—		(11,069	)					(11,069	)
Unrealized gain (losses) on marketable securities		—		—		—		-			73			73
Balance at March 31, 2019		35,254,844	$	4	$	222,882	$	(82,462	)	$	32		$	140,456

	Series A Redeemable Convertible Preferred Stock						Series B Redeemable Convertible Preferred Stock						Common Stock				Additional Paid In		Accumulated			Shareholders Equity
	Shares			Amount			Shares			Amount			Shares		Amount		Capital		Deficit			(Deficit)
Balance at December 31, 2017		15,527,951		$	41,674			4,792,716		$	39,946			4,562,640	$	1	$	1,849	$	(33,779	)	$	(31,929	)
Conversion of convertible preferred stock into common stock upon the closing of initial public offering		(15,527,951	)		(41,674	)		(4,792,716	)		(39,946	)		15,870,559		1		81,619		—			81,620
Issuance of common stock upon closing of initial public offering, net of issuance costs of $8,379		—			—			—			—			6,516,667		1		89,369		—			89,370
Vesting of restricted shares		—			—			—			—			1,096,449		—		865		—			865
Stock-based compensation expense		—			—			—			—			—		—		316		—			316
Net loss		—			—			—			—			—		—		—		(9,859	)		(9,859	)
Balance at March 31, 2018		—		$	—			—		$	—			28,046,315	$	3	$	174,018	$	(43,638	)	$	130,383

	Three Months Ended March 31,						Three Months Ended March 31,
	2018			2017			2019			2018
Operating activities:
Net loss	$	(9,859	)	$	(3,357	)	$	(11,069	)	$	(9,859	)
Adjustments to reconcile net loss to net cash used in operating activities:
Accretion on marketable securities								(247	)		—
Depreciation and amortization expense		9			—			27			9
Stock-based compensation expense		1,181			125			663			1,181
Expense related to acquisition of intellectual property (see Note 5)		—			3,157
Changes in operating assets and liabilities:
Restricted cash		(84	)		—			—			(84	)
Prepaid expenses and other current assets		(264	)		(229	)		(81	)		(264	)
Accounts payable		80			10			144			80
Accrued liabilities		1,105			—			(1,482	)		1,105
Funding advance		500			—			—			500
Other liabilities		28			—			(4	)		28
Net cash used in operating activities		(7,304	)		(294	)		(12,049	)		(7,304	)
Investing activities:
Purchases of property and equipment		(278	)		—			(24	)		(278	)
Maturities of marketable securities								42,500			—
Purchases of marketable securities								(77,104	)		—
Net cash used in investing activities		(278	)		—			(34,628	)		(278	)
Financing activities:
Proceeds from issuance of Series A redeemable convertible preferred stock		—			294
Proceeds from initial public offering, net of issuance costs		89,938			—
Proceeds from public offering, net of issuance costs								46,816			89,938
Net cash provided by financing activities		89,938			294			46,816			89,938
Net increase in cash and cash equivalents		82,356			—			139			82,356
Cash and cash equivalents at beginning of period		53,349			—			7,042			53,349
Cash and cash equivalents at end of period	$	135,705		$	—		$	7,181		$	135,705
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable	$	8		$	—		$	—		$	8
Conversion of redeemable convertible preferred stock into common stock	$	81,620		$	—		$	—		$	81,620
Issuance costs associated with public offering included in accounts payable							$	231		$	—

resTORbio, Inc. (collectively referred to with its wholly-owned, controlled subsidiary, resTORbio Securities Corp. as “resTORbio” or the “Company”) was incorporated in the State of Delaware on July 5, 2016. The Company is a clinical-stage biopharmaceutical company ~~focused on~~developing innovative medicines that target the ~~development and commercialization~~biology of ~~novel therapeutics for the treatment of~~aging to prevent or treat aging-related diseases ~~and conditions.~~. The Company’s principal operations are located in Boston, Massachusetts.

Since inception, the Company has been primarily involved in research and development activities. The Company devotes substantially all of its efforts to product research and development, initial market development and raising capital. 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, competition from other companies, the need for development of commercially viable products and the need to obtain adequate additional financing to fund the development of its product candidates. The Company is also subject to a number of risks similar to other companies in the life sciences industry, including regulatory approval of products, uncertainty of market acceptance of products, competition from substitute products and larger companies, the need to obtain additional financing, compliance with government regulations, protection of proprietary technology, dependence on third parties, product liability and dependence on key individuals.

On January 12, 2018, the Company effected a one-for-1.2804 reverse 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 7). Accordingly, all share and per share amounts for all periods presented in the accompanying condensed consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock split and adjustment of the preferred stock conversion ratios.

On ~~January 30, 2018,~~March 22, 2019, the Company completed ~~its initial~~an underwritten public offering, ~~(“IPO”),~~ whereby the Company sold ~~6,516,667~~7,200,000 shares of its common stock ~~(inclusive of 850,000 shares of common stock sold by the Company pursuant to the full exercise of an overallotment option granted to the underwriters in connection with the offering)~~ at a price of ~~$15.00~~$6.95 per share. ~~The shares began trading on The Nasdaq Global Select Market on January 26, 2018.~~ The aggregate net proceeds received by the Company from the offering were approximately ~~$89.4~~$46.6 million, after deducting underwriting discounts and commissions and other offering expenses payable by the Company of ~~$8.4~~$3.5 million. ~~Upon~~In addition, the ~~closing of~~Company granted the ~~IPO, all outstanding shares of redeemable convertible preferred stock converted into 15,870,559~~underwriters a 30-day option to purchase up to an additional 1,080,000 shares of common stock at the public offering price, less underwriting discounts and ~~all unvested~~commissions. On April 10, 2019, the Company sold an additional 487,934 shares of ~~restricted~~its common stock ~~automatically vested. Additionally,~~at a price of $6.95 per share. The aggregate net proceeds received by the Company ~~is now authorized to issue 150,000,000 shares~~were approximately $3.1 million, after deducting underwriting discounts and commissions and other offering expenses payable by the Company of ~~common stock and 10,000,000 shares of preferred stock.~~$0.3 million.

In the course of its development activities, the Company has sustained operating losses and expects such losses to continue over the next several years. The Company’s ultimate success depends on the outcome of its research and development activities. The Company has incurred net losses from operations since inception and has an accumulated deficit of ~~$43.6~~$82.5 million as of March 31, ~~2018. On January 30, 2018, the Company completed its IPO whereby the Company sold 6,516,667 shares of its common stock for aggregate net proceeds of approximately $89.4 million.~~2019. As of March 31, ~~2018,~~2019, the Company had ~~$135.7~~$143.1 million of cash, ~~and~~ cash equivalents, and marketable securities, which the Company believes will be sufficient to fund the Company’s current operating plan through at least the next twelve months.

The accompanying condensed consolidated financial statements are unaudited. The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair statement of the Company's financial position atas of March 31, ~~2018~~2019 and ~~its~~the results of operations and cash flows ~~and stockholders' equity (deficit)~~ for the ~~three months~~interim periods ended March 31, ~~2018~~2019 and ~~2017.~~2018. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018 that was filed with the Securities and Exchange Commission (“SEC”) on March ~~29, 2018~~18, 2019 (the ~~“2017~~“2018 Form 10-K”). Interim results are not necessarily indicative of results for a full year or for any other interim period.

The condensed consolidated financial statements include the accounts of resTORbio, Inc. and its wholly owned subsidiary, resTORbio Securities Corp. All inter-company transactions and balances have been eliminated in consolidation.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities, as of the date of the condensed consolidated financial statements, and the reported amounts of any expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including those related to accrued liabilities, ~~fair value of common stock,~~ income taxes, and stock-based compensation expense. Management bases its estimates on historical experience, and on various other market-specific relevant assumptions that management believes to be reasonable, under the circumstances. Actual results may differ from those estimates or assumptions.

The significant accounting policies and estimates used in the preparation of the condensed consolidated financial statements are described in the Company’s audited financial statements as of and for the year ended December 31, ~~2017,~~2018, and the notes thereto, which are included in the ~~2017~~2018 Form 10-K. There have been no material changes in the Company’s significant accounting policies during the three months ended March 31, ~~2018.~~

The Company maintains a letter of credit for the benefit of the landlord in connection with the Company’s office lease. As of March 31, 2018 and December 31, 2017, restricted cash (non-current) consisted of $0.1 million and $0, respectively, held for the benefit of the landlord in connection with the Company’s office lease.2019.

Fair value is defined as the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties. The authoritative accounting guidance describes a fair value hierarchy based on three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last is considered unobservable. These levels of inputs are as follows:

Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3—Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

The following table summarizes assets measured at fair value on a recurring basis at March 31, ~~2018~~2019 (in thousands):

Active

Observable

Unobservable

March 31,

Markets

Inputs

Inputs

Description

2018

(Level 1)

(Level 2)

(Level 3)

Assets:

Cash equivalents

$
135,705

$
135,705

—

—

Restricted cash

84

84

—

—

Total assets

$
135,789

$
135,789

$
—

$
—

			Active		Observable		Unobservable
	March 31,		Markets		Inputs		Inputs
Description	2019		(Level 1)		(Level 2)		(Level 3)
Cash	$	31	$	31	$	—	$	—
Money market funds (included in cash and cash equivalents)		7,150		7,150		—		—
U.S. treasury securities (included in marketable securities)		135,910		135,910		—		—
Total	$	143,091	$	143,091	$	—	$	—

The following table summarizes assets measured at fair value on a recurring basis at December 31, ~~2017~~2018 (in thousands):

Active

Observable

Unobservable

December 31,

Markets

Inputs

Inputs

Description

2017

(Level 1)

(Level 2)

(Level 3)

Assets:

Cash equivalents

$
53,349

$
53,349

—

—

Restricted cash

—

—

—

—

Total assets

$
53,349

$
53,349

$
—

$
—

			Active		Observable		Unobservable
	December 31,		Markets		Inputs		Inputs
Description	2018		(Level 1)		(Level 2)		(Level 3)
Money market funds (included in cash and cash equivalents)	$	6,804	$	6,804	$	—	$	—
U.S. treasury securities (included in cash and cash equivalents)		238		238		—		—
U.S. treasury securities (included in marketable securities)		100,986		100,986		—		—
Total	$	108,028	$	108,028	$	—	$	—

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 proceeds generated as a result of the offering. Should the planned equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the consolidated statements of operations. The Company recorded deferred offering costs of $0 and $0.9 million as of March 31, 2018 and December 31, 2017, respectively.

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets. Depreciation begins at the time the asset is placed in service. Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred. Upon sale or retirement of assets, the cost and related accumulated depreciation are removed from the consolidated balance sheet and the resulting gain or loss is reflected in the consolidated statements of operations.

~~In May 2017, the FASB issued ASU 2017-09,~~ ~~Compensation—Stock Compensation~~ ~~(Topic 718): Scope of Modification Accounting (“ASU 2017-09”). ASU 2017-09 provides guidance about which~~There have been no changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The guidance is effective for annual periods beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period for which financial statements have not yet been issued.valuation methods utilized by the Company during the three months ended March 31, 2019 and 2018. The Company ~~adopted~~evaluates transfers between levels at the ~~provisions~~end of ~~ASU 2017-09 on January 1, 2018. No modifications~~each reporting period. There were no transfers of ~~share-based payment awards have occurred as of~~financial instruments between levels during the three months ended March 31, 2019 and 2018.

In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which requires a lessee to recognize a right-of-use asset and a lease liability for operating leases, initially measured at the present value of the future lease payments, in the balance sheet. ASU 2016-02 also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. This new guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the potential effects of adopting the provisions of ASU ~~2016-02.~~2016-02 on its consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (“ASU 2016-18”), which requires that amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when

reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December 15, 2019 and should be applied using a retrospective transition method to each period presented. Early adoption is permitted. The Company does not expect the impact of ASU 2016-18 to be material to its consolidated financial statements.

In July 2017, the FASB issued ASU 2017-11, Accounting for Certain Financial Instruments with Down Round Features (“ASU 2017-11”), which updates the guidance related to the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. Under ASU 2017-11, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (“EPS”) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. ASU 2017-11 is effective for public entities for all annual and interim periods beginning after December 15, 2019. Early adoption is permitted. The Company does not expect the impact of ASU 2017-11 to be material to its consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), which intends to simplify aspects of share-based compensation issued to non-employees by making the guidance consistent with the accounting for employee share-based compensation. For public entities, ASU 2018-07 is required to be adopted for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. For non-public entities and emerging growth companies that choose to take advantage of the extended transition period, ASU 2018-07 is effective for annual periods beginning after December 15, 2019. Early adoption is permitted for all entities but no earlier than the Company’s adoption of ASU No. 2016-10, Revenue from Contracts with Customers (“ASC 606”). The Company is currently evaluating the impact that the adoption of ASU ~~2017-11~~2018-07 will have on its consolidated financial statements.

As of March 31, 2019, the fair value of marketable securities by type of security was as follows (in thousands):

As of December 31, 2018, the fair value of marketable securities by type of security was as follows (in thousands):

The estimated fair value and amortized cost of the Company’s available-for-sale securities by contractual maturity are summarized as follows (in thousands):

	As of March 31, 2018			As of December 31, 2017			March 31, 2019			December 31, 2018
	(In thousands)						(In thousands)
Leasehold improvements	$	60		$	—		$	68		$	65
Machinery and equipment		38			38			38			38
Furniture and fixtures		167			—			210			194
Computers		34			6			81			76
Office equipment		9			—			11			11
Software		22			—			22			22
Total property and equipment		330			44			430			406
Less: accumulated depreciation		(14	)		(5	)		(112	)		(85	)
Property and equipment, net	$	316		$	39		$	318		$	321

Depreciation and amortization expense was ~~$9,000~~$27,000 and $0$9,000 for the three months ended March 31, 2019 and 2018, ~~and 2017,~~ respectively.

	As of March 31, 2018		As of December 31, 2017		March 31, 2019		December 31, 2018
	(In thousands)				(In thousands)
Accrued payroll and related expenses	$	233	$	394	$	557	$	1,189
Accrued research and development expenses		4,418		3,250		524		1,028
Deferred offering costs		—		238
Other		203		105		164		510
Total accrued liabilities	$	4,854	$	3,987	$	1,245	$	2,727

On March 23, 2017, the Company entered into an exclusive license agreement with Novartis International Pharmaceutical Ltd. (“Novartis”). Under the agreement, Novartis granted the Company an exclusive, field-restricted, worldwide license, to certain intellectual property rights owned or controlled by Novartis, to develop, commercialize and sell one or more therapeutic products comprising RTB101 or RTB101 in combination with everolimus in a fixed dose combination. The exclusive field under the license agreement is for the treatment, prevention and diagnosis of disease and other conditions in all indications in humans and animals.

As initial consideration for the licensed rights, the Company issued Novartis Institutes for Biomedical Research (“NIBR”) 2,587,992 shares of the Company’s Series A Preferred Stock. The fair value of the Novartis license was $3.2 million based on the fair value of the Series A Preferred Stock which was determined to be $1.22 per share based on an independent third-party valuation, and is recorded as research and development expenses in the consolidated statements of operations.

The agreement may be terminated by either party upon a material breach by the other party that is not cured within 60 days after written notice. The Company may terminate the agreement in its entirety or on a product-by-product or country-by-country basis with or without cause with 60 days’ prior written notice.

Novartis may terminate the portion of the agreement related to everolimus if the Company fails to use commercially reasonable efforts to research, develop and commercialize a product utilizing everolimus for a period of three years. Novartis may terminate the license agreement upon the Company’s bankruptcy, insolvency, dissolution or winding up.

As additional consideration for the license, the Company is required to pay up to an aggregate of $4.3 million upon the satisfaction of clinical milestones, up to an aggregate of $24 million upon the satisfaction of regulatory milestones for the first indication approved, and up to an aggregate of $18 million upon the satisfaction of regulatory milestones for the second indication approved. In addition, the Company is required to pay up to an aggregate of $125 million upon the satisfaction of commercial milestones, based on the amount of annual net sales. The Company is also required to pay tiered royalties ranging from a mid single-digit percentage to a low teen-digit percentage on annual net sales of products. These royalty obligations last on a product-by-product and country-by-country basis until the latest of (i) the expiration of the last valid claim of a Novartis patent covering a subject product, (ii) the expiration of any regulatory exclusivity for the subject product in a country, or (iii) the 10^th anniversary of the first commercial sale in the country, and are subject to a reduction after the expiration of the last valid claim of a Novartis patent or the introduction of a generic equivalent of a product in a country. In addition, if the Company sublicenses the rights under the license agreement, the Company is required to pay a certain percentage of sublicense revenue to Novartis. Novartis will no longer be entitled to sublicense revenue following the last visit of the 400^th ~~subject in any human clinical trial conducted by the Company or a sublicensee of the Company.~~

Milestone payments to Novartis will be recorded as research and development expenses in the condensed consolidated statements of operations once achievement of each associated milestone has ~~occurred or the achievement is considered probable.~~occurred. In May 2017, the Company initiated a Phase 2b clinical trial for a first indication, triggering the first milestone payment under the agreement. Accordingly, the Company paid the related $0.3 million ~~milestone~~payment in May 2017. As of March 31, ~~2018,~~2019, none of the remaining development milestones, regulatory milestones, sales milestones, or royalties had been ~~reached or were probable~~reached. In May 2019, the Company initiated a Phase 3 clinical trial for the first indication, triggering a milestone payment of ~~achievement.~~$2.5 million under the agreement.

On March 6, 2018, the Company and the Silverstein Foundation for Parkinson’s with GBA (the “Silverstein Foundation”) entered into a research funding agreement (the “Funding Agreement”). One of the Company’s directors is a co-founder and current trustee of the Silverstein Foundation. Under the terms of the Funding Agreement, the Silverstein Foundation will partially fund the preclinical research, development work, and Phase 2 clinical trial expenses (the “Research”) to be conducted and borne by the Company in connection with the development of RTB101, ~~product,~~ alone or in combination with other products (the “Product”).

Upon execution of the Funding Agreement, the Silverstein Foundation paid the Company an upfront sum of $0.5 million (the “Funding Amount”). The Company is entitled to use the Funding Amount solely to conduct the Research and is obligated to repay the Funding Amount in full to the Silverstein Foundation if it successfully conducts a positive Phase 3 clinical trial of the Product for Parkinson’s Disease. The Company is solely responsible for commencing and conducting the Research and will furnish periodic progress updates to the Silverstein Foundation throughout the term of the Funding Agreement. After completing the Research, the Company must provide the Silverstein Foundation with a formal report describing the work performed and the results of the Research.

The Company recognizes proceeds received from the Silverstein Foundation as a reduction to research and development expenses, rather than as revenue, in the condensed consolidated statements of operations and comprehensive loss because the corresponding Funding Agreement does not contain specified performance obligations other than to conduct research on a particular program or in a particular field and ~~contain~~ no obligations to deliver specified products or technology.

For funds received under the ~~agreement with the Silverstein Foundation,~~Funding Agreement, the Company recognizes a reduction in research and development expenses in an amount equal to the qualifying expenses incurred in each period up to the amount funded by the Silverstein Foundation. Funding that has been received by the Company in advance of incurring qualifying expenses is recorded in the condensed consolidated balance sheet as funding advance. No qualifying expenses were incurred during the three months ended March 31, 2019 and 2018. As of March 31, ~~2018, no~~2019, $0.5 million qualifying expenses have been incurred. Therefore, all amounts received have been recorded as a reduction of the research and development expense.

As of March 31, ~~2018,~~2019, the Company had 10,000,000 shares of preferred stock authorized and none issued and outstanding. As of December 31, 2017, the Company had 20,320,667 shares of preferred stock authorized, of which 15,527,951 shares were issued and outstanding and were designated as $0.0001 par value Series A Preferred Stock and 4,792,716 shares were issued and outstanding and were designated as $0.0001 par value Series B Preferred Stock.

Upon completion of the Company’s initial public offering in January 2018, all the outstanding preferred stock of the Company automatically converted into 15,870,559 shares of the Company’s common stock. As of March 31, 2018, no shares of preferred stock were outstanding.

The Company has reserved the following number of shares of common stock for future issuance upon the ~~conversion of preferred stock,~~ exercise of options, vesting of restricted stock units or grant of equity awards:

	As of March 31, 2018		As of December 31, 2017		March 31, 2019		December 31, 2018
Redeemable convertible preferred stock, on an as-converted basis		—		15,870,559
Options issued and outstanding		667,590		195,668		1,706,317		1,122,677
Unvested restricted stock units						24,960		24,960
Options available for future grants		1,839,658		1,670,341		1,889,155		1,350,582
Shares available for issuance under the 2018 ESPP		275,030		—		555,583		275,030
Total		2,782,278		17,736,568		4,176,015		2,773,249

In 2017, the Company adopted the 2017 Stock Incentive Plan (the “2017 Plan”). Under the 2017 Plan, a total of 537,914 shares of the Company’s common stock ~~have been~~were reserved for the issuance of stock options to employees, directors, and consultants under terms and provisions established by the Board of ~~Directors. A total of 537,914 shares were reserved for issuance under the 2017 Plan.~~Directors (the “Board”). Under the terms of the 2017 Plan, options ~~may be~~were granted at an exercise price not less than fair market value. The terms of options granted under the 2017 Plan may not exceed ten years. The Board ~~shall determine~~determined the terms and conditions of a Restricted Stock Award, including the conditions for vesting and repurchase (or forfeiture) and the issue price, if any. On October 11, 2017, the Company increased the number of shares of common stock available for issuance under the 2017 Plan from 537,914 shares to 630,662 shares. On November 29, 2017, the Company increased the number of shares of common stock available for issuance under the 2017 Plan from 630,662 shares to 1,866,009 shares.

In connection with the Company’s ~~IPO,~~initial public offering completed in January 2018, the ~~Company’s~~ Board ~~of Directors~~ adopted and the Company’s stockholders approved the 2018 ~~stock incentive plan~~Stock Incentive Plan (“2018 Plan”), which became effective on the date immediately ~~prior to~~preceding the ~~closing of~~date on which the Company’s ~~IPO.~~registration statement became effective. The 2018 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards, restricted stock units, stock appreciation rights, and other stock-based awards. The Company’s employees, officers, directors, consultants and advisors are eligible to receive awards under the 2018 Plan. The number of shares of common stock that ~~are~~were reserved for issuance under the 2018 Plan ~~are~~were 2,200,260 shares. The 2018 Plan provides that the number of shares reserved and available for

issuance under the plan will automatically increase each January 1, beginning on January 1, 2019, by 4% of the outstanding number of shares of the Company’s common stock on the immediately preceding December 31 or such lesser number of shares as determined by the ~~Board~~Board. On January 1, 2019, as a result of ~~Directors.~~the foregoing evergreen provision, the number of shares of common stock available for issuance under the 2018 Plan automatically increased from 2,200,260 to 3,322,473 shares.

~~On and after~~Since the ~~effective~~ date of effectiveness of the 2018 Plan, the Company has not and will not grant any further awards under the 2017 Plan. However, any shares of common stock subject to awards under the 2017 Plan that expire, terminate, or otherwise are surrendered, canceled, forfeited or repurchased without having been fully exercised or resulting in any common stock being issued will become available for issuance under the 2018 Plan.

Total stock-based compensation expense is recognized for stock options granted to employees and non-employees and has been reported in the Company’s condensed consolidated condensed statements of operations as follows:

	Three Months Ended March 31,				Three Months Ended March 31,
	2018		2017		2019		2018
Research and development	$	625	$	62	$	277	$	625
General and administrative		556		63		386		556
Total stock-based compensation expense	$	1,181	$	125	$	663	$	1,181

Shares
Available for
Grant

Number of
Options
Outstanding

Weighted-
Average
Exercise Price
per Option

Weighted-
Average
Remaining
Contract Term

Aggregate
Intrinsic Value

(In thousands)

Outstanding, December 31, 2017

1,670,341

195,668

$
4.49

9.67

Shares reserved for issuance

641,239

Options granted⁽¹⁾

(471,922
)

471,922

14.60

Outstanding, March 31, 2018

1,839,658

667,590

11.63

9.71

$
1,048

Exercisable, March 31, 2018

—

—

Vested and expected to vest, March 31, 2018

667,590

11.63

9.71

$
1,048

	Shares Available for Grant			Number of Options Outstanding			Weighted- Average Exercise Price per Option		Weighted- Average Remaining Contract Term		Aggregate Intrinsic Value
											(In thousands)
Outstanding, December 31, 2018		1,350,582			1,122,677		$	11.63		9.22
Shares reserved for issuance		1,122,213
Options granted⁽¹⁾		(604,440	)		604,440			8.58
Options cancelled		20,800			(20,800	)		9.91
Outstanding, March 31, 2019		1,889,155			1,706,317			10.57		9.30	$	627
Exercisable, March 31, 2019					194,221			11.62		8.70		202
Vested and expected to vest, March 31, 2019					1,706,317			10.57		9.30		627

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 fair value of the Company’s common stock as of March 31, ~~2018.~~2019. No options were exercised ~~cancelled or forfeited~~ during the three months ended March 31, ~~2018.~~2019.

During the three months ended March 31, ~~2018,~~2019, the Company granted options to employees and directors to purchase an aggregate of ~~464,722~~594,600 common shares with a weighted-average grant date fair value of ~~$9.88~~$6.65 per share. During the three months ended March 31, ~~2018,~~2019, the Company granted options to non-employees to purchase an aggregate of ~~7,200~~9,840 common shares with a weighted-average grant date fair value of ~~$12.51~~$5.79 per share. The expense related to options granted to employees and directors for the three months ended March 31, 2019 was $0.6 million. The expense related to options granted to non-employees for the three months ended March 31, 2019 was $7,000. The expense related to options granted to employees, directors and non-employees was $0.3 million and $3,000, respectively, for the three months ended March 31, 2018. ~~There were no stock options granted to employees or non-employees during the three months ended March 31, 2017.~~

As of March 31, ~~2018,~~2019, the total unrecognized compensation expense related to unvested ~~employee~~options granted to employees and directors was $10.7 million, which the Company expects to recognize over an estimated weighted-average

period of 3.30 years. As of March 31, 2019, the total unrecognized compensation expense related to unvested non-employee options was ~~$5.0~~$0.2 million, which the Company expects to recognize over an estimated weighted-average period of ~~3.68~~2.99 years. As of March 31, 2018, the total unrecognized compensation expense related to unvested non-employee options was $0.3 million, which the Company expects to recognize over an estimated weighted-average period of 3.43 years.

The fair value of stock options for employees and non-employees was estimated using a Black-Scholes option pricing model with the following assumptions:

			Three Months Ended March 31,
	Three Months Ended March 31, 2018		2019		2018
Employees:
Fair value of common stock	$13.17 - $15.45		$8.53 - $8.90		$13.17 - $15.45
Expected term (in years)	5.8-6.6			6.1	5.8 - 6.6
Expected volatility	76.1%-77.7%		93.7% - 94.8%		76.1% - 77.7%
Risk-free interest rate	2.4%-2.7%		2.5% - 2.6%		2.4% - 2.7%
Expected dividend yield	0.0%		0.0%		0.0%
Non-employees:
Fair value of common stock	$	15.45	$6.82 - $8.61		$9.58 - $15.45
Expected term (in years)		10.0	8.2 - 10.0		9.2 - 10.0
Expected volatility	77.9%		91.3% - 94.9%		77.9% - 78.1%
Risk-free interest rate	2.7%		2.4% - 2.6%		2.7% - 2.8%
Expected dividend yield	0.0%		0.0%		0.0%

On ~~July 11, 2016, certain founders purchased 3,772,726 common~~April 17, 2018, the Company granted 2,000 shares ~~that are subject~~of restricted stock to a ~~repurchase right upon termination or cessation~~consultant. The restrictions will lapse in four equal quarterly installments and will be fully vested on the first anniversary of ~~services at the original purchase price of $0.0001 per share, or $483. The repurchase right lapses as vesting occurs.~~such grant. Compensation ~~expense~~expenses of such unvested shares ~~was~~will be remeasured at fair value until vested at each reporting date. On April 4, 2017, the non-employee directors became employees of the Company and as a result, compensation expense of the unvested shares was remeasured at fair value and fixed and was being recognized over the remaining vesting period. Upon the closing of the Series A preferred financing, a portion of the unvested shares accelerated and vested in full. Upon the Company’s IPO, the remaining unvested shares accelerated and vested in full.

The Company recognized $1,000 and $0.9 million ~~and $125,000~~ of stock-based compensation expense related to restricted shares during the three months ended March 31, ~~2018~~2019 and ~~2017,~~2018, respectively. As of March 31, ~~2018,~~2019, there was no$159 of unrecognized stock-based compensation expense related to unvested restricted stock. This amount is expected to be recognized over a remaining weighted-average period of 0.05 years. There were no restricted stock awards during the three months ended March 31, 2019 and 2018.

In May 2018, the Company granted 24,960 restricted stock units to an employee with a grant date fair value of $9.03 per share.

The Company recognized $14,000 of stock-based compensation expense related to restricted stock units during the three months ended March 31, 2019. As of March 31, 2019, there was $0.2 million of unrecognized stock-based compensation expense related to unvested restricted stock units. This amount is expected to be recognized over a remaining weighted-average period of 3.14 years. There were no restricted stock units granted to employees or non-employees during the three months ended March 31, 2019 and 2018.

The ~~Company’s~~ Board ~~of Directors~~ adopted and the Company’s stockholders approved the 2018 ~~employee stock purchase plan~~Employee Stock Purchase Plan (“2018 ESPP”), which ~~will become~~became effective on athe date ~~determined by~~immediately preceding the date on which the Company’s ~~Board of Directors. Once effective, the~~registration statement became effective. The 2018 ESPP ~~will enable~~enables eligible employees to purchase shares of the Company’s Common Stock at a discount. The number of shares of common stock that are reserved for issuance under the 2018 ESPP are 275,030 shares. The 2018 ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2019 and increasing each January 1 thereafter through January 1, 2028, by the least of (i) 1% of the outstanding number of shares of the Company’s common stock on the immediately preceding December 31; (ii) 543,926 shares or (iii) such number of shares as determined by the ESPP administrator. On January 1, 2019, as a result of the foregoing evergreen provision, the number of shares of common stock available for issuance under the 2018 ESPP automatically increased from 275,030 to 555,583 shares.

The Company is not a party to any litigation and does not have contingency reserves established for any litigation liabilities as of March 31, ~~2018~~2019 and December 31, ~~2017.~~2018.

The Company computes basic and diluted ~~earnings (losses)~~losses per share using a methodology that gives effect to the impact of outstanding participating securities (the “two-class” method). Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period and excludes any dilutive effects of share-based awards. Diluted net loss per share is computed giving effect to all potential dilutive common shares, including common stock issuable upon exercise of stock options, convertible preferred stock, and unvested restricted common stock. As the Company had net losses for the three months ended March 31, ~~2018~~2019 and ~~2017,~~2018, there is no income allocation required under the two-class method or dilution attributed to weighted average shares outstanding in the calculation of diluted loss per share.

The following potentially dilutive securities have been excluded from the calculation of diluted net loss per share because including them would have had an anti-dilutive effect (in common stock equivalent shares):

	Three Months Ended March 31,				As of March 31,
	2018		2017		2019		2018
Redeemable convertible preferred stock		—		2,021,237
Options issued and outstanding		667,590		—		1,706,317		667,590
Total		667,590		2,021,237		1,706,317		667,590

Since the Company’s incorporation in July 2016, the Company has engaged in transactions with related parties.

The Company is a party to an intellectual property license agreement with Novartis. In addition, NIBR, an affiliate of Novartis, is a shareholder of the Company (See Note 5)6). No payments ~~were~~have been made to Novartis during the three months ended March 31, ~~2018~~2019 and ~~2017.~~2018.

The Company is a party to a Funding Agreement with the Silverstein Foundation, an entity in which one of the Company’s directors is a co-founder and current ~~trustee (See Note 6).~~trustee. The Company received $0 and $0.5 million from the Silverstein Foundation during the three months ended March 31, ~~2018. No funds were received during~~2019 and 2018, respectively.

In April 2019, the ~~three months ended March 31, 2017.~~Company amended its multi-year lease agreement to relocate its office space in Boston, Massachusetts under an operating lease agreement. The amended lease term is for a period of seven years from the date of relocation. The initial annual base rent of the relocation premises is $0.6 million per year, increasing 2% annually. In connection with the lease amendment, the Company issued a new letter of credit for the benefit of the landlord in the amount of $0.2 million.

In May 2019, the Company was awarded a 5-year grant for up to $1.5 million from the National Institutes of Health.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with our condensed consolidated financial statements and accompanying footnotes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related footnotes included in our Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2018. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q includes forward-looking statements that involve risks and uncertainties. Actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause future results to differ materially from those projected in the forward-looking statements include, but are not limited to, those set forth in Item 1A, “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, ~~2017,~~2018, as supplemented by our subsequent filings with the SEC. Unless the context indicated otherwise, all references herein to our company include our wholly-owned subsidiary, resTORbio Securities Corp.

We are a clinical-stage biopharmaceutical company ~~focused on~~developing innovative medicines that target the ~~development and commercialization~~biology of ~~novel therapeutics for the treatment of~~aging to prevent or treat aging-related ~~diseases.~~diseases. Our lead program selectively inhibits the target of rapamycin complex 1, or TORC1, an evolutionarily conserved pathway that contributes to the decline in function of multiple organ systems. Our lead product candidate, RTB101, is an oral, selective, and potent inhibitor of TORC1. RTB101 inhibits the phosphorylation of multiple targets downstream of TORC1. TORC1 inhibition has ~~demonstrated~~been shown to be of therapeutic benefit in multiple aging-related conditions in preclinical species including immunosenescence (aging-related decline in immune function), suggesting potential benefits in several aging-related diseases. In two Phase 2 clinical trials enrolling over 900 elderly people, RTB101 was observed to improve immune function by upregulation of antiviral gene expression and to reduce the incidence of respiratory tract infections, or RTIs. In May 2019, we initiated our Phase 3 program to evaluate the safety and efficacy of RTB101 in decreasing the percent of elderly subjects with clinically symptomatic respiratory illness, defined as clinical symptoms consistent with an RTI based on prespecified diagnostic criteria, with or without laboratory-confirmation of a pathogen. Our PROTECTOR Phase 3 program includes two randomized, double-blinded, placebo-controlled clinical trials that will evaluate RTB101 10mg once daily for 16 weeks during winter cold and flu season to subjects 65 years of age and older, excluding current smokers and chronic obstructive pulmonary disease, or COPD, patients. The primary endpoint is the reduction in the percentage of subjects with clinically symptomatic respiratory illness with or without laboratory-confirmation of a pathogen. PROTECTOR 1, the first Phase 3 clinical trial, initiated in the southern hemisphere is expected to enroll approximately 1,000 subjects. PROTECTOR 2, the second Phase 3 clinical trial, is planned to begin in the northern hemisphere in the fourth quarter of 2019 and is expected to enroll approximately 1,600 subjects. Based on current enrollment expectations for the Phase 3 program, we expect top-line data from both PROTECTOR Phase 3 studies in mid-2020.

In April of 2019, we initiated a Phase 1b/2a clinical trial of RTB101 alone or in combination with sirolimus in Parkinson’s disease, or PD. PD is a progressive neurodegenerative disease that affects approximately 7.5 million people worldwide. The incidence of PD increases rapidly in people 60 years of age and older, with a mean age at diagnosis of 70.5 years. Glucocerebrosidase, or GBA1, gene mutations are the most common of the currently known PD genetic mutations and up to 10 percent of people with PD in the United States carry it. Patients with PD develop shaking, rigidity, slowness of movement and difficulty walking. PD may be attributed in part to neuronal damage caused by the accumulation within neurons of abnormal aggregates containing the protein α-synuclein. Preclinical studies in mouse models of PD have shown that mTOR inhibition can induce autophagy, reduce α-synuclein accumulation and decrease neuronal cell death. Therefore, induction of autophagy with RTB101 in combination with a rapalogs, such as sirolimus, may have therapeutic benefit for patients with PD. The four-week, multicenter, 2:1 randomized, double-blind, placebo-controlled Phase 1b/2a trial is evaluating the safety and tolerability of RTB101 alone or in combination with sirolimus in PD. We plan to enroll 45 patients with mild to moderate PD who are already on standard-of-care therapy, including ~~a randomized, placebo-controlled~~those with and without glucocerebrosidase mutations. Patients are expected to be enrolled into five cohorts and dosed once-weekly with RTB101 300mg alone or in combination with three dose levels of sirolimus (2 mg, 4 mg and 6 mg). The planned primary endpoint of the trial ~~the potential to treat multiple diseases of aging for which there are no approved therapies.~~ is safety and tolerability, and secondary endpoints will include exposure in blood, plasma and cerebrospinal fluid, or CSF. The planned exploratory endpoints include biomarkers in plasma and CSF, and various clinical assessments. We expect data from this trial in 2020.

The decline in immune function that occurs during aging, or immunosenescence, increases susceptibility to a variety of diseases, including ~~respiratory tract infections, or~~ RTIs, that significantly contribute to morbidity and mortality in the elderly. Our approach focuses on the mechanistic target of rapamycin, or mTOR, pathway, an evolutionarily conserved pathway that regulates aging, and specifically on selective inhibition of the target of rapamycin complex 1, or TORC1. Our initial focus is on the development of RTB101 ~~an orally administered, small molecule, potent TORC1 inhibitor, alone and in combination with other mTOR inhibitors such as everolimus—~~as a first-in-class immunotherapy ~~program~~ designed to improve immune function and thereby reduce ~~the incidence of RTIs~~respiratory illness in the elderly regardless of the causative pathogen. ~~We licensed the worldwide rights to~~Our TORC1 immunotherapy approach is supported by two randomized, placebo-controlled Phase 2 clinical trials which enrolled more than 900 elderly subjects and provided

statistically significant (defined as nominal p < 0.05) and clinically meaningful results. In 2018, we reported results from our TORC1 program, including RTB101 alone or in combination with everolimus or other mTOR inhibitors, from Novartis International Pharmaceutical Ltd., or Novartis, in March 2017. We are evaluating RTB101 alone and in combination with everolimus in aexploratory dose-ranging randomized, placebo-controlled Phase 2b clinical trial in 652 elderly patients at increased risk of RTI-associated morbidity and mortality defined as aged 85 and over, or 65-84 with one or more comorbidities including: asthma, COPD, type 2 diabetes mellitus, or T2DM, or current smoker. The results from this trial demonstrated a statistically significant and clinically meaningful 30.6% reduction in the percentage of patients with one or more laboratory-confirmed RTIs, the primary endpoint of the trial, in the RTB101 10 mg once daily cohort compared to the placebo cohort. Prespecified analyses of the patient populations enrolled in the trial demonstrated (i) a statistically significant 52.1% reduction in the percentage of patients with severe laboratory-confirmed RTI symptoms in the RTB101 10 mg once daily cohort compared to the placebo cohort, (ii) a statistically significant 66.7%, 68.9%, and 25.3% reduction in the prespecified endpoint of patients 85 and older, 65 and older with asthma and 65 and older with T2DM, respectively, with one or more laboratory-confirmed RTIs in the RTB101 10 mg once daily cohort compared to the placebo cohort, and (iii) no reduction in the incidence of laboratory-confirmed RTIs in patients who were current smokers or with COPD in the RTB101 10 mg once daily cohort compared to the placebo cohort. The lack of efficacy observed in current smokers and patients with COPD is consistent with preclinical data suggesting that mTOR inhibition exacerbates cigarette smoke-induced lung inflammation in COPD. The combination of RTB101 + everolimus and the RTB101 10 mg twice daily did not meet the primary endpoint, suggesting that less TORC1 inhibition with RTB101 10 mg once daily may be more beneficial for reducing the incidence of RTIs in high risk elderly patients. We believe the collective results from our Phase 2a and Phase 2b clinical trials enrolling more than 900 elderly subjects suggest that RTB101 10 mg once daily, if successfully developed and approved, may improve the function of the aging immune system and reduce the incidence of clinically symptomatic respiratory illness in elderly patients. In our Phase 3 program, we expect to enroll elderly subjects 65 and older, excluding current smokers and COPD patients.

We observed additional positive results from prespecified analyses for any infection and urinary tract infections, or UTIs, in our Phase 2b trial, such as (i) a statistically significant 23.6% reduction in the percentage of patients with any infection in the RTB101 10 mg once daily cohort compared to the placebo cohort, (ii) a statistically significant 74.6% reduction in the percentage of patients with one or more UTIs in the RTB101 10 mg twice daily cohort and (iii) a 34.4% reduction in patients with one or more UTIs in the RTB101 10 mg once daily cohort. Recent scientific findings, including those published in the scientific journals Cell, Nature and Science, suggest that aging and aging-related conditions, such as immunosenescence, may be attributable not only to random cellular wear and tear, but also to specific intra-cellular signaling pathways, including the mTOR pathway. mTOR is a protein kinase that signals via two multiprotein complexes, known as TORC1 and TORC2. TORC1 inhibition has been observed to prolong lifespan, enhance immune function, ameliorate heart failure, enhance memory and mobility, decrease adiposity, and delay the onset of aging-related diseases in multiple animal studies. Specifically, with respect to enhanced immune function, TORC1 inhibition was observed in preclinical studies to rejuvenate blood, or hematopoietic, stem cell function, increase infection-fighting white blood cell production and enhance antibody-mediated, or adaptive, immunity. On the other hand, TORC2 inhibition has been observed to decrease lifespan in preclinical studies and cause unwanted side effects of hyperlipidemia and hyperglycemia in certain animals and humans. Therefore, based on these observations and data from more than 900 patients enrolled in our Phase 2a and Phase 2b clinical trials, we believe our TORC1 program has the potential to improve immune function and counteract immunosenescence in the elderly.

The reduced ability of elderly subjects to effectively detect and fight infections is most commonly manifested in their susceptibility to RTIs and the negative effects such infections have on their overall health. RTIs are the second leading cause of hospitalization in people age 85 and over, and the fourth leading cause in people age 65 and over, contributing to high healthcare costs that are three to five times higher than for the ~~reduction~~elderly population than for the younger population. Furthermore, antibiotics, which are ineffective against viruses, are often prescribed indiscriminately to treat RTIs, which may cause side effects and contribute to the growing global problem of ~~RTI~~antibiotic resistance. As the elderly represent the fastest growing population in the world, we believe there is significant unmet medical need for innovative therapeutic options for reducing the incidence of RTIs by improving the function of the aging immune system.

We believe our approach to addressing RTIs in the elderly possesses several clinical and ~~expect~~commercial advantages. Our TORC1 program offers an immunotherapy approach that has the potential to ~~report top-line data from this trial~~address a broad range of viral and bacterial pathogens. Statistically significant and clinically meaningful reductions in RTI incidence were observed in our Phase 2a and Phase 2b clinical trials with RTB101 10mg once daily. We believe the risk-to-benefit ratio of our program observed in clinical studies to date is well-suited to the elderly due to the following observations: our oral product candidates were well-tolerated in elderly subjects, none of the participants in the ~~second half~~active treatment arms experienced a serious adverse event that was related to the study drug, and the doses being investigated in our Phase 2b clinical trial were 60 to 240 times lower than maximum tolerated doses established in prior clinical trials for other indications. In May 2019, we initiated our Phase 3 program to evaluate the safety and efficacy of ~~2018.~~RTB101 in decreasing the percent of elderly subjects with clinically symptomatic respiratory illness, defined as clinical symptoms consistent with an RTI based on prespecified diagnostic

criteria, with or without laboratory-confirmation of a pathogen. We plan to conduct pivotal clinical trials and to seek regulatory approval for commercialization of RTB101 in the United States and Europe. Separate pivotal trials may be conducted to support potential approvals in Japan and China. In some markets, we may collaborate with third parties for the development and commercialization of our product candidates.

Since our inception in July 2016, we have devoted substantially all of our resources to: identifying, acquiring, and developing our product candidate portfolio; organizing and staffing our company; raising capital; developing manufacturing capabilities; conducting clinical trials; and providing general and administrative support for these operations. To date, we have primarily financed our operations through the issuance and sale of our redeemable convertible preferred stock and our ~~initial~~common stock. In March 2019, we completed an underwritten public ~~offering of our common stock, or IPO. In January 2018, we closed our IPO.~~offering. We received aggregate net proceeds from the ~~IPO~~offering of approximately ~~$89.4~~$46.6 million, after deducting underwriting discounts and commissions and other offering expenses payable by us. In addition, we granted the underwriters a 30-day option to purchase up to an additional 1,080,000 shares of common stock at the public offering price, less underwriting discounts and commissions. In April 2019, we sold an additional 487,934 shares of common stock at a price of $6.95 per share. We received aggregate net proceeds of approximately $3.1 million, after deducting underwriting discounts and commissions and other offering expenses payable by us.

We have never generated revenue and have incurred significant net losses since inception. Our net losses were ~~$1,000, $33.8~~$37.6 million and ~~$9.9~~$11.1 million, ~~for the period from July 5, 2016 (inception) through December 31, 2016,~~ for the year ended December 31, ~~2017~~2018 and for the three months ended March 31, ~~2018,~~2019, respectively. As of March 31, ~~2018,~~2019, we had an accumulated deficit of ~~$43.6~~$82.5 million. Our net losses may fluctuate significantly from quarter to quarter and year to year. We expect to incur significant expenses and increasing operating losses for the foreseeable future. We anticipate that our expenses will increase substantially as we:

We believe that our cash, ~~and~~ cash equivalents and marketable securities as of March 31, ~~2018~~2019 will be sufficient to fund our operations through 2020. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. We do not expect to generate revenue from product sales unless and until we successfully complete development and obtain regulatory approval for a product candidate or enter into collaborative agreements with third parties, which we expect will take a number of years and the outcome of which is subject to significant uncertainty. Additionally, we currently use third parties such as contract research organizations, or CROs, and contract manufacturing organizations, or CMOs, to carry out our preclinical and clinical development activities and we do not yet have a sales organization. If we obtain regulatory approval for our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. To fund our current and future operating plans, we will need additional capital, which we may obtain through one or more equity offerings, debt financings or other third-party funding, including potential strategic alliances and licensing or collaboration arrangements. We may, however, be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements as and when needed would have a

negative impact on our financial condition and our ability to develop our current product candidates, or any additional product candidates, if developed. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our preclinical and clinical development efforts. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.

On March 23, 2017, we entered into a license agreement with Novartis, pursuant to which we were granted an exclusive, field-restricted, worldwide license to certain intellectual property rights owned or controlled by Novartis, including patents, patent applications, proprietary information, know-how and other intellectual property, to develop, commercialize and sell one or more therapeutic products comprising RTB101 or RTB101 and everolimus in a fixed dose combination. Under the license agreement, we have been licensed a patent portfolio of ten patent families directed to composition of matter of RTB101 and its salts, formulations of everolimus and methods of using RTB101 and everolimus to enhance the immune response among others. The exclusive field for RTB101 under the license agreement is for the treatment, prevention and diagnosis of diseases and other conditions in all indications in humans and animals.

As initial consideration for the license, we issued Novartis Institutes for Biomedical Research, Inc., or NIBR, 2,587,992 shares of our Series A Preferred Stock.

The agreement may be terminated by either party upon a material breach of obligation by the other party that is not cured with 60 days after written notice. We may terminate the agreement in its entirety or on a product-by-product or country-by-country basis with or without cause with 60 days’ prior written notice.

Novartis may terminate the portion of the agreement related to everolimus if we fail to use commercially reasonable efforts to research, develop and commercialize a product utilizing everolimus for a period of three years. Novartis may terminate the license agreement upon our bankruptcy, insolvency, dissolution or winding up.

As additional consideration for the license, we are required to pay up to an aggregate of $4.3 million upon the satisfaction of clinical milestones, up to an aggregate of $24 million upon the satisfaction of regulatory milestones for the first indication approved, and up to an aggregate of $18 million upon the satisfaction of regulatory milestones for the second indication approved. In addition, we are required to pay up to an aggregate of $125 million upon the satisfaction of commercial milestones, based on the amount of annual net sales. We are also required to pay tiered royalties ranging from a mid-single digit percentage to a low-teen digit percentage on annual net sales of products. These royalty obligations last on a product-by-product and country-by-country basis until the latest of (i) the expiration of the last valid claim of a Novartis patent covering a subject product, (ii) the expiration of any regulatory exclusivity for the subject product in a country, or (iii) the 10^th anniversary of the first commercial sale in the country, and are subject to a reduction after the expiration of the last valid claim of a Novartis patent or the introduction of a generic equivalent of a product in a country. In addition, if we sublicense the rights under the license agreement, we are required to pay a certain percentage of the sublicense revenue to Novartis. Novartis will no longer be entitled to sublicense revenue following the last visit of the 400^th ~~subject in any human clinical trial conducted by us or a sublicensee of ours, which we expect to occur by the end of our ongoing Phase 2b clinical trial.~~

Milestone payments to Novartis will be recorded as research and development expenses in our condensed consolidated statements of operations and comprehensive loss once achievement of each associated milestone has occurred or the achievement is considered probable. In May 2017, we initiated a Phase 2b clinical trial for a first indication, triggering the first milestone payment under the agreement. Accordingly, we paid the related $0.3 million payment in May 2017. As of March 31, ~~2018,~~2019, none of the remaining development milestones, regulatory milestones, sales milestones, or royalties had been ~~reached or were probable~~reached. In May 2019, we initiated a Phase 3 clinical trial for the first indication, triggering a milestone payment of ~~achievement. We also enter into contracts in~~$2.5 million under the normal course of business with various third parties for preclinical research studies, clinical trials, testing and other services. These contracts generally provide for termination upon notice, and therefore we believe that our noncancelable obligations under these agreements are not material.agreement.

We have not generated any revenue from the sale of our products, and we do not expect to generate any revenue unless and until we obtain regulatory approval of and commercialize RTB101, alone or in combination with ~~everolimus.~~a rapalog, such as everolimus or sirolimus.

Research and development expenses consist primarily of costs incurred for the development of our product candidates, which include:

We have not provided program costs since inception because historically we have not tracked or recorded our research and development expenses on a program-by-program basis. We use our personnel and infrastructure resources across multiple research and development programs directed toward developing our TORC1 program and for identifying and developing product candidates. We manage certain activities such as contract research and manufacturing of RTB101 alone or in combination with a rapalog, such as everolimus or sirolimus, and our discovery programs through our third-party vendors, and do not track the costs of these activities on a program-by-program basis.

We expense all research and development costs in the periods in which they are incurred. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and third-party service providers.

We expect our research and development expenses to increase substantially for the foreseeable future as we continue to invest in research and development activities related to developing our product candidates, including investments in ~~developing a sustainable and scalable~~ manufacturing, ~~process for our product candidates,~~ as our programs advance into later stages of development and we continue to conduct clinical trials. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of any of our product candidates.

Because of the numerous risks and uncertainties associated with product development, we cannot determine with certainty the duration and completion costs of the current or future preclinical studies and clinical trials or if, when, or to what extent we will generate revenues from the commercialization and sale of our product candidates. We may never succeed in achieving regulatory approval for our product candidates. The duration, costs and timing of preclinical studies and clinical trials and development of our product candidates will depend on a variety of factors, including:

A change in the outcome of any of these factors could mean a significant change in the costs and timing associated with the development of our current and future preclinical and clinical product candidates. For example, if the ~~U.S. Food and Drug Administration, or~~ FDA, or another regulatory authority were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of clinical development, or if we experience significant delays in execution of or enrollment in any of our preclinical studies or clinical trials, we could be required to expend significant additional financial resources and time on the completion of preclinical and clinical development. ~~We expect our research and development expenses to increase for the foreseeable future as we continue the development of product candidates.~~

General and administrative expenses consist primarily of personnel costs, costs related to maintenance and filing of intellectual property, depreciation expense and other expenses for outside professional services, including legal, human resources, audit and accounting services. Personnel costs consist of salaries, benefits and stock-based compensation expense. We expect our general and administrative expenses to increase for the foreseeable future due to anticipated increases in headcount to advance our product candidates and as a result of operating as a public company, including expenses related to compliance with the rules and regulations of the Securities and Exchange Commission, ~~or the SEC,~~ The Nasdaq Global Select Market, additional insurance expenses, investor relations activities and other administration and professional services.

Other income, net, consists primarily of interest income earned on cash, cash equivalents and ~~cash equivalents.~~marketable securities.

	Three Months Ended March 31,						Three Months Ended March 31,
	2018			2017			2019			2018
Operating expenses:
Research and development	$	8,106		$	3,294		$	8,852		$	8,106
General and administrative		2,094			63			2,839			2,094
Total operating expenses		10,200			3,357			11,691			10,200
Loss from operations		(10,200	)		(3,357	)		(11,691	)		(10,200	)
Other income, net		341			—			631			341
Loss before income taxes								(11,060	)		(9,859	)
Income tax expense								9			—
Net loss	$	(9,859	)	$	(3,357	)	$	(11,069	)	$	(9,859	)

Research and development expenses increased to $8.9 million for the three months ended March 31, 2019, and were primarily attributable to $4.5 million of costs from third-party contract organizations and investigative clinical trial sites related to clinical trials $2.3 million of costs related to preclinical studies and the production of preclinical and clinical materials, $0.3 million of costs related to external consulting incurred to supplement our research and development personnel, and $1.8 million of personnel costs, including stock-based compensation. Research and development expenses were $8.1 million for the three months ended March 31, 2018, and were primarily attributable to $5.8 million of costs related to clinical trials, including the ~~ongoing~~ Phase 2b clinical trial, $1.0 million of costs related to contract research and supplies, $0.1 million of costs related to external consulting incurred to supplement our research and development personnel, and $1.0 million of personnel costs, including stock-based compensation. Research and development expenses were $3.3 million for the three months ended March 31, 2017, and were primarily attributable to $3.2 million of costs associated with our license agreement, including the license of the intellectual property in exchange for Series A preferred stock.

General and administrative expenses increased to $2.8 million for the three months ended March 31, 2019, and were primarily attributable to $1.4 million of personnel, including stock-based compensation, and $1.4 million of professional services fees, including costs related to intellectual property, legal and filing costs, accounting costs, insurance, and external consulting costs incurred to supplement our personnel. General and administrative expenses were $2.1 million for the three months ended March 31, 2018, and were primarily attributable to $1.3 million of personnel, including stock-based compensation, and $0.8 million of professional services fees, including costs related to intellectual property, legal and filing costs, accounting costs, insurance, and external consulting costs incurred to supplement our personnel. ~~General and administrative expenses were $63,000~~

Other income, net was $0.6 million for the three months ended March 31, ~~2017,~~2019, and primarily consisted ~~entirely~~ of ~~stock-based compensation expense.~~

interest income. Other income, net was $0.3 million for the three months ended March 31, 2018, and primarily consisted of interest income. ~~Other income, net was $0 for the three months ended March 31, 2017.~~

In ~~January 2018,~~March 2019, we ~~closed our IPO~~completed an underwritten public offering and received aggregate net proceeds of approximately ~~$89.4~~$46.6 million, after deducting underwriting discounts and commissions and other offering expenses payable by us. In addition, we granted the underwriters a 30-day option to purchase up to an additional 1,080,000 shares of common stock at the public offering price, less underwriting discounts and commissions. In April 2019, we sold an additional 487,934 shares of common stock at a price of $6.95 per share. We received aggregate net proceeds of approximately $3.1 million, after deducting underwriting discounts and commissions and other offering expenses payable by us.

Since inception, we have not generated any revenue from any sources, including from product sales, and have incurred significant operating losses and negative cash flows from our operations. We have funded our operations to date primarily with proceeds from ~~our IPO~~the sale of shares of common stock and the sale of shares of our redeemable convertible preferred stock. As of March 31, ~~2018,~~2019, we had ~~$135.7~~$143.1 million in cash, ~~and~~ cash equivalents, and marketable securities and an accumulated deficit of ~~$43.6~~$82.5 million.

Our primary use of cash has been to fund operating expenses, which consist of research and development and general and administrative expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses.

Based upon our current operating plan, we believe that our existing cash, ~~and~~ cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements through 2020, including the completion of ~~our ongoing Phase 2b clinical trial of RTB101 alone or in combination with everolimus, the completion of~~ a ~~subsequent~~ pivotal Phase 3 clinical program ~~assuming a successful outcome in our Phase 2b clinical trial of~~for RTB101, ~~alone or in combination with everolimus,~~ and the filing of ana New Drug Application, or NDA, with the FDA, assuming a successful outcome in our Phase 3 clinical program. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. We will continue to require additional financing to advance our current product candidate through clinical development, to develop, acquire or in-license other potential product candidates and to fund operations for the foreseeable future. ~~Furthermore, with the closing of our IPO, we have begun to incur additional costs associated with operating as a public company.~~ Accordingly, we will continue to seek funds through equity or debt financings, collaborative or other arrangements, or through other sources of financing. Adequate additional funding may not be available to us on acceptable terms, or at all. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies.

Further, our operating plans may change, and we may need additional funds to meet operational needs and capital requirements for clinical trials and other research and development activities. We currently have no credit facility or committed sources of capital. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated product development programs.

If we need to raise additional capital to fund our operations, funding may not be available to us on acceptable terms, or at all. If we are unable to obtain adequate financing when needed, we may have to delay, reduce the scope of or suspend one or more of our clinical trials, research and development programs or commercialization efforts. We may seek to raise any necessary additional capital through a combination of public or private equity offerings, debt financings, and collaborations or licensing arrangements. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be

diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If additional funding is required, there can be no assurance that additional funds will be available to us on acceptable terms on a timely basis, if at all. If we are unable to raise capital, we will need to curtail planned activities to reduce costs. Doing so will likely have an unfavorable effect on our ability to execute our business plans.

	Three Months Ended March 31,						Three Months Ended March 31,
	2018			2017			2019			2018
Net cash used in operating activities	$	(7,304	)	$	(294	)	$	(12,049	)	$	(7,304	)
Net cash used in investing activities		(278	)		—			(34,628	)		(278	)
Net cash provided by financing activities		89,938			294			46,816			89,938
Net increase in cash	$	82,356		$	—
Net increase in cash and cash equivalents							$	139		$	82,356

Cash used in operating activities for the three months ended March 31, 2019 was $12.0 million, consisting of a net loss of $11.1 million adjusted for noncash items including stock-based compensation expense of $0.7 million and accretion on marketable securities of $0.2 million. The change in our net operating assets and liabilities for the three months ended March 31, 2019 were due primarily to an decrease in accounts payable and accrued liabilities of $1.3 million primarily due to decreased clinical activities and an increase in prepaid expenses and other current assets of $0.1 million due to prepayments for our research and development activities. Cash used in operating activities for the three months ended March 31, 2018 was $7.3 million, consisting of a net loss of $9.9 million adjusted for noncash items including stock-based compensation expense of $1.2 million. The change in our net operating assets and liabilities ~~from~~for the three months ended March 31, 2018 were due primarily to an increase in accrued liabilities of $1.1 million primarily due to increased clinical activities and $0.5 million received from the Silverstein Foundation, which were partially offset by an increase in prepaid expenses and other current assets of $0.3 million due to prepayments for our research and development activities.

Cash used in ~~operating~~investing activities for the three months ended March 31, ~~2017~~2019 was ~~$0.3 million, consisting of a net loss of $3.4 million adjusted for noncash items including stock-based compensation expense of $0.1~~$34.6 million and ~~expense related to~~consisted of $77.1 million for the ~~acquisition~~purchases of ~~intellectual property~~marketable securities, partially offset by $42.5 million from maturities of $3.2 million. The change in our net operating assets and liabilities from the three months ended March 31, 2017 were due primarily to an increase in prepaid expenses of $0.2 million due to prepayments for our research and development activities.

marketable securities. Cash used in investing activities for the three months ended March 31, 2018 was $0.3 million and consisted of the purchases of property and equipment. ~~No cash was used in investing~~

Cash provided by financing activities for the three months ended March 31, ~~2017.~~

~~Cash Flows~~2019 was $46.8 million, net of issuance costs, from ~~Financing Activities~~

the proceeds from the public offering completed in March 2019. Cash provided by financing activities for the three months ended March 31, 2018 was $89.9 million from the proceeds from the IPO, net of issuance costs paid in 2018. ~~Cash provided by financing activities for the three months ended March 31, 2017 was $0.3 million from the issuance of redeemable convertible preferred stock.~~

The disclosure of our contractual obligations and commitments was reported in our Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2018. There have been no material changes from the contractual commitments and obligations previously disclosed in our Annual Report on Form ~~10-K.~~

~~In January 2018, we entered into a multi-year agreement to lease office space in Boston, Massachusetts under an operating lease agreement. Our minimum rent commitment under~~10-K for the ~~lease totals approximately $0.7 million. Payments under the contract commenced in March~~year ended December 31, 2018. ~~Future minimum lease payments under this lease are as follows (in thousands):~~

We enter into contracts in the normal course of business with CROs and CMOs to assist in the performance of our research and development activities and other services and products for operating purposes. These contracts generally provide for termination on notice, and therefore are cancelable contracts and not included in the table of contractual obligations and commitments.

We did not have during the previous periods, and we do not ~~entered into~~currently have, any off-balance sheet arrangements as defined under the rules and regulations of the Securities and Exchange Commission and do not have any holdings in variable interest entities.

Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated condensed financial statements, which have been prepared in accordance with United States generally accepted accounting principles, or U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as the expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

We accrue for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of preclinical studies, clinical trials, and contract manufacturing activities. We record the estimated costs of research and development activities based upon the estimated amount of services provided, and include these costs in accrued liabilities in our condensed consolidated balance sheets and within research and development expenses in our condensed consolidated statements of ~~operations.~~operations and comprehensive loss. These costs are a significant component of our research and development expenses. We estimate the amount of work completed by third-party service providers through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and the agreed-upon fee to be paid for such services. The majority of our service providers invoice in arrears for services performed, on a pre-determined schedule or when contractual milestones are met; however, some require advanced payments. We make significant judgments and estimates in determining the accrued balance in each reporting ~~period.~~period based on the facts and circumstances known at that time. As actual costs become known, we adjust our accrued estimates. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed, the number of patients enrolled and the rate of patient enrollment may vary from our estimates and could result in us reporting amounts that are too high or too low in any particular period. Our accrued expenses are dependent, in part, upon the receipt of timely and accurate reporting from CROs, CMOs and other third-party service providers. To date, there have been no material differences from our accrued expenses to actual expenses.

Research and development costs are expensed as incurred and consist of personnel costs, lab supplies and other costs, as well as fees paid to third parties to conduct research and development activities on our behalf.

Amounts incurred in connection with license agreements are also included in research and development expenses. We record payments made to outside vendors for services performed or goods being delivered for use in research and development activities as either prepaid expenses or accrued expenses, depending on the timing of when services are performed or goods are delivered.

~~In May 2017, the FASB issued ASU 2017-09,~~ ~~Compensation—Stock Compensation~~ (Topic 718): Scope of Modification Accounting, or ASU 2017-09. ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The guidance is effective for annual periods beginning after December 15, 2017, with early adoption permitted, including adoption in any interim period for which financial statements have not yet been issued. We adopted the provisions of ASU 2017-09 on January 1, 2018. No modifications of share-based payment awards have occurred as of March 31, 2018.

of the lease is allocated over the lease term, generally on a straight-line basis. This new guidance is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. ~~The Company is~~We are currently evaluating the potential effects of adopting the provisions of ASU ~~2016-02.~~2016-02 on our consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows, or ASU 2016-18, which requires that amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when

reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2018 and should be applied using a retrospective transition method to each period presented. Early adoption is permitted. We do not expect the impact of ASU 2016-18 to be material to our consolidated financial statements.

In July 2017, the FASB issued ASU 2017-11, Accounting for Certain Financial Instruments with Down Round Features, or ASU 2017-11, which updates the guidance related to the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. Under ASU 2017-11, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share, or EPS, in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. ASU 2017-11 is effective for public entities for all annual and interim periods beginning after December 15, 2019. Early adoption is permitted. We do not expect the impact of ASU 2017-11 will be material to our consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), which intends to simplify aspects of share-based compensation issued to non-employees by making the guidance consistent with the accounting for employee share-based compensation. For public entities, ASU 2018-07 is required to be adopted for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. For non-public entities and emerging growth companies that choose to take advantage of the extended transition period, ASU 2018-07 is effective for annual periods beginning after December 15, 2019. Early adoption is permitted for all entities but no earlier than the Company’s adoption of ASU No. 2016-10, Revenue from Contracts with Customers (“ASC 606”). We are currently evaluating the impact that the adoption of ASU ~~2017-11~~2018-07 will have on our consolidated financial statements.

We are exposed to market risk related to changes in interest rates. As of March 31, ~~2018,~~2019, we had cash, ~~and~~ cash equivalents and marketable securities of ~~$135.7~~$143.1 million, primarily ~~comprised of~~invested in U.S. treasury securities and money market mutual ~~funds consisting of U.S. government-backed securities.~~funds. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because our investments are in short-term marketable securities. Our available for sale securities are subject to interest rate risk and will fall in value if market interest rates increase. Due to the short-term duration of our investment portfolio and the low risk profile of our investments, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our portfolio.

We contract with ~~CROs~~contract research organizations and contract manufacturers globally. We may be subject to fluctuations in foreign currency rates in connection with certain of these agreements. Transactions denominated in currencies other than the United States dollar are recorded based on exchange rates at the time such transactions arise. We have not engaged in the hedging of our foreign currency transactions to date, we are evaluating the costs and benefits of initiating such a program and may in the future hedge selected significant transactions denominated in currencies other than the U.S. dollar as we expand our international operation and our risk grows.date. As of March 31, ~~2018,~~2019, substantially all of our total liabilities were denominated in the ~~United States~~U.S. dollar.

Inflation generally affects us by increasing our cost of labor. We do not believe that inflation had a material effect on our business, financial condition or results of operations during the three months ended March 31, 2019 and 2018.

The Company has established disclosure controls and procedures (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, as amended, or Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to management, including the principal executive officer (our Chief Executive Officer) and principal financial officer (our Vice President, Finance), to allow timely decisions regarding required disclosure.

The Company’s management, with the participation of the Company’s Chief Executive Officer and Vice President, Finance, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures have been designed to provide reasonable assurance of achieving their objectives. Based on such evaluation, the Company’s Chief Executive Officer and Vice President, Finance concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level as of March 31, ~~2018.~~2019.

There was no other change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended March 31, ~~2018~~2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

From time to time, we may be involved in lawsuits, claims, investigations and proceedings, consisting of intellectual property, commercial, employment and other matters which arise in the ordinary course of business. While the outcome of any such proceedings cannot be predicted with certainty, as of March 31, ~~2018,~~2019, we were not party to any legal proceedings that we would expect to have a material adverse impact on our financial position, results of operations or cash flow.

The matters discussed in this Quarterly Report on Form 10-Q include forward looking statements that involve risks and uncertainties. These statements are neither promises nor guarantees but are based on various assumptions by management regarding future circumstances, over many of which resTORbio has little or no control. In addition to the other information set forth in this Quarterly Report on Form 10-Q, careful consideration should be given to the risk factors ~~discussed~~ in Item ~~1A,~~1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2017, which could materially affect our business, financial condition, and/~~2018, and in all of the other information included or ~~future results. The risks described~~incorporated in our Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results. this report. There have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, ~~2017.~~2018.

During the period between January 1, 2018 and March 31, 2018, we issued to certain of our directors options to purchase an aggregate of 46,860 shares of our common stock at an exercise price of $13.17 per share. We deemed these issuances to be exempt from registration under the Securities Act either in reliance on Rule 701 of the Securities Act as sales and offers under compensatory benefit plans and contracts relating to compensation in compliance with Rule 701, or in reliance on Section 4(a)(2), as transaction by an issuer not involving a public offering.

On January 30, 2018, we closed our initial public offering, in which we issued and sold 5,666,667 shares of common stock at a public offering price of $15.00 per share, and issued an additional 850,000 shares of common stock at a price of $15.00 per share pursuant to the exercise of the underwriters’ over-allotment option. All of the shares of common stock issued and sold in our initial public offering were registered under the Securities Act pursuant to a registration statement on Form S-1 (Registration No. 333-222373), which was declared effective by the SEC on January 25, 2018. BofA Merrill Lynch, Leerink Partners, and Evercore ISI acted as joint book-running managers for the offering. Wedbush PacGrow acted as a co-manager for the offering. The aggregate gross proceeds to us from our initial public offering, inclusive of the over-allotment exercise, were $97.8 million. The offering commenced on January 25, 2018 and did not terminate until the sale of all shares offered.

The aggregate net proceeds to us from the public offering, inclusive of the over-allotment exercise, were approximately $89.4 million, after deducting underwriting discounts and commissions and offering expenses payable by us of approximately $8.4 million. No offering expenses were paid directly or indirectly to any of our directors or officers (or their associates) or persons owning 10% or more of any class of our equity securities or to any other affiliates.

As of March 31, ~~2018,~~2019, we estimate that we have used approximately ~~$6.6~~$48.9 million of ~~our existing~~ cash and cash equivalents ~~at the time of the initial public offering, together with the net proceeds from~~since our initial public offering to advance our product candidates through clinical trial programs and for working capital and general corporate purposes.

The exhibits filed as part of this Quarterly Report are set forth on the Exhibit Index, which is incorporated herein by reference.~~xhibits.~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware		81-3305277
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
500 Boylston Street, 12^th Floor Boston, MA		02116
(Address of principal executive offices)		(Zip Code)

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	TORC	The Nasdaq Global Select Market

Large accelerated filer	☐		Accelerated filer	☐
Non-accelerated filer	☒	~~(Do not check if a small reporting company)~~	~~Small~~Smaller reporting company	☐☒
			Emerging growth Company	☒

		Page
PART I.	FINANCIAL INFORMATION	23
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	23
	Condensed Consolidated Balance Sheets as of March 31, ~~2018~~2019 and December 31, ~~2017~~2018	23
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, ~~2018~~2019 and ~~2017~~2018	34
	Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the three months ended March 31, 2019 and 2018	5
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, ~~2018~~2019 and ~~2017~~2018	46
	Notes to Unaudited Condensed Consolidated Financial Statements	57
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1417
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2126
Item 4.	Controls and Procedures	2127
PART II.	OTHER INFORMATION	2228
Item 1.	Legal Proceedings	2228
Item 1A.	Risk Factors	2228
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2228
Item 3.	Defaults Upon Senior Securities	2228
Item 4.	Mine Safety Disclosures	2228
Item 5.	Other Information	2228
Item 6.	Exhibits	2328
Signatures		2430

		~~Useful Life~~ ~~(in years)~~
~~Leasehold improvements~~		~~Lesser of useful life or remaining lease term~~
~~Laboratory and manufacturing equipment~~		~~2-8 years~~
~~Computer equipment and software~~		~~1-5 years~~
~~Furniture and Fixtures~~		~~3-5 years~~
~~Office Equipment~~		~~3-5 years~~
~~Software~~		~~3-5 years~~

	Amortized		Unrealized		Unrealized		Fair
Description	Cost		Gains		Losses		Value
U.S. government agency securities and treasuries	$	135,878	$	32	$	—	$	135,910
Total	$	135,878	$	32	$	—	$	135,910

	March 31, 2019
	Amortized		Fair
	Cost		Value
Due in one year or less	$	135,878	$	135,910
Total	$	135,878	$	135,910

	December 31, 2018
	Amortized		Fair
	Cost		Value
Due in one year or less	$	101,027	$	100,986
Total	$	101,027	$	100,986

	Number of Restricted Shares Outstanding
Unvested shares — December 31, ~~2017~~2018		~~1,096,449~~1,000
Vested		(~~1,096,449~~500	)
Unvested shares — March 31, ~~2018~~2019		—500

	Number of Restricted Stock Units Outstanding
Unvested shares — December 31, 2018		24,960
Granted		—
Vested		—
Unvested shares — March 31, 2019		24,960

Exhibit Number		Description
~~3.1~~10.1*		~~Third Amended~~Second Amendment to Offer Letter, effective as of March 1, 2019, between the Company and ~~Restated Certificate of Incorporation of the Registrant (as currently in effect) (Incorporated by reference to Exhibit 3.1 to our CurrentReport on Form 8-K (File No. 001-38359) filed with the SEC on January 30, 2018)~~Joan Mannick
~~3.2~~10.2*		~~Amended and Restated Bylaws of the Registrant (as currently in effect) (Incorporated by reference~~First Amendment to ~~Exhibit 3.2 to our Current Report on Form 8-K (File No. 001-38359) filed with the SEC on January 30, 2018)~~
~~4.1~~		Specimen stock certificate evidencing the shares of common stock (Incorporated by reference to Exhibit 4.1 to our Registration Statement on Form S-1/A (File No. 333-222373) filed with the SEC on January 16, 2018)
~~10.1#~~		2018 Stock Incentive Plan and forms of award agreements thereunder (Incorporated by reference to Exhibit 10.2 to our Registration Statement on Form S-1/A (File No. 333-222373) filed with the SEC on January 16, 2018)
~~10.2#~~		~~Form of Director Indemnification Agreement (Incorporated by reference to Exhibit 10.3 to our Registration Statement on Form S-1/A (File No. 333-222373) filed with the SEC on January 16, 2018)~~
~~10.3#~~		~~Form of Officer Indemnification Agreement (Incorporated by reference to Exhibit 10.4 to our Registration Statement on Form S-1/A (File No. 333-222373) filed with the SEC on January 16, 2018)~~
~~10.4#~~		~~2018 Employee Stock Purchase Plan (Incorporated by reference to Exhibit 10.5 to our Registration Statement on Form S‑1/A (File No. 333-222373) filed with the SEC on January 16, 2018)~~
~~10.5#~~		~~Non-Employee Director Compensation Policy (Incorporated by reference to Exhibit 10.6 to our Registration Statement on Form S-1/A (File No. 333-222373) filed with the SEC on January 16, 2018)~~
~~10.6~~		Office Lease, ~~Agreement,~~ dated as of ~~January 8, 2018,~~April 1, 2019, by and between the ~~Registrant~~Company and 500 Boylston and 222 Berkeley Owner (DE) LLC ~~(Incorporated by reference to Exhibit 10.15 to our Registration Statement on Form S-1/A (File No. 333-222373) filed with the SEC on January 16, 2018)~~
~~10.7#~~		~~Senior Executive Cash Incentive Bonus Plan (Incorporated by reference to Exhibit 10.16 to our Annual Report on Form 10-K (File No. 001-383359) filed with the SEC on March 29, 2018)~~
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended
32.1*32.1+		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
~~101.INS~~101.INS*		XBRL Instance Document
~~101.SCH~~101.SCH*		XBRL Taxonomy Extension Schema Document
~~101.CAL~~101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
~~101.DEF~~101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
~~101.LAB~~101.LAB*		XBRL Taxonomy Extension Label Linkbase Document
~~101.PRE~~101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

	RESTORBIO, INC.

Date: May ~~10, 2018~~15, 2019	By:	/s/ Chen Schor
		Chen Schor
		President and Chief Executive Officer (Principal executive officer)

Date: May ~~10, 2018~~15, 2019	By:	/s/ John J. McCabe
		John J. McCabe
		Vice President, Finance (Principal financial and accounting officer)