Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 26, 2021 | Jun. 30, 2020 | |
Document And Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2020 | ||
Entity File Number | 001-37852 | ||
Entity Registrant Name | PROTAGONIST THERAPEUTICS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 98-0505495 | ||
Entity Address, Address Line One | 7707 Gateway Boulevard, Suite 140 | ||
Entity Address, City or Town | Newark | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94560 | ||
City Area Code | 510 | ||
Local Phone Number | 474-0170 | ||
Title of 12(b) Security | Common Stock, $0.00001 par value | ||
Trading Symbol | PTGX | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Ex Transition Period | true | ||
Entity Small Business | true | ||
ICFR Auditor Attestation Flag | false | ||
Entity Emerging Growth Company | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 640.7 | ||
Entity Common Stock, Shares Outstanding | 43,808,308 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001377121 | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 117,358 | $ 33,006 |
Marketable securities | 188,451 | 100,011 |
Restricted cash - current | 10 | 10 |
Receivable from collaboration partner and contract asset - related party | 2,426 | 6,755 |
Research and development tax incentive receivable | 1,084 | |
Prepaid expenses and other current assets | 6,277 | 5,529 |
Total current assets | 315,606 | 145,311 |
Marketable securities - noncurrent | 2,000 | |
Property and equipment, net | 1,462 | 1,681 |
Restricted cash - noncurrent | 450 | 450 |
Operating lease right-of-use asset | 4,950 | 6,042 |
Deferred tax asset | 1,433 | |
Total assets | 324,468 | 154,917 |
Current liabilities: | ||
Accounts payable | 3,075 | 2,790 |
Payable to collaboration partner - related party | 2,732 | 1,262 |
Accrued expenses and other payables | 18,498 | 12,360 |
Deferred revenue - related party - current | 14,477 | 17,738 |
Operating lease liability - current | 1,459 | 1,256 |
Total current liabilities | 40,241 | 35,406 |
Long-term debt, net | 9,794 | |
Deferred revenue - related party - noncurrent | 23,792 | |
Operating lease liability - noncurrent | 4,500 | 5,961 |
Other liabilities | 121 | |
Total liabilities | 44,862 | 74,953 |
Commitments and contingencies (Note 11) | ||
Stockholders' equity: | ||
Preferred stock, $0.00001 par value, 10,000,000 shares authorized; no shares issued and outstanding | ||
Common stock, $0.00001 par value, 90,000,000 shares authorized; 43,745,465 and 27,217,649 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively | ||
Additional paid-in capital | 563,389 | 297,846 |
Accumulated other comprehensive gain (loss) | 28 | (221) |
Accumulated deficit | (283,811) | (217,661) |
Total stockholders' equity | 279,606 | 79,964 |
Total liabilities and stockholders' equity | $ 324,468 | $ 154,917 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Consolidated Balance Sheets | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 43,745,465 | 27,217,649 |
Common stock, shares outstanding | 43,745,465 | 27,217,649 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Operations | |||
License and collaboration revenue - related party | $ 28,628 | $ 231 | $ 30,925 |
Operating expenses: | |||
Research and development | 74,506 | 65,003 | 59,497 |
General and administrative | 18,638 | 15,749 | 13,697 |
Total operating expenses | 93,144 | 80,752 | 73,194 |
Loss from operations | (64,516) | (80,521) | (42,269) |
Interest income | 900 | 2,813 | 2,566 |
Interest expense | (598) | (169) | |
Loss on early repayment of debt | (585) | ||
Other expense, net | (46) | (1) | (20) |
Loss before income tax (expense) benefit | (64,845) | (77,878) | (39,723) |
Income tax (expense) benefit | (1,305) | 691 | 799 |
Net loss | $ (66,150) | $ (77,187) | $ (38,924) |
Net loss per share, basic and diluted | $ (1.92) | $ (2.98) | $ (1.74) |
Weighted-average shares used to compute net loss per share, basic and diluted | 34,396,446 | 25,894,024 | 22,364,515 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Comprehensive Loss | |||
Net loss | $ (66,150) | $ (77,187) | $ (38,924) |
Other comprehensive loss: | |||
Gain (loss) on translation of foreign operations | 266 | (44) | (322) |
Unrealized (loss) gain on marketable securities | (17) | 56 | 95 |
Comprehensive loss | $ (65,901) | $ (77,175) | $ (39,151) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common StockAt-the-market offering | Common Stock | Additional Paid-In CapitalAt-the-market offering | Additional Paid-In Capital | Accumulated Other Comprehensive Gain (Loss) | Accumulated Deficit | At-the-market offering | Total |
Balance, Beginning at Dec. 31, 2017 | $ 222,188 | $ (6) | $ (101,550) | $ 120,632 | ||||
Balance, Beginning (in shares) at Dec. 31, 2017 | 21,088,306 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of common stock, net of issuance costs | $ 1,508 | $ 1,508 | ||||||
Issuance of common stock, net of issuance costs (in shares) | 151,273 | |||||||
Issuance of common stock and warrants upon private placement, net of issuance costs | 21,673 | 21,673 | ||||||
Issuance of common stock and warrants upon private placement, net of issuance costs (in shares) | 2,750,000 | |||||||
Issuance of common stock upon under equity incentive and employee stock purchase plans | 934 | 934 | ||||||
Issuance of common stock upon under equity incentive and employee stock purchase plans (in shares) | 197,640 | |||||||
Retirement of common stock in exchange for common stock warrant | (6,670) | (6,670) | ||||||
Retirement of common stock in exchange for common stock warrant (in shares) | (1,000,000) | |||||||
Issuance of common stock warrant in exchange for retirement of common stock | 6,670 | 6,670 | ||||||
Stock-based compensation expense | 6,919 | 6,919 | ||||||
Other comprehensive gain (loss) | (227) | (227) | ||||||
Net loss | (38,924) | (38,924) | ||||||
Balance, Ending at Dec. 31, 2018 | 253,222 | (233) | (140,474) | 112,515 | ||||
Balance, Ending (in shares) at Dec. 31, 2018 | 23,187,219 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of common stock, net of issuance costs | 34,492 | 34,492 | ||||||
Issuance of common stock, net of issuance costs (in shares) | 2,846,641 | |||||||
Issuance of common stock upon under equity incentive and employee stock purchase plans | 1,779 | 1,779 | ||||||
Issuance of common stock upon under equity incentive and employee stock purchase plans (in shares) | 583,792 | |||||||
Issuance of common stock upon exercise of Exchange Warrants (in shares) | 599,997 | |||||||
Stock-based compensation expense | 8,353 | 8,353 | ||||||
Other comprehensive gain (loss) | 12 | 12 | ||||||
Net loss | (77,187) | (77,187) | ||||||
Balance, Ending at Dec. 31, 2019 | 297,846 | (221) | (217,661) | $ 79,964 | ||||
Balance, Ending (in shares) at Dec. 31, 2019 | 27,217,649 | 27,217,649 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Issuance of common stock, net of issuance costs | $ 41,871 | 212,974 | $ 41,871 | $ 212,974 | ||||
Issuance of common stock, net of issuance costs (in shares) | 2,483,719 | 13,526,189 | ||||||
Issuance of common stock upon under equity incentive and employee stock purchase plans | 2,799 | 2,799 | ||||||
Issuance of common stock upon under equity incentive and employee stock purchase plans (in shares) | 517,908 | |||||||
Stock-based compensation expense | 7,899 | 7,899 | ||||||
Other comprehensive gain (loss) | 249 | 249 | ||||||
Net loss | (66,150) | (66,150) | ||||||
Balance, Ending at Dec. 31, 2020 | $ 563,389 | $ 28 | $ (283,811) | $ 279,606 | ||||
Balance, Ending (in shares) at Dec. 31, 2020 | 43,745,465 | 43,745,465 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net loss | $ (66,150) | $ (77,187) | $ (38,924) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Stock-based compensation | 7,899 | 8,353 | 6,919 |
Operating lease right-of-use asset amortization | 1,775 | 1,792 | |
Depreciation and amortization | 789 | 703 | 527 |
Loss on early repayment of debt | 585 | ||
Net amortization of premium (accretion of discount) on marketable securities | 37 | (594) | 206 |
Amortization of debt issuance costs and accretion of debt discount | 159 | 29 | |
Gain on disposal of property and equipment | 8 | ||
Change in deferred tax asset | 1,438 | (775) | (658) |
Changes in operating assets and liabilities: | |||
Research and development tax incentive receivable | (990) | 1,411 | (236) |
Receivable from collaboration partner - related party | 4,329 | (2,168) | (2,771) |
Prepaid expenses and other assets | (1,102) | (2,820) | 1,117 |
Accounts payable | 309 | (3,000) | 4,430 |
Payable to collaboration partner - related party | 1,471 | 201 | 1,061 |
Accrued expenses and other payables | 5,840 | 1,098 | 1,911 |
Deferred revenue - related party | (27,053) | 33,307 | (23,529) |
Operating lease liability | (1,941) | (1,885) | |
Other liability | 121 | ||
Net cash used in operating activities | (72,484) | (41,527) | (49,947) |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchase of marketable securities | (280,027) | (166,936) | (71,060) |
Proceeds from maturities of marketable securities | 189,533 | 114,193 | 73,759 |
Purchases of property and equipment | (471) | (967) | (486) |
Net cash (used in) provided by investing activities | (90,965) | (53,710) | 2,213 |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from public offering of common stock, net of issuance costs | 213,303 | ||
Proceeds from issuance of common stock and warrants in private placement, net of issuance costs | 21,673 | ||
Proceeds from at-the-market offering, net of issuance costs | 42,062 | 34,492 | 1,508 |
Proceeds from issuance of common stock upon exercise of stock options and purchases under employee stock purchase plan | 2,799 | 1,779 | 934 |
Proceeds from issuance of long-term debt, net of issuance costs | 9,765 | ||
Issuance costs related to long-term debt | (14) | ||
Early repayment of long-term debt | (10,524) | ||
Net cash provided by financing activities | 247,626 | 46,036 | 24,115 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 175 | (26) | (177) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 84,352 | (49,227) | (23,796) |
Cash, cash equivalents and restricted cash, beginning of period | 33,466 | 82,693 | 106,489 |
Cash, cash equivalents and restricted cash, end of period | 117,818 | 33,466 | 82,693 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING INFORMATION: | |||
Cash paid for interest | 438 | 70 | |
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING INFORMATION: | |||
Purchases of property and equipment in accounts payable and accrued liabilities | 85 | 100 | 24 |
Fair value of common stock retired in exchange for issuance of common stock warrant | $ 6,670 | ||
Public Offering | Accrued liabilities and other payables | |||
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING INFORMATION: | |||
Issuance costs related to common stock | 205 | $ 80 | |
Public Offering | Prepaid expenses and other assets | |||
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING INFORMATION: | |||
Issuance costs related to common stock | 124 | ||
At-the-market offering | Prepaid expenses and other assets | |||
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING INFORMATION: | |||
Issuance costs related to common stock | $ 191 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2020 | |
Organization and Description of Business | |
Organization and Description of Business | PROTAGONIST THERAPEUTICS, INC. Notes to Consolidated Financial Statements Note 1. Organization and Description of Business Protagonist Therapeutics, Inc. (the “Company”) is headquartered in Newark, California. The Company is a clinical-stage biopharmaceutical company that utilizes a proprietary technology platform to discover and develop novel peptide-based therapeutics to address significant unmet medical needs and transform existing treatment paradigms for patients. Protagonist Pty Limited (“Protagonist Australia”) is a wholly-owned subsidiary of the Company and is located in Brisbane, Queensland, Australia. Protagonist Australia was incorporated in Australia in September 2001. The Company manages its operations as a single operating segment. Liquidity The Company has incurred net losses from operations since inception and has an accumulated deficit of $283.8 million as of December 31, 2020. The Company’s ultimate success depends on the outcome of its research and development and collaboration activities. The Company expects to incur additional losses in the future and anticipates the need to raise additional capital to continue to execute its long-range business plan. Since the Company’s initial public offering in August 2016, it has financed its operations primarily through offerings of common stock and payments received under a license and collaboration agreement. Risks and Uncertainties The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic. The Company is continuing to closely monitor the impact of the COVID-19 pandemic on its business and has taken and continues to take proactive efforts to protect the health and safety of its patients, clinical research staff and employees, and to maintain business continuity. The extent of the impact of the COVID-19 pandemic on the Company's activities is highly uncertain and difficult to predict, as the response to the pandemic is ongoing and information continues to evolve. Capital markets and economies worldwide have been negatively impacted by the COVID-19 pandemic, which has contributed to the current global economic recession. Such economic disruption could have a material adverse effect on the Company’s business. Policymakers around the globe have responded with fiscal policy actions to support the healthcare industry and economy as a whole. The magnitude and overall effectiveness of these actions remains uncertain. The severity of the impact of the COVID-19 pandemic on the Company's activities will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic, including the severity of any additional periods of increases or spikes in the number of cases in the areas the Company and its suppliers operate and areas where the Company’s clinical trial sites are located. Accordingly, the extent and severity of the impact on the Company's existing and planned clinical trials, manufacturing, collaboration activities and operations, is uncertain and cannot be fully predicted. The Company has experienced delays in its existing and planned clinical trials due to the worldwide impacts of the pandemic. The Company's future results of operations and liquidity could be adversely impacted by further delays in existing and planned clinical trials, continued difficulty in recruiting patients for these clinical trials, delays in manufacturing and collaboration activities, supply chain disruptions, the ongoing impact on its operating activities and employees, and the ongoing impact of any initiatives or programs that the Company may undertake to address financial and operational challenges. As of the date of issuance of these consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact the Company's future financial condition, liquidity or results of operations remains uncertain. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note Basis of Presentation and Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Protagonist Australia, and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated upon consolidation. The financial statements of Protagonist Australia use the Australian dollar as the functional currency since the majority of expense transactions occur in such currency. Gains and losses from foreign currency transactions were not material for all periods presented. The re-measurement from Australian dollar to U.S. dollars is outlined below: a. Equity accounts, except for the change in retained earnings during the year, have been translated using historical exchange rates. b. All other Australian dollar denominated assets and liabilities as of December 31, 2020 and 2019 have been translated using the year-end exchange rate. c. The consolidated statements of operations have been translated at the weighted average exchange rates in effect during each year. Foreign currency translation gains and losses are reported as a component of stockholders’ equity in accumulated other comprehensive loss on the consolidated balance sheets. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, accruals for research and development activities, stock-based compensation, income taxes, marketable securities and leases. Estimates related to revenue recognition include actual costs incurred versus total estimated costs of the Company’s deliverables to determine percentage of completion in addition to the application and estimates of potential revenue constraints in the determination of the transaction price under its license and collaboration agreements. Management bases these estimates on historical and anticipated results, trends and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to forecasted amounts and future events. Actual results may differ significantly from those estimates. Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. The Company has taken into consideration any known COVID-19 impacts in its accounting estimates to date and is not aware of any additional specific events or circumstances that would require any additional updates to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of this Annual Report on Form 10-K. These estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions. Concentrations of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents and marketable securities. Substantially all of the Company’s cash is held by two financial institutions that management believes are of high credit quality. Such deposits may, at times, exceed federally insured limits. The primary focus of the Company’s investment strategy is to preserve capital and to meet liquidity requirements. The Company’s cash equivalents and marketable securities are managed by external managers within the guidelines of the Company’s investment policy. The Company’s investment policy addresses the level of credit exposure by limiting concentration in any one corporate issuer and establishing a minimum allowable credit rating. To manage its credit risk exposure, the Company maintains its portfolio of cash equivalents and marketable securities in fixed income securities denominated and payable in U.S. dollars. Permissible investments of fixed income securities include obligations of the U.S. government and its agencies, money market instruments including commercial paper and negotiable certificates of deposit, and highly rated corporate debt obligations and money market funds. Cash Equivalents Cash equivalents that are readily convertible to cash are stated at cost, which approximates fair value. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Restricted Cash Restricted cash consists of cash balances primarily held as security in connection with a letter of credit related to the Company’s facility lease entered into in March 2017 and the Company’s corporate credit card. Cash as Reported in Consolidated Statements of Cash Flows Cash as reported in the consolidated statements of cash flows includes the aggregate amounts of cash and cash equivalents and the restricted cash as presented on the consolidated balance sheets. Cash as reported in the consolidated statements of cash flows consists of (in thousands): December 31, 2020 2019 2018 Cash and cash equivalents $ 117,358 $ 33,006 $ 82,233 Restricted cash - current 10 10 10 Restricted cash - noncurrent 450 450 450 Total cash, cash equivalent and restricted cash in consolidated statements of cash flows $ 117,818 $ 33,466 $ 82,693 Marketable Securities All marketable securities have been classified as “available-for-sale” and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its marketable securities at the time of purchase and reevaluates such designation as of each balance sheet date. Short-term marketable securities have maturities greater than three months but not longer than 365 days as of the balance sheet date. Long-term marketable securities have maturities of 365 days or longer as of the balance sheet date. Unrealized gains and losses are excluded from earnings and are reported as a component of comprehensive loss. Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in interest income. The cost of securities sold is based on the specific-identification method. Interest on marketable securities is included in interest income. Fair Value of Financial Instruments Fair value accounting is applied to all financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually). The carrying amount of the Company’s financial instruments, including cash equivalents, receivable from collaboration partner, accounts payable, payable to collaboration partner and accrued expenses and other payables approximate fair value due to their short-term maturities. See Note 4. to the Consolidated Financial Statements for additional information regarding the fair value of the Company’s other financial assets and liabilities. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, ranging from three Leases The Company adopted Accounting Standards Codification Topic 842, Leases, The Company records tenant improvement allowances as a reduction to the ROU asset with the impact of the decrease recognized prospectively over the remaining lease term. The leasehold improvements will be amortized over the shorter of their useful life or the remaining term of the lease. Impairment of Long-Lived Assets The Company reviews long-lived assets, primarily comprised of property, equipment and operating lease right-of-use assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount to the future net cash flows which the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. There have been no such impairments of long-lived assets for any of the periods presented. Long Term Debt The Company accounts for interest on its long-term debt under the effective interest method, with interest expense comprised of contractual interest, amortization of origination fees and other issuance costs, and accretion of final payment fees. Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those from stockholders. The Company’s foreign currency translation and unrealized gains and losses on available-for-sale securities represent the only components of other comprehensive loss that are excluded from reported net loss and that are presented in the consolidated statements of comprehensive loss. Income Taxes The Company uses the asset and liability method to account for income taxes in accordance with the authoritative guidance for income taxes. Under this method, deferred tax assets and liabilities are determined based on future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and tax loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than a 50% likelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in income tax expense. To date, there have been no interest or penalties recorded in relation to unrecognized tax benefits. Revenue Recognition The Company follows Accounting Standards Codification Topic 606, Revenue from Contracts with Customers Licenses of intellectual property: If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in an arrangement, the Company recognizes revenue from non-refundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring proportional performance for purposes of recognizing revenue from non-refundable, upfront fees. The Company evaluates the measure of proportional performance each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone payments: At the inception of each arrangement or amendment that includes development, regulatory or commercial milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. ASC 606 suggests two alternatives to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. Whichever method is used, it should be consistently applied throughout the life of the contract; however, it is not necessary for the Company to use the same approach for all contracts. The Company expects to use the most likely amount method for development and regulatory milestone payments. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. If there is more than one performance obligation, the transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. The Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability or achievement of each such milestone and any related constraint, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Upfront payments and fees are recorded as deferred revenue upon receipt or when due and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional. Amounts payable to the Company and not yet billed to the collaboration partner are recorded as contract assets. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Contractual cost sharing payments made to a customer or collaboration partner are accounted for as a reduction to the transaction price if such payments are not related to distinct goods or services received from the customer or collaboration partner. Contracts may be amended to account for changes in contract specifications and requirements. Contract modifications exist when the amendment either creates new, or changes existing, enforceable rights and obligations. When contract modifications create new performance obligations and the increase in consideration approximates the standalone selling price for goods and services related to such new performance obligations as adjusted for specific facts and circumstances of the contract, the modification is considered to be a separate contract. If a contract modification is not accounted for as a separate contract, the Company accounts for the promised goods or services not yet transferred at the date of the contract modification (the remaining promised goods or services) prospectively, as if it were a termination of the existing contract and the creation of a new contract, if the remaining goods or services are distinct from the goods or services transferred on or before the date of the contract modification. The Company accounts for a contract modification as if it were a part of the existing contract if the remaining goods or services are not distinct and, therefore, form part of a single performance obligation that is partially satisfied at the date of the contract modification. In such case the effect that the contract modification has on the transaction price, and on the entity’s measure of progress toward complete satisfaction of the performance obligation, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) at the date of the contract modification (the adjustment to revenue is made on a cumulative catch-up basis). The period between when the Company transfers control of promised goods or services and when the Company receives payment is expected to be one year or less, which is consistent with the Company’s historical experience. Upfront payment contract liabilities resulting from the Company’s license and collaboration agreements do not represent a financing component as the payment is not financing the transfer of goods and services, and the technology underlying the licenses granted reflects research and development expenses already incurred by the Company. As such, the Company does not adjust its revenues for the effects of a significant financing component. Research and Development Costs Research and development costs are expensed as incurred, unless there is an alternate future use in other research and development projects or otherwise. Research and development costs include salaries and benefits, stock-based compensation expense, laboratory supplies and facility-related overhead, outside contracted services including clinical trial costs, manufacturing and process development costs for both clinical and pre-clinical materials, research costs, development milestone payments under license and collaboration agreements, and other consulting services. The Company accrues for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of pre-clinical studies and clinical trials, and contract manufacturing activities. The Company records the estimated costs of research and development activities based upon the estimated services provided but not yet invoiced and includes these costs in accrued expenses and other payables in the consolidated balance sheets and within research and development expense in the consolidated statements of operations. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers. As actual costs become known, the Company adjusts its accrued liabilities. The Company has not experienced any material differences between accrued liabilities and actual costs incurred. However, the status and timing of actual services performed, number of patients enrolled, the rate of patient enrollment and number and location of sites activated may vary from the Company’s estimates, resulting in adjustments to expense in future periods. Changes in these estimates that result in material changes to the Company’s accruals could materially affect the Company’s results of operations. The Company has received orphan drug designation from the U.S. Food and Drug Administration (“FDA”) for its clinical asset rusfertide (generic name for PTG-300) for the treatment of polycythemia vera and beta-thalassemia and may qualify for a related 25% U.S. Federal income tax credit on qualifying clinical study expenditures. Research and Development Tax Incentive The Company is eligible under the AusIndustry research and development tax incentive program to obtain either a refundable cash tax incentive or a taxable credit in the form of a non-cash tax incentive from the Australian Taxation Office (“ATO”). The refundable cash tax incentive is available to the Company on the basis of specific criteria with which the Company must comply. Specifically, the Company must have annual turnover of less than AUD 20.0 million and cannot be controlled by income tax exempt entities. The refundable cash tax incentive is recognized as a reduction to research and development expense when the right to receive has been attained and funds are considered to be collectible. The tax incentive is denominated in Australian dollars and, therefore, the related receivable is remeasured into U.S. dollars as of each reporting date. The Company may alternatively be eligible for a taxable credit in the form of a non-cash tax incentive in years when the annual turnover exceeds the limit. The Company evaluates its eligibility under tax incentive programs as of each balance sheet date and makes accrual and related adjustments based on the most current and relevant data available. Small Business Innovation Research (“SBIR”) Grants The Company has received SBIR grants from the National Institutes of Health (“NIH”) in support of its research activities. The Company recognizes a reduction to research and development expenses when expenses related to grants have been incurred and the grant funds become contractually due from NIH. Stock-based Compensation The Company measures its stock-based awards made to its equity plan participants based on the estimated fair values of the awards as of the grant date. For stock option awards, the Company uses the Black-Scholes option-pricing model to estimate fair values. For restricted stock unit awards, the estimated fair value is generally the fair market value of the underlying stock on the grant date. Stock-based compensation expense is recognized over the requisite service period and is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. The Company recognizes forfeitures of stock-based awards as they occur. Net Loss per Share Basic net loss per share is calculated by dividing the Company’s net loss by the weighted average number of shares of common stock and Exchange Warrants outstanding during the period, without consideration of potentially dilutive securities. In accordance with Accounting Standards Codification Topic 260, Earnings Per Share Recently Adopted Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606 Recently Issued Accounting Pronouncements Not Yet Adopted as of December 31, 2020 In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, |
License and Collaboration Agree
License and Collaboration Agreement | 12 Months Ended |
Dec. 31, 2020 | |
License and Collaboration Agreement | |
License and Collaboration Agreement | |
License and Collaboration Agreement | Note 3. License and Collaboration Agreement Agreement Terms On May 26, 2017, the Company and Janssen Biotech, Inc., (“Janssen”), one of the Janssen Pharmaceutical Companies of Johnson & Johnson, entered into an exclusive license and collaboration agreement (the “Janssen License and Collaboration Agreement”) for the development, manufacture and potential commercialization of PTG-200 worldwide for the treatment of Crohn’s disease (“CD”) and ulcerative colitis (“UC”). Janssen is a related party to the Company as Johnson & Johnson Innovation - JJDC, Inc., a significant stockholder of the Company, and Janssen are both subsidiaries of Johnson & Johnson. PTG-200 is the Company’s orally delivered gut-restricted Interleukin 23 receptor (“IL-23R”) antagonist drug candidate currently in development. The Janssen License and Collaboration Agreement became effective on July 13, 2017. Upon the effectiveness of the agreement, the Company received a non-refundable, upfront cash payment of $50.0 million from Janssen. Under the Janssen License and Collaboration Agreement, the Company granted to Janssen an exclusive worldwide license to develop, manufacture and commercialize PTG-200 and related IL-23R compounds for all indications, including CD and UC. The Company was responsible, at its own expense, for the conduct of the Phase 1 clinical trial for PTG-200, and Janssen is responsible for the conduct of the Phase 2 clinical trial for PTG-200 in CD, including filing the U.S. Investigational New Drug application (“IND”). Development costs for the Phase 2 clinical trial are shared between the parties on an 80/20 basis, with Janssen assuming the larger share. Janssen submitted an IND for PTG-200 in CD during the second quarter of 2019, which took effect in July 2019. The Company initiated a Phase 2 clinical study for PTG-200 in CD with Janssen in the fourth quarter of 2019. The Company entered into an amendment (the “First Amendment”) to the Janssen License and Collaboration Agreement effective May 7, 2019. The First Amendment builds upon the Company’s ongoing development collaboration with Janssen for PTG-200 and, upon the effectiveness of the First Amendment, the Company became eligible to receive a $25.0 million payment from Janssen, which was received during the second quarter of 2019. The First Amendment expanded the scope of the Janssen License and Collaboration Agreement by supporting research efforts towards identifying and developing second-generation IL-23R antagonists (“second-generation compounds”). Two second-generation IL-23R compounds have been nominated and are currently in development: PN-235, in a Phase 1 clinical study, and PN-232, in preclinical studies. As part of the services added in the First Amendment, Janssen will pay certain costs and milestones related to advancing pre-clinical candidates from the second-generation research program through Phase 1 studies, including funding of a certain number of full-time equivalent employees (“FTEs”) at the Company for an agreed upon period of time. The Company will pay 100% of the costs for the preclinical studies and Phase 1 studies for the first second-generation compound, and 50% of the costs of the Phase 1 studies for the second and third second-generation compounds; thereafter Janssen will pay 100% of any further Phase 1 development costs. Development costs for the Phase 2 clinical trials for second-generation compounds are shared between the parties on an 80/20 basis, with Janssen assuming the larger share. The Company’s Phase 1 and Phase 2 development costs are also limited by overall spending caps. In December 2019, the Company became eligible to receive a $5.0 million payment trigged by the successful nomination of a second-generation development compound, which was received during the first quarter of 2020. The Company will be eligible to receive a $7.5 million milestone payment at the completion of a Phase 1 study for the first second-generation compound. Prior to the effectiveness of the First Amendment, the Company had been eligible to receive a $25.0 million milestone payment upon Janssen’s filing of the IND. This amount had been considered constrained until a time at which the Company would have become eligible to receive the $25.0 million payment from Janssen. Payments to the Company for research and development services are generally billed and collected as services are performed or assets are delivered, including research activities and Phase 1 and Phase 2 development activities. Janssen bills the Company for its 20% share of the Phase 2 development costs as expenses are incurred by Janssen. Milestone payments are received after the related milestones are achieved. Pursuant to the First Amendment, the Company will be eligible to receive clinical development, regulatory and sales milestones, if and as achieved, and/or payments relating to Janssen’s elections to maintain or expand its license rights. The next possible milestone or opt-in election events based on a Phase 2 clinical trial in CD are as follows: • Janssen can elect to advance PTG-200 into Phase 2b following receipt of the top line results of the CD Phase 2a clinical trial for PTG-200 by paying a $50.0 million maintenance fee (the “Amended First Opt-in Election”); or • Janssen can also then elect to receive exclusive, world-wide commercial rights for both PTG-200 and second-generation products following the Phase 2b completion date for PTG-200 or a second-generation product by paying a $50.0 million payment (the “Amended Second Opt-in Election”). The Company will also be eligible for certain additional milestone payments including a potential payment of either $100.0 million upon a Phase 3 CD clinical trial meeting a primary clinical endpoint with respect to PTG-200 or $115.0 million upon a Phase 3 CD clinical trial meeting a primary clinical endpoint with respect to a second-generation compound. Pursuant to the First Amendment, the Company will be eligible to receive tiered royalties on net product sales at percentages ranging from mid-single digits to ten percent. Under the terms of the First Amendment, the Company will be eligible to receive up to an aggregate $1.0 billion in research, development, regulatory and sales milestones. The Janssen License and Collaboration Agreement remains in effect until the royalty obligations cease following patent and regulatory expiry, unless terminated earlier. Upon a termination of the Janssen License and Collaboration Agreement, all rights revert back to the Company, and in certain circumstances, if such termination occurs during ongoing clinical trials, Janssen would, if requested, provide certain financial and operational support to the Company for the completion of such trials. Revenue Recognition The Company concluded that the amended Janssen License and Collaboration Agreement continued to contain a single performance obligation including the development license; second-generation compound research services; Phase 1 development services for PTG-200 and potential second-generation compounds; the Company’s services associated with Phase 2 development for PTG-200 until Phase 2a; the Company’s services associated with Phase 2 development for second-generation products until the dosing of the third patient in Phase 2b in CD or UC, or Phase 2 in an additional indication; and all other such services that the Company may perform at the request of Janssen to support the development of PTG-200, second-generation research services, or the development of second-generation compounds. The Company concluded that the Amended First Opt-in Election and the Amended Second Opt-in Election options are not considered to be material rights. The Company determined that the license was not distinct from the added research and development services within the context of the agreement because the added research and development services significantly increase the utility of the intellectual property. The Company also determined that the remaining research and development services are not distinct from the partially delivered combined promise comprised under the agreement prior to the First Amendment of the development license and PTG-200 services, including compound supply and other services. Therefore, the First Amendment is treated as if it were part of the original Janssen License and Collaboration Agreement. The First Amendment was accounted for as if it were an extension of services under the initial Janssen License and Collaboration Agreement by applying a cumulative catch-up adjustment to revenue. As of the effective date of the First Amendment, the Company calculated the adjusted cumulative revenue under the amended Janssen License and Collaboration Agreement by updating the transaction price for the incremental consideration to be received, net of the incremental development cost reimbursement to be paid to Janssen, and an updated percentage complete, which resulted in a cumulative adjustment recorded during the year ended December 31, 2019 that reduced revenue by $9.4 million. The contract duration is defined as the period in which parties to the contract have present enforceable rights and obligations. For revenue recognition purposes, the Company determined that the duration of the Janssen License and Collaboration Agreement, as amended, began on the effective date of July 13, 2017 and is estimated to end upon the later of end of Phase 2a for PTG-200 or upon dosing of the third patient in Phase 2b for a second-generation compound. The Company uses the most likely amount method to estimate variable consideration included in the transaction price. Variable consideration after the First Amendment consists of future milestone payments and cost sharing payments from Janssen for agreed upon services, offset by development cost reimbursements payable to Janssen. Cost sharing payments from Janssen relate to the agreed upon services for development activities that the Company performs within the duration of the contract and are included in the transaction price at the Company’s share of estimated budgeted costs for these activities, including primarily internal full-time equivalent effort and third party contract costs. Cost sharing payments to Janssen relate to agreed upon services for Phase 2 activities that Janssen performs within the duration of the contract and are not a distinct service that Janssen transfers to the Company. Therefore, the consideration payable to Janssen is accounted for as a reduction in the transaction price. The Company concluded that the transaction price of the initial performance obligation under the Janssen License and Collaboration Agreement was $98.6 million as of December 31, 2020, a decrease of $14.3 million from the transaction price of $112.9 million at December 31, 2019 and an increase of $37.9 million from the transaction price of $60.7 million at December 31, 2018. In order to determine the transaction price, the Company evaluated all payments to be received during the duration of the contract, net of Phase 2 development costs reimbursement expected to be payable to Janssen. The Company determined that the transaction price of the initial performance obligation as of December 31, 2020 includes the $50.0 million upfront payment, the $25.0 million payment received upon the effectiveness of the First Amendment, the $5.0 million payment triggered by the successful nomination of a second-generation compound, $17.9 million of reimbursement from Janssen for services performed for PTG-200 Phase 2 and for second-generation compound research and development costs and other services, and estimated variable consideration consisting of a $7.5 million milestone payment subject to the completion of a Phase 1 study for a second-generation compound, partially offset by $6.8 million of net cost reimbursement to Janssen for services performed. The Company evaluated whether the variable component of the transaction price should be constrained to ensure that a significant reversal of revenue recognized on a cumulative basis as of December 31, 2020 is not probable. The Company concluded that the variable consideration constraint does not further decrease the estimated transaction price as of December 31, 2020. The additional potential development, regulatory and sales milestone payments after the completion of Phase 2a activities in UC and CD that the Company would be eligible to receive are currently outside the contract term as defined for revenue recognition purposes and as such have been excluded from the transaction price. Janssen has also opted in for certain additional services to be performed by the Company that are outside the initial performance obligation; revenue is recognized as these services are performed. The Company re-evaluates the transaction price, including variable consideration, at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur. The Company and Janssen make quarterly cost sharing payments to one another in amounts necessary to ensure that each party bears its contractual share of the overall shared costs incurred. The Company utilizes a cost-based input method to measure proportional performance and to calculate the corresponding amount of revenue to recognize. In applying the cost-based input method of revenue recognition, the Company uses actual costs incurred relative to expected costs to fulfill the combined performance obligation. These costs consist primarily of internal FTE effort and third-party contract costs. Revenue will be recognized based on actual costs incurred as a percentage of total estimated costs as the Company completes its performance obligations. A cost-based input method of revenue recognition requires management to make estimates of costs to complete the Company’s performance obligations. The Company believes this is the best measure of progress because other measures do not reflect how the Company transfers its performance obligation to Janssen. In making such estimates, significant judgment is required to evaluate assumptions related to cost estimates. The cumulative effect of revisions to estimated costs to complete the Company’s performance obligations will be recorded in the period in which changes are identified and amounts can be reasonably estimated. A significant change in these assumptions and estimates could have a material impact on the timing and amount of revenue recognized in future periods. For the year ended December 31, 2020, the Company recognized $28.6 million of license and collaboration revenue. This amount included $27.1 million of the transaction price based on proportional performance and an update in forecasted amounts for future services remaining to be performed and recognized under the Janssen License and Collaboration Agreement. In addition, the Company recorded $1.5 million of revenue for the year ended December 31, 2020 related to additional services provided by the Company under the Janssen License and Collaboration Agreement. For the year ended December 31, 2019, the Company recognized $0.2 million of license and collaboration revenue. This amount included a $9.4 million cumulative catchup adjustment as a reduction of revenue, offset by $8.0 million of license and collaboration revenue recognized following the contract modification for the First Amendment and $1.6 million of collaboration revenue recognized during the first quarter of 2019 under the original Janssen License and Collaboration Agreement prior to the effectiveness of the First Amendment. No revenue for additional services was recognized for the year ended December 31, 2019. For the year ended December 31, 2018, the Company recognized $30.9 million of license and collaboration revenue. This amount included $30.8 million of the transaction price for the Janssen License and Collaboration Agreement recognized based on proportional performance, and $0.1 million, net, for other services related to Phase 2 activities performed by the Company on behalf of Janssen that were not included in the performance obligations identified under the Janssen License and Collaboration Agreement. The following table presents changes in the Company’s contract assets and liabilities during the periods presented (in thousands): Balance at Balance at Beginning of End of Year Ended December 31, 2020 Period Additions Deductions Period Contract assets: Receivable from collaboration partner - related party $ 5,955 $ 6,221 $ (9,750) $ 2,426 Contract asset - related party $ 800 $ 342 $ (1,142) $ — Contract liabilities: Deferred revenue - related party $ 41,530 $ 3,963 $ (31,016) $ 14,477 Payable to collaboration partner - related party $ 1,262 $ 3,800 $ (2,330) $ 2,732 Balance at Balance at Beginning of End of Year Ended December 31, 2019 Period Additions Deductions Period Contract assets: Receivable from collaboration partner - related party $ 2,042 $ 36,837 $ (32,924) $ 5,955 Contract asset - related party $ 2,545 $ 800 $ (2,545) $ 800 Contract liabilities: Deferred revenue - related party $ 8,223 $ 42,456 $ (9,149) $ 41,530 Payable to collaboration partner - related party $ 1,061 $ 1,468 $ (1,267) $ 1,262 During the year ended December 31, 2020, the Company recognized revenue of $14.1 million from amounts included in the deferred revenue contract liability balance at the beginning of the year. During the year ended December 31, 2019, the Company recognized revenue of $1.6 million from amounts included in the deferred revenue contract liability balance at the beginning of the year, which represents the revenue recognized during the first quarter of 2019 prior to the effectiveness of the First Amendment. During the year ended December 31, 2018, the Company recognized $23.5 million in revenue from the deferred revenue contract liability balance at the beginning of the year. None of the costs to obtain or fulfill the contract were capitalized. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | Note 4. Fair Value Measurements Financial assets and liabilities are recorded at fair value. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: Level 1 Level 2— Level 3 In determining fair value, the Company utilizes quoted market prices, broker or dealer quotations, or valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value. The following table presents the fair value of the Company’s financial assets determined using the inputs defined above (in thousands). December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 27,481 $ — $ — $ 27,481 Commercial paper — 65,863 — 65,863 Corporate debt securities — 27,590 — 27,590 U.S. Treasury and agency securities — 183,210 — 183,210 Total financial assets $ 27,481 $ 276,663 $ — $ 304,144 December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 12,964 $ — $ — $ 12,964 Commercial paper — 44,282 — 44,282 Corporate debt securities — 33,662 — 33,662 U.S. Treasury and agency securities — 40,810 — 40,810 Total financial assets $ 12,964 $ 118,754 $ — $ 131,718 The Company’s commercial paper, corporate debt securities and U.S. Treasury and agency securities, including U.S. Treasury bills, are classified as Level 2 as they were valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. Fair Value of Other Financial Instruments The carrying value of long-term debt as of December 31, 2019 approximated fair value because the Term Loan bore interest at a rate that approximated prevailing market rates for instruments with similar characteristics and there was no significant change in the credit worthiness of the Company. The Company had no long-term debt balance as of December 31, 2020. |
Cash Equivalents and Marketable
Cash Equivalents and Marketable Securities | 12 Months Ended |
Dec. 31, 2020 | |
Cash Equivalents and Marketable Securities | |
Cash Equivalents and Marketable Securities | Note 5. Cash Equivalents and Marketable Securities Cash equivalents and marketable securities consisted of the following (in thousands): December 31, 2020 Amortized Gross Unrealized Cost Gains Losses Fair Value Money market funds $ 27,481 $ — $ — $ 27,481 Commercial paper 65,866 — (3) 65,863 Corporate debt securities 27,592 2 (4) 27,590 U.S. Treasury and agency securities 183,203 10 (3) 183,210 Total cash equivalents and marketable securities $ 304,142 $ 12 $ (10) $ 304,144 Classified as: Cash equivalents $ 113,693 Marketable securities - current 188,451 Marketable securities - noncurrent 2,000 Total cash equivalents and marketable securities $ 304,144 December 31, 2019 Amortized Gross Unrealized Cost Gains Losses Fair Value Money market funds $ 12,964 $ — $ — $ 12,964 Commercial paper 44,284 2 (4) 44,282 Corporate debt securities 33,653 11 (2) 33,662 U.S. Treasury and agency securities 40,798 14 (2) 40,810 Total cash equivalents and marketable securities $ 131,699 $ 27 $ (8) $ 131,718 Classified as: Cash equivalents $ 31,707 Marketable securities - current 100,011 Total cash equivalents and marketable securities $ 131,718 Marketable securities – current of $188.5 million and $100.0 million held at December 31, 2020 and December 31, 2019, respectively, had contractual maturities of less than one year. Marketable securities – noncurrent of $2.0 million held at December 31, 2020 had contractual maturities of at least one year but less than two years. The Company did not hold any marketable securities – noncurrent at December 31, 2019. The Company has not experienced any material credit losses on its investments. The Company does not intend to sell its securities that are in an unrealized loss position, and it is unlikely that the Company will be required to sell its securities before recovery of their amortized cost basis at maturity. There were no realized gains or realized losses on marketable securities for the periods presented. Factors considered in determining whether a loss is temporary include the length of time and extent to which the fair value has been less than the amortized cost basis and whether the Company intends to sell the security or whether it is more likely than not that the Company would be required to sell the security before recovery of the amortized cost basis. |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2020 | |
Balance Sheet Components | |
Balance Sheet Components | Note 6. Balance Sheet Components Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2020 2019 Prepaid clinical and research related expenses $ 3,517 $ 2,567 Prepaid insurance 1,440 1,161 Other prepaid expenses 1,009 1,057 Other receivable 311 744 Prepaid expenses and other current assets $ 6,277 $ 5,529 Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): December 31, 2020 2019 Laboratory equipment $ 3,539 $ 2,947 Furniture and computer equipment 648 512 Leasehold improvements 748 863 Total property and equipment 4,935 4,322 Less: accumulated depreciation and amortization (3,473) (2,641) Property and equipment, net $ 1,462 $ 1,681 Depreciation expense for the years ended December 31, 2020, 2019, and 2018 was $789,000, $703,000 and $527,000, respectively. As of December 31, 2020, 2019 and 2018, $46,000, $37,000 and $200, respectively, of property and equipment, net, was located in Australia. The remainder of the Company’s property and equipment is located in the United States. Accrued Expenses and Other Payables Accrued expenses and other payables consisted of the following (in thousands): December 31, 2020 2019 Accrued clinical and research related expenses $ 11,335 $ 7,232 Accrued employee related expenses 6,413 4,637 Accrued professional service fees 668 301 Accrued interest payable — 68 Other 82 122 Total accrued expenses and other payables $ 18,498 $ 12,360 |
Research Collaboration and Lice
Research Collaboration and License Agreement | 12 Months Ended |
Dec. 31, 2020 | |
Research Collaboration and License Agreement | |
Research Collaboration and License Agreement | |
Research Collaboration and License Agreement | Note 7. Research Collaboration and License Agreement The Company and Zealand Pharma A/S entered into a collaboration agreement in June 2012. In October 2013, Zealand Pharma abandoned the collaboration and the collaboration agreement was terminated in 2014. The agreement provides for certain post-termination payment obligations to Zealand with respect to compounds related to the collaboration that meet specified conditions set forth in the collaboration agreement and which the Company elects to further develop following Zealand’s abandonment of the collaboration. The Company has the right, but not the obligation, to further develop and commercialize such compounds. The agreement provides for payments to Zealand for the achievement of certain development, regulatory and sales milestone events that occur prior to a partnering arrangement related to such compounds between the Company and a third party. The Company initially determined that rusfertide is a compound for which the post-termination payments described above are required under the collaboration agreement and has made three development milestone payments for an aggregate amount of $1.0 million under the agreement. However, the Company concluded in 2019 that rusfertide is not a compound with respect to which post-termination payments are required under the agreement, and initiated the arbitration proceeding described in Note 11 below. Milestone payments to collaboration partners are recorded as research and development expenses in the period that the expense is incurred. No research and development expense was recorded under this agreement for the years ended December 31, 2020 or 2019. For the year ended December 31, 2018, the Company recorded research and development expense of $500,000 under this agreement. If the Company is required to continue to make payments with respect to rusfertide under the collaboration agreement, the next two milestones that would be due under the agreement include: $1.0 million to $3.0 million for initiation of placebo-controlled Phase 2b clinical trial; and $1.5 million to $4.5 million for initiation of a Phase 3 clinical trial. The milestone amounts vary depending on the number of patients in the applicable clinical trial, and the Company expects the milestones would be the lowest amount within the specified range. See Note 11. Commitments and Contingencies – Legal Proceedings for additional information on arbitration proceedings related to this research and collaboration agreement. |
Government Programs
Government Programs | 12 Months Ended |
Dec. 31, 2020 | |
Government Programs | |
Government Programs | Note 8. Government Programs Research and Development Tax Incentive During the years ended December 31, 2020 and 2018, the Company recognized AUD 1.4 million ($1.0 million) and AUD 2.1 million ($1.6 million), respectively, as a reduction of research and development expenses in connection with the research and development cash tax incentive from the ATO. During the year ended December 31, 2019, the Company recognized AUD 1.9 million ($1.3 million) of research and development expenses in connection with the research and development tax incentive from the ATO because the Company determined that it had exceeded the annual turnover limit to claim such amounts following the receipt of certain payments under the Janssen License and Collaboration Agreement. As of December 31, 2020, the research and development tax incentive receivable was AUD 1.4 million ($1.1 million). There was no research and development tax incentive receivable as of December 31, 2019. Small Business Innovation Research (“SBIR”) Grants In May 2017, the Company was awarded a Phase 2 SBIR grant from the National Institute of Diabetes and Digestive and Kidney Diseases of the NIH in support of research aimed at developing biomarkers that define IL-23R target engagement by orally delivered peptide antagonists and the effects of that engagement of downstream signaling. The total grant award was $1.3 million and was originally for the period from May 2017 to April 2019. During the year ended December 31, 2019, the Company requested and received an extension of this grant through April 2020. In September 2018, the Company was awarded a Phase 2 SBIR Grant from the National Heart, Lungs and blood Institute of the NIH in support of research aimed at developing the Company’s novel hepcidin mimetic rusfertide for the potential treatment of chronic anemia and iron overload in rare blood disorders, including beta-thalassemia. The total grant award was $1.5 million and was originally for the period from September 2018 to August 2020. During the year ended December 31, 2020, the Company requested an extension of this grant through July 2021, which was received in February 2021. The Company recognizes a reduction to research and development expenses when expenses related to the grants have been incurred and the grant funds become contractually due from NIH. The Company recorded $0.5 million, $1.4 million and $0.7 million, as a reduction of research and development expenses for the years ended December 31, 2020, 2019 and 2018, respectively. The Company recorded a receivable for $0.3 million as of December 31, 2019 to reflect the eligible costs incurred under the grants that were contractually due to the Company. This receivable is included in prepaid expenses and other current assets on the consolidated balance sheets. There was no such receivable as of December 31, 2020. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt | |
Debt | Note 9. Debt On October 30, 2019, the Company entered into a Credit and Security Agreement, dated as of October 30, 2019 (the “Closing Date”) by and among the Company, MidCap Financial Trust, as a lender, Silicon Valley Bank, as a lender, the other lenders party thereto from time to time and MidCap Financial Trust, as administrative agent and collateral agent (“Agent”), (the “Term Loan Credit Agreement”), which provides for a $50.0 million term loan facility. The Term Loan Credit Agreement provides for (i) on the Closing Date, $10.0 million aggregate principal amount of term loans, (ii) at the Company’s option, until December 31, 2020, an additional $20.0 million term loan facility subject to the satisfaction of certain conditions, including clinical milestone achievement, and (iii) at the Company’s option, until September 30, 2021, an additional $20.0 million term loan facility subject to the satisfaction of certain conditions, including clinical milestone achievement, (collectively, the “Term Loans”). The Company intends to use any proceeds of the Term Loans for general corporate purposes. The Term Loans are subject to an origination fee of 0.25% for each funded tranche under the Term Loan Credit Agreement and bear interest at an annual rate based on prime rate plus 2.91%, subject to a prime rate floor of 4.94%. The Company will make interest-only payments on the Term Loans for 24 months, followed by 24 months of principal and interest payments. At the Company’s option, the Company may prepay the outstanding principal balance of the Term Loans in whole or in part, subject to a prepayment premium of 3.0% of any amount prepaid if the prepayment occurs through and including the first anniversary of the closing date, 2.0% of the amount prepaid if the prepayment occurs after the first anniversary of the closing date through and including the second anniversary of the closing date, and 1.0% of any amount prepaid after the second anniversary of the closing date and prior to October 1, 2023. An additional fee of 2.85% of the amount of Term Loans advanced by the Lenders will be due upon prepayment or repayment of the Term Loans. The Term Loan Credit Agreement requires the Company to maintain cash and cash equivalents of at least 35% of the outstanding Term Loans at all times and is secured by a perfected security interest in all of the Company's assets except for intellectual property and certain other customary excluded property pursuant to the terms of the Term Loan Credit Agreement. The Term Loan Credit Agreement contains other covenants that limit the Company’s ability and the ability of its subsidiaries to perform certain actions, including obligations to not pay dividends and to maintain unrestricted cash balances above certain threshold, non-occurrence of material adverse change, non-occurrence of change of control and other customary affirmative and negative covenants. The violation of any provision of covenants will result in default for the Company. The Term Loan Credit Agreement includes a clause which allows lenders to accelerate repayment upon the occurrence of certain events of default. In June 2020, the Company prepaid its outstanding $10.0 million balance on the term loan as well as $0.6 million for related prepayment and exit fees. Accordingly, the company accelerated amortization of $0.1 million related to capitalized and unamortized debt issuance costs, which is included as part of the $0.6 million loss on early repayment of debt. The Company did not exercise its option to borrow the $20.0 million second tranche of Term Loans, which expired on December 31, 2020, and therefore has no outstanding balance as of December 31, 2020 related to the Term Loan Credit Agreement. As of December 31, 2020, the Company was in compliance with the debt covenants, no event of default occurred and the probability of occurrence of event of default was considered remote. The Company’s long-term debt balance was as follows for the periods presented (dollars in thousands): Annual Balance at Balance at Interest Rate December 31, 2020 December 31, 2019 Term loan (maturity date October 1, 2023) 7.85% $ — $ 10,000 Debt issuance costs, net of amortization — (222) Accrued final payment fees — 16 Long-term debt, net $ — $ 9,794 The effective interest rate on long-term debt was 9.85% and 9.81% for the years ended December 31, 2020 and 2019, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Leases | Note 10. Leases On January 1, 2019, the Company adopted ASC 842, which requires entities to recognize assets and liabilities for leases with lease terms of more than 12 months on the balance sheet. Leases with terms of 12 months or less are not recorded on the balance sheet, and the related lease expenses are recognized on a straight-line basis over the lease term. The Company has one operating lease agreement entered into in March 2017 for laboratory and office space located in Newark, California. The Company provided the landlord with a $450,000 letter of credit collateralized by restricted cash as security deposit for the lease, which expires in May 2024. During the years ended December 31, 2020 and 2019, the Company recognized $89,400 and $64,000 of sublease income, respectively. The Company did not The weighted average lease term and discount rate are as follows: December 31, 2020 2019 Operating Lease Term and Discount Rate: Weighted-average remaining lease term 3.4 years 4.4 years Weighted-average discount rate 11.0% 11.0% The following table summarizes the Company’s minimum lease payments and lease liability as of December 31, 2020 (in thousands): Year Ending December 31: Amount 2021 $ 2,000 2022 2,059 2023 2,121 2024 895 2025 — Thereafter — Total future minimum lease payments 7,075 Less: imputed interest (1,116) Present value of future minimum lease payments 5,959 Less: current portion of operating lease liability (1,459) Operating lease liability - noncurrent $ 4,500 Supplemental lease cost information is as follows (in thousands): Year Ended December 31, 2020 2019 Operating lease cost $ 1,775 $ 1,792 Supplemental balance sheet information is as follows (in thousands): As of December 31, 2020 2019 Operating Leases: Operating lease right-of-use asset $ 4,950 $ 6,042 Operating lease liability - current $ 1,459 $ 1,256 Operating lease liability - noncurrent 4,500 5,961 Total operating lease liabilities $ 5,959 $ 7,217 Supplemental cash flow information is as follows (in thousands): Year Ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow used by operating leases $ 1,941 $ 1,885 Prior to the adoption of ASC 842, the Company’s rent expense was $1.9 million for the year ended December 31, 2018. Rent expense was recognized on a straight-line basis over the term of the lease and accordingly, the Company recorded the difference between cash rent payments and the recognition of rent expense as a deferred rent liability. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 11. Commitments and Contingencies In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by California corporate law. The Company carries a directors’ and officers’ insurance policy. To date, the Company has not incurred material costs to defend lawsuits or settle claims related to the indemnification agreements. The Company believes that the fair value of these indemnification agreements is minimal and has not accrued any amounts for the obligations. Legal Proceedings The Company is a party to the legal action described below. The Company recognizes accruals for such actions to the extent that it concludes that a loss is both probable and reasonably estimable. The Company accrues for the best estimate of a loss within a range; however, if no estimate in the range is better than any other, it accrues the minimum amount in the range. If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, it discloses the possible loss. On January 23, 2020, the Company initiated arbitration proceedings with the International Court of Arbitration of the International Chamber of Commerce against Zealand Pharma A/S (“Zealand”) related to a collaboration agreement the Company and Zealand entered into in 2012 and terminated in 2014. The agreement provides for certain post-termination payment obligations to Zealand with respect to compounds related to the collaboration that the Company elects to further develop and meet specified conditions. In the Company’s arbitration claim, it is seeking a declaration that the Company has no past, present or future milestone or royalty payment obligations under the agreement with respect to rusfertide because it is not a compound relating to the collaboration for which post-termination payments to Zealand apply. The Company is also seeking repayment of $1.0 million in milestone payments it has made, as well as its costs, fees, and expenses of the proceeding. Zealand disputes the Company’s claims and has filed counterclaims for payment of a development milestone Zealand claims is due, as well as payment of their arbitration costs, fees and expenses . Although the Company cannot predict with certainty the ultimate outcome of these arbitration proceedings, it has concluded that the probability of any related loss is remote and therefore no related accruals were recognized as of December 31, 2020. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity | |
Stockholders' Equity | Note 12. Stockholders’ Equity In September 2017, the Company filed a registration statement on Form S-3 with the Securities and Exchange Commission (File No. 333-220314) that was declared effective as of October 5, 2017 and permitted the offering, issuance, and sale by the Company of up to a maximum aggregate offering price of $200.0 million of its common stock, preferred stock and certain debt securities (the “2017 Form S-3”). Up to a maximum of $50.0 million of the maximum aggregate offering price of $200.0 million could be issued and sold pursuant to an at-the-market (“ATM”) financing facility under a sales agreement (the “2017 Sales Agreement”). The 2017 Sales Agreement was terminated in 2019. During the year ended December 31, 2019, prior to the termination of the 2017 Sales Agreement, the Company sold 2,846,641 shares of its common stock for net proceeds of $34.5 million, after deducting issuance costs. The Company sold 151,273 shares of its common stock pursuant to the 2017 Sales Agreement during the year ended December 31, 2018 for net proceeds of $1.5 million, after deducting issuance costs. The 2017 Form S-3 expired in October 2020. In August 2018, the Company entered into a Securities Purchase Agreement with certain accredited investors (each, an “Investor” and, collectively, the “Investors”), pursuant to which the Company sold an aggregate of 2,750,000 shares of its common stock at a price of $8.00 per share, for aggregate net proceeds of $21.7 million, after deducting offering expenses payable by the Company. In a concurrent private placement, the Company issued the Investors warrants to purchase an aggregate of 2,750,000 shares of its common stock (each, a “Warrant” and, collectively, the “Warrants”). Each Warrant is exercisable from August 8, 2018 through August 8, 2023. Warrants to purchase 1,375,000 shares of the Company’s common stock have an exercise price of $10.00 per share and Warrants to purchase 1,375,000 shares of the Company’s common stock have an exercise price of $15.00 per share. The exercise price and number of shares of common stock issuable upon the exercise of the Warrants (the “Warrant Shares”) are subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Warrants. Under certain circumstances, the Warrants may be exercisable on a “cashless” basis. In connection with the issuance and sale of the common stock and Warrants, the Company granted the Investors certain registration rights with respect to the Warrants and the Warrant Shares. The common stock and warrants are classified as equity in accordance with Accounting Standards Codification Topic 480 , Distinguishing Liabilities from Equity , In December 2018, the Company entered into an exchange agreement (the “Exchange Agreement”) with an Investor and its affiliates (the “Exchanging Stockholders”), pursuant to which the Company exchanged an aggregate of 1,000,000 shares of the Company’s common stock, par value $0.00001 per share, owned by the Exchanging Stockholders for pre-funded warrants (the “Exchange Warrants”) to purchase an aggregate of 1,000,000 shares of common stock (subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Exchange Warrants), with an exercise price of $0.00001 per share. The Exchange Warrants will expire ten years from the date of issuance. The Exchange Warrants are exercisable at any time prior to expiration except that the Exchange Warrants cannot be exercised by the Exchanging Stockholders if, after giving effect thereto, the Exchanging Stockholders would beneficially own more than 9.99% of the Company’s common stock, subject to certain exceptions. In accordance with Accounting Standards Codification Topic 505, Equity , In October 2019, the Company filed a registration statement on Form S-3 (File no. 333-234414) that was declared effective as of November 22, 2019 and permits the offering, issuance, and sale by the Company of up to a maximum aggregate offering price of $250.0 million of its common stock, preferred stock, debt securities and warrants (the “2019 Form S-3”). Up to a maximum of $75.0 million of the maximum aggregate offering price of $250.0 million may be issued and sold pursuant to an ATM financing facility under a sales agreement entered into by the Company on November 27, 2019 (the “2019 Sales Agreement”). In May 2020, the Company completed an underwritten public offering of 7,000,000 shares of common stock at a public offering price of $14.00 per share and issued an additional 1,050,000 shares of its common stock at a price of $14.00 per share following the underwriters’ exercise of their option to purchase additional shares. Net proceeds, after deducting underwriting commissions and offering costs paid by the Company, were $105.3 million. The Company sold 2,483,719 shares of its common stock pursuant to the 2019 Sales Agreement during the year ended December 31, 2020 for net proceeds of $41.9 million, after deducting issuance costs. As of December 31, 2020, a total of $94.2 million of common stock remained available for sale under the 2019 Form S-3, $31.9 million of which remained available for sale under the ATM financing facility. In December 2020, the Company filed an automatic registration statement on Form S-3ASR and an accompanying prospectus (Registration Statement No. 333-251254), pursuant to which the Company completed an underwritten public offering of 4,761,904 shares of common stock at a public offering price of $21.00 per share and issued an additional 714,285 shares of its common stock at a price of $21.00 per share following the underwriters’ exercise of their option to purchase additional shares. Net proceeds, after deducting underwriting commissions and offering costs paid by the Company, were $107.6 million. |
Equity Plans
Equity Plans | 12 Months Ended |
Dec. 31, 2020 | |
Equity Plans | |
Equity Plans | Note 13. Equity Plans Equity Incentive Plan In May 2007, the Company established the 2007 Stock Option and Incentive Plan (“2007 Plan”) which provided for the granting of stock options to employees and consultants of the Company. Options granted under the 2007 Plan were either incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”). ISOs were granted only to Company employees (including officers and directors who are also employees). NSOs were granted to Company employees and consultants. Options under the 2007 Plan have a term of ten years and generally vest over a four-year period. In July 2016, the Company’s board of directors and stockholders approved the 2016 Equity Incentive Plan (“2016 Plan”) to replace the 2007 Plan. Under the 2016 Plan, 1,200,000 shares of the Company’s common stock were initially reserved for the issuance of stock options, restricted stock units and other awards to employees, directors and consultants. Pursuant to the “evergreen” provision contained in the 2016 Plan, the number of shares reserved for issuance under the 2016 Plan automatically increases on January 1 of each year, starting on January 1, 2017 and continuing through (and including) January 1, 2026, by 4% of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding fiscal year, or a lesser number of shares determined by the Company’s board of directors. Upon adoption of the 2016 Plan, no additional stock awards were issued under the 2007 Plan. Options granted under the 2007 Plan that were outstanding on the date the 2016 Plan became effective remain subject to the terms of the 2007 Plan. The number of options available for grant under the 2007 Plan was ceased and the number was added to the common stock reserved for issuance under the 2016 Plan. As of December 31, 2020, approximately 538,374 shares of common stock were available for issuance under the 2016 Plan. The 2016 Plan is administered by the board of directors or a committee appointed by the board of directors, which determines the types of awards to be granted, including the number of shares subject to the awards, the exercise price and the vesting schedule. Options granted under the 2016 Plan expire no later than ten years from the date of grant. The exercise price of each option may not be less than 100% of the fair market value of the common stock at the date of grant. Options may be granted to stockholders possessing more than 10% of the total combined voting power of all classes of stocks of the Company at an exercise price at least 110% of the fair value of the common stock at the date of grant and the options are not exercisable after the expiration of 10 years from the date of grant. Employee stock options generally vest over a period of approximately four years. Non-employee director initial stock options generally vest monthly over a period of approximately three years, and non-employee director annual refresher stock options generally vest over a period of approximately one year. Inducement Plan In May 2018, the Company’s board of directors approved the 2018 Inducement Plan, a non-stockholder approved stock plan, under which it reserved and authorized 750,000 shares of the Company’s common stock in order to award options and restricted stock unit awards to persons that were not previously employees or directors of the Company, or following a bona fide period of non-employment, as an inducement material to such persons entering into employment with the Company, within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. The 2018 Inducement Plan is administered by the board of directors or the Compensation Committee of the board, which determines the types of awards to be granted, including the number of shares subject to the awards, the exercise price and the vesting schedule. Awards granted under the 2018 Inducement Plan expire no later than ten years from the date of grant. As of December 31, 2020, approximately 574,375 shares were available for issuance under the 2018 Inducement Plan. Stock Options Activity under the Company’s equity incentive plans is set forth below: Weighted- Weighted- Average Average Exercise Remaining Aggregate Options Price Per Contractual Intrinsic Outstanding Share Life (years) Value (1) (in millions) Balances at December 31, 2019 3,681,521 $ 11.64 7.78 $ 2.4 Options granted 1,536,400 11.53 Options exercised (294,238) 7.49 Options forfeited (275,563) 11.54 Balances at December 31, 2020 4,648,120 $ 11.87 7.61 $ 40.0 Options exercisable – December 31, 2020 2,619,943 $ 12.10 6.65 $ 22.1 Options vested and expected to vest – December 31, 2020 4,648,120 $ 11.87 7.61 $ 40.0 ____________________ (1) The aggregate intrinsic value of options exercised was $3.0 million, $2.6 million and $1.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. During the years ended December 31, 2020, 2019 and 2018, the estimated weighted-average grant-date fair value of common stock underlying options granted was $7.76, $5.45 and $8.12 per share, respectively. Stock Options Valuation The fair value of stock option awards accounted for under ASC 718 was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions: Year Ended December 31, 2020 2019 2018 Expected term (in years) 5.27 - 6.08 5.00 - 6.08 5.49 - 6.08 Expected volatility 72.1% - 87.5% 61.0% - 64.8% 62.0% - 66.5% Risk-free interest rate 0.23% - 1.44% 1.42% - 2.58% 2.42% - 3.03% Dividend yield — — — In determining the fair value of the options granted, the Company uses the Black-Scholes option-pricing model and assumptions discussed below. Each of these inputs is subjective, and expected volatility generally requires significant judgment to determine. Expected Term Expected Volatility Risk-Free Interest Rate Expected Dividend Restricted Stock Units The Company began issuing restricted stock units under the 2016 Plan during the year ended December 31, 2018. A restricted stock unit is an agreement to issue shares of the Company’s common stock at the time of vesting. Restricted stock unit annual refresher awards vest in four equal installments on approximately the first, second, third and fourth anniversaries of the grant date. Restricted stock unit incentive awards granted during 2018 vested in three equal installments at six months intervals over a period of 18 months. Restricted stock unit activity under the Company’s equity incentive plans is set forth below: Weighted Average Number of Grant Date Shares Fair Value Unvested at December 31, 2019 278,482 $ 10.08 Granted 142,000 7.80 Vested (131,147) 9.52 Forfeited (44,790) 8.67 Unvested at December 31, 2020 244,545 $ 9.31 Stock-based compensation expense associated with restricted stock units is based on the fair value of the Company’s common stock on the grant date, which equals the closing market price of the Company’s common stock on the grant date. For restricted stock units, the Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest. Employee Stock Purchase Plan In July 2016, the Company’s board of directors and stockholders approved the 2016 Employee Stock Purchase Plan (“2016 ESPP”). The 2016 ESPP is intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended, and is administered by the Company’s board of directors and the Compensation Committee of the board of directors. Under the 2016 ESPP, 150,000 shares of the Company’s common stock were initially reserved for employee purchases of the Company’s common stock. Pursuant to the “evergreen” provision contained in the 2016 ESPP, the number of shares reserved for issuance automatically increases on January 1 of each year, starting on January 1, 2017 and continuing through (and including) January 1, 2026 by the lesser of (i) 1% of the total number of shares of common stock outstanding on December 31 of the preceding fiscal year (ii) 300,000 shares, or (iii) such other number of shares determined by the board of directors. The 2016 ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation. At the end of each offering period, eligible employees are able to purchase shares at 85% of the lower of the fair market value of the Company’s common stock at the beginning of the offering period or at the end of each applicable purchase period. During the year ended December 31, 2020, 92,523 shares were issued under the ESPP. As of December 31, 2020, 757,647 shares are available for issuance. The fair value of the rights granted under the 2016 ESPP was calculated using the Black-Scholes option-pricing model with the following assumptions: Year Ended December 31, 2020 2019 2018 Expected term (in years) 0.50 0.50 0.50 Expected volatility 89.1% - 120.4% 58.9% - 65.3% 49.0% - 63.4% Risk-free interest rate 0.12% - 0.43% 1.89% - 2.32% 1.89% - 2.32% Dividend yield — — — Stock-Based Compensation Total stock-based compensation expense was as follows (in thousands): Year Ended December 31, 2020 2019 2018 Research and development $ 4,121 $ 4,350 $ 3,424 General and administrative 3,778 4,003 3,495 Total stock-based compensation expense $ 7,899 $ 8,353 $ 6,919 As of December 31, 2020, total unrecognized stock-based compensation expense was $16.0 million, which the Company expects to recognize over a period of approximately 2.7 years. |
401(k) Plan
401(k) Plan | 12 Months Ended |
Dec. 31, 2020 | |
401(k) Plan | |
401(k) Plan | Note 14. 401(k) Plan The Company has a retirement and savings plan under Section of 401(k) of Internal Revenue Code (the “401(k) Plan”) covering all U.S. employees. The 401(k) Plan allows employees to make pre- and post-tax contributions up to the maximum allowable amount set by the Internal Revenue Service. For the years ended December 31, 2020, 2019 and 2018, the Company did not make matching contributions to the 401(k) Plan on behalf of participants. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Income Taxes | Note 15. Income Taxes The Company recorded income tax expense of $1.3 million for the year ended December 31, 2020. During the second quarter of 2020, the Company’s Australia subsidiary sold beneficial rights to discovery intellectual property to its U.S. entity, and the U.S. entity reimbursed the Australia subsidiary for certain direct development costs. Upon completion of the sale, the Company analyzed tax planning strategies and future income and concluded that a full valuation allowance is necessary for its Australia subsidiary. Income tax expense for the year ended December 31, 2020 reflects this sale of intellectual property rights, cost reimbursements and related adjustments to the deferred tax asset, establishing a valuation allowance and certain uncertain unrecognized tax benefits. The Company continues to maintain a full valuation allowance against its U.S. net deferred tax assets due to the uncertainty surrounding the realization of such assets. The Company recorded an income tax benefit of $0.7 million for the year ended December 31, 2019 primarily due to research and development tax credits and the recognition of deferred tax assets in Protagonist Australia. The Company recorded an income tax benefit of $0.8 million for the year ended December 31, 2018 from the recognition of deferred tax assets in Protagonist Australia. The following table presents domestic and foreign components of net loss before income taxes (in thousands): Year Ended December 31, 2020 2019 2018 Domestic $ (71,073) $ (72,271) $ (37,511) Foreign 6,228 (5,607) (2,212) Total net loss before taxes $ (64,845) $ (77,878) $ (39,723) The federal, state and foreign components of the income tax expense (benefit) are summarized as follows: Year Ended December 31, 2020 2019 2018 Current: Federal $ — $ — $ — State — — — Foreign (88) 84 — Total current tax (benefit) expense (88) 84 — Deferred: Federal — — — State — — — Foreign 1,393 (775) (799) Total deferred tax expense (benefit) 1,393 (775) (799) Total income tax expense (benefit) $ 1,305 $ (691) $ (799) The effective tax rate of the provision for income taxes differs from the federal statutory rate as follows: Year Ended December 31, 2020 2019 2018 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % State taxes, net of federal benefit 1.9 1.2 7.0 Research and development credits 6.5 4.3 (1.3) Foreign tax rate difference (0.9) 0.7 0.4 Change in valuation allowance (34.3) (23.8) (22.2) Other 3.8 (2.5) (2.9) Provision (benefit) for income taxes (2.0) % 0.9 % 2.0 % The components of the deferred tax assets are as follows (in thousands): December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 50,272 $ 39,907 Depreciation and amortization 1,237 318 Accruals/other 5,332 5,454 Operating lease liability 1,252 1,516 Research and development and foreign credits 14,856 8,038 Total deferred tax assets 72,949 55,233 Deferred tax liabilities: Operating right-of-use asset (1,040) (1,269) Total deferred tax liabilities (1,040) (1,269) Valuation allowance (71,909) (52,531) Net deferred tax assets $ — $ 1,433 Realization of the deferred tax assets is dependent upon future taxable income, if any, the amount and timing of which are uncertain. The Company has established a valuation allowance to offset U.S. deferred tax assets as of December 31, 2020, 2019 and 2018 due to the uncertainty of realizing future tax benefits from its net operating loss carryforwards and other deferred tax assets. The Company has also established a valuation allowance to offset Australian deferred tax assets as of December 31, 2020. The valuation allowance increased by approximately $19.4 million, $18.5 million and $8.2 million during the years ended December 31, 2020, 2019 and 2018, respectively. Federal and state laws impose substantial restrictions on the utilization of net operating loss and tax credit carryforwards in the event of an ownership change for tax purposes, as defined in Section 382 of the Internal Revenue Code. As a result of such ownership changes, the annual limitation may result in the expiration of net operating losses and credits before utilization. The Company performed a Section 382 analysis through December 31, 2020. The Company has experienced ownership changes in the past and in the current year. The ownership changes will not result in a limitation that will materially reduce the total amount of net operation loss carryforwards and credits that can be utilized. Subsequent ownership changes may affect the limitation in future years. At December 31, 2020, the Company had $222.8 million of federal net operating loss carryforwards and $214.3 million of state net operating loss carryforwards. $78.7 million of the federal net operating loss carryforwards will begin to expire in 2033, if not utilized, and the remaining $144.1 million have no expiration. The state net operating loss carryforwards will begin to expire in 2035, if not utilized. At December 31, 2020, the Company also had accumulated Australian tax losses of AUD 3.7 million ($2.8 million) available for carry forward against future earnings which, under relevant tax laws, do not expire but may be limited under certain circumstances. As of December 31, 2020, the Company had $12.3 million of federal and $4.8 million of state research and development tax credit carryforwards available to reduce future income taxes. The federal research and development tax credits will begin to expire in 2035, if not utilized. The state research and development tax credits have no expiration date. As of December 31, 2020, the Company had AUD 3.6 million ($2.8 million) of Australian research and development tax credit carryforwards available to reduce future income taxes. The Australian research and development tax credits have no expiration date. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Year Ended December 31, 2020 2019 2018 Balance at beginning of year $ 16,631 $ 9,466 $ 5,414 (Decreases) increases based on tax positions related to prior years (3,799) 184 108 Increases based on tax positions related to current year 7,053 6,981 3,944 Balance at end of year $ 19,885 $ 16,631 $ 9,466 At December 31, 2020, the Company had unrecognized tax benefits of $19.9 million, which are subject to a valuation allowance and would not affect the effective tax rate if recognized. The Company does not anticipate that the total amounts of unrecognized tax benefits will significantly increase or decrease in the next 12 months. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the provision for income taxes, as necessary. Management determined that no accrual for interest or penalties was required as of December 31, 2020, 2019 and 2018. The Company files income tax returns in the United States federal jurisdiction, the State of California and Australia. The Company is not currently under examination by income tax authorities in federal, state or other jurisdictions. The Company’s tax returns remain open for examination for all years. The Company’s Australia subsidiary had an accumulated deficit at December 31, 2020 and, accordingly, no provision has been provided thereon for any unremitted earnings. The Company has elected to recognize any potential global intangible low-taxed income (“GILTI”) obligation as an expense in the period it is incurred. 2020 Tax Law Updates On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was enacted and signed into law in response to the COVID-19 pandemic. GAAP requires recognition of the tax effects of new legislation during the reporting period that includes the enactment date. The CARES Act includes changes to the tax provisions that benefits business entities and makes certain technical corrections to the 2017 Tax Cuts and Jobs Act. The tax relief measures for businesses include a five-year net operating loss carryback, suspension of the annual deduction limitation of 80% of taxable income from net operating losses generated in a tax year beginning after December 31, 2017, changes in the deductibility of interest, acceleration of alternative minimum tax credit refunds, payroll tax relief, technical corrections on net operating loss carryforwards for fiscal year taxpayers and allows accelerated deduction qualified improvement property. The CARES Act also provides other non-tax benefits to assist those impacted by the pandemic. The Company evaluated the impact of the CARES Act and determined that there is no material impact to the for the year ended December 31, 2020. On June 29, 2020, California Assembly Bill 85 was signed into law. The legislation suspends the California net operating loss deductions for 2020, 2021, and 2022 for certain taxpayers and imposes a limitation of certain California tax credits for 2020, 2021, and 2022. The legislation disallows the use of California net operating loss deductions if the taxpayer recognizes business income and its adjusted gross income is greater than $1,000,000. The carryover periods for net operating loss deductions disallowed by this provision will be extended. Additionally, any business credit will only offset a maximum of $5,000,000 of California tax. Given the Company’s loss position in the current year, the new legislation will not impact the current year provision. The Company will continue to monitor possible California net operating loss and credit limitations in future periods. On December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law, including further COVID-19 economic relief and the extension of certain expiring tax provisions. The relief package includes a tax provision clarifying that businesses with forgiven Paycheck Protection Program loans can deduct regular business expenses that are paid for with the loan proceeds. Additional pandemic relief tax measures include an expansion of the employee retention credit, enhanced charitable contribution deductions, and a temporary full deduction for business expenses for food and beverages provided by a restaurant. The provisions are not impactful for the Company as it has not participated in previous COVID-19 economic relief measures. |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Dec. 31, 2020 | |
Net Loss per Share | |
Net Loss per Share | Note 16. Net Loss per Share As the Company had a net loss for the years ended December 31, 2020, 2019 and 2018, all potential common shares were determined to be anti-dilutive. The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share data): Year Ended December 31, 2020 2019 2018 Numerator: Net loss $ (66,150) $ (77,187) $ (38,924) Denominator: Weighted-average shares used to compute net loss per common share, basic and diluted 34,396,446 25,894,024 22,364,515 Net loss per shares, basic and diluted $ (1.92) $ (2.98) $ (1.74) The following outstanding shares of potentially dilutive securities have been excluded from diluted net loss per share calculations for the years ended December 31, 2020, 2019 and 2018 because their inclusion would be anti-dilutive: Year Ended December 31, 2020 2019 2018 Options to purchase common stock 4,648,120 3,681,521 3,178,441 Common stock warrants 2,750,000 2,750,000 2,750,000 Restricted stock units 244,545 278,482 418,450 ESPP shares 28,445 40,275 52,134 Total 7,671,110 6,750,278 6,399,025 |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring | |
Restructuring | Note 17. Restructuring On May 7, 2020, the Company approved a limited reduction in force plan affecting approximately 12% of the Company’s employee base and informed the affected employees. The reduction-in-force plan was completed by the end of the second quarter of 2020. Total cash expenditures for the reduction in force plan were $0.3 million, substantially all of which were related to employee severance and benefits costs. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Protagonist Australia, and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated upon consolidation. The financial statements of Protagonist Australia use the Australian dollar as the functional currency since the majority of expense transactions occur in such currency. Gains and losses from foreign currency transactions were not material for all periods presented. The re-measurement from Australian dollar to U.S. dollars is outlined below: a. Equity accounts, except for the change in retained earnings during the year, have been translated using historical exchange rates. b. All other Australian dollar denominated assets and liabilities as of December 31, 2020 and 2019 have been translated using the year-end exchange rate. c. The consolidated statements of operations have been translated at the weighted average exchange rates in effect during each year. Foreign currency translation gains and losses are reported as a component of stockholders’ equity in accumulated other comprehensive loss on the consolidated balance sheets. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, accruals for research and development activities, stock-based compensation, income taxes, marketable securities and leases. Estimates related to revenue recognition include actual costs incurred versus total estimated costs of the Company’s deliverables to determine percentage of completion in addition to the application and estimates of potential revenue constraints in the determination of the transaction price under its license and collaboration agreements. Management bases these estimates on historical and anticipated results, trends and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to forecasted amounts and future events. Actual results may differ significantly from those estimates. Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. The Company has taken into consideration any known COVID-19 impacts in its accounting estimates to date and is not aware of any additional specific events or circumstances that would require any additional updates to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of this Annual Report on Form 10-K. These estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents and marketable securities. Substantially all of the Company’s cash is held by two financial institutions that management believes are of high credit quality. Such deposits may, at times, exceed federally insured limits. The primary focus of the Company’s investment strategy is to preserve capital and to meet liquidity requirements. The Company’s cash equivalents and marketable securities are managed by external managers within the guidelines of the Company’s investment policy. The Company’s investment policy addresses the level of credit exposure by limiting concentration in any one corporate issuer and establishing a minimum allowable credit rating. To manage its credit risk exposure, the Company maintains its portfolio of cash equivalents and marketable securities in fixed income securities denominated and payable in U.S. dollars. Permissible investments of fixed income securities include obligations of the U.S. government and its agencies, money market instruments including commercial paper and negotiable certificates of deposit, and highly rated corporate debt obligations and money market funds. |
Cash Equivalents | Cash Equivalents Cash equivalents that are readily convertible to cash are stated at cost, which approximates fair value. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. |
Restricted Cash | Restricted Cash Restricted cash consists of cash balances primarily held as security in connection with a letter of credit related to the Company’s facility lease entered into in March 2017 and the Company’s corporate credit card. |
Cash as Reported in Consolidated Statements of Cash Flows | Cash as Reported in Consolidated Statements of Cash Flows Cash as reported in the consolidated statements of cash flows includes the aggregate amounts of cash and cash equivalents and the restricted cash as presented on the consolidated balance sheets. Cash as reported in the consolidated statements of cash flows consists of (in thousands): December 31, 2020 2019 2018 Cash and cash equivalents $ 117,358 $ 33,006 $ 82,233 Restricted cash - current 10 10 10 Restricted cash - noncurrent 450 450 450 Total cash, cash equivalent and restricted cash in consolidated statements of cash flows $ 117,818 $ 33,466 $ 82,693 |
Marketable Securities | Marketable Securities All marketable securities have been classified as “available-for-sale” and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its marketable securities at the time of purchase and reevaluates such designation as of each balance sheet date. Short-term marketable securities have maturities greater than three months but not longer than 365 days as of the balance sheet date. Long-term marketable securities have maturities of 365 days or longer as of the balance sheet date. Unrealized gains and losses are excluded from earnings and are reported as a component of comprehensive loss. Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in interest income. The cost of securities sold is based on the specific-identification method. Interest on marketable securities is included in interest income. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value accounting is applied to all financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually). The carrying amount of the Company’s financial instruments, including cash equivalents, receivable from collaboration partner, accounts payable, payable to collaboration partner and accrued expenses and other payables approximate fair value due to their short-term maturities. See Note 4. to the Consolidated Financial Statements for additional information regarding the fair value of the Company’s other financial assets and liabilities. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, ranging from three |
Leases | Leases The Company adopted Accounting Standards Codification Topic 842, Leases, The Company records tenant improvement allowances as a reduction to the ROU asset with the impact of the decrease recognized prospectively over the remaining lease term. The leasehold improvements will be amortized over the shorter of their useful life or the remaining term of the lease. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets, primarily comprised of property, equipment and operating lease right-of-use assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount to the future net cash flows which the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows arising from the asset. There have been no such impairments of long-lived assets for any of the periods presented. |
Long Term Debt | Long Term Debt The Company accounts for interest on its long-term debt under the effective interest method, with interest expense comprised of contractual interest, amortization of origination fees and other issuance costs, and accretion of final payment fees. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those from stockholders. The Company’s foreign currency translation and unrealized gains and losses on available-for-sale securities represent the only components of other comprehensive loss that are excluded from reported net loss and that are presented in the consolidated statements of comprehensive loss. |
Income Taxes | Income Taxes The Company uses the asset and liability method to account for income taxes in accordance with the authoritative guidance for income taxes. Under this method, deferred tax assets and liabilities are determined based on future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and tax loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than a 50% likelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized tax benefits in income tax expense. To date, there have been no interest or penalties recorded in relation to unrecognized tax benefits. |
Revenue Recognition | Revenue Recognition The Company follows Accounting Standards Codification Topic 606, Revenue from Contracts with Customers Licenses of intellectual property: If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in an arrangement, the Company recognizes revenue from non-refundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring proportional performance for purposes of recognizing revenue from non-refundable, upfront fees. The Company evaluates the measure of proportional performance each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Milestone payments: At the inception of each arrangement or amendment that includes development, regulatory or commercial milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. ASC 606 suggests two alternatives to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. Whichever method is used, it should be consistently applied throughout the life of the contract; however, it is not necessary for the Company to use the same approach for all contracts. The Company expects to use the most likely amount method for development and regulatory milestone payments. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. If there is more than one performance obligation, the transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. The Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability or achievement of each such milestone and any related constraint, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). Upfront payments and fees are recorded as deferred revenue upon receipt or when due and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional. Amounts payable to the Company and not yet billed to the collaboration partner are recorded as contract assets. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Contractual cost sharing payments made to a customer or collaboration partner are accounted for as a reduction to the transaction price if such payments are not related to distinct goods or services received from the customer or collaboration partner. Contracts may be amended to account for changes in contract specifications and requirements. Contract modifications exist when the amendment either creates new, or changes existing, enforceable rights and obligations. When contract modifications create new performance obligations and the increase in consideration approximates the standalone selling price for goods and services related to such new performance obligations as adjusted for specific facts and circumstances of the contract, the modification is considered to be a separate contract. If a contract modification is not accounted for as a separate contract, the Company accounts for the promised goods or services not yet transferred at the date of the contract modification (the remaining promised goods or services) prospectively, as if it were a termination of the existing contract and the creation of a new contract, if the remaining goods or services are distinct from the goods or services transferred on or before the date of the contract modification. The Company accounts for a contract modification as if it were a part of the existing contract if the remaining goods or services are not distinct and, therefore, form part of a single performance obligation that is partially satisfied at the date of the contract modification. In such case the effect that the contract modification has on the transaction price, and on the entity’s measure of progress toward complete satisfaction of the performance obligation, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) at the date of the contract modification (the adjustment to revenue is made on a cumulative catch-up basis). The period between when the Company transfers control of promised goods or services and when the Company receives payment is expected to be one year or less, which is consistent with the Company’s historical experience. Upfront payment contract liabilities resulting from the Company’s license and collaboration agreements do not represent a financing component as the payment is not financing the transfer of goods and services, and the technology underlying the licenses granted reflects research and development expenses already incurred by the Company. As such, the Company does not adjust its revenues for the effects of a significant financing component. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred, unless there is an alternate future use in other research and development projects or otherwise. Research and development costs include salaries and benefits, stock-based compensation expense, laboratory supplies and facility-related overhead, outside contracted services including clinical trial costs, manufacturing and process development costs for both clinical and pre-clinical materials, research costs, development milestone payments under license and collaboration agreements, and other consulting services. The Company accrues for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of pre-clinical studies and clinical trials, and contract manufacturing activities. The Company records the estimated costs of research and development activities based upon the estimated services provided but not yet invoiced and includes these costs in accrued expenses and other payables in the consolidated balance sheets and within research and development expense in the consolidated statements of operations. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers. As actual costs become known, the Company adjusts its accrued liabilities. The Company has not experienced any material differences between accrued liabilities and actual costs incurred. However, the status and timing of actual services performed, number of patients enrolled, the rate of patient enrollment and number and location of sites activated may vary from the Company’s estimates, resulting in adjustments to expense in future periods. Changes in these estimates that result in material changes to the Company’s accruals could materially affect the Company’s results of operations. The Company has received orphan drug designation from the U.S. Food and Drug Administration (“FDA”) for its clinical asset rusfertide (generic name for PTG-300) for the treatment of polycythemia vera and beta-thalassemia and may qualify for a related 25% U.S. Federal income tax credit on qualifying clinical study expenditures. |
Research and Development Tax Incentive | Research and Development Tax Incentive The Company is eligible under the AusIndustry research and development tax incentive program to obtain either a refundable cash tax incentive or a taxable credit in the form of a non-cash tax incentive from the Australian Taxation Office (“ATO”). The refundable cash tax incentive is available to the Company on the basis of specific criteria with which the Company must comply. Specifically, the Company must have annual turnover of less than AUD 20.0 million and cannot be controlled by income tax exempt entities. The refundable cash tax incentive is recognized as a reduction to research and development expense when the right to receive has been attained and funds are considered to be collectible. The tax incentive is denominated in Australian dollars and, therefore, the related receivable is remeasured into U.S. dollars as of each reporting date. The Company may alternatively be eligible for a taxable credit in the form of a non-cash tax incentive in years when the annual turnover exceeds the limit. The Company evaluates its eligibility under tax incentive programs as of each balance sheet date and makes accrual and related adjustments based on the most current and relevant data available. |
Small Business Innovation Research ("SBIR") Grants | Small Business Innovation Research (“SBIR”) Grants The Company has received SBIR grants from the National Institutes of Health (“NIH”) in support of its research activities. The Company recognizes a reduction to research and development expenses when expenses related to grants have been incurred and the grant funds become contractually due from NIH. |
Stock-based Compensation | Stock-based Compensation The Company measures its stock-based awards made to its equity plan participants based on the estimated fair values of the awards as of the grant date. For stock option awards, the Company uses the Black-Scholes option-pricing model to estimate fair values. For restricted stock unit awards, the estimated fair value is generally the fair market value of the underlying stock on the grant date. Stock-based compensation expense is recognized over the requisite service period and is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. The Company recognizes forfeitures of stock-based awards as they occur. |
Net Loss per Share | Net Loss per Share Basic net loss per share is calculated by dividing the Company’s net loss by the weighted average number of shares of common stock and Exchange Warrants outstanding during the period, without consideration of potentially dilutive securities. In accordance with Accounting Standards Codification Topic 260, Earnings Per Share |
Recently Issued Accounting Pronouncements Adopted and Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13, Fair Value Measurement (Topic 820) – Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606 Recently Issued Accounting Pronouncements Not Yet Adopted as of December 31, 2020 In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Schedule of cash as reported in the consolidated statements of cash flows | December 31, 2020 2019 2018 Cash and cash equivalents $ 117,358 $ 33,006 $ 82,233 Restricted cash - current 10 10 10 Restricted cash - noncurrent 450 450 450 Total cash, cash equivalent and restricted cash in consolidated statements of cash flows $ 117,818 $ 33,466 $ 82,693 |
License and Collaboration Agr_2
License and Collaboration Agreement (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
License and Collaboration Agreement. | |
Schedule of changes in contract assets and liabilities | The following table presents changes in the Company’s contract assets and liabilities during the periods presented (in thousands): Balance at Balance at Beginning of End of Year Ended December 31, 2020 Period Additions Deductions Period Contract assets: Receivable from collaboration partner - related party $ 5,955 $ 6,221 $ (9,750) $ 2,426 Contract asset - related party $ 800 $ 342 $ (1,142) $ — Contract liabilities: Deferred revenue - related party $ 41,530 $ 3,963 $ (31,016) $ 14,477 Payable to collaboration partner - related party $ 1,262 $ 3,800 $ (2,330) $ 2,732 Balance at Balance at Beginning of End of Year Ended December 31, 2019 Period Additions Deductions Period Contract assets: Receivable from collaboration partner - related party $ 2,042 $ 36,837 $ (32,924) $ 5,955 Contract asset - related party $ 2,545 $ 800 $ (2,545) $ 800 Contract liabilities: Deferred revenue - related party $ 8,223 $ 42,456 $ (9,149) $ 41,530 Payable to collaboration partner - related party $ 1,061 $ 1,468 $ (1,267) $ 1,262 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Measurements | |
Schedule of fair value of financial assets | The following table presents the fair value of the Company’s financial assets determined using the inputs defined above (in thousands). December 31, 2020 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 27,481 $ — $ — $ 27,481 Commercial paper — 65,863 — 65,863 Corporate debt securities — 27,590 — 27,590 U.S. Treasury and agency securities — 183,210 — 183,210 Total financial assets $ 27,481 $ 276,663 $ — $ 304,144 December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 12,964 $ — $ — $ 12,964 Commercial paper — 44,282 — 44,282 Corporate debt securities — 33,662 — 33,662 U.S. Treasury and agency securities — 40,810 — 40,810 Total financial assets $ 12,964 $ 118,754 $ — $ 131,718 |
Cash Equivalents and Marketab_2
Cash Equivalents and Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Cash Equivalents and Marketable Securities | |
Schedule of cash equivalents and marketable securities | Cash equivalents and marketable securities consisted of the following (in thousands): December 31, 2020 Amortized Gross Unrealized Cost Gains Losses Fair Value Money market funds $ 27,481 $ — $ — $ 27,481 Commercial paper 65,866 — (3) 65,863 Corporate debt securities 27,592 2 (4) 27,590 U.S. Treasury and agency securities 183,203 10 (3) 183,210 Total cash equivalents and marketable securities $ 304,142 $ 12 $ (10) $ 304,144 Classified as: Cash equivalents $ 113,693 Marketable securities - current 188,451 Marketable securities - noncurrent 2,000 Total cash equivalents and marketable securities $ 304,144 December 31, 2019 Amortized Gross Unrealized Cost Gains Losses Fair Value Money market funds $ 12,964 $ — $ — $ 12,964 Commercial paper 44,284 2 (4) 44,282 Corporate debt securities 33,653 11 (2) 33,662 U.S. Treasury and agency securities 40,798 14 (2) 40,810 Total cash equivalents and marketable securities $ 131,699 $ 27 $ (8) $ 131,718 Classified as: Cash equivalents $ 31,707 Marketable securities - current 100,011 Total cash equivalents and marketable securities $ 131,718 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Balance Sheet Components | |
Summary of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2020 2019 Prepaid clinical and research related expenses $ 3,517 $ 2,567 Prepaid insurance 1,440 1,161 Other prepaid expenses 1,009 1,057 Other receivable 311 744 Prepaid expenses and other current assets $ 6,277 $ 5,529 |
Summary of Property and Equipment Net | Property and equipment, net consisted of the following (in thousands): December 31, 2020 2019 Laboratory equipment $ 3,539 $ 2,947 Furniture and computer equipment 648 512 Leasehold improvements 748 863 Total property and equipment 4,935 4,322 Less: accumulated depreciation and amortization (3,473) (2,641) Property and equipment, net $ 1,462 $ 1,681 |
Schedule of Accrued Expenses and Other Payables | Accrued expenses and other payables consisted of the following (in thousands): December 31, 2020 2019 Accrued clinical and research related expenses $ 11,335 $ 7,232 Accrued employee related expenses 6,413 4,637 Accrued professional service fees 668 301 Accrued interest payable — 68 Other 82 122 Total accrued expenses and other payables $ 18,498 $ 12,360 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt | |
Schedule of maturities of long-term debt | The Company’s long-term debt balance was as follows for the periods presented (dollars in thousands): Annual Balance at Balance at Interest Rate December 31, 2020 December 31, 2019 Term loan (maturity date October 1, 2023) 7.85% $ — $ 10,000 Debt issuance costs, net of amortization — (222) Accrued final payment fees — 16 Long-term debt, net $ — $ 9,794 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Schedule of weighted average lease term and discounts rate | December 31, 2020 2019 Operating Lease Term and Discount Rate: Weighted-average remaining lease term 3.4 years 4.4 years Weighted-average discount rate 11.0% 11.0% |
Schedule of minimum lease payments and lease liabilities | The following table summarizes the Company’s minimum lease payments and lease liability as of December 31, 2020 (in thousands): Year Ending December 31: Amount 2021 $ 2,000 2022 2,059 2023 2,121 2024 895 2025 — Thereafter — Total future minimum lease payments 7,075 Less: imputed interest (1,116) Present value of future minimum lease payments 5,959 Less: current portion of operating lease liability (1,459) Operating lease liability - noncurrent $ 4,500 |
Schedule of least cost information | Supplemental lease cost information is as follows (in thousands): Year Ended December 31, 2020 2019 Operating lease cost $ 1,775 $ 1,792 |
Schedule of balance sheet information | Supplemental balance sheet information is as follows (in thousands): As of December 31, 2020 2019 Operating Leases: Operating lease right-of-use asset $ 4,950 $ 6,042 Operating lease liability - current $ 1,459 $ 1,256 Operating lease liability - noncurrent 4,500 5,961 Total operating lease liabilities $ 5,959 $ 7,217 |
Schedule of cash flow information | Supplemental cash flow information is as follows (in thousands): Year Ended December 31, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow used by operating leases $ 1,941 $ 1,885 |
Equity Plans (Tables)
Equity Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Schedule of activity under equity incentive plans | Weighted- Weighted- Average Average Exercise Remaining Aggregate Options Price Per Contractual Intrinsic Outstanding Share Life (years) Value (1) (in millions) Balances at December 31, 2019 3,681,521 $ 11.64 7.78 $ 2.4 Options granted 1,536,400 11.53 Options exercised (294,238) 7.49 Options forfeited (275,563) 11.54 Balances at December 31, 2020 4,648,120 $ 11.87 7.61 $ 40.0 Options exercisable – December 31, 2020 2,619,943 $ 12.10 6.65 $ 22.1 Options vested and expected to vest – December 31, 2020 4,648,120 $ 11.87 7.61 $ 40.0 ____________________ (1) |
Schedule of stock-based compensation expense | Total stock-based compensation expense was as follows (in thousands): Year Ended December 31, 2020 2019 2018 Research and development $ 4,121 $ 4,350 $ 3,424 General and administrative 3,778 4,003 3,495 Total stock-based compensation expense $ 7,899 $ 8,353 $ 6,919 |
Options to purchase common stock | |
Black-Scholes option-pricing model assumptions | Year Ended December 31, 2020 2019 2018 Expected term (in years) 5.27 - 6.08 5.00 - 6.08 5.49 - 6.08 Expected volatility 72.1% - 87.5% 61.0% - 64.8% 62.0% - 66.5% Risk-free interest rate 0.23% - 1.44% 1.42% - 2.58% 2.42% - 3.03% Dividend yield — — — |
Restricted stock units | |
Schedule of activity under equity incentive plans | Weighted Average Number of Grant Date Shares Fair Value Unvested at December 31, 2019 278,482 $ 10.08 Granted 142,000 7.80 Vested (131,147) 9.52 Forfeited (44,790) 8.67 Unvested at December 31, 2020 244,545 $ 9.31 |
ESPP rights | |
Black-Scholes option-pricing model assumptions | Year Ended December 31, 2020 2019 2018 Expected term (in years) 0.50 0.50 0.50 Expected volatility 89.1% - 120.4% 58.9% - 65.3% 49.0% - 63.4% Risk-free interest rate 0.12% - 0.43% 1.89% - 2.32% 1.89% - 2.32% Dividend yield — — — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Schedule of domestic and foreign components of net loss | The following table presents domestic and foreign components of net loss before income taxes (in thousands): Year Ended December 31, 2020 2019 2018 Domestic $ (71,073) $ (72,271) $ (37,511) Foreign 6,228 (5,607) (2,212) Total net loss before taxes $ (64,845) $ (77,878) $ (39,723) |
Schedule of federal, state and foreign of the income tax expense (benefit) | Year Ended December 31, 2020 2019 2018 Current: Federal $ — $ — $ — State — — — Foreign (88) 84 — Total current tax (benefit) expense (88) 84 — Deferred: Federal — — — State — — — Foreign 1,393 (775) (799) Total deferred tax expense (benefit) 1,393 (775) (799) Total income tax expense (benefit) $ 1,305 $ (691) $ (799) |
Schedule of provision differences from federal statutory rate | Year Ended December 31, 2020 2019 2018 Federal statutory income tax rate 21.0 % 21.0 % 21.0 % State taxes, net of federal benefit 1.9 1.2 7.0 Research and development credits 6.5 4.3 (1.3) Foreign tax rate difference (0.9) 0.7 0.4 Change in valuation allowance (34.3) (23.8) (22.2) Other 3.8 (2.5) (2.9) Provision (benefit) for income taxes (2.0) % 0.9 % 2.0 % |
Schedule of components of deferred tax assets | The components of the deferred tax assets are as follows (in thousands): December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 50,272 $ 39,907 Depreciation and amortization 1,237 318 Accruals/other 5,332 5,454 Operating lease liability 1,252 1,516 Research and development and foreign credits 14,856 8,038 Total deferred tax assets 72,949 55,233 Deferred tax liabilities: Operating right-of-use asset (1,040) (1,269) Total deferred tax liabilities (1,040) (1,269) Valuation allowance (71,909) (52,531) Net deferred tax assets $ — $ 1,433 |
Schedule of reconciliation of beginning and ending unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): Year Ended December 31, 2020 2019 2018 Balance at beginning of year $ 16,631 $ 9,466 $ 5,414 (Decreases) increases based on tax positions related to prior years (3,799) 184 108 Increases based on tax positions related to current year 7,053 6,981 3,944 Balance at end of year $ 19,885 $ 16,631 $ 9,466 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Net Loss per Share | |
Schedule of computation of the basic and diluted net loss per share attributable to common stockholders | Year Ended December 31, 2020 2019 2018 Numerator: Net loss $ (66,150) $ (77,187) $ (38,924) Denominator: Weighted-average shares used to compute net loss per common share, basic and diluted 34,396,446 25,894,024 22,364,515 Net loss per shares, basic and diluted $ (1.92) $ (2.98) $ (1.74) |
Schedule of potentially dilutive securities excluded from diluted net loss per share calculations | Year Ended December 31, 2020 2019 2018 Options to purchase common stock 4,648,120 3,681,521 3,178,441 Common stock warrants 2,750,000 2,750,000 2,750,000 Restricted stock units 244,545 278,482 418,450 ESPP shares 28,445 40,275 52,134 Total 7,671,110 6,750,278 6,399,025 |
Organization and Description _2
Organization and Description of Business - Liquidity (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Net losses from operations since inception | ||
Accumulated deficit | $ (283,811) | $ (217,661) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Concentrations of Credit Risk (Details) | Dec. 31, 2020Institution |
Summary of Significant Accounting Policies | |
Number of financial institutions at which cash is held | 2 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Aggregate amounts of cash and cash equivalents and the restricted cash | ||||
Cash and cash equivalents | $ 117,358 | $ 33,006 | $ 82,233 | |
Restricted cash - current | 10 | 10 | 10 | |
Restricted cash - noncurrent | 450 | 450 | 450 | |
Total cash, cash equivalent and restricted cash in consolidated statements of cash flows | $ 117,818 | $ 33,466 | $ 82,693 | $ 106,489 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Property and Equipment and Impairment of Long-Lived Assets (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Property and Equipment | |
Impairments of long-lived assets | $ 0 |
Minimum | |
Property and Equipment | |
Useful lives | 3 years |
Maximum | |
Property and Equipment | |
Useful lives | 5 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Income Taxes (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Summary of Significant Accounting Policies | |
Interest or penalties recorded in relation to unrecognized tax benefits | $ 0 |
License and Collaboration Agr_3
License and Collaboration Agreement (Details) - USD ($) $ in Thousands | May 07, 2019 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 13, 2017 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Upfront payments and fees | $ 23,792 | $ 23,792 | ||||||
Revenue recognized | $ 14,100 | 1,600 | $ 23,500 | |||||
Costs to obtain or fulfill the contract that were capitalized | 0 | $ 0 | 0 | 0 | ||||
License and Collaborative Revenue | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Development cost | 20.00% | |||||||
Second-Generation Analog, Phase 3 CD Clinical Trial Primary Clinical Endpoint [Member] | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Development cost | 80.00% | |||||||
Second Generation Analog Phase 2 Cd Clinical Trial Primary Clinical | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Development cost | 80.00% | |||||||
Phase 2 clinical trial | Additional services | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Revenue | 100 | |||||||
First Amendment | Development, regulatory and sales milestone payments | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Eligible payment receivable | $ 1,000,000 | |||||||
First Amendment | Development, regulatory and sales milestone payments | Maximum | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Percentages on net product sales | 10.00% | |||||||
Janssen Biotech, Inc. | License and Collaborative Revenue | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Revenue | $ 27,100 | |||||||
Revenue recognized | 28,600 | 200 | 30,900 | |||||
Janssen Biotech, Inc. | Additional services | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Revenue | $ 1,500 | 0 | ||||||
Janssen Biotech, Inc. | Second-Generation Analog, Phase 3 CD Clinical Trial Primary Clinical Endpoint [Member] | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Development cost | 20.00% | |||||||
Janssen Biotech, Inc. | License and Collaboration Agreement | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Increase (decrease) in transaction price | $ (14,300) | 37,900 | ||||||
Transaction price | 112,900 | 98,600 | 112,900 | 60,700 | ||||
Revenue | $ 30,800 | |||||||
Janssen Biotech, Inc. | License and Collaboration Agreement | Upfront cash payment | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Upfront payments and fees | $ 50,000 | |||||||
Janssen Biotech, Inc. | First, second-generation compound | Milestone payment | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Amount payable upon the effectiveness of the First Amendment | $ 7,500 | |||||||
Janssen Biotech, Inc. | First, second-generation compound | Second-Generation Analog, Phase 3 CD Clinical Trial Primary Clinical Endpoint [Member] | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Research program cost | 100.00% | |||||||
Janssen Biotech, Inc. | Second and third, second-generation compounds | Second-Generation Analog, Phase 3 CD Clinical Trial Primary Clinical Endpoint [Member] | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Research program cost | 50.00% | |||||||
Janssen Biotech, Inc. | Thereafter | Second-Generation Analog, Phase 3 CD Clinical Trial Primary Clinical Endpoint [Member] | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Research program cost | 100.00% | |||||||
Janssen Biotech, Inc. | Second-Generation Phase 2b Milestone | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Amount payable upon the effectiveness of the First Amendment | $ 5,000 | |||||||
Janssen Biotech, Inc. | Second-Generation Phase 2b Milestone | Milestone payment | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Revenue recognized | $ 6,800 | |||||||
Janssen Biotech, Inc. | Phase 2 clinical trial | License and Collaborative Revenue | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Revenue | 17,900 | |||||||
Janssen Biotech, Inc. | First Amendment | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Increase (decrease) in transaction price | (9,400) | |||||||
Revenue recognized | 5,000 | |||||||
Janssen Biotech, Inc. | First Amendment | License and Collaborative Revenue | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Eligible amount received | $ 25,000 | |||||||
Revenue recognized | 25,000 | |||||||
Revenue following contract modification | $ 8,000 | |||||||
Revenue recognized from performance obligations in previous periods | $ 1,600 | |||||||
Janssen Biotech, Inc. | First Amendment | PTG-200, Phase 3 CD Clinical Trial Primary Clinical Endpoint | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Eligible payment receivable | $ 100,000 | |||||||
Janssen Biotech, Inc. | First Amendment | Second-Generation Analog, Phase 3 CD Clinical Trial Primary Clinical Endpoint [Member] | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Eligible payment receivable | $ 115,000 | |||||||
Janssen Biotech, Inc. | First Amendment | Second-Generation Phase 2b Milestone Payment | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Amount payable upon the effectiveness of the First Amendment | 50,000 | |||||||
Janssen Biotech, Inc. | Amended First Opt-in | Upfront cash payment | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Amount payable upon the effectiveness of the First Amendment | 50,000 | |||||||
Janssen Biotech, Inc. | Amended Second Opt-in | Upfront cash payment | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Amount payable upon the effectiveness of the First Amendment | 50,000 | |||||||
Janssen Biotech, Inc. | Estimated variable consideration | License and Collaborative Revenue | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Amount payable upon the effectiveness of the First Amendment | $ 7,500 | |||||||
Janssen Biotech, Inc. | Pro Forma | License and Collaborative Revenue | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Amount payable upon the effectiveness of the First Amendment | 25,000 | |||||||
Janssen Biotech, Inc. | Pro Forma | Milestone payment | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Amount payable upon the effectiveness of the First Amendment | $ 25,000 |
License and Collaboration Agr_4
License and Collaboration Agreement - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred revenue - related party | ||
Balance at Beginning of Period | $ 17,738 | |
Balance at End of Period | 14,477 | $ 17,738 |
Payable to collaboration partner - related party | ||
Balance at Beginning of Period | 1,262 | |
Balance at End of Period | 2,732 | 1,262 |
Janssen Biotech, Inc. | License and Collaboration Agreement | ||
Receivable from collaboration partner - related party | ||
Balance at Beginning of Period | 5,955 | 2,042 |
Additions | 6,221 | 36,837 |
Deductions | (9,750) | (32,924) |
Balance at End of Period | 2,426 | 5,955 |
Contract asset - related party | ||
Contract asset - related party, Balance at Beginning of Period | 800 | 2,545 |
Contract asset - related party, Additions | 342 | 800 |
Contract asset - related party, Deductions | (1,142) | (2,545) |
Contract asset - related party, Balance at End of Period | 800 | |
Deferred revenue - related party | ||
Balance at Beginning of Period | 41,530 | 8,223 |
Additions | 3,963 | 42,456 |
Deductions | (31,016) | (9,149) |
Balance at End of Period | 14,477 | 41,530 |
Payable to collaboration partner - related party | ||
Balance at Beginning of Period | 1,262 | 1,061 |
Additions | 3,800 | 1,468 |
Deductions | (2,330) | (1,267) |
Balance at End of Period | $ 2,732 | $ 1,262 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value of Long-term Debt | $ 0 | |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 304,144 | $ 131,718 |
Recurring | Money Market Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 27,481 | 12,964 |
Recurring | Commercial Paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 65,863 | 44,282 |
Recurring | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 27,590 | 33,662 |
Recurring | U.S. Treasury and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 183,210 | 40,810 |
Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 27,481 | 12,964 |
Recurring | Level 1 | Money Market Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 27,481 | 12,964 |
Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 276,663 | 118,754 |
Recurring | Level 2 | Commercial Paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 65,863 | 44,282 |
Recurring | Level 2 | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | 27,590 | 33,662 |
Recurring | Level 2 | U.S. Treasury and agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total financial assets | $ 183,210 | $ 40,810 |
Cash Equivalents and Marketab_3
Cash Equivalents and Marketable Securities - Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Cash Equivalents and Marketable Securities | ||
Total cash equivalents and marketable securities, Amortized Cost | $ 304,142 | $ 131,699 |
Total cash equivalents and marketable securities, Gross Unrealized Gains | 12 | 27 |
Total cash equivalents and marketable securities, Gross Unrealized Losses | (10) | (8) |
Total cash equivalents and marketable securities, Fair Value | 304,144 | 131,718 |
Corporate debt securities | ||
Cash Equivalents and Marketable Securities | ||
Total cash equivalents and marketable securities, Amortized Cost | 27,592 | 33,653 |
Total cash equivalents and marketable securities, Gross Unrealized Gains | 2 | 11 |
Total cash equivalents and marketable securities, Gross Unrealized Losses | (4) | (2) |
Total cash equivalents and marketable securities, Fair Value | 27,590 | 33,662 |
U.S. Treasury and agency securities | ||
Cash Equivalents and Marketable Securities | ||
Total cash equivalents and marketable securities, Amortized Cost | 183,203 | 40,798 |
Total cash equivalents and marketable securities, Gross Unrealized Gains | 10 | 14 |
Total cash equivalents and marketable securities, Gross Unrealized Losses | (3) | (2) |
Total cash equivalents and marketable securities, Fair Value | 183,210 | 40,810 |
Money Market Funds | ||
Cash Equivalents and Marketable Securities | ||
Total cash equivalents and marketable securities, Amortized Cost | 27,481 | 12,964 |
Total cash equivalents and marketable securities, Fair Value | 27,481 | 12,964 |
Commercial Paper | ||
Cash Equivalents and Marketable Securities | ||
Total cash equivalents and marketable securities, Amortized Cost | 65,866 | 44,284 |
Total cash equivalents and marketable securities, Gross Unrealized Gains | 2 | |
Total cash equivalents and marketable securities, Gross Unrealized Losses | (3) | (4) |
Total cash equivalents and marketable securities, Fair Value | $ 65,863 | $ 44,282 |
Cash Equivalents and Marketab_4
Cash Equivalents and Marketable Securities - Classification of Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Classified as: | ||
Cash equivalents | $ 113,693 | $ 31,707 |
Marketable securities - current | 188,451 | 100,011 |
Marketable securities - noncurrent | 2,000 | |
Total cash equivalents and marketable securities | $ 304,144 | 131,718 |
Contractual maturities | ||
Maximum period of current contractual maturities | 1 year | |
Minimum period of noncurrent contractual maturities | 1 year | |
Maximum period of Noncurrent contractual maturities | 2 years | |
Realized Gain (loss) | $ 0 | $ 0 |
Balance Sheet Components - Prep
Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid clinical and research related expenses | $ 3,517 | $ 2,567 |
Prepaid insurance | 1,440 | 1,161 |
Other prepaid expenses | 1,009 | 1,057 |
Other receivable | 311 | 744 |
Prepaid expenses and other current assets | $ 6,277 | $ 5,529 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property and Equipment | |||
Total property and equipment | $ 4,935,000 | $ 4,322,000 | |
Less: accumulated depreciation and amortization | (3,473,000) | (2,641,000) | |
Property and equipment, net | 1,462,000 | 1,681,000 | |
Property and equipment income statement disclosure | |||
Depreciation expense | 789,000 | 703,000 | $ 527,000 |
Laboratory equipment | |||
Property and Equipment | |||
Total property and equipment | 3,539,000 | 2,947,000 | |
Furniture and computer equipment | |||
Property and Equipment | |||
Total property and equipment | 648,000 | 512,000 | |
Leasehold improvements | |||
Property and Equipment | |||
Total property and equipment | 748,000 | 863,000 | |
Australia | |||
Property and Equipment | |||
Property and equipment, net | $ 46,000 | $ 37,000 | $ 200 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Expenses and Other Payables (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued Expenses and Other Payables | ||
Accrued clinical and research related expenses | $ 11,335 | $ 7,232 |
Accrued employee related expenses | 6,413 | 4,637 |
Accrued professional service fees | 668 | 301 |
Accrued interest payable | 68 | |
Other | 82 | 122 |
Total accrued expenses and other payables | $ 18,498 | $ 12,360 |
Research Collaboration and Li_2
Research Collaboration and License Agreement (Details) | 12 Months Ended | ||
Dec. 31, 2020USD ($)item | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Research Collaboration and License Agreement | |||
Research and Development Expense | $ 74,506,000 | $ 65,003,000 | $ 59,497,000 |
Research Collaboration and License Agreement | |||
Research Collaboration and License Agreement | |||
Number of development milestone payments | item | 3 | ||
Aggregate development milestone payment | $ 1,000,000 | ||
Research and Development Expense | 0 | $ 0 | $ 500,000 |
Research Collaboration and License Agreement | Phase 2b | Minimum | Entity Required to Continue to Make Payments | |||
Research Collaboration and License Agreement | |||
Additional payment obligation to the former collaboration partner | 1,000,000 | ||
Research Collaboration and License Agreement | Phase 2b | Maximum | Entity Required to Continue to Make Payments | |||
Research Collaboration and License Agreement | |||
Additional payment obligation to the former collaboration partner | 3,000,000 | ||
Research Collaboration and License Agreement | Phase 3 | Minimum | Entity Required to Continue to Make Payments | |||
Research Collaboration and License Agreement | |||
Additional payment obligation to the former collaboration partner | 1,500,000 | ||
Research Collaboration and License Agreement | Phase 3 | Maximum | Entity Required to Continue to Make Payments | |||
Research Collaboration and License Agreement | |||
Additional payment obligation to the former collaboration partner | $ 4,500,000 |
Government Programs (Details)
Government Programs (Details) $ in Thousands, $ in Millions | 1 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2018USD ($) | May 31, 2017USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020AUD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019AUD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018AUD ($) | Dec. 31, 2020AUD ($) | |
Government Programs | |||||||||
Research and development tax incentive receivable | $ 1,084 | ||||||||
SBIR Grant | |||||||||
Government Programs | |||||||||
Reduction of research and development expenses related to tax | 500 | $ 1,400 | $ 700 | ||||||
Research and development grants | $ 1,500 | $ 1,300 | |||||||
Grants receivable | 0 | 300 | |||||||
Australian | |||||||||
Government Programs | |||||||||
Reduction of research and development expenses related to tax | 1,000 | $ 1.4 | 1,300 | $ 1.9 | $ 1,600 | $ 2.1 | |||
Overseas Findings | Australian | |||||||||
Government Programs | |||||||||
Research and development tax incentive receivable | $ 1,100 | $ 0 | $ 1.4 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Oct. 31, 2019 | Jun. 30, 2020 | Oct. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||||
Long-term Debt | $ 9,794 | ||||
Loss on early repayment of debt | $ (585) | ||||
Term Loan Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Loan facility for general corporate | $ 50,000 | $ 50,000 | |||
Long-term Debt | 10,000 | 10,000 | 0 | ||
Tranche Installment Amount | $ 20,000 | $ 20,000 | $ 20,000 | ||
Cash and cash equivalents ( In percentage) | 35.00% | ||||
Loan Origination Fee (In Percentage) | 0.25% | ||||
Period Of Interest Only Payments | 24 months | ||||
Consecutive monthly payments | 24 months | ||||
Additional Prepayment (In Percentage) | 2.85% | ||||
Outstanding balance paid | $ 10,000 | ||||
Loss on early repayment of debt | 600 | ||||
Prepayment and exit fees | 600 | ||||
Accelerated capitalized and unamortized debt issuance costs | $ 100 | ||||
Prime Rate | Term Loan Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
prime rate (In Percentage) | 2.91% | ||||
Floor rate (In Percentage) | 4.94% | ||||
Debt Instrument Repayment On Or Before First Anniversary | Term Loan Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Prepayment premium (In Percentage) | 3.00% | ||||
Debt Instrument Repayment Between First And Second Anniversary | Term Loan Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Prepayment premium (In Percentage) | 2.00% | ||||
Debt Instrument Repayment After Second Anniversary | Term Loan Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Prepayment premium (In Percentage) | 1.00% |
Debt - Long-term debt (Details)
Debt - Long-term debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt | ||
Term loan (matures October 1, 2023) | $ 10,000 | |
Debt issuance costs, net of amortization | (222) | |
Accrued final payment fee | 16 | |
Long-term debt, net | $ 9,794 | |
Annual interest rate | 7.85% | |
Effective interest rate on long-term debt | 9.85% | 9.81% |
Leases - Agreement (Details)
Leases - Agreement (Details) | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2017USD ($)lease | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Leases | ||||
Security deposit | $ 450,000 | |||
Sublease Income | $ 89,400 | $ 64,000 | $ 0 | |
Newark, California | ||||
Leases | ||||
Number of operating lease agreement | lease | 1 |
Leases - Weighted average lease
Leases - Weighted average lease term and discount rate (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases | ||
Weighted-average remaining lease term | 3 years 4 months 24 days | 4 years 4 months 24 days |
Weighted-average discount rate | 11.00% | 11.00% |
Leases - Minimum lease payments
Leases - Minimum lease payments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Minimum lease payments: | ||
2021 | $ 2,000 | |
2022 | 2,059 | |
2023 | 2,121 | |
2024 | 895 | |
Total future minimum lease payments | 7,075 | |
Less: imputed interest | (1,116) | |
Present value of future minimum lease payments | 5,959 | $ 7,217 |
Less: current portion of operating lease liability | (1,459) | (1,256) |
Operating lease liability - noncurrent | $ 4,500 | $ 5,961 |
Leases - Lease cost information
Leases - Lease cost information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases | ||
Operating lease cost | $ 1,775 | $ 1,792 |
Leases - Supplemental balance s
Leases - Supplemental balance sheet information (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Operating Leases: | ||
Operating lease right-of-use asset | $ 4,950 | $ 6,042 |
Financial position | us-gaap:OperatingLeaseRightOfUseAsset | us-gaap:OperatingLeaseRightOfUseAsset |
Operating lease liability - current | $ 1,459 | $ 1,256 |
Financial position | us-gaap:OperatingLeaseLiabilityCurrent | us-gaap:OperatingLeaseLiabilityCurrent |
Operating lease liability - noncurrent | $ 4,500 | $ 5,961 |
Financial position | us-gaap:OperatingLeaseLiabilityNoncurrent | us-gaap:OperatingLeaseLiabilityNoncurrent |
Total operating lease liabilities | $ 5,959 | $ 7,217 |
Financial position | us-gaap:OperatingLeaseLiabilityCurrent us-gaap:OperatingLeaseLiabilityNoncurrent | us-gaap:OperatingLeaseLiabilityCurrent us-gaap:OperatingLeaseLiabilityNoncurrent |
Leases - Cash flow information
Leases - Cash flow information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Leases | |||
Operating cash flow used by operating leases | $ 1,941 | $ 1,885 | |
Rent expense | $ 1,900 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Zealand Pharma $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Loss Contingencies [Line Items] | |
Amount of damages sought | $ 1 |
Loss contingency accrual | 0 |
Successfully develop and commercialize Rusfertide Component with out partner | |
Loss Contingencies [Line Items] | |
Potential development and regulatory milestone payments on contractual obligation | 28 |
Potential sales milestone payments on contractual obligation | $ 100 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 21, 2018 | Dec. 31, 2020 | May 31, 2020 | Oct. 31, 2019 | Dec. 31, 2018 | Aug. 31, 2018 | Sep. 30, 2017 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Aug. 06, 2018 |
Stock transactions | |||||||||||
Proceeds from public offering of common stock, net of issuance costs | $ 213,303 | ||||||||||
Par value (per share) | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||||
2017 Form S-3 | |||||||||||
Stock transactions | |||||||||||
Maximum aggregate offering price | $ 200,000 | ||||||||||
2019 Form S-3 | |||||||||||
Stock transactions | |||||||||||
Maximum aggregate offering price | $ 250,000 | $ 94,200 | |||||||||
Common Stock | |||||||||||
Stock transactions | |||||||||||
Price (in dollars per share) | $ 21 | $ 14 | $ 21 | ||||||||
Common stock sold (in shares) | 4,761,904 | 7,000,000 | 13,526,189 | ||||||||
Issuance of common stock upon exercise of Exchange Warrants (in shares) | 599,997 | ||||||||||
Common Stock | 2019 Form S-3 | |||||||||||
Stock transactions | |||||||||||
Common stock sold (in shares) | 2,483,719 | ||||||||||
Proceeds from public offering of common stock, net of issuance costs | $ 41,900 | ||||||||||
Common Stock | Underwriter overallotment option | |||||||||||
Stock transactions | |||||||||||
Price (in dollars per share) | $ 21 | $ 14 | $ 21 | ||||||||
Common stock sold (in shares) | 714,285 | 1,050,000 | |||||||||
Proceeds from public offering of common stock, net of issuance costs | $ 107,600 | ||||||||||
Common Stock | Private Placement | |||||||||||
Stock transactions | |||||||||||
Number of warrants exercised | 0 | 0 | |||||||||
Common Stock | 2017 Sales Agreement | |||||||||||
Stock transactions | |||||||||||
Common stock sold (in shares) | 2,846,641 | 151,273 | |||||||||
Proceeds from public offering of common stock, net of issuance costs | $ 105,300 | $ 34,500 | $ 1,500 | ||||||||
At-the-market offering (ATM) | |||||||||||
Stock transactions | |||||||||||
Maximum aggregate offering price | $ 31,900 | ||||||||||
At-the-market offering (ATM) | 2019 Form S-3 | |||||||||||
Stock transactions | |||||||||||
Maximum aggregate offering price | $ 75,000 | ||||||||||
At-the-market offering (ATM) | 2017 Sales Agreement | |||||||||||
Stock transactions | |||||||||||
Maximum aggregate offering price | $ 50,000 | ||||||||||
Investors | Common Stock | |||||||||||
Stock transactions | |||||||||||
Price (in dollars per share) | $ 8 | ||||||||||
Common stock sold (in shares) | 2,750,000 | ||||||||||
Aggregate gross proceeds | $ 21,700 | ||||||||||
Investors | Common Stock | Private Placement | |||||||||||
Stock transactions | |||||||||||
Warrants to purchase common stock, number of shares | 2,750,000 | ||||||||||
Exchange Agreement | Exchanging Stockholders | |||||||||||
Stock transactions | |||||||||||
Warrants to purchase common stock, number of shares | 1,000,000 | ||||||||||
Common stock exchanged for pre-funded warrants | 1,000,000 | ||||||||||
Par value (per share) | $ 0.00001 | ||||||||||
Exercise Price (per share) | $ 0.00001 | ||||||||||
Duration of warrants from date of issuance (in years) | 10 years | ||||||||||
Equity method investment, ownership percentage | 9.99% | ||||||||||
Exchange Agreement | Exchanging Stockholders | Common Stock | |||||||||||
Stock transactions | |||||||||||
Number of warrants exercised | 600,000 | ||||||||||
Issuance of common stock upon exercise of Exchange Warrants (in shares) | 599,997 | ||||||||||
Exchange warrants unexercised | 400,000 | 400,000 | |||||||||
Group one | Common Stock | Private Placement | |||||||||||
Stock transactions | |||||||||||
Number of shares to be converted for each warrant | 1,375,000 | ||||||||||
Exercise Price (per share) | $ 10 | ||||||||||
Group two | Common Stock | Private Placement | |||||||||||
Stock transactions | |||||||||||
Number of shares to be converted for each warrant | 1,375,000 | ||||||||||
Exercise Price (per share) | $ 15 |
Equity Plans - Narrative (Detai
Equity Plans - Narrative (Details) - shares | 1 Months Ended | 12 Months Ended | |||
Jul. 31, 2016 | Dec. 31, 2020 | Dec. 31, 2018 | Dec. 31, 2019 | May 31, 2018 | |
Equity Plans | |||||
Average volatility | 75.00% | ||||
Percentage of volatility of stock options since IPO | 25.00% | ||||
2007 Stock Option and Incentive Plan | |||||
Equity Plans | |||||
Number of shares available for issuance | 0 | ||||
2016 Equity Incentive Plan | |||||
Equity Plans | |||||
Number of shares authorized | 1,200,000 | ||||
Maximum annual additional authorized shares as a percentage of outstanding shares | 4.00% | ||||
Number of shares available for issuance | 538,374 | ||||
2016 Equity Incentive Plan | Stockholders possessing more than 10% of the total combined voting power | Minimum | |||||
Equity Plans | |||||
Exercise price as a percentage of the fair market value of common stock on grant date | 110.00% | ||||
2016 Equity Incentive Plan | Tranche two | |||||
Equity Plans | |||||
Vesting period | 4 years | ||||
Restricted stock unit incentive awards granted in 2018 | |||||
Equity Plans | |||||
Expiration period | 10 years | ||||
Vesting period | 18 months | ||||
Number of shares authorized | 750,000 | ||||
Number of shares available for issuance | 574,375 | ||||
Stock options - employees, consultants, directors | 2007 Stock Option and Incentive Plan | |||||
Equity Plans | |||||
Expiration period | 10 years | ||||
Stock options - employees, consultants, directors | 2007 Stock Option and Incentive Plan | Minimum | |||||
Equity Plans | |||||
Vesting period | 4 years | ||||
Stock options - employees, consultants, directors | 2016 Equity Incentive Plan | |||||
Equity Plans | |||||
Expiration period | 10 years | ||||
Stock options - employees, consultants, directors | 2016 Equity Incentive Plan | Minimum | |||||
Equity Plans | |||||
Exercise price as a percentage of the fair market value of common stock on grant date | 100.00% | ||||
Non Employee Director Initial Stock Options | 2016 Equity Incentive Plan | Maximum | |||||
Equity Plans | |||||
Vesting period | 3 years | ||||
Nonemployee Director Annual Refresher Stock Options | 2016 Equity Incentive Plan | Minimum | |||||
Equity Plans | |||||
Vesting period | 1 year |
Equity Plans - Activity (Detail
Equity Plans - Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Options Outstanding | |||
Options Outstanding, Beginning balance | 3,681,521 | ||
Options Outstanding, Options granted | 1,536,400 | ||
Options Outstanding, Options exercised | (294,238) | ||
Options Outstanding, Options forfeited | (275,563) | ||
Options Outstanding, Ending balance | 4,648,120 | 3,681,521 | |
Options Outstanding, Options exercisable | 2,619,943 | ||
Options Outstanding, Options vested and expected to vest | 4,648,120 | ||
Weighted-Average Exercise Price Per Share | |||
Weighted-Average Exercise Price Per Share, Beginning balance | $ 11.64 | ||
Weighted-Average Exercise Price Per Share, Options granted | 11.53 | ||
Weighted-Average Exercise Price Per Share, Options exercised | 7.49 | ||
Weighted-Average Exercise Price Per Share, Options forfeited | 11.54 | ||
Weighted-Average Exercise Price Per Share, Ending balance | 11.87 | $ 11.64 | |
Weighted-Average Exercise Price Per Share, Options exercisable | 12.10 | ||
Weighted-Average Exercise Price Per Share, Options vested and expected to vest | $ 11.87 | ||
Weighted-Average Remaining Contractual Life (years) | |||
Weighted-Average Remaining Contractual Life (years) | 7 years 7 months 9 days | 7 years 9 months 10 days | |
Weighted-Average Remaining Contractual Life (years), Options exercisable | 6 years 7 months 24 days | ||
Weighted-Average Remaining Contractual Life (years), Options vested and expected to vest | 7 years 7 months 9 days | ||
Aggregate Intrinsic Value | |||
Aggregate Intrinsic Value, Options Outstanding | $ 40 | $ 2.4 | |
Aggregate Intrinsic Value, Options exercisable | 22.1 | ||
Aggregate Intrinsic Value, Options vested and expected to vest | 40 | ||
Aggregate intrinsic value of options exercised | $ 3 | $ 2.6 | $ 1.3 |
Options, weighted-average grant-date fair value | $ 7.76 | $ 5.45 | $ 8.12 |
Equity Plans - Employee Stock O
Equity Plans - Employee Stock Options Valuation Assumptions (Details) - Options to purchase common stock | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Equity Plans | |||
Expected volatility, Minimum | 72.10% | 61.00% | 62.00% |
Expected volatility, Maximum | 87.50% | 64.80% | 66.50% |
Risk-free interest rate, Minimum | 0.23% | 1.42% | 2.42% |
Risk-free interest rate, Maximum | 1.44% | 2.58% | 3.03% |
Minimum | |||
Equity Plans | |||
Expected term | 5 years 3 months 7 days | 5 years | 5 years 5 months 26 days |
Maximum | |||
Equity Plans | |||
Expected term | 6 years 29 days | 6 years 29 days | 6 years 29 days |
Equity Plans - Restricted Stock
Equity Plans - Restricted Stock Units - (Details) | 12 Months Ended | |
Dec. 31, 2020installment$ / sharesshares | Dec. 31, 2018installment | |
Equity Plans | ||
Restricted stock units vesting, number of equal installments | installment | 4 | |
Restricted stock unit incentive awards granted in 2018 | ||
Equity Plans | ||
Restricted stock units vesting, number of equal installments | installment | 3 | |
Vesting period | 18 months | |
Number of Shares | ||
Number of shares, Unvested, Beginning balance | shares | 278,482 | |
Number of shares, Granted | shares | 142,000 | |
Number of shares, Vested | shares | (131,147) | |
Number of Shares, Forfeited | shares | (44,790) | |
Number of shares, Unvested, Ending balance | shares | 244,545 | |
Weighted-Average Grant Date Fair Value | ||
Weighted-Average Grant Date Fair Value, Unvested, Beginning balance | $ / shares | $ 10.08 | |
Weighted-Average Grant Date Fair Value, Granted | $ / shares | 7.80 | |
Weighted-Average Grant Date Fair Value, Vested | $ / shares | 9.52 | |
Weighted-Average Grant Date Fair Value, Forfeited | $ / shares | 8.67 | |
Weighted-Average Grant Date Fair Value, Unvested, Ending balance | $ / shares | $ 9.31 |
Equity Plans - Employee Stock P
Equity Plans - Employee Stock Purchase Plan (Details) - shares | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 31, 2016 | |
ESPP rights | ||||
Equity Plans | ||||
Expected term | 6 months | 6 months | 6 months | |
Expected volatility, Minimum | 89.10% | 58.90% | 49.00% | |
Expected volatility, Maximum | 120.40% | 65.30% | 63.40% | |
Risk-free interest rate, Minimum | 0.12% | 1.89% | 1.89% | |
Risk-free interest rate, Maximum | 0.43% | 2.32% | 2.32% | |
2016 ESPP | ||||
Equity Plans | ||||
Maximum payroll deduction for share purchases (as a percent) | 15.00% | |||
Purchase price of stock (as a percent) | 85.00% | |||
Shares issued in period | 92,523 | |||
Number of shares available for issuance | 757,647 | |||
Number of shares authorized | 150,000 | |||
Maximum annual additional authorized shares as a percentage of outstanding shares | 1.00% | |||
Maximum annual additional authorized shares (in shares) | 300,000 |
Equity Plans - Stock-based Comp
Equity Plans - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 7,899 | $ 8,353 | $ 6,919 |
Total unrecognized stock-based compensation costs related to stock options | $ 16,000 | ||
Period of unrecognized stock-based compensation costs to be recognized | 2 years 8 months 12 days | ||
Research and Development | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 4,121 | 4,350 | 3,424 |
General and Administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 3,778 | $ 4,003 | $ 3,495 |
Income Taxes - Provision and Co
Income Taxes - Provision and Components of Net Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | |||
Income tax benefit | $ (1,305) | $ 691 | $ 799 |
Domestic and foreign components of net loss | |||
Domestic | (71,073) | (72,271) | (37,511) |
Foreign | 6,228 | (5,607) | (2,212) |
Loss before income tax (expense) benefit | $ (64,845) | $ (77,878) | $ (39,723) |
Income Taxes - Components of Fe
Income Taxes - Components of Federal, State and Foreign Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | |||
Foreign | $ (88) | $ 84 | |
Total current tax (benefit) expense | (88) | 84 | |
Deferred: | |||
Foreign | 1,393 | (775) | $ (799) |
Total deferred tax expense (benefit) | 1,393 | (775) | (799) |
Total income tax expense (benefit) | $ 1,305 | $ (691) | $ (799) |
Income Taxes - Provision Differ
Income Taxes - Provision Difference from Federal Statutory Rate (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Effective tax rate of provision for income taxes difference from federal statutory rate | |||
Federal statutory income tax rate (as a percent) | 21.00% | 21.00% | 21.00% |
State taxes, net of federal benefit (as a percent) | 1.90% | 1.20% | 7.00% |
Research and development credits (as a percent) | 6.50% | 4.30% | (1.30%) |
Foreign tax rate difference (as a percent) | (0.90%) | 0.70% | 0.40% |
Change in valuation allowance (as a percent) | (34.30%) | (23.80%) | (22.20%) |
Other (as a percent) | 3.80% | (2.50%) | (2.90%) |
Provision (benefit) for income taxes | (2.00%) | 0.90% | 2.00% |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred tax assets: | |||
Net operating loss carryforwards | $ 50,272 | $ 39,907 | |
Depreciation and amortization | 1,237 | 318 | |
Accruals/other | 5,332 | 5,454 | |
Operating lease liability | 1,252 | 1,516 | |
Research and development and foreign credits | 14,856 | 8,038 | |
Total deferred tax assets | 72,949 | 55,233 | |
Deferred tax liabilities: | |||
Operating right-of-use asset | (1,040) | (1,269) | |
Total deferred tax liabilities | (1,040) | (1,269) | |
Valuation allowance | (71,909) | (52,531) | |
Net deferred tax assets | 1,433 | ||
Valuation allowance | |||
Increase in valuation allowance | $ 19,400 | $ 18,500 | $ 8,200 |
Income Taxes - Net Operating Lo
Income Taxes - Net Operating Loss Carryforwards (Details) $ in Thousands, $ in Millions | Dec. 31, 2020USD ($) | Dec. 31, 2020AUD ($) | Dec. 31, 2019USD ($) |
Net operating loss carryforwards | |||
Operating loss carryforwards available to offset future taxable income | $ 50,272 | $ 39,907 | |
Australian | |||
Net operating loss carryforwards | |||
Net operating loss carryforwards | 2,800 | $ 3.7 | |
State | |||
Net operating loss carryforwards | |||
Net operating loss carryforwards | 214,300 | ||
Federal | |||
Net operating loss carryforwards | |||
Net operating loss carryforwards | 222,800 | ||
Operating loss carryforwards available to offset future taxable income | 78,700 | ||
Net operating loss carryforwards with no expiration | $ 144,100 |
Income Taxes - Research and Dev
Income Taxes - Research and Development Tax Credit Carryforwards (Details) - Dec. 31, 2020 - Research and Development Tax Incentive $ in Millions, $ in Millions | USD ($) | AUD ($) |
State | ||
Tax credit carryforwards | ||
Tax credit carryforwards available to reduce future income taxes | $ 4.8 | |
Federal | ||
Tax credit carryforwards | ||
Tax credit carryforwards available to reduce future income taxes | 12.3 | |
Australian | ||
Tax credit carryforwards | ||
Tax credit carryforwards available to reduce future income taxes | $ 2.8 | $ 3.6 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of beginning and ending amount of unrecognized tax benefits | |||
Balance at beginning of year | $ 16,631 | $ 9,466 | $ 5,414 |
(Decreases) increases based on tax positions related to prior years | (3,799) | ||
(Decreases) increases based on tax positions related to prior years | 184 | 108 | |
Increase based on tax positions related to current year | 7,053 | 6,981 | 3,944 |
Balance at end of year | 19,885 | 16,631 | 9,466 |
Accrual for interest or penalties | $ 0 | $ 0 | $ 0 |
Income Taxes - 2020 Tax Law Upd
Income Taxes - 2020 Tax Law Updates (Details) - USD ($) | Jun. 29, 2020 | Mar. 27, 2020 | Dec. 31, 2020 |
Effective tax rate of provision for income taxes difference from federal statutory rate | |||
Net Operating Loss Carryback | 5 years | ||
Deduction of Taxable Income, Percentage | 80.00% | ||
Amount of income limit for California Net Operating Loss deductions | $ 1,000,000 | ||
Amount of California tax offset for business credit | $ 5,000,000 | ||
Australian | |||
Effective tax rate of provision for income taxes difference from federal statutory rate | |||
Foreign income tax benefit | $ 0 |
Net Loss per Share - Computatio
Net Loss per Share - Computation (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | |||
Net loss | $ (66,150) | $ (77,187) | $ (38,924) |
Denominator: | |||
Weighted-average shares used to compute net loss per common share, basic and diluted | 34,396,446 | 25,894,024 | 22,364,515 |
Net loss per shares, basic and diluted | $ (1.92) | $ (2.98) | $ (1.74) |
Net Loss per Share - Antidiluti
Net Loss per Share - Antidilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Potentially dilutive securities have been excluded from diluted net loss per share calculations | |||
Anti-dilutive securities (in shares) | 7,671,110 | 6,750,278 | 6,399,025 |
Options to purchase common stock | |||
Potentially dilutive securities have been excluded from diluted net loss per share calculations | |||
Anti-dilutive securities (in shares) | 4,648,120 | 3,681,521 | 3,178,441 |
Common stock warrants | |||
Potentially dilutive securities have been excluded from diluted net loss per share calculations | |||
Anti-dilutive securities (in shares) | 2,750,000 | 2,750,000 | 2,750,000 |
Restricted stock units | |||
Potentially dilutive securities have been excluded from diluted net loss per share calculations | |||
Anti-dilutive securities (in shares) | 244,545 | 278,482 | 418,450 |
ESPP rights | |||
Potentially dilutive securities have been excluded from diluted net loss per share calculations | |||
Anti-dilutive securities (in shares) | 28,445 | 40,275 | 52,134 |
Restructuring (Details)
Restructuring (Details) $ in Millions | Mar. 07, 2020USD ($) |
Restructuring | |
Percentage of employee base impacted by the restructuring plan | 12.00% |
Total cash expenditures for the reduction in force plan | $ 0.3 |