Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 07, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | NGM | |
Entity Registrant Name | NGM BIOPHARMACEUTICALS INC | |
Entity Central Index Key | 0001426332 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity File Number | 001-38853 | |
Entity Tax Identification Number | 26-1679911 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Address, Address Line One | 333 Oyster Point Boulevard | |
Entity Address, City or Town | South San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94080 | |
City Area Code | 650 | |
Local Phone Number | 243-5555 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Security Exchange Name | NASDAQ | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Common Stock, Shares Outstanding | 68,141,868 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 256,952 | $ 245,598 |
Short-term marketable securities | 71,517 | 98,913 |
Related party receivable from collaboration | 742 | 5,206 |
Prepaid expenses and other current assets | 9,096 | 5,531 |
Total current assets | 338,307 | 355,248 |
Property and equipment, net | 18,274 | 19,475 |
Restricted cash | 1,874 | 1,874 |
Other non-current assets | 2,246 | 3,806 |
Total assets | 360,701 | 380,403 |
Current liabilities: | ||
Accounts payable | 3,648 | 9,026 |
Accrued liabilities | 21,949 | 22,991 |
Deferred rent, current | 2,865 | 2,829 |
Deferred revenue, current | 4,872 | |
Total current liabilities | 28,462 | 39,718 |
Deferred rent, non-current | 8,667 | 9,392 |
Other non-current liabilities | 4,188 | |
Early exercise stock option liability | 412 | 574 |
Total liabilities | 41,729 | 49,684 |
Commitments and contingencies (Note 6) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding as of March 31, 2020 and December 31, 2019, respectively | ||
Common stock, $0.001 par value; 400,000,000 shares authorized; 67,936,438 and 66,960,279 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively | 68 | 67 |
Additional paid-in capital | 534,218 | 526,771 |
Accumulated other comprehensive gain (loss) | (55) | 25 |
Accumulated deficit | (215,259) | (196,144) |
Total stockholders' equity | 318,972 | 330,719 |
Total liabilities and stockholders' equity | $ 360,701 | $ 380,403 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
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 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 67,936,438 | 66,960,279 |
Common stock, shares outstanding | 67,936,438 | 66,960,279 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Related party revenue | $ 24,364 | $ 25,552 |
Operating expenses: | ||
Research and development | 38,439 | 29,527 |
General and administrative | 6,595 | 5,367 |
Total operating expenses | 45,034 | 34,894 |
Loss from operations | (20,670) | (9,342) |
Interest income | 1,175 | 1,110 |
Other income (expense), net | 380 | (36) |
Net loss | $ (19,115) | $ (8,268) |
Net loss per share, basic and diluted | $ (0.28) | $ (1.21) |
Weighted average shares used to compute net loss per share, basic and diluted | 67,396,229 | 6,812,129 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net Loss | $ (19,115) | $ (8,268) |
Other comprehensive gain (loss), net of tax: | ||
Net unrealized gain (loss) on available-for-sale marketable securities | (80) | 222 |
Total comprehensive loss | $ (19,195) | $ (8,046) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Other Comprehensive Gain (Loss) | Accumulated Deficit | |||
Balance at Dec. 31, 2018 | $ (108,195) | $ 294,874 | $ 7 | $ 39,258 | $ (267) | $ (147,193) | |||
Balance, shares at Dec. 31, 2018 | 47,267 | 6,733 | |||||||
Issuance of common stock under 401(k) Plan | 98 | 98 | |||||||
Issuance of common stock under 401(k) Plan, shares | 8 | ||||||||
Issuance of common stock upon exercise of stock options | 279 | 279 | |||||||
Issuance of common stock upon exercise of stock options, shares | 80 | ||||||||
Vesting of common stock from early exercises | 237 | 237 | |||||||
Vesting of common stock from early exercises, shares | 34 | ||||||||
Stock-based compensation expense | 2,605 | 2,605 | |||||||
Changes in unrealized (loss) gain on available-for-sale securities | 222 | 222 | |||||||
Net exercise of preferred stock warrant to Series A preferred stock | $ 198 | ||||||||
Net exercise of preferred stock warrant to Series A preferred stock, shares | 16 | ||||||||
Cumulative effect adjustment upon adoption of ASU 2014-09 | (6,156) | (6,156) | |||||||
Net loss | (8,268) | (8,268) | |||||||
Balance at Mar. 31, 2019 | (119,178) | $ 295,072 | $ 7 | 42,477 | (45) | (161,617) | |||
Balance, shares at Mar. 31, 2019 | 47,283 | 6,855 | |||||||
Balance at Dec. 31, 2019 | 330,719 | $ 67 | [1] | 526,771 | [1] | 25 | (196,144) | ||
Balance, shares at Dec. 31, 2019 | [1] | 66,886 | |||||||
Issuance of common stock upon exercise of stock options | 3,591 | $ 1 | [1] | 3,590 | [1] | ||||
Issuance of common stock upon exercise of stock options, shares | [1] | 984 | |||||||
Vesting of common stock from early exercises | 162 | 162 | [1] | ||||||
Vesting of common stock from early exercises, shares | [1] | 21 | |||||||
Stock-based compensation expense | 3,695 | 3,695 | [1] | ||||||
Changes in unrealized (loss) gain on available-for-sale securities | (80) | (80) | |||||||
Net loss | (19,115) | (19,115) | |||||||
Balance at Mar. 31, 2020 | $ 318,972 | $ 68 | [1] | $ 534,218 | [1] | $ (55) | $ (215,259) | ||
Balance, shares at Mar. 31, 2020 | [1] | 67,891 | |||||||
[1] | In April 2019, the Company completed its initial public offering (“IPO”) and concurrent private placement with Merck Sharp & Dohme Corp. (“Merck”), in which the Company issued an aggregate of 7,521,394 and 4,121,683 shares of common stock, respectively, for net proceeds of $107.8 million and $65.9 million, respectively. Upon the closing of the IPO, all of the then outstanding shares of convertible preferred stock were automatically converted into shares of common stock and its related carrying amount of $295.1 million was reclassified to common stock and additional paid-in-capital. |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) (Parenthetical) - Common Stock $ in Millions | 1 Months Ended |
Apr. 30, 2019USD ($)shares | |
Proceeds from issuance of common stock upon initial public offering, net | $ 107.8 |
Reclassification to common stock and additional paid-in capital | 295.1 |
Proceeds from issuance of common stock upon completion of private placement | $ 65.9 |
IPO | |
Number of shares issued in transaction | shares | 7,521,394 |
Private Placement | |
Number of shares issued in transaction | shares | 4,121,683 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities | ||
Net loss | $ (19,115) | $ (8,268) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 1,731 | 1,961 |
Amortization of discount on marketable securities | (122) | (453) |
Stock-based compensation expense | 3,695 | 2,605 |
Other non-cash expenses | 120 | 98 |
Changes in operating assets and liabilities: | ||
Related party receivable from collaboration | 4,464 | 3,669 |
Prepaid expenses and other assets | (2,005) | (1,602) |
Accounts payable | (5,343) | (1,193) |
Accrued expenses and other liabilities | 3,026 | (1,182) |
Deferred rent | (689) | (653) |
Deferred revenue | (4,872) | (7,082) |
Net cash used in operating activities | (19,110) | (12,100) |
Cash flows from investing activities | ||
Purchase of marketable securities | (29,399) | (72,734) |
Proceeds from sales and maturities of marketable securities | 56,837 | 76,993 |
Purchase of property and equipment | (565) | (1,766) |
Net cash provided by investing activities | 26,873 | 2,493 |
Cash flows from financing activities | ||
Proceeds from issuance of common stock upon exercise of stock options | 3,591 | 252 |
Payments of deferred financing costs | (255) | |
Net cash provided by (used in) financing activities | 3,591 | (3) |
Net increase (decrease) in cash and cash equivalents | 11,354 | (9,610) |
Cash, cash equivalents and restricted cash at beginning of period | 247,472 | 59,172 |
Cash, cash equivalents and restricted cash at end of period | 258,826 | 49,562 |
Non-cash investing and financing activities: | ||
Net exercise of convertible preferred stock warrant to Series A preferred stock | 198 | |
Vesting of common stock from early exercises | 162 | 237 |
Cost of property and equipment purchases accrued but not yet paid | $ 270 | 228 |
Deferred IPO costs accrued but not yet paid | $ 1,122 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business NGM Biopharmaceuticals, Inc. and its wholly-owned subsidiary (collectively, referred to as the “Company”) is a biopharmaceutical company focused on developing novel therapeutics based on our scientific understanding of key biological pathways underlying cardio-metabolic, liver, oncologic and ophthalmic diseases. The Company’s current most advanced portfolio is composed of six proprietary product candidates (aldafermin (NGM282), NGM313, NGM120, NGM217, NGM621 and NGM395) focused on non-alcoholic steatohepatitis (“NASH”), diabetes, oncology, age-related macular degeneration (“AMD”) and metabolic disease. The Company was incorporated in Delaware in December 2007 and commenced operations in 2008. Its headquarters are located at 333 Oyster Point Blvd., South San Francisco, California 94080. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and Regulation S-X for interim consolidated financial information. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the U.S. Securities and Exchange Commission (“SEC”) on March 17, 2020 (the “Annual Report”). These unaudited condensed consolidated financial statements reflect all adjustments that management believes are necessary for a fair presentation of the periods presented. All such adjustments are of a normal recurring nature and are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period. These unaudited condensed consolidated financial statements include the consolidated accounts of the Company and its wholly-owned foreign subsidiary in Australia. All intercompany balances and transactions have been eliminated upon consolidation. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make judgments, assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. Specific accounts that require management estimates include, but are not limited to, the valuation of common stock and the associated stock-based compensation expense, contract manufacturing accruals, clinical trial accruals and revenue recognition in accordance with Accounting Standards Codification 606 ( “ ASC 606 ” ). Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from those estimates. Need for Additional Capital Since inception, the Company has incurred net losses and negative cash flow from operations. During the three months ended March 31, 2020 and 2019, the Company incurred net losses of $19.1 million and $8.3 million, respectively. As of March 31, 2020, the Company had an accumulated deficit of $215.3 million and does not expect to experience positive cash flows from operations in the near future. The Company had $328.5 million of cash, cash equivalents and marketable securities as of March 31, 2020, unaudited condensed Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, receivables from collaborations, the related party receivables from collaboration and other current assets and liabilities approximate their respective fair values because of the short-term nature of those instruments. Fair value accounting is applied to the convertible preferred stock warrant liabilities that are recorded at their estimated fair value in the condensed consolidated financial statements. Cash and Cash Equivalents Cash and cash equivalents are stated at fair value. Cash equivalents are securities with an original maturity of three months or less at the time of purchase. The Company limits its credit risk associated with cash and cash equivalents by placing its investments with a bank it believes is highly creditworthy and with highly rated money market funds. As of March 31, 2020 and December 31, 2019, cash and cash equivalents consisted of bank deposits and investments in money market funds. Marketable Securities The appropriate classification of the Company’s marketable securities is determined at the time of purchase and such designations are re-evaluated at each balance sheet date. All of the Company’s securities are considered as available-for-sale and carried at estimated fair values and reported in cash equivalents, short-term marketable securities or long-term marketable securities. Unrealized gains and losses on available-for-sale securities are excluded from net loss and reported in accumulated other comprehensive loss as a separate component of stockholders’ equity. Other income (expense), net, includes interest, amortization of purchase premiums and accretion of purchase discounts, realized gains and losses on sales of securities and other-than-temporary declines in the fair value of securities, if any. The cost of securities sold is based on the specific identification method. The Company’s investments are regularly reviewed for other-than-temporary declines in fair value. This review includes the consideration of the cause of the impairment, including the creditworthiness of the security issuers, the number of securities in an unrealized loss position, the severity and duration of the unrealized losses, whether the Company has the intent to sell the securities and whether it is more likely than not that the Company will be required to sell the securities before the recovery of their amortized cost basis. When the Company determines that the decline in fair value of an investment is below its carrying value and this decline is other-than-temporary, the Company reduces the carrying value of the security it holds and records a loss for the amount of such decline. As of March 31, 2020, the Company did not record any impairment related to other-than-temporary declines in the fair value of securities. Restricted Cash The Company’s restricted cash represents collateral in connection with the lease on the Company’s headquarters entered into in 2015 and is classified as a non-current asset on the condensed consolidated balance sheets as the collateral will not be returned to the Company in less than 12 months (Note 6) Concentration of Credit and Other Risks Cash and cash equivalents and marketable securities from the Company’s available-for-sale and marketable security portfolio potentially subject the Company to concentrations of credit risk. The Company is invested in money market funds and marketable securities through custodial relationships with major U.S. and Australian banks. Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. Related party receivables from collaborations (Note 5) are typically unsecured. Accordingly, the Company may be exposed to credit risk generally associated with its current Collaboration Agreement with Merck (“Collaboration Agreement”) and any future collaboration agreements with other collaboration partners. To date, the Company has not experienced any losses related to these receivables. Merck accounted for 100% of the Company’s revenue for the three months ended March 31, 2020 and 2019. Property and Equipment, Net Property and equipment is recorded at cost and consists of computer equipment, laboratory equipment and office furniture and leasehold improvements. Maintenance and repairs, and training on the use of equipment, are expensed as incurred. Costs that improve assets or extend their economic lives are capitalized. Depreciation is recognized using the straight-line method based on an estimated useful life of the asset, which is as follows: Computer equipment 3 years Laboratory equipment and office furniture 3 years Leasehold improvement Shorter of life of asset or lease term Leases The Company’s lease agreements for its laboratory and office facilities are classified as operating leases. Rent expense is recognized on a straight-line basis over the term of the lease. Incentives granted under the Company’s facilities leases, including allowances to fund leasehold improvements and rent holidays, are capitalized and are recognized as reductions to rental expense on a straight-line basis over the term of the lease. Impairment of Long-Lived Assets Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. As of March 31, 2020 and December 31, 2019, no revision to the remaining useful lives or write-down of long-lived assets was required. Income Taxes Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and the operating loss and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Deferred tax assets and liabilities are measured at the balance sheet date using the enacted tax rates expected to apply 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 the period such tax rate changes are enacted. Revenue Recognition The Company adopted Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), and subsequent amendments, on January 1, 2019. ASC 606 requires an entity to recognize revenue upon the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company applies the following five-step revenue recognition model outlined in ASC 606 to adhere to this core principle: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the Company satisfies a performance obligation. All of the Company’s revenue to date has been generated from its collaboration agreements, primarily with Merck. The terms of these agreements generally require the Company to provide (i) license options for its compounds, (ii) research and development services and (iii) non-mandatory services in connection with participation in research or steering committees. Payments received under these arrangements may include non-refundable upfront license fees, partial or complete reimbursement of research and development costs, contingent consideration payments based on the achievement of defined collaboration objectives and royalties on sales of commercialized products. In some agreements, the collaboration partner is solely responsible for meeting defined objectives that trigger contingent or royalty payments. Often the partner only pursues such objectives subsequent to exercising an optional license on compounds identified as a result of the research and development services performed under the collaboration agreement. The Company assesses whether the promises in its arrangements, including any options provided to the customer, are considered distinct performance obligations that should be accounted for separately. Judgment is required to determine whether the license to a compound is distinct from research and development services or participation in research or steering committees, as well as whether options create material rights in the contract. The transaction price in each arrangement is generally comprised of a non-refundable upfront fee and unconstrained The Company’s collaboration agreements may include contingent payments related to specified development and regulatory milestones or contingent payments for royalties based on sales of a commercialized product. Milestones can be achieved for such activities in connection with progress in clinical trials, regulatory filings in various geographical markets and marketing approvals from regulatory authorities. Sales-based royalties are generally related to the volume of annual sales of a commercialized product. At the inception of each agreement that includes such payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price by using the most likely amount method. 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 Company’s or its customer’s control, such as those related to regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation based on a relative SSP basis. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of each such milestone and any related constraint and, if necessary, adjusts its estimate of the overall transaction price. Pursuant to the guidance in ASC 606, sales-based royalties are not included in the transaction price. Instead, royalties are recognized at the later of when the performance obligation is satisfied or partially satisfied, or when the sale that gives rise to the royalty occurs. Research and Development Research and development costs are expensed as incurred. Research and development expenses primarily include salaries and benefits for medical, clinical, quality, preclinical, manufacturing and research personnel, costs related to research activities, preclinical studies, clinical trials, drug manufacturing expenses and allocated overhead and facility occupancy costs. The Company accounts for non-refundable advance payments for goods or services that will be used in future research and development activities as expenses when the goods have been received or when the service has been performed rather than when the payment is made. Clinical trial costs are a component of research and development expenses. The Company expenses costs for its clinical trial activities performed by third parties, including clinical research organizations (“CROs”) and other service providers, as they are incurred, based upon estimates of the work completed over the life of the individual study in accordance with associated agreements. The Company uses information it receives from internal personnel and outside service providers to estimate the clinical trial costs incurred. Stock-Based Compensation The Company’s stock-based compensation programs include stock options and shares that will be issued under the Company’s 2019 Employee Stock Purchase Plan (the “ESPP”). Stock-based compensation to employees is valued on the grant date of each award using the Black-Scholes option-pricing model, and its estimated fair value is recognized over the period during which the employee is required to provide service in exchange for the award, which is generally the vesting period of each award. Stock-based compensation expense for non-employee stock-based awards is also measured based on the fair value on grant date with its estimated fair value recorded over the period for which the non-employee is required to provide service in exchange for the award. As non-cash stock-based compensation expense is based on awards ultimately expected to vest, it is reduced by an estimate for future forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures materially differ from estimates. Foreign Currency Transactions The functional currency of NGM Biopharmaceuticals Australia Pty Ltd., a wholly-owned subsidiary, is the U.S. Dollar. Accordingly, all monetary assets and liabilities of the subsidiary are remeasured into U.S. Dollars at the current period-end exchange rates and non-monetary assets are remeasured using historical exchange rates. Income and expense elements are remeasured to U.S. Dollars using the average exchange rates in effect during the period. Remeasurement gains and losses are recorded as other income (expense), net on the consolidated statements of operations. The Company is subject to foreign currency risk with respect to its clinical and manufacturing contracts denominated in currencies other than the U.S. Dollar, primarily British Pounds, Swiss Francs, Australian Dollars and the Euro. Payments on contracts denominated in foreign currencies are made at the spot rate on the day of payment. Changes in the exchange rate between billing dates and payment dates are recorded within other income (expense), net on the condensed consolidated statements of operations . Comprehensive Loss Comprehensive loss is comprised of net loss and certain changes in equity that are excluded from net loss. For the three months ended March 31, 2020 and 2019, the difference between comprehensive loss and net loss consisted . Net Loss per Share Basic net loss per share is calculated by dividing net loss by the weighted average number of shares outstanding during the period, less shares subject to repurchase and excludes any dilutive effects of stock-based awards and warrants. Diluted net loss per share is computed giving effect to all potentially dilutive shares, including common stock issuable upon exercise of stock options, and unvested restricted common stock and stock units. As the Company had net losses for the three months ended March 31, 2020 and 2019, all potential common shares were determined to be anti-dilutive. The following table sets forth the computation of net loss per common share (in thousands, except share and per share amounts): Three Months Ended March 31, 2020 2019 Numerator: Net loss $ (19,115 ) $ (8,268 ) Denominator: Weighted average number of shares used in calculating net loss per share—basic and diluted (1) 67,396,229 6,812,129 Net loss per share—basic and diluted $ (0.28 ) $ (1.21 ) (1) In April 2019, the Company completed its IPO and concurrent private placement with Merck, in which the Company issued an aggregate of 7,521,394 and 4,121,683 shares of common stock, respectively. All of the then outstanding shares of convertible preferred stock were automatically converted into shares of common stock upon the closing of the IPO. Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows: Three Months Ended March 31, 2020 2019 Convertible preferred stock — 47,283,846 Options to purchase common stock 10,824,034 11,183,787 Shares committed under ESPP 396,360 — Total 11,220,394 58,467,633 Segment and Geographical Information The Company operates in one business segment. Substantially all of the Company’s long-lived assets, comprised of property and equipment, are based in the United States. For the three months ended March 31, 2020 and 2019, the Company’s revenues were entirely within the United States based upon the location of the customers Recent Accounting Pronouncements New accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on our condensed consolidated financial statements upon adoption. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company, and has elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement as part of the FASB’s disclosure framework project. This ASU modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement by removing the requirement to disclose amounts of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and the valuation process for Level 3 fair value measurements. This ASU also modifies existing disclosure requirements by clarifying that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date, and it adds required disclosures for the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The Company adopted this ASU effective January 1, 2020, noting no material impact on the Company’s condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which increases lease transparency and comparability among organizations. Under the new standard, lessees will be required to recognize right-of-use (“ROU”) assets and lease liabilities arising from lease arrangements on the consolidated balance sheets, with the exception of leases with a term of 12 months or less, which permits a lessee to make an accounting policy election by class of underlying asset not to recognize the ROU assets and lease liabilities. In March 2018, the FASB approved an alternative transition method to the modified retrospective approach, which eliminates the requirement to restate prior period condensed consolidated financial statements and allows the cumulative effect of the retrospective allocation to be recorded as an adjustment to the opening balance of retained earnings at the date of adoption. In November 2019, the FASB issued ASU 2019-10, which defers the effective date for certain ASUs including ASU 2016-02. The new guidance is now effective for the Company’s fiscal year beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The Company plans to adopt the new lease standard using the optional transition method, which allows the Company to recognize a cumulative-effect adjustment to the opening balance of accumulated deficit at the date of adoption and apply the new disclosure requirements beginning in the period of adoption. The Company also plans to elect the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allows the Company to carryforward the historical lease classification and make an accounting policy election whereby ROU assets and lease liabilities associated with lease arrangements with terms less than one year will not be recognized. We will continue to evaluate the effect that this guidance will have on our condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard amends guidance on reporting credit losses for financial assets held at amortized cost basis, including accounts receivable, investments classified as available for sale, such as our debt securities, and unbilled related party revenue. Estimated credit losses will be recorded as an allowance rather than a write-down. This standard is effective for the Company’s fiscal year beginning after December 15, 2022. Early adoption is permitted for all entities. The Company is currently assessing the timing of adoption and the impact that the adoption of ASU 2016-13 will have on its condensed consolidated financial statements. In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (ASC 808): Clarifying the Interaction between ASC 808 and ASC 606, which clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under ASC 606 when the collaborative arrangement participant is a customer in the context of a unit of account. In those situations, all the guidance in ASC 606 should be applied, including recognition, measurement, presentation and disclosure requirements. This ASU adds unit-of-account guidance in ASC 808 to align with the guidance in ASC 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of ASC 606, and requires that in a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, presenting the transaction together with revenue recognized under ASC 606 is precluded if the collaborative arrangement participant is not a customer. This ASU will be effective for the Company’s fiscal year beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The Company is currently assessing the impact of this ASU on its condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The new guidance modifies ASC 740 to simplify several aspects of accounting for income taxes, including eliminating certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation. This ASU will be effective for the Company for fiscal year beginning after December 15, 2021, and interim periods within fiscal year beginning after December 15, 2022, and is required to be adopted prospectively, with the exception of certain specific amendments. The Company is currently assessing the impact of this ASU on its condensed consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements Financial assets and liabilities are recorded at fair value. The carrying amount of certain financial instruments, including cash and cash equivalents, receivable from collaboration, related party receivable from collaboration and other current assets and liabilities approximate fair value due to their relatively short maturities. Assets and liabilities recorded at fair value on a recurring basis in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value accounting is applied to the convertible preferred stock warrant liabilities that are recorded at their estimated fair value in the condensed consolidated financial statements. The FASB has defined fair value as the exchange price that would be received for an asset or paid to transfer a liability, or an exit price, in the principal or most advantageous market for that asset or liability in an orderly transaction between market participants on the measurement date, and established a fair value hierarchy that requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value. The FASB set forth three levels of inputs that may be used to measure fair value: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. To date, the Company has not recorded any impairment charges on marketable securities other than temporary declines in market value. In determining whether a decline is other than temporary, the Company considers various factors including the length of time and extent to which the market value has been less than cost, the financial condition and near-term prospects of the issuer and the Company’s intent and ability to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value. The Company estimates the fair values of investments in corporate agency bond securities, commercial paper and government agencies securities using level 2 inputs, by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data and other observable inputs. Cash and cash equivalents and marketable securities, all of which are classified as available-for-sale securities consisted of the following (in thousands): Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value As of March 31, 2020 Money market funds $ 239,089 $ — $ — $ 239,089 Corporate and agency bonds 34,171 — (55 ) 34,116 Commercial paper 37,401 — — 37,401 Total $ 310,661 $ — $ (55 ) $ 310,606 Classified as: Cash and cash equivalents $ 239,089 Short-term marketable securities (amortized cost of $71,572) 71,517 Total cash and cash equivalents and marketable securities $ 310,606 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value As of December 31, 2019 Money market funds $ 244,973 $ — $ — $ 244,973 Corporate and agency bonds 66,063 28 (14 ) 66,077 Commercial paper 24,840 — — 24,840 U.S. government agencies securities 7,985 11 — 7,996 Total $ 343,861 $ 39 $ (14 ) $ 343,886 Classified as: Cash and cash equivalents $ 244,973 Short-term marketable securities (amortized cost of $98,888) 98,913 Total cash and cash equivalents and marketable securities $ 343,886 Cash and cash equivalents in the table above excludes cash on deposit with banks of $17.9 million and $0.6 million as of March 31, 2020 and December 31, 2019, respectively. As of March 31, 2020 and December 31, 2019, the Company’s marketable securities had remaining contractual maturities less than one year. As of March 31, 2020 and December 31, 2019, there were four marketable securities in an unrealized loss position, all of which have been in an unrealized loss position for less than 12 months. The Company does not intend to sell the marketable securities that are currently in an unrealized loss position and it is highly unlikely that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table sets forth the estimated fair value of the Company’s financial assets and liabilities that were measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 (in thousands): Fair Value Measurements As of March 31, 2020 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 239,089 $ — $ — $ 239,089 Corporate and agency bonds — 34,116 — 34,116 Commercial paper — 37,401 — 37,401 $ 239,089 $ 71,517 $ — $ 310,606 Fair Value Measurements As of December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 244,973 $ — $ — $ 244,973 Corporate and agency bonds — 66,077 — 66,077 Commercial paper — 24,840 — 24,840 U.S. government agencies securities — 7,996 — 7,996 $ 244,973 $ 98,913 $ — $ 343,886 There were no transfers of assets or liabilities between the fair value measurement levels during the three months ended March 31, 2020 and year ended December 31, 2019. |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2020 | |
Statement Of Financial Position [Abstract] | |
Balance Sheet Components | 4. Balance Sheet Components Cash, Cash Equivalent and Restricted Cash A reconciliation of cash, cash equivalents and restricted cash reported within our condensed consolidated balance sheets to the amount reported within the accompanying condensed consolidated statements of cash flows is as follows (in thousands): March 31, December 31, 2020 2019 Cash and cash equivalents $ 256,952 $ 245,598 Restricted cash 1,874 1,874 Total cash, cash equivalents and restricted cash $ 258,826 $ 247,472 Property and Equipment Property and equipment consist of the following (in thousands): March 31, December 31, 2020 2019 Computer equipment $ 1,201 $ 1,201 Laboratory equipment and office furniture 22,432 21,652 Leasehold improvements 25,880 25,880 Construction in process 247 498 Total property and equipment, gross 49,760 49,231 Less: accumulated depreciation and amortization (31,486 ) (29,756 ) Total property and equipment, net $ 18,274 $ 19,475 Depreciation expense was approximately $1.7 million and $2.0 million for the three months ended March 31, 2020 and 2019, respectively. Accrued Liabilities Accrued liabilities consist of the following (in thousands): March 31, December 31, 2020 2019 Accrued expenses $ 2,684 $ 2,901 Clinical trials and research and development costs 10,826 11,051 Personnel-related costs 3,718 6,446 Manufacturing costs 4,721 2,593 Total accrued liabilities $ 21,949 $ 22,991 |
Research Collaboration and Lice
Research Collaboration and License Agreements | 3 Months Ended |
Mar. 31, 2020 | |
Collaboration And License Agreement Disclosure [Abstract] | |
Research Collaboration and License Agreements | 5. Research Collaboration and License Agreements Merck In February 2015, the Company entered into the Collaboration Agreement with Merck, covering the discovery, development and commercialization of novel therapies across a range of therapeutic areas. Pursuant to this agreement, the Company received an upfront payment of $94.0 million in April 2015. Concurrent with entry into the Collaboration Agreement, the parties entered into a Stock Purchase Agreement in which Merck agreed to purchase 8,833,333 shares of Series E convertible preferred stock at a price of $12.00 per share, resulting in net proceeds of approximately $106.0 million. The Company considered the ASC 606 criteria for combining contracts and determined that the Collaboration Agreement and Stock Purchase Agreement should be combined into a single contract. The Company accounted for the overall agreement based on the fair values of the assets and services exchanged, resulting in $106.0 million allocated to the equity component and $94.0 million allocated to the revenue components. The Collaboration Agreement became effective in March 2015 and has a non-cancellable five-year term running through March 16, 2020. The agreement included an exclusive worldwide license to our growth differentiation factor 15 (“GDF15”) receptor agonist program. In March 2019, Merck exercised its option to extend the research phase of the collaboration through March 16, 2022. Merck terminated its license to the GDF15 receptor agonist program in May 2019. The collaboration also includes a broad, multiyear drug discovery and early development program financially supported by Merck but scientifically directed by the Company with input from Merck. The Company determines the scientific direction and areas of therapeutic interest, with input from Merck, and is primarily responsible for the conduct of all research, preclinical and early clinical development activities, through human proof of concept. The Company makes the final determinations as to which compounds to advance into and through initial clinical trials, which to progress into human proof-of-concept studies and the design of any such studies, with input from Merck through various governance committees. The Company may terminate its participation in any of the governance committees by providing written notice to Merck of its intention to disband and no longer participate. Merck will fund both the internal and external costs of the Company’s research and early development activities up to $75.0 million each year of the initial five-year term and during the extended two-year research period. Upon completion of a human proof-of-concept study for a particular compound, regardless of the results of such study, Merck has the one-time option, at a cost of $20.0 million, to obtain an exclusive, worldwide license, on specified terms, to that compound, as well as to other molecules that are directed against the same target in the same manner. If Merck exercises its option, Merck will be responsible, at its own cost, for any further development and commercialization activities for compounds within that licensed program. Upon such exercise by Merck, the Company in turn has the right, at the start of the first Phase 3 clinical study for that compound, to elect to participate in a worldwide cost and profit share with Merck, as well as the option to co-detail the compound in the United States, or the Company can elect instead to receive milestones and royalties from Merck based on Merck’s further development and commercialization of the compound. If the Company elects to participate in the cost and profit share, subject to certain limitations, Merck will provide the Company with financial assistance in the form of interest bearing advances of the Company’s share of the overall development costs, which Merck will recoup from the Company’s share of any profit ultimately resulting from sales of the compound and other compounds that reach commercialization. If the Company does not opt in to the cost and profit sharing option, then the Company is eligible to receive development and regulatory milestone payments upon the achievement of specific clinical development or regulatory events with respect to the licensed compound indications in the United States, European Union (“EU”) and Japan of up to an aggregate of $449.0 million. The Company may also receive commercial milestone payments up to $125.0 million and royalty payments of varying percentages based on the achievement of certain levels of net sales. Under the Collaboration Agreement, the Company also granted Merck a worldwide, exclusive right to conduct research and development on small molecule compounds generated by Merck that have specified activity against any target that the Company is researching or developing under the research phase and about which the Company has generated unique biological insights. If Merck ultimately does not exercise its license option to the compound the Company has taken through a human proof-of-concept study that is directed to any such target, Merck’s research license for its own small molecule program will become non-exclusive, but it will retain an exclusive license to any small molecule compounds that it has, as of that time, identified and developed. Merck has sole responsibility for the research and development of any of these small molecule compounds, at its own cost. The Company is eligible to receive milestone and royalty payments on small molecule compounds that are developed by Merck under the Company’s license, in some cases at the same rates as those the Company is eligible to receive from Merck for a licensed program originating from the Company’s own research and development efforts, provided that, but for use of the Company’s proprietary information, Merck would not have discovered such small molecule compounds. However, the Company will not have the option to cost and profit share or the option to co-detail those small molecule products. The research and early development program had an initial term of five years, until March 16, 2020. In March 2019, Merck exercised its option to extend the research phase of the collaboration through March 16, 2022. In connection with this extension, Merck agreed to continue to fund the Company’s research and development efforts during the two-year extension period at the same levels as during the initial term and, in lieu of a $20.0 million extension fee that would have otherwise been payable to the Company, Merck will make additional payments totaling up to $20.0 million in support of the Company’s research and development program activities across 2021 and the first quarter of 2022. Under the terms of the agreement, Merck is required to pay a $20.0 million extension fee if it elects to exercise its second option to extend the research phase of the collaboration through March 16, 2024. At the end of the research phase, Merck has the right to either require the Company to continue to conduct research and development activities with respect to certain of the then-existing programs for up to three years, which we call the tail period, by agreeing to pay all its internal and external costs for related work, or to take over such selected programs and conduct such research and development activities itself, at its own cost. The Company evaluated the Collaboration Agreement with Merck under ASC 606. The Company identified the following promised goods or services at the inception of the Collaboration Arrangement: (i) license to GDF15 receptor agonist program; (ii) license to pursue research and development and commercialization of small molecule compounds; (iii) performance of research and development services for five years; (iv) two options to extend performance of the research and development services, each for two additional years; and (v) options to obtain licenses to additional compounds after proof of concept trials. The Company determined the GDF15 receptor agonist program license and small molecule program license are not distinct from the research and development services, resulting in these items being combined into a single performance obligation. The Company considered whether the options created material rights in the contract and concluded that the fee attached to the exercise of such options approximated the SSP of the promised goods or services included in the options. Therefore, the options do not give rise to material rights, are not performance obligations in the Collaboration Agreement and, if and when exercised, will be accounted for as separate arrangements under ASC 606. The transaction price consists of the $94.0 million upfront fee and the potential funding amounts of up to $75.0 million per year for each of the first five years of the Collaboration Agreement. No milestones or other forms of consideration are included in the transaction price as those amounts are contingent upon Merck exercising an option for licenses on additional compounds and would, therefore, be pursuant to separate arrangements and are not part of the Collaboration Agreement estimated transaction price. Additionally, if a separate arrangement is created by the exercise of an option, such amounts would then be contingent on events outside of either party’s control, such as products proving to be commercially viable and governmental agencies granting regulatory approval. Such contingencies and uncertainties result in the amounts being constrained and withheld from inclusion in the estimated transaction price of a separate arrangement. Consequently, the estimated transaction price related to the Collaboration Agreement is comprised of the up-front payment and the ongoing research and development reimbursements. Any fees associated with options, including upfront fees, funding fees, milestones, etc., are not included in the transaction price as they are associated with options that are not material rights and, thus, are not performance obligations within the Collaboration Agreement. This includes the $20.0 million license fee associated with Merck’s exercise of its option on NGM313. That amount was recognized in the period of exercise (i.e., fourth quarter of 2018) as the Company has no further obligations related to that license. Merck exercised its option on the NGM313 compound and paid the Company the $20.0 million option exercise fee in November 2018. The Phase 3 clinical study for NGM313 has not begun, and the Company has not made an election as to whether it will participate in the cost and profit share or receive milestone and royalty payments. The amounts do not impact the estimated transaction price associated with the single performance obligation identified in the Collaboration Agreement. As there is only one performance obligation in the Collaboration Agreement, the transaction price was allocated entirely to that performance obligation. The Company uses a cost-based input method to measure proportional performance and calculate the corresponding amount of revenue to recognize. The Company believes this is the best measure of progress given that other measures do not reflect how the Company transfers its performance obligation to Merck. In applying the cost-based input measure of revenue recognition, the Company measures actual costs incurred relative to budgeted costs to fulfill the combined performance obligation. These costs consist of full-time equivalent hours plus allowable external (third-party) costs incurred. Revenue is recognized based on actual costs incurred as a percentage of total budgeted costs as the Company completes its performance obligation. The Company re-evaluates the estimate of expected costs to satisfy the performance obligation each reporting period and makes adjustments for any significant changes. In May 2019, Merck terminated its license to the GDF15 receptor agonist program. The research and development services within the Collaboration Agreement are not affected by the GDF15 receptor agonist program license termination and are expected to continue through the remainder of the research program term. As of March 31, 2020 and December 31, 2019, deferred revenue related to the single performance obligation in the Collaboration Agreement was zero and $4.9 million, respectively. The remaining balance of $4.9 million In connection with the Series E convertible preferred stock purchase agreement, the Company and Merck entered into an agreement whereby Merck agreed to purchase 4,121,683 shares of our common stock in a separate private placement concurrent with the completion of the Company’s IPO at a price per share equal to the public offering price of $16.00, resulting in Merck owning approximately 19.9% of the Company’s outstanding shares of common stock following the completion of the IPO. The Company is also eligible to receive additional payments specific to Merck opting into a licensed program. Each licensed program is eligible to receive a one-time payment of $20.0 million upon Merck’s exercise of its one-time option to obtain an exclusive, worldwide license to a compound following its completion of a human proof-of-concept study. In addition, if the Company does not opt into the cost and profit sharing option, then the Company is eligible to receive an aggregate of $449.0 million in milestone payments, of which $77.7 million relates to the potential achievement of specific clinical development events and $371.3 million relates to the potential achievement of certain regulatory events with respect to the licensed compounds for the first three indications in the United States, EU and Japan. A breakout of the milestone payments in connection with the potential achievement of certain clinical development events is as follows (in thousands): First Indication Second Indication Third Indication Upon administration of an applicable product to the first patient in the first Phase 3 clinical trial for such product for the given indication $ 35,000 $ 25,250 $ 17,500 A breakout of the milestone payments in connection with the potential achievement of certain regulatory events for each of the three indications, for each of the three geographic areas, is as follows (in thousands): First Indication Second Indication Third Indication Total United States $ 75,000 $ 56,250 $ 37,500 $ 168,750 European Union 60,000 45,000 30,000 135,000 Japan 30,000 22,500 15,000 67,500 $ 165,000 $ 123,750 $ 82,500 $ 371,250 Summary of Related Party Revenue The Company recognized revenue from its collaboration and license agreements as follows (in thousands): Three Months Ended March 31, 2020 2019 Related party revenue $ 24,364 $ 25,552 For the three months ended March 31, 2020 and March 31 2019, the Company recognized collaboration and license revenue under the Collaboration Agreement of $24.4 million and $25.6 million, respectively, of which $4.9 million and $5.7 million, respectively, The Company is also eligible to receive commercial milestone payments of up to $125.0 million payable for each licensed product. In addition, the Company is eligible to receive royalties at ascending low-double digit to mid-teen percentage rates, depending on the level of net sales Merck achieves worldwide for each licensed compound. Contract Assets and Liabilities Changes in related party contract liabilities were as follows (in thousands): Amounts Balance at December 31, 2019 $ 4,872 Revenue recognized through March 16, 2020 (4,872 ) Balance at March 31, 2020 $ — There were no contract assets for all the periods presented |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Operating Lease and Lease Guarantee In September 2009, the Company entered into an operating lease for a corporate office space and laboratory facility at 630 Gateway Blvd, in South San Francisco, California (“630 Gateway”) for approximately 50,000 square feet, as amended in June 2014 (“2014 Lease Amendment”), which expires in November 2020. The 2014 Lease Amendment provided for tenant improvement allowances of $0.8 million. The 2014 Lease Amendment contains scheduled rent increases over the lease term and has an option for the Company to extend the lease for an additional three-year term. In December 2015, the Company entered into a new operating lease for its corporate office space and laboratory facility at 333 Oyster Point Blvd, South San Francisco, California (“333 Oyster Point”) for approximately 122,000 square feet that expires in December 2023. The lease provided a tenant improvement allowance of $15.2 million that the Company used in 2016 towards $22.3 million in total leasehold improvements that are amortized over the lease term of seven years. The 333 Oyster Point lease agreement requires a letter of credit in the amount of $2.3 million as a security deposit to the lease, which the Company has recorded as long-term restricted cash on the condensed consolidated balance sheets. The Company has the right to reduce the letter of credit amount by $0.4 million on each of the 3rd anniversary and 4th anniversary of the rent commencement date. In September 2019, the Company reduced its letter of credit by $0.4 million and reclassified from restricted cash to cash and cash equivalents on the condensed consolidated balance sheets. In July 2016, the Company assigned its operating lease of 630 Gateway to Merck, a related party, as part of the Company’s relocation to 333 Oyster Point. As part of the assignment of the lease, the Company is liable to the lessor if Merck defaults on its lease obligations. Therefore, in substance, the Company has guaranteed the lease payments for 630 Gateway, including lease-related expenses such as utilities, property tax, and common area maintenance without any limitations. The Company assessed the need for a potential guarantee liability on the assigned lease, and concluded that the value of the guarantee was insignificant as of March 31, 2020 because of the short duration of the remaining lease term through November 2020, and Merck’s credit rating of AA/A1 and subsequent investment in tenant improvements to the facility. As of March 31, 2020 and 2019, the remaining lease payment obligations that are due for 630 Gateway were approximately $1.5 million and $3.5 million, respectively, which are to be paid directly from Merck to the lessor. The Company recognizes rent expense on a straight-line basis over the lease period with the difference recorded as deferred rent. In addition, tenant improvement allowances recorded are amortized as a reduction to rent expense on a straight-line basis over the lease term. Rent expense under these facility operating leases was approximately $0.5 million for the three months ended March 31, 2020 and 2019, respectively. Future minimum payments under the unassigned lease obligations described above are as follows as of March 31, 2020 (in thousands): Year Ended December 31, 2020 $ 3,764 2021 5,141 2022 5,294 2023 5,455 Total $ 19,654 Indemnification In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and may provide for indemnification of the counterparty. The Company’s exposure under these agreements is unknown because it involves claims that may be made against it in the future, but have not yet been made. In accordance with the Company’s amended and restated certificate of incorporation and its amended and restated bylaws, the Company has indemnification obligations to its officers and directors, subject to some limits, with respect to their service in such capacities. The Company has also entered into indemnification agreements with its directors and certain of its officers. To date, the Company has not been subject to any claims, and it maintains director and officer insurance that may enable it to recover a portion of any amounts paid for future potential claims. The Company’s exposure under these agreements is unknown because it involves claims that may be made against it in the future, but have not yet been made. The Company believes that the fair value of these indemnification obligations is minimal and, accordingly, it has not recognized any liabilities relating to these obligations for any period presented. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | 7. Stockholders’ Equity Preferred Stock The Company has 10,000,000 shares of preferred stock authorized, which may be issued at the discretion of the Company’s board of directors. The board of directors may issue shares of preferred stock in one or more series and to fix the number, rights, preferences, privileges and restrictions. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences and sinking fund terms. As of March 31, 2020, the Company did not have any shares of preferred stock issued or outstanding. Common Stock As of March 31, 2020 and December 31, 2019, the Company had 67,936,438 and 66,960,279 shares of common stock outstanding, respectively, which includes shares subject to repurchase of 53,437 and 74,454, respectively, as a result of early exercise of stock options not yet vested. March 31, December 31, 2020 2019 Common stock options outstanding 10,824,034 10,824,780 Common stock options available for grant 7,012,247 5,316,066 401(k) Matching Plan 28,274 28,274 ESPP shares available for purchase 897,255 897,255 Total 18,761,810 17,066,375 Stock Option Plan In 2018, the Company adopted the 2018 Equity Incentive Plan (the “2018 Plan”) for eligible employees, officers, directors, advisors and consultants, which provides for the grant of incentive and non-statutory stock options, restricted stock awards and stock appreciation rights. The terms of the stock option agreements, including vesting requirements, are determined by the board of directors, subject to the provisions of the 2018 Plan. Options granted by the Company generally vest within four years and are exercisable from the grant date until ten years after the date of grant. Vesting of certain employee options may be accelerated in the event of a change in control of the Company. The Company’s 2008 Equity Incentive Plan (the “2008 Plan”) expired at the beginning of 2018. Stock Option Activity A summary of the activity under the 2008 Plan and the 2018 Plan is as follows: Outstanding Options Options Available for Grant Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Aggregate Intrinsic Value (in Thousands) Balances at December 31, 2019 5,316,066 10,824,780 $ 7.52 6.29 $ 118,770 Additional shares reserved 2,678,411 Options granted (1,463,250 ) 1,463,250 16.66 Options exercised — (982,976 ) 3.65 Options cancelled 481,020 (481,020 ) 12.15 Balances at March 31, 2020 7,012,247 10,824,034 $ 8.90 6.55 $ 44,651 Vested and expected to vest at March 31, 2020 10,701,082 $ 8.84 6.52 $ 44,576 Outstanding and exercisable at March 31, 2020 10,824,034 $ 8.90 6.55 $ 44,651 The aggregate intrinsic values of options outstanding, exercisable, vested and expected to vest were calculated as the difference between the exercise price of the options and the estimated fair value of the Company’s common stock. The weighted-average grant date fair value of stock options granted during the three months ended March 31, 2020 and 2019 was $9.73 and $7.72 per share, respectively. The intrinsic value of stock options exercised was $12.8 million and $0.7 million for the three months ended March 31, 2020 and 2019, respectively. Due to the Company’s net operating losses, the Company did not realize any tax benefits from stock-based payment arrangements for the three months ended March 31, 2020 and 2019. Employee Stock-Based Compensation Expense Employee and director stock-based compensation expense for the three months ended March 31, 2020 and 2019, was calculated based on awards ultimately expected to vest and has been reduced for estimated forfeitures. The following table summarizes stock-based compensation expense related to stock-based payment awards previously granted to employees and directors for the three months ended March 31, 2020 and 2019, which was allocated as follows (in thousands): Three Months Ended March 31, 2020 2019 Research and development $ 1,873 $ 1,412 General and administrative 1,794 1,161 Total stock-based compensation expense $ 3,667 $ 2,573 Non-employee Stock-Based Compensation Expense and Grants The Company grants stock options to non-employees in exchange for services performed for the Company. The Company did not grant stock options to non-employees during the three months ended March 31, 2020 and granted 25,000 options to non-employees during the three months ended March 31, 2019. Stock-based compensation expense related to stock-based payment awards to non-employees for the three months ended March 31, 2020 and 2019 was $28,000 and $32,000, respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes Since inception, the Company has incurred net losses and expects to record a net loss for the year ended December 31, 2020. Additionally, the net deferred tax assets have been fully offset by a valuation allowance. Therefore, the Company has not recorded a tax provision for income taxes for the three months ended March 31, 2020. On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted. Under U.S. GAAP, the Company is required to recognize the tax effects of new legislation in the reporting period in which the legislation was enacted. The CARES Act included changes to current U.S. tax provisions that benefit business entities and modified certain tax provisions of the 2017 Tax Cuts and Jobs Act (the “2017 Tax Act”). The tax relief measures included 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 and a technical correction to allow accelerated deductions for qualified improvement properties. The CARES Act also provided other non-tax benefits to assist business entities impacted by the ongoing COVID-19 pandemic. The Company has evaluated the CARES Act and concluded that it did not result in any material adjustments to the Company’s income tax provision or net deferred tax assets for the three months ended March 31, 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and Regulation S-X for interim consolidated financial information. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the U.S. Securities and Exchange Commission (“SEC”) on March 17, 2020 (the “Annual Report”). These unaudited condensed consolidated financial statements reflect all adjustments that management believes are necessary for a fair presentation of the periods presented. All such adjustments are of a normal recurring nature and are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period. These unaudited condensed consolidated financial statements include the consolidated accounts of the Company and its wholly-owned foreign subsidiary in Australia. All intercompany balances and transactions have been eliminated upon consolidation. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make judgments, assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. Specific accounts that require management estimates include, but are not limited to, the valuation of common stock and the associated stock-based compensation expense, contract manufacturing accruals, clinical trial accruals and revenue recognition in accordance with Accounting Standards Codification 606 ( “ ASC 606 ” ). Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from those estimates. |
Need for Additional Capital | Need for Additional Capital Since inception, the Company has incurred net losses and negative cash flow from operations. During the three months ended March 31, 2020 and 2019, the Company incurred net losses of $19.1 million and $8.3 million, respectively. As of March 31, 2020, the Company had an accumulated deficit of $215.3 million and does not expect to experience positive cash flows from operations in the near future. The Company had $328.5 million of cash, cash equivalents and marketable securities as of March 31, 2020, unaudited condensed |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, receivables from collaborations, the related party receivables from collaboration and other current assets and liabilities approximate their respective fair values because of the short-term nature of those instruments. Fair value accounting is applied to the convertible preferred stock warrant liabilities that are recorded at their estimated fair value in the condensed consolidated financial statements. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents are stated at fair value. Cash equivalents are securities with an original maturity of three months or less at the time of purchase. The Company limits its credit risk associated with cash and cash equivalents by placing its investments with a bank it believes is highly creditworthy and with highly rated money market funds. As of March 31, 2020 and December 31, 2019, cash and cash equivalents consisted of bank deposits and investments in money market funds. |
Marketable Securities | Marketable Securities The appropriate classification of the Company’s marketable securities is determined at the time of purchase and such designations are re-evaluated at each balance sheet date. All of the Company’s securities are considered as available-for-sale and carried at estimated fair values and reported in cash equivalents, short-term marketable securities or long-term marketable securities. Unrealized gains and losses on available-for-sale securities are excluded from net loss and reported in accumulated other comprehensive loss as a separate component of stockholders’ equity. Other income (expense), net, includes interest, amortization of purchase premiums and accretion of purchase discounts, realized gains and losses on sales of securities and other-than-temporary declines in the fair value of securities, if any. The cost of securities sold is based on the specific identification method. The Company’s investments are regularly reviewed for other-than-temporary declines in fair value. This review includes the consideration of the cause of the impairment, including the creditworthiness of the security issuers, the number of securities in an unrealized loss position, the severity and duration of the unrealized losses, whether the Company has the intent to sell the securities and whether it is more likely than not that the Company will be required to sell the securities before the recovery of their amortized cost basis. When the Company determines that the decline in fair value of an investment is below its carrying value and this decline is other-than-temporary, the Company reduces the carrying value of the security it holds and records a loss for the amount of such decline. As of March 31, 2020, the Company did not record any impairment related to other-than-temporary declines in the fair value of securities. |
Restricted Cash | Restricted Cash The Company’s restricted cash represents collateral in connection with the lease on the Company’s headquarters entered into in 2015 and is classified as a non-current asset on the condensed consolidated balance sheets as the collateral will not be returned to the Company in less than 12 months (Note 6) |
Concentration of Credit and Other Risks | Concentration of Credit and Other Risks Cash and cash equivalents and marketable securities from the Company’s available-for-sale and marketable security portfolio potentially subject the Company to concentrations of credit risk. The Company is invested in money market funds and marketable securities through custodial relationships with major U.S. and Australian banks. Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government. Related party receivables from collaborations (Note 5) are typically unsecured. Accordingly, the Company may be exposed to credit risk generally associated with its current Collaboration Agreement with Merck (“Collaboration Agreement”) and any future collaboration agreements with other collaboration partners. To date, the Company has not experienced any losses related to these receivables. Merck accounted for 100% of the Company’s revenue for the three months ended March 31, 2020 and 2019. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment is recorded at cost and consists of computer equipment, laboratory equipment and office furniture and leasehold improvements. Maintenance and repairs, and training on the use of equipment, are expensed as incurred. Costs that improve assets or extend their economic lives are capitalized. Depreciation is recognized using the straight-line method based on an estimated useful life of the asset, which is as follows: Computer equipment 3 years Laboratory equipment and office furniture 3 years Leasehold improvement Shorter of life of asset or lease term |
Leases | Leases The Company’s lease agreements for its laboratory and office facilities are classified as operating leases. Rent expense is recognized on a straight-line basis over the term of the lease. Incentives granted under the Company’s facilities leases, including allowances to fund leasehold improvements and rent holidays, are capitalized and are recognized as reductions to rental expense on a straight-line basis over the term of the lease. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. As of March 31, 2020 and December 31, 2019, no revision to the remaining useful lives or write-down of long-lived assets was required. |
Income Taxes | Income Taxes Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and the operating loss and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Deferred tax assets and liabilities are measured at the balance sheet date using the enacted tax rates expected to apply 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 the period such tax rate changes are enacted. |
Revenue Recognition | Revenue Recognition The Company adopted Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), and subsequent amendments, on January 1, 2019. ASC 606 requires an entity to recognize revenue upon the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company applies the following five-step revenue recognition model outlined in ASC 606 to adhere to this core principle: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the Company satisfies a performance obligation. All of the Company’s revenue to date has been generated from its collaboration agreements, primarily with Merck. The terms of these agreements generally require the Company to provide (i) license options for its compounds, (ii) research and development services and (iii) non-mandatory services in connection with participation in research or steering committees. Payments received under these arrangements may include non-refundable upfront license fees, partial or complete reimbursement of research and development costs, contingent consideration payments based on the achievement of defined collaboration objectives and royalties on sales of commercialized products. In some agreements, the collaboration partner is solely responsible for meeting defined objectives that trigger contingent or royalty payments. Often the partner only pursues such objectives subsequent to exercising an optional license on compounds identified as a result of the research and development services performed under the collaboration agreement. The Company assesses whether the promises in its arrangements, including any options provided to the customer, are considered distinct performance obligations that should be accounted for separately. Judgment is required to determine whether the license to a compound is distinct from research and development services or participation in research or steering committees, as well as whether options create material rights in the contract. The transaction price in each arrangement is generally comprised of a non-refundable upfront fee and unconstrained The Company’s collaboration agreements may include contingent payments related to specified development and regulatory milestones or contingent payments for royalties based on sales of a commercialized product. Milestones can be achieved for such activities in connection with progress in clinical trials, regulatory filings in various geographical markets and marketing approvals from regulatory authorities. Sales-based royalties are generally related to the volume of annual sales of a commercialized product. At the inception of each agreement that includes such payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price by using the most likely amount method. 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 Company’s or its customer’s control, such as those related to regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation based on a relative SSP basis. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of each such milestone and any related constraint and, if necessary, adjusts its estimate of the overall transaction price. Pursuant to the guidance in ASC 606, sales-based royalties are not included in the transaction price. Instead, royalties are recognized at the later of when the performance obligation is satisfied or partially satisfied, or when the sale that gives rise to the royalty occurs. |
Research and Development | Research and Development Research and development costs are expensed as incurred. Research and development expenses primarily include salaries and benefits for medical, clinical, quality, preclinical, manufacturing and research personnel, costs related to research activities, preclinical studies, clinical trials, drug manufacturing expenses and allocated overhead and facility occupancy costs. The Company accounts for non-refundable advance payments for goods or services that will be used in future research and development activities as expenses when the goods have been received or when the service has been performed rather than when the payment is made. Clinical trial costs are a component of research and development expenses. The Company expenses costs for its clinical trial activities performed by third parties, including clinical research organizations (“CROs”) and other service providers, as they are incurred, based upon estimates of the work completed over the life of the individual study in accordance with associated agreements. The Company uses information it receives from internal personnel and outside service providers to estimate the clinical trial costs incurred. |
Stock-Based Compensation | Stock-Based Compensation The Company’s stock-based compensation programs include stock options and shares that will be issued under the Company’s 2019 Employee Stock Purchase Plan (the “ESPP”). Stock-based compensation to employees is valued on the grant date of each award using the Black-Scholes option-pricing model, and its estimated fair value is recognized over the period during which the employee is required to provide service in exchange for the award, which is generally the vesting period of each award. Stock-based compensation expense for non-employee stock-based awards is also measured based on the fair value on grant date with its estimated fair value recorded over the period for which the non-employee is required to provide service in exchange for the award. As non-cash stock-based compensation expense is based on awards ultimately expected to vest, it is reduced by an estimate for future forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures materially differ from estimates. |
Foreign Currency Transactions | Foreign Currency Transactions The functional currency of NGM Biopharmaceuticals Australia Pty Ltd., a wholly-owned subsidiary, is the U.S. Dollar. Accordingly, all monetary assets and liabilities of the subsidiary are remeasured into U.S. Dollars at the current period-end exchange rates and non-monetary assets are remeasured using historical exchange rates. Income and expense elements are remeasured to U.S. Dollars using the average exchange rates in effect during the period. Remeasurement gains and losses are recorded as other income (expense), net on the consolidated statements of operations. The Company is subject to foreign currency risk with respect to its clinical and manufacturing contracts denominated in currencies other than the U.S. Dollar, primarily British Pounds, Swiss Francs, Australian Dollars and the Euro. Payments on contracts denominated in foreign currencies are made at the spot rate on the day of payment. Changes in the exchange rate between billing dates and payment dates are recorded within other income (expense), net on the condensed consolidated statements of operations . |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is comprised of net loss and certain changes in equity that are excluded from net loss. For the three months ended March 31, 2020 and 2019, the difference between comprehensive loss and net loss consisted . |
Net Loss per Share | Net Loss per Share Basic net loss per share is calculated by dividing net loss by the weighted average number of shares outstanding during the period, less shares subject to repurchase and excludes any dilutive effects of stock-based awards and warrants. Diluted net loss per share is computed giving effect to all potentially dilutive shares, including common stock issuable upon exercise of stock options, and unvested restricted common stock and stock units. As the Company had net losses for the three months ended March 31, 2020 and 2019, all potential common shares were determined to be anti-dilutive. The following table sets forth the computation of net loss per common share (in thousands, except share and per share amounts): Three Months Ended March 31, 2020 2019 Numerator: Net loss $ (19,115 ) $ (8,268 ) Denominator: Weighted average number of shares used in calculating net loss per share—basic and diluted (1) 67,396,229 6,812,129 Net loss per share—basic and diluted $ (0.28 ) $ (1.21 ) (1) In April 2019, the Company completed its IPO and concurrent private placement with Merck, in which the Company issued an aggregate of 7,521,394 and 4,121,683 shares of common stock, respectively. All of the then outstanding shares of convertible preferred stock were automatically converted into shares of common stock upon the closing of the IPO. Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows: Three Months Ended March 31, 2020 2019 Convertible preferred stock — 47,283,846 Options to purchase common stock 10,824,034 11,183,787 Shares committed under ESPP 396,360 — Total 11,220,394 58,467,633 |
Segment and Geographical Information | Segment and Geographical Information The Company operates in one business segment. Substantially all of the Company’s long-lived assets, comprised of property and equipment, are based in the United States. For the three months ended March 31, 2020 and 2019, the Company’s revenues were entirely within the United States based upon the location of the customers |
Recent Accounting Pronouncements | Recent Accounting Pronouncements New accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on our condensed consolidated financial statements upon adoption. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company, and has elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act. Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement as part of the FASB’s disclosure framework project. This ASU modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement by removing the requirement to disclose amounts of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels and the valuation process for Level 3 fair value measurements. This ASU also modifies existing disclosure requirements by clarifying that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date, and it adds required disclosures for the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The Company adopted this ASU effective January 1, 2020, noting no material impact on the Company’s condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which increases lease transparency and comparability among organizations. Under the new standard, lessees will be required to recognize right-of-use (“ROU”) assets and lease liabilities arising from lease arrangements on the consolidated balance sheets, with the exception of leases with a term of 12 months or less, which permits a lessee to make an accounting policy election by class of underlying asset not to recognize the ROU assets and lease liabilities. In March 2018, the FASB approved an alternative transition method to the modified retrospective approach, which eliminates the requirement to restate prior period condensed consolidated financial statements and allows the cumulative effect of the retrospective allocation to be recorded as an adjustment to the opening balance of retained earnings at the date of adoption. In November 2019, the FASB issued ASU 2019-10, which defers the effective date for certain ASUs including ASU 2016-02. The new guidance is now effective for the Company’s fiscal year beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The Company plans to adopt the new lease standard using the optional transition method, which allows the Company to recognize a cumulative-effect adjustment to the opening balance of accumulated deficit at the date of adoption and apply the new disclosure requirements beginning in the period of adoption. The Company also plans to elect the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allows the Company to carryforward the historical lease classification and make an accounting policy election whereby ROU assets and lease liabilities associated with lease arrangements with terms less than one year will not be recognized. We will continue to evaluate the effect that this guidance will have on our condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard amends guidance on reporting credit losses for financial assets held at amortized cost basis, including accounts receivable, investments classified as available for sale, such as our debt securities, and unbilled related party revenue. Estimated credit losses will be recorded as an allowance rather than a write-down. This standard is effective for the Company’s fiscal year beginning after December 15, 2022. Early adoption is permitted for all entities. The Company is currently assessing the timing of adoption and the impact that the adoption of ASU 2016-13 will have on its condensed consolidated financial statements. In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (ASC 808): Clarifying the Interaction between ASC 808 and ASC 606, which clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under ASC 606 when the collaborative arrangement participant is a customer in the context of a unit of account. In those situations, all the guidance in ASC 606 should be applied, including recognition, measurement, presentation and disclosure requirements. This ASU adds unit-of-account guidance in ASC 808 to align with the guidance in ASC 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of ASC 606, and requires that in a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, presenting the transaction together with revenue recognized under ASC 606 is precluded if the collaborative arrangement participant is not a customer. This ASU will be effective for the Company’s fiscal year beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The Company is currently assessing the impact of this ASU on its condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The new guidance modifies ASC 740 to simplify several aspects of accounting for income taxes, including eliminating certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation. This ASU will be effective for the Company for fiscal year beginning after December 15, 2021, and interim periods within fiscal year beginning after December 15, 2022, and is required to be adopted prospectively, with the exception of certain specific amendments. The Company is currently assessing the impact of this ASU on its condensed consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Estimated Useful Life of Asset | Depreciation is recognized using the straight-line method based on an estimated useful life of the asset, which is as follows: Computer equipment 3 years Laboratory equipment and office furniture 3 years Leasehold improvement Shorter of life of asset or lease term |
Computation of Net Loss Per Common Share | The following table sets forth the computation of net loss per common share (in thousands, except share and per share amounts): Three Months Ended March 31, 2020 2019 Numerator: Net loss $ (19,115 ) $ (8,268 ) Denominator: Weighted average number of shares used in calculating net loss per share—basic and diluted (1) 67,396,229 6,812,129 Net loss per share—basic and diluted $ (0.28 ) $ (1.21 ) (1) In April 2019, the Company completed its IPO and concurrent private placement with Merck, in which the Company issued an aggregate of 7,521,394 and 4,121,683 shares of common stock, respectively. All of the then outstanding shares of convertible preferred stock were automatically converted into shares of common stock upon the closing of the IPO. |
Potentially Dilutive Securities Not Included in Diluted Per Share Calculations | Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows: Three Months Ended March 31, 2020 2019 Convertible preferred stock — 47,283,846 Options to purchase common stock 10,824,034 11,183,787 Shares committed under ESPP 396,360 — Total 11,220,394 58,467,633 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Summary of Cash and Cash Equivalents and Marketable Securities Classified as Available-for-sale Securities | Cash and cash equivalents and marketable securities, all of which are classified as available-for-sale securities consisted of the following (in thousands): Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value As of March 31, 2020 Money market funds $ 239,089 $ — $ — $ 239,089 Corporate and agency bonds 34,171 — (55 ) 34,116 Commercial paper 37,401 — — 37,401 Total $ 310,661 $ — $ (55 ) $ 310,606 Classified as: Cash and cash equivalents $ 239,089 Short-term marketable securities (amortized cost of $71,572) 71,517 Total cash and cash equivalents and marketable securities $ 310,606 Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value As of December 31, 2019 Money market funds $ 244,973 $ — $ — $ 244,973 Corporate and agency bonds 66,063 28 (14 ) 66,077 Commercial paper 24,840 — — 24,840 U.S. government agencies securities 7,985 11 — 7,996 Total $ 343,861 $ 39 $ (14 ) $ 343,886 Classified as: Cash and cash equivalents $ 244,973 Short-term marketable securities (amortized cost of $98,888) 98,913 Total cash and cash equivalents and marketable securities $ 343,886 |
Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table sets forth the estimated fair value of the Company’s financial assets and liabilities that were measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 (in thousands): Fair Value Measurements As of March 31, 2020 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 239,089 $ — $ — $ 239,089 Corporate and agency bonds — 34,116 — 34,116 Commercial paper — 37,401 — 37,401 $ 239,089 $ 71,517 $ — $ 310,606 Fair Value Measurements As of December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 244,973 $ — $ — $ 244,973 Corporate and agency bonds — 66,077 — 66,077 Commercial paper — 24,840 — 24,840 U.S. government agencies securities — 7,996 — 7,996 $ 244,973 $ 98,913 $ — $ 343,886 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Statement Of Financial Position [Abstract] | |
Schedule of Reconciliation of Cash, Cash Equivalent and Restricted Cash | A reconciliation of cash, cash equivalents and restricted cash reported within our condensed consolidated balance sheets to the amount reported within the accompanying condensed consolidated statements of cash flows is as follows (in thousands): March 31, December 31, 2020 2019 Cash and cash equivalents $ 256,952 $ 245,598 Restricted cash 1,874 1,874 Total cash, cash equivalents and restricted cash $ 258,826 $ 247,472 |
Property and Equipment | Property and equipment consist of the following (in thousands): March 31, December 31, 2020 2019 Computer equipment $ 1,201 $ 1,201 Laboratory equipment and office furniture 22,432 21,652 Leasehold improvements 25,880 25,880 Construction in process 247 498 Total property and equipment, gross 49,760 49,231 Less: accumulated depreciation and amortization (31,486 ) (29,756 ) Total property and equipment, net $ 18,274 $ 19,475 |
Accrued Liabilities | Accrued liabilities consist of the following (in thousands): March 31, December 31, 2020 2019 Accrued expenses $ 2,684 $ 2,901 Clinical trials and research and development costs 10,826 11,051 Personnel-related costs 3,718 6,446 Manufacturing costs 4,721 2,593 Total accrued liabilities $ 21,949 $ 22,991 |
Research Collaboration and Li_2
Research Collaboration and License Agreements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Collaboration And License Agreement Disclosure [Abstract] | |
Schedule of Milestone Payments by Indications | A breakout of the milestone payments in connection with the potential achievement of certain clinical development events is as follows (in thousands): First Indication Second Indication Third Indication Upon administration of an applicable product to the first patient in the first Phase 3 clinical trial for such product for the given indication $ 35,000 $ 25,250 $ 17,500 A breakout of the milestone payments in connection with the potential achievement of certain regulatory events for each of the three indications, for each of the three geographic areas, is as follows (in thousands): First Indication Second Indication Third Indication Total United States $ 75,000 $ 56,250 $ 37,500 $ 168,750 European Union 60,000 45,000 30,000 135,000 Japan 30,000 22,500 15,000 67,500 $ 165,000 $ 123,750 $ 82,500 $ 371,250 |
Schedule of Recognized Revenue from Collaboration and License Agreements | The Company recognized revenue from its collaboration and license agreements as follows (in thousands): Three Months Ended March 31, 2020 2019 Related party revenue $ 24,364 $ 25,552 |
Schedule of Changes in Related Party Contract Liabilities | Contract Assets and Liabilities Changes in related party contract liabilities were as follows (in thousands): Amounts Balance at December 31, 2019 $ 4,872 Revenue recognized through March 16, 2020 (4,872 ) Balance at March 31, 2020 $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Future Minimum Commitments under Unassigned Lease Obligations | Future minimum payments under the unassigned lease obligations described above are as follows as of March 31, 2020 (in thousands): Year Ended December 31, 2020 $ 3,764 2021 5,141 2022 5,294 2023 5,455 Total $ 19,654 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of Shares of Common Stock Reserved for Issuance | As of March 31, 2020 and December 31, 2019, the Company reserved shares of common stock for issuance as follows: March 31, December 31, 2020 2019 Common stock options outstanding 10,824,034 10,824,780 Common stock options available for grant 7,012,247 5,316,066 401(k) Matching Plan 28,274 28,274 ESPP shares available for purchase 897,255 897,255 Total 18,761,810 17,066,375 |
Summary of Activity under 2008 Plan and 2018 Plan | A summary of the activity under the 2008 Plan and the 2018 Plan is as follows: Outstanding Options Options Available for Grant Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Aggregate Intrinsic Value (in Thousands) Balances at December 31, 2019 5,316,066 10,824,780 $ 7.52 6.29 $ 118,770 Additional shares reserved 2,678,411 Options granted (1,463,250 ) 1,463,250 16.66 Options exercised — (982,976 ) 3.65 Options cancelled 481,020 (481,020 ) 12.15 Balances at March 31, 2020 7,012,247 10,824,034 $ 8.90 6.55 $ 44,651 Vested and expected to vest at March 31, 2020 10,701,082 $ 8.84 6.52 $ 44,576 Outstanding and exercisable at March 31, 2020 10,824,034 $ 8.90 6.55 $ 44,651 |
Summary of Stock Based Compensation Expense | The following table summarizes stock-based compensation expense related to stock-based payment awards previously granted to employees and directors for the three months ended March 31, 2020 and 2019, which was allocated as follows (in thousands): Three Months Ended March 31, 2020 2019 Research and development $ 1,873 $ 1,412 General and administrative 1,794 1,161 Total stock-based compensation expense $ 3,667 $ 2,573 |
Organization and Description _2
Organization and Description of Business - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Place of incorporation | DE |
Date of incorporation | Dec. 31, 2007 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | ||
Mar. 31, 2020USD ($)Segment | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||
Net losses | $ 19,115,000 | $ 8,268,000 | |
Accumulated deficit | 215,259,000 | $ 196,144,000 | |
Cash, cash equivalents and marketable securities | 328,500,000 | ||
Impairment related to other-than-temporary | 0 | ||
Net unrealized gain (loss) on marketable securities | $ (100,000) | $ 200,000 | |
Number of operating business segment | Segment | 1 | ||
Revenue | Customer Concentration Risk | Merck | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Percentage of revenue | 100.00% | 100.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Estimated Useful Life of Asset (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Computer Equipment | |
Property Plant And Equipment [Line Items] | |
Estimated useful life of asset | 3 years |
Laboratory Equipment and Office Furniture | |
Property Plant And Equipment [Line Items] | |
Estimated useful life of asset | 3 years |
Leasehold Improvement | |
Property Plant And Equipment [Line Items] | |
Leasehold improvement | Shorter of life of asset or lease term |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Computation of Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator: | ||
Net Loss | $ (19,115) | $ (8,268) |
Denominator: | ||
Weighted average shares used to compute net loss per share, basic and diluted | 67,396,229 | 6,812,129 |
Net loss per share—basic and diluted | $ (0.28) | $ (1.21) |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Computation of Net Loss Per Common Share (Parenthetical) (Details) - Common Stock | 1 Months Ended |
Apr. 30, 2019shares | |
IPO | |
Subsidiary Sale Of Stock [Line Items] | |
Number of shares issued in transaction | 7,521,394 |
Private Placement | |
Subsidiary Sale Of Stock [Line Items] | |
Number of shares issued in transaction | 4,121,683 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Potentially Dilutive Securities Not Included in Diluted Per Share Calculations (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities not included in calculations of diluted per share | 11,220,394 | 58,467,633 |
Options to Purchase Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities not included in calculations of diluted per share | 10,824,034 | 11,183,787 |
Convertible Preferred Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities not included in calculations of diluted per share | 47,283,846 | |
Shares Committed Under ESPP | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Potentially dilutive securities not included in calculations of diluted per share | 396,360 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Cash and Cash Equivalents and Marketable Securities Classified as Available-for-sale Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 310,661 | $ 343,861 |
Gross Unrealized Gain | 39 | |
Gross Unrealized Loss | (55) | (14) |
Fair Value | 310,606 | 343,886 |
Money Market Funds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 239,089 | 244,973 |
Fair Value | 239,089 | 244,973 |
Corporate and Agency Bonds | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 34,171 | 66,063 |
Gross Unrealized Gain | 28 | |
Gross Unrealized Loss | (55) | (14) |
Fair Value | 34,116 | 66,077 |
Commercial Paper | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 37,401 | 24,840 |
Fair Value | 37,401 | 24,840 |
U.S. Government Agencies Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 7,985 | |
Gross Unrealized Gain | 11 | |
Fair Value | 7,996 | |
Cash and Cash Equivalents | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Fair Value | 239,089 | 244,973 |
Short-term Marketable Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 71,572 | 98,888 |
Fair Value | $ 71,517 | $ 98,913 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Cash and Cash Equivalents and Marketable Securities Classified as Available-for-sale Securities (Parenthetical) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 310,661 | $ 343,861 |
Short-term Marketable Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 71,572 | $ 98,888 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) | Mar. 31, 2020USD ($)Security | Dec. 31, 2019USD ($)Security |
Fair Value Disclosures [Abstract] | ||
Cash on deposit with banks | $ 17,900,000 | $ 600,000 |
Number of marketable securities in unrealized loss positions less than 12 months | Security | 4 | 4 |
Fair value, assets, level 1 to level 2 transfers, amount | $ 0 | $ 0 |
Fair value, assets, level 2 to level 1 transfers, amount | 0 | 0 |
Fair value, liabilities, level 1 to level 2 transfers, amount | 0 | 0 |
Fair value, liabilities, level 2 to level 1 transfers, amount | $ 0 | $ 0 |
Fair Value Measurements - Sum_3
Fair Value Measurements - Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value Measurements, Recurring - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets: | ||
Assets fair value | $ 310,606 | $ 343,886 |
Level 1 | ||
Assets: | ||
Assets fair value | 239,089 | 244,973 |
Level 2 | ||
Assets: | ||
Assets fair value | 71,517 | 98,913 |
Money Market Funds | ||
Assets: | ||
Assets fair value | 239,089 | 244,973 |
Money Market Funds | Level 1 | ||
Assets: | ||
Assets fair value | 239,089 | 244,973 |
Corporate and Agency Bonds | ||
Assets: | ||
Assets fair value | 34,116 | 66,077 |
Corporate and Agency Bonds | Level 2 | ||
Assets: | ||
Assets fair value | 34,116 | 66,077 |
Commercial Paper | ||
Assets: | ||
Assets fair value | 37,401 | 24,840 |
Commercial Paper | Level 2 | ||
Assets: | ||
Assets fair value | $ 37,401 | 24,840 |
U.S. Government Agencies Securities | ||
Assets: | ||
Assets fair value | 7,996 | |
U.S. Government Agencies Securities | Level 2 | ||
Assets: | ||
Assets fair value | $ 7,996 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Reconciliation of Cash, Cash Equivalent and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||||
Cash and cash equivalents | $ 256,952 | $ 245,598 | ||
Restricted cash | 1,874 | 1,874 | ||
Total cash, cash equivalents and restricted cash | $ 258,826 | $ 247,472 | $ 49,562 | $ 59,172 |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 49,760 | $ 49,231 |
Less: accumulated depreciation and amortization | (31,486) | (29,756) |
Total property and equipment, net | 18,274 | 19,475 |
Computer Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 1,201 | 1,201 |
Laboratory Equipment and Office Furniture | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 22,432 | 21,652 |
Leasehold Improvement | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 25,880 | 25,880 |
Construction In Process | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 247 | $ 498 |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement Of Financial Position [Abstract] | ||
Depreciation expense | $ 1,731 | $ 1,961 |
Balance Sheet Components - Sc_3
Balance Sheet Components - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Accrued expenses | $ 2,684 | $ 2,901 |
Clinical trials and research and development costs | 10,826 | 11,051 |
Personnel-related costs | 3,718 | 6,446 |
Manufacturing costs | 4,721 | 2,593 |
Total accrued liabilities | $ 21,949 | $ 22,991 |
Research Collaboration and Li_3
Research Collaboration and License Agreements - Additional Information (Details) | Nov. 30, 2018USD ($) | Feb. 28, 2015USD ($)$ / sharesshares | Mar. 31, 2020USD ($)Option$ / sharesshares | Mar. 31, 2019USD ($) | Mar. 31, 2020USD ($)Option$ / shares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Nov. 29, 2018USD ($) | Apr. 30, 2015USD ($) |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||
Deferred revenue | $ 4,872,000 | ||||||||
Deferred revenue recognized | $ 4,872,000 | ||||||||
Collaboration and license revenue | $ 24,364,000 | $ 25,552,000 | |||||||
Contract assets | 0 | $ 0 | |||||||
Collaboration Agreement | Merck Sharp & Dohme Corp | |||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||
Upfront payment received | $ 94,000,000 | ||||||||
Fair values of assets and services exchanged allocated to equity component | $ 106,000,000 | ||||||||
Fair values of assets and services exchanged allocated to revenue component | $ 94,000,000 | ||||||||
Term of agreement | 5 years | ||||||||
Research and development services additional option extend term | 2 years | ||||||||
License fee | $ 20,000,000 | ||||||||
Development and regulatory milestone payments received | $ 449,000,000 | ||||||||
Research and Development Collaboration Agreement Additional Term Description | In connection with this extension, Merck agreed to continue to fund the Company’s research and development efforts during the two-year extension period at the same levels as during the initial term and, in lieu of a $20.0 million extension fee that would have otherwise been payable to the Company, Merck will make additional payments totaling up to $20.0 million in support of the Company’s research and development program activities across 2021 and the first quarter of 2022. | ||||||||
Amount of fund received for research activities | $ 20,000,000 | ||||||||
Amount of additional fund received for research activities | $ 20,000,000 | ||||||||
Performance of R&D services period | 5 years | ||||||||
Number of options to extend performance of research program | Option | 2 | 2 | |||||||
Upfront Fee | $ 94,000,000 | ||||||||
Collaborative agreement milestone or other forms of consideration | 0 | ||||||||
Received amount from options | $ 20,000,000 | ||||||||
Deferred revenue | 0 | $ 0 | $ 4,900,000 | ||||||
Deferred revenue recognized | 4,900,000 | ||||||||
Collaboration and license revenue | 24,400,000 | 25,600,000 | $ 388,100,000 | ||||||
One-time payment | 20,000,000 | ||||||||
Milestone payments | 449,000,000 | ||||||||
Milestone payments relates to potential achievement of specific clinical development events | 77,700,000 | ||||||||
Milestone payments relates to potential achievement of certain regulatory events | 371,300,000 | ||||||||
Upfront license fee | 4,900,000 | $ 5,700,000 | |||||||
Collaboration Agreement | Merck Sharp & Dohme Corp | Maximum | |||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||
Collaborative arrangement funding, amount | 75,000,000 | ||||||||
Commercial milestone payments received | 125,000,000 | ||||||||
Eligible to receive commercial milestone payments | $ 125,000,000 | ||||||||
Collaboration Agreement | Merck Sharp & Dohme Corp | Series E Convertible Preferred Stock | |||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||
Preferred stock, shares issued | shares | 8,833,333 | ||||||||
Preferred stock, price per share | $ / shares | $ 12 | ||||||||
Proceeds from issuance of preferred stock | $ 106,000,000 | ||||||||
Small Molecule Compounds | Merck Sharp & Dohme Corp | |||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||
Initial research term | 5 years | ||||||||
Research collaboration and license agreements extension fee | $ 20,000,000 | ||||||||
Additional term | 3 years | ||||||||
Side Letter Agreement | Merck Sharp & Dohme Corp | |||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||
Public offering price of common stock | $ / shares | $ 16 | $ 16 | |||||||
Percentage of outstanding shares of common stock owned by related party | 19.90% | ||||||||
Side Letter Agreement | Merck Sharp & Dohme Corp | Private Placement | |||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |||||||||
Common stock purchased by related party | shares | 4,121,683 |
Research Collaboration and Li_4
Research Collaboration and License Agreements - Schedule of Milestone Payments by Indications (Details) - Collaboration Agreement $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | $ 371,250 |
United States | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 168,750 |
European Union | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 135,000 |
Japan | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 67,500 |
First Indication | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 165,000 |
First Indication | United States | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 75,000 |
First Indication | European Union | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 60,000 |
First Indication | Japan | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 30,000 |
Second Indication | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 123,750 |
Second Indication | United States | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 56,250 |
Second Indication | European Union | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 45,000 |
Second Indication | Japan | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 22,500 |
Third Indication | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 82,500 |
Third Indication | United States | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 37,500 |
Third Indication | European Union | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 30,000 |
Third Indication | Japan | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Milestone payments in connection with potential achievement of certain regulatory events | 15,000 |
First Indication | Clinical Trial to First Patient in First Phase 3 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Upon administration of an applicable product to the first patient in the first Phase 3 clinical trial for such product for the given indication | 35,000 |
Second Indication | Clinical Trial to First Patient in First Phase 3 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Upon administration of an applicable product to the first patient in the first Phase 3 clinical trial for such product for the given indication | 25,250 |
Third Indication | Clinical Trial to First Patient in First Phase 3 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Upon administration of an applicable product to the first patient in the first Phase 3 clinical trial for such product for the given indication | $ 17,500 |
Research Collaboration and Li_5
Research Collaboration and License Agreements - Schedule of Recognized Revenue from Collaboration and License Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Collaboration Agreement | Merck Sharp & Dohme Corp | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Related party revenue | $ 24,364 | $ 25,552 |
Research Collaboration and Li_6
Research Collaboration and License Agreements - Schedule of Changes in Related Party Contract Liabilities (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Research Collaboration And License Agreements [Abstract] | |
Beginning Balance | $ 4,872 |
Revenue recognized through March 16, 2020 | $ (4,872) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
Dec. 31, 2015USD ($)ft² | Sep. 30, 2009USD ($)ft² | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | |
Commitments And Contingencies Disclosure [Line Items] | ||||||
Total Leasehold improvements | $ 18,274 | $ 19,475 | ||||
Corporate Office Space and Laboratory Facility | ||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||
Area of leased property | ft² | 122,000 | 50,000 | ||||
Operating lease agreement, amended period | 2014-06 | |||||
Operating lease agreement, expiration period | 2023-12 | 2020-11 | ||||
Tenant improvement allowances | $ 15,200 | $ 800 | ||||
Operating lease option additional extend term | 3 years | |||||
Rent expense | 500 | $ 500 | ||||
Corporate Office Space and Laboratory Facility | Merck Sharp & Dohme Corp | ||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||
Remaining lease payment obligation | $ 1,500 | $ 3,500 | ||||
Corporate Office Space and Laboratory Facility | Letter of Credit | ||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||
Letter of credit as a security deposit | 2,300 | |||||
Reduction in letter of credit on each 3rd anniversary and 4th anniversary | 400 | |||||
Corporate Office Space and Laboratory Facility | Letter of Credit | Cash and Cash Equivalents | ||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||
Reduction in letter of credit | $ 400 | |||||
Corporate Office Space and Laboratory Facility | Leasehold Improvement | ||||||
Commitments And Contingencies Disclosure [Line Items] | ||||||
Total Leasehold improvements | $ 22,300 | |||||
Operating lease term | 7 years |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Commitments under Unassigned Lease Obligations (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2020 | $ 3,764 |
2021 | 5,141 |
2022 | 5,294 |
2023 | 5,455 |
Total | $ 19,654 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Class Of Stock [Line Items] | |||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Common stock, shares outstanding | 67,936,438 | 66,960,279 | |
Stock repurchase plan, authorized shares | 53,437 | 74,454 | |
Weighted-average grant date fair value of stock options ,Granted | $ 9.73 | $ 7.72 | |
Intrinsic value of stock options exercised | $ 12,800,000 | $ 700,000 | |
Tax benefits realized | 0 | 0 | |
Non-employees | |||
Class Of Stock [Line Items] | |||
Stock-based compensation expense | $ 28,000 | $ 32,000 | |
Options granted | 0 | 25,000 | |
2018 Plan | Minimum | |||
Class Of Stock [Line Items] | |||
Stock options, vesting period | 4 years | ||
2018 Plan | Maximum | |||
Class Of Stock [Line Items] | |||
Stock options, vesting period | 10 years |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Shares of Common Stock Reserved for Issuance (Details) - shares | Mar. 31, 2020 | Dec. 31, 2019 |
Class Of Stock [Line Items] | ||
Total | 18,761,810 | 17,066,375 |
Common Stock Options Outstanding | ||
Class Of Stock [Line Items] | ||
Total | 10,824,034 | 10,824,780 |
Common Stock Options Available for Grant | ||
Class Of Stock [Line Items] | ||
Total | 7,012,247 | 5,316,066 |
401(k) Matching Plan | ||
Class Of Stock [Line Items] | ||
Total | 28,274 | 28,274 |
Shares Committed Under ESPP | ||
Class Of Stock [Line Items] | ||
Total | 897,255 | 897,255 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Activity under 2008 Plan and 2018 Plan (Details) - 2008 Plan and 2018 Plan - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | |
Class Of Stock [Line Items] | ||||
Outstanding Options, Options Available for Grant, Beginning balance | 5,316,066 | |||
Outstanding Options, Options Available for Grant, Additional Shares | 2,678,411 | |||
Outstanding Options, Options Available for Grant, Granted | (1,463,250) | |||
Outstanding Options, Options Available for Grant, Cancelled | 481,020 | |||
Outstanding Options, Options Available for Grant, Ending balance | 7,012,247 | |||
Outstanding Options, Number of Options, Beginning balance | 10,824,780 | |||
Outstanding Options, Number of Options, Granted | 1,463,250 | |||
Outstanding Options, Number of Options, Exercised | (982,976) | |||
Outstanding Options, Number of Options, Cancelled | (481,020) | |||
Outstanding Options, Number of Options, Ending balance | 10,824,034 | |||
Outstanding Options, Number of Options, Options vested and expected to vest | 10,701,082 | |||
Outstanding Options, Number of Options, Options exercisable | 10,824,034 | |||
Outstanding Options, Weighted-Average Exercise Price, Beginning balance | $ 7.52 | |||
Outstanding Options, Weighted-Average Exercise Price, Granted | 16.66 | |||
Outstanding Options, Weighted-Average Exercise Price, Exercised | 3.65 | |||
Outstanding Options, Weighted-Average Exercise Price, Cancelled | 12.15 | |||
Outstanding Options, Weighted-Average Exercise Price, Ending balance | 8.90 | |||
Outstanding Options, Weighted-Average Exercise Price, Options vested and expected to vest | 8.84 | |||
Outstanding Options, Weighted-Average Exercise Price, Options exercisable | $ 8.90 | |||
Weighted Average Remaining Contractual Life (in Years) | 6 years 6 months 18 days | 6 years 3 months 14 days | ||
Weighted Average Remaining Contractual Life (in Years), Vested and expected to vest | 6 years 6 months 7 days | |||
Weighted Average Remaining Contractual Life (in Years),Outstanding and Exercisable | 6 years 6 months 18 days | |||
Outstanding Options, Aggregate Intrinsic Value, Balance | $ 44,651 | $ 118,770 | ||
Outstanding Options, Aggregate Intrinsic Value, Options vested and expected to vest-March 31, 2019 | 44,576 | |||
Options Outstanding, Aggregate Intrinsic Value, Options exercisable-March 31, 2019 | $ 44,651 |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Stock Based Compensation Expense (Details) - Employees and Directors - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 3,667 | $ 2,573 |
Research and Development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 1,873 | 1,412 |
General and Administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 1,794 | $ 1,161 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | Mar. 27, 2020 |
Income Tax Disclosure [Abstract] | |
CARES Act of 2020 aid net operating loss carry forward period | 5 years |
CARES Act of 2020 aid net operating losses carryforward maximum percentage of taxable income | 80.00% |