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FATE Fate Therapeutics

Document and Entity Information

Document and Entity Information - shares6 Months Ended
Jun. 30, 2020Aug. 03, 2020
Cover [Abstract]
Entity Registrant NameFATE THERAPEUTICS INC
Entity Central Index Key0001434316
Document Type10-Q
Document Period End DateJun. 30,
2020
Amendment Flagfalse
Current Fiscal Year End Date--12-31
Entity Filer CategoryLarge Accelerated Filer
Entity Small Businessfalse
Entity Emerging Growth Companyfalse
Trading SymbolFATE
Entity Common Stock, Shares Outstanding86,844,029
Document Fiscal Year Focus2020
Document Fiscal Period FocusQ2
Entity Current Reporting StatusYes
Entity Shell Companyfalse
Entity File Number001-36076
Entity Tax Identification Number65-1311552
Entity Address, Address Line One3535 General Atomics Court
Entity Address, Address Line TwoSuite 200
Entity Address, City or TownSan Diego
Entity Address, State or ProvinceCA
Entity Address, Postal Zip Code92121
City Area Code858
Local Phone Number875-1800
Entity Interactive Data CurrentYes
Title of 12(b) SecurityCommon Stock
Security Exchange NameNASDAQ
Entity Incorporation, State or Country CodeDE
Document Quarterly Reporttrue
Document Transition Reportfalse

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in ThousandsJun. 30, 2020Dec. 31, 2019
Current assets:
Cash and cash equivalents $ 433,074 $ 99,814
Accounts receivable1,717
Short-term investments and related maturity receivables100,335 121,613
Prepaid expenses and other current assets5,099 5,662
Total current assets540,225 227,089
Long-term investments39,440
Property and equipment, net15,932 11,419
Operating lease right-of-use assets68,229 22,752
Restricted cash15,227 227
Collaboration contract assets13,972 1,338
Other assets9 9
Total assets653,594 302,274
Current liabilities:
Accounts payable13,563 5,822
Accrued expenses11,618 14,697
CIRM award liability, current portion3,160 2,808
Deferred revenue, current portion14,626 2,787
Operating lease liabilities, current portion2,355 1,692
Total current liabilities45,322 27,806
Deferred revenue, net of current portion54,688 3,775
CIRM award liability, net of current portion790 702
Operating lease liabilities, net of current portion78,683 25,235
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value; authorized shares—5,000,000 at June 30, 2020 and December 31, 2019; Class A Convertible Preferred shares issued and outstanding—2,794,549 at June 30, 2020 and December 31, 20193 3
Common stock, $0.001 par value; authorized shares—150,000,000 at June 30, 2020 and December 31, 2019; issued and outstanding—86,802,162 at June 30, 2020 and 75,730,260 at December 31, 201987 76
Additional paid-in capital918,535 628,200
Accumulated other comprehensive gain623 22
Accumulated deficit(445,137)(383,545)
Total stockholders’ equity474,111 244,756
Total liabilities and stockholders’ equity $ 653,594 $ 302,274

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / sharesJun. 30, 2020Dec. 31, 2019
Preferred stock, par value (in dollars per share) $ 0.001 $ 0.001
Preferred stock, shares authorized5,000,000 5,000,000
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, authorized shares150,000,000 150,000,000
Common stock issued86,802,162 75,730,260
Common stock, outstanding shares86,802,162 75,730,260
Class A Convertible Preferred Shares
Preferred stock, issued shares2,794,549 2,794,549
Preferred stock, outstanding shares2,794,549 2,794,549

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2020Jun. 30, 2019Jun. 30, 2020Jun. 30, 2019
Income Statement [Abstract]
Collaboration revenue $ 5,465 $ 2,817 $ 7,980 $ 5,449
Type of Revenue [Extensible List]us-gaap:LicenseMemberus-gaap:LicenseMemberus-gaap:LicenseMemberus-gaap:LicenseMember
Operating expenses:
Research and development $ 26,669 $ 21,631 $ 55,947 $ 39,359
General and administrative7,503 5,270 15,232 10,620
Total operating expenses34,172 26,901 71,179 49,979
Loss from operations(28,707)(24,084)(63,199)(44,530)
Other income (expense):
Interest income635 1,015 1,607 2,106
Interest expense(409)(814)
Total other income, net635 606 1,607 1,292
Net loss(28,072)(23,478)(61,592)(43,238)
Other comprehensive income (loss):
Unrealized gain on available-for-sale securities, net481 93 601 95
Comprehensive loss $ (27,591) $ (23,385) $ (60,991) $ (43,143)
Net loss per common share, basic and diluted $ (0.35) $ (0.36) $ (0.79) $ (0.66)
Weighted-average common shares used to compute basic and diluted net loss per share79,304,627 65,213,364 77,595,795 65,067,801

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands6 Months Ended
Jun. 30, 2020Jun. 30, 2019
Operating activities
Net loss $ (61,592) $ (43,238)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization1,453 983
Stock-based compensation14,149 8,254
Amortization of debt discounts and debt issuance costs32
Accretion and amortization of premiums and discounts on investments, net518 (303)
Amortization of collaboration contract assets644 271
Noncash interest expense159
Deferred revenue62,753 (4,795)
Changes in operating assets and liabilities:
Accounts receivable(1,717)500
Prepaid expenses and other assets(12,788)519
Accounts payable and accrued expenses4,804 (893)
Right-of-use assets and lease liabilities, net3,944 709
Net cash provided by (used in) operating activities12,168 (37,802)
Investing activities
Purchases of property and equipment(1,706)(3,541)
Purchases of investments(106,182)
Maturities of investments60,800 26,500
Net cash provided by (used in) investing activities59,094 (83,223)
Financing activities
Issuance of common stock from equity incentive plans, net of issuance costs3,570 1,946
Proceeds from public offering of common stock, net of issuance costs189,054
Proceeds from private placement of common stock, net of issuance costs50,000
Proceeds from sale of common stock to collaboration partner, net of issuance costs33,934
Proceeds from CIRM award440
Net cash provided by financing activities276,998 1,946
Net change in cash, cash equivalents and restricted cash348,260 (119,079)
Cash, cash equivalents and restricted cash at beginning of the period100,041 190,741
Cash, cash equivalents and restricted cash at end of the period448,301 71,662
Supplemental disclosure of cash flow information
Interest paid626
Supplemental schedule of noncash investing and financing activities
Purchases of property and equipment in accounts payable172 1,053
Right-of use assets obtained in exchange for lease obligations $ 48,226 $ 7,705

Organization and Summary of Sig

Organization and Summary of Significant Accounting Policies6 Months Ended
Jun. 30, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Organization and Summary of Significant Accounting Policies1.
Organization and Summary of Significant Accounting Policies Organization Fate Therapeutics, Inc. (the Company) was incorporated in the state of Delaware on April 27, 2007 and has its principal operations in San Diego, California. The Company is a clinical-stage biopharmaceutical company dedicated to the development of programmed cellular immunotherapies for cancer and immune disorders. The Company’s therapeutic pipeline is comprised of immuno-oncology programs, including off-the-shelf engineered natural killer (NK) and T-cell product candidates derived from clonal master induced pluripotent stem cell (iPSC) lines, and immuno-regulatory programs, including product candidates to prevent life-threatening complications in patients undergoing hematopoietic cell transplantation. The Company’s product candidates are based on its proprietary cell programming approach, which it applies to modulate the therapeutic function and direct the fate of immune cells. As of June 30, 2020, the Company has devoted substantially all of its efforts to product development, raising capital and building infrastructure and has not generated any revenues from any sales of its therapeutic products. To date, the Company’s revenues have been derived from collaboration agreements and government grants. Public Equity Offerings In June 2020, the Company completed a public offering of common stock in which investors, certain of which are affiliated with a director of the Company, purchased 7.1 million shares of the Company’s common stock at a price of $28.31 per share under a shelf registration statement. Gross proceeds from the offering were $201.3 million, and, after giving effect to $12.5 million of costs related to the offering (of which $0.3 million was unpaid as of June 30, 2020), net proceeds were $188.8 million. In September 2019, the Company completed a public offering of common stock in which investors, certain of which are affiliated with a director of the Company, purchased 9.9 million shares of the Company’s common stock at a price of $17.50 per share under a shelf registration statement. Gross proceeds from the offering were $173.1 million, and, after giving effect to $10.7 million of costs related to the offering, net proceeds were $162.4 million. Private Placements In June 2020, in connection with the June 2020 public offering of common stock, the Company exercised its right to cause an existing shareholder, Johnson & Johnson Innovation-JJDC, Inc (JJDC), to purchase $50.0 million of the Company’s common stock, and JJDC purchased in a private placement 1.8 million shares of the Company’s common stock at a price of $28.31 per share, for aggregate proceeds of $50.0 million. In April 2020, in connection with the Janssen Agreement described in Note 2, JJDC purchased in a private placement 1.6 million shares of the Company’s common stock at a price of $31.00 per share, for aggregate proceeds of $50.0 million. The shares of common stock purchased in the private placements were not subject to any underwriting discounts or commissions. Use of Estimates The Company’s unaudited condensed consolidated financial statements are prepared in accordance with United States generally accepted accounting principles (U.S. GAAP). The preparation of the Company’s unaudited condensed consolidated financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the Company’s unaudited condensed consolidated financial statements and accompanying notes. The most significant estimates and assumptions in the Company’s unaudited condensed consolidated financial statements relate to its contracts containing leases, accrued expenses and the estimated total costs expected to be incurred under the Company’s collaboration agreements. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions. Risks and Uncertainties Due to the global outbreak of SARS-CoV-2, the novel strain of coronavirus that causes Coronavirus disease 19 (COVID-19), the Company experienced impacts on certain aspects of its business, including its clinical trial and research and development activities, during the six months ended June 30, 2020. For example, certain of the Company’s research and development activities have been delayed or disrupted as a result of measures the Company implemented in response to governmental “stay at home” orders and in the interests of public health and safety, and the Company has experienced delays or disruptions in the initiation and conduct of its clinical trials as a result of prioritization of hospital and other medical resources toward pandemic efforts, policies and procedures implemented at clinical sites with respect to the conduct of clinical trials, and other precautionary measures taken in treating patients or in practicing medicine in response to the COVID-19 pandemic. The scope and duration of these delays and disruptions, and the ultimate impacts of COVID-19 on the Company’s operations, are currently unknown. The Company is continuing to actively monitor the situation and may take further precautionary and preemptive actions as may be required by federal, state or local authorities or that it determines are in the best interests of public health and safety and that of the Company’s patient community, employees, partners, and stockholders. The Company cannot predict the effects that such actions, or the impact of COVID-19 on global business operations and economic conditions, may have on its business, strategy, collaborations, or financial and operating results. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries, Fate Therapeutics Ltd., incorporated in the United Kingdom, Fate Therapeutics, B.V., incorporated in the Netherlands and Tfinity Therapeutics, Inc., incorporated in the United States. To date, the aggregate operations of these subsidiaries have not been significant and all intercompany transactions and balances have been eliminated in consolidation. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include cash in readily available checking and savings accounts, money market accounts and money market funds. The Company considers all highly liquid investments with an original maturity of three months or less from the date of purchase to be cash equivalents. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same such amount shown in the unaudited condensed consolidated statements of cash flows as of June 30, 2020 and 2019 (in thousands):
Six Months Ended June 30,
2020
2019
Cash and cash equivalents
$
433,074
$
71,435
Restricted cash
15,227
227
Total cash, cash equivalents, and restricted cash shown in the unaudited condensed consolidated statement of cash flows
$
448,301
$
71,662
During the six months ended June 30, 2020, the Company entered into a lease for a facility in San Diego that it intends to use as its new corporate headquarters. In lieu of a security deposit, Silicon Valley Bank issued a $15.0 million letter of credit on the Company’s behalf, which letter of credit is secured by a deposit of equal amount Investments Investments are accounted for as available-for-sale securities and are carried at fair value on the unaudited condensed consolidated balance sheets. Upon initial recognition of the investment and at each reporting period, the Company evaluates whether any unrealized losses on investments are attributable to a credit loss or other factors. Any unrealized losses attributable to credit loss are recorded through an allowance for credit losses, limited to the amount by which the fair value is below amortized cost, with the offsetting amount recorded in other income or expense in the unaudited condensed consolidated statement of operations and comprehensive loss. Unrealized losses not attributable to an expected credit loss and unrealized gains on investments are recorded in other comprehensive income (loss) on the condensed consolidated statements of operations and comprehensive loss. Realized gains and losses, if any, on investments classified as available-for-sale securities are included in other income or expense. The amortized cost of investments classified as available-for-sale debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion are included in interest income. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in interest income . Unaudited Interim Financial Information The accompanying interim condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and following the requirements of the United States Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required can be condensed or omitted. The interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and accompanying notes for the fiscal year ended December 31, 2019, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed by the Company with the SEC on March 2, 2020. In management’s opinion, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position and its results of operations and comprehensive loss and its cash flows for the periods presented. The results for the three and six months ended June 30, 2020 are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period. Revenue Recognition The Company recognizes revenue in a manner that depicts the transfer of control of a product or a service to a customer and reflects the amount of the consideration the Company is entitled to receive in exchange for such product or service. In doing so, the Company follows a five-step approach: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) the customer obtains control of the product or service. A customer is a party that has entered into a contract with the Company, where the purpose of the contract is to obtain a product or a service that is an output of the Company’s ordinary activities in exchange for consideration. To be considered a contract, (i) the contract must be approved (in writing, orally, or in accordance with other customary business practices), (ii) each party’s rights regarding the product product product A performance obligation is defined as a promise to transfer a product The transaction price is the amount of consideration the Company is entitled to receive in exchange for the transfer of control of a product or a service to If a contract has multiple performance obligations, the Company allocates the transaction price to each distinct performance obligation in an amount that reflects the consideration the Company is entitled to receive in exchange for satisfying each distinct performance obligation. For each distinct performance obligation, revenue is recognized when (or as) the Company transfers control of the product or the service applicable to such performance obligation. In those instances where the Company first receives consideration in advance of satisfying its performance obligation, the Company classifies such consideration as deferred revenue until (or as) the Company satisfies such performance obligation. In those instances where the Company first satisfies its performance obligation prior to its receipt of consideration, the consideration is recorded as accounts receivable. The Company expenses incremental costs of obtaining and fulfilling a contract as and when incurred if the expected amortization period of the asset that would be recognized is one year or less, or if the amount of the asset is immaterial. Otherwise, such costs are capitalized as contract assets if they are incremental to the contract and amortized to expense proportionate to revenue recognition of the underlying contract. Leases The Company determines if a contract contains a lease at the inception of the contract. The Company currently has leases related to its facilities leased for office and laboratory space, which are classified as operating leases. These leases result in operating right-of-use (ROU) assets, current operating lease liabilities, and non-current operating lease liabilities in the unaudited condensed consolidated balance sheets. The Company does not have any financing leases. Leases with a term of 12 months or less are considered short-term and a ROU asset and lease obligation are not recognized. Payments associated with short-term leases are expensed on a straight-line basis over the lease term. Lease liabilities represent an obligation to make lease payments arising from the lease and ROU assets represent the right to use the underlying asset identified in the lease for the lease term. Lease liabilities are measured at the present value of the lease payments not yet paid discounted using the discount rate for the lease established at the lease commencement date. To determine the present value, the implicit rate is used when readily determinable. For those leases where the implicit rate is not provided, the Company determines an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. ROU assets are measured as the present value of the lease payments and also include any prepaid lease payments made and any other indirect costs incurred, and exclude any lease incentives received. Lease terms may include the impact of options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term. The Company aggregates all lease and non-lease components for each class of underlying assets into a single lease component. Stock-Based Compensation Stock-based compensation expense represents the cost of the grant date fair value of employee stock option and restricted stock unit grants recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis. For stock option grants for which vesting is subject to performance-based milestones, the expense is recorded over the remaining service period after the point when the achievement of the milestone is probable or the performance condition has been achieved. For stock option grants for which vesting is subject to both performance-based milestones and market conditions, expense is recorded over the derived service period after the point when the achievement of the performance-based milestone is probable or the performance condition has been achieved. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model, with the exception of option grants for which vesting is subject to both performance-based milestones and market conditions, which are valued using a lattice-based model. The fair value of restricted stock units is based on the closing price of the Company’s common stock as reported on The Nasdaq Global Market on the date of grant. The Company recognizes forfeitures for all awards as such forfeitures occur. Convertible Preferred Stock The Company applies the relevant accounting standards to distinguish liabilities from equity when assessing the classification and measurement of preferred stock. Preferred shares subject to mandatory redemptions are considered liabilities and measured at fair value. Conditionally redeemable preferred shares are considered temporary equity. All other preferred shares are considered as stockholders’ equity. The Company applies the relevant accounting standards for derivatives and hedging (in addition to distinguishing liabilities from equity) when accounting for hybrid contracts that contain conversion options. Conversion options must be bifurcated from the host instruments and accounted for as free-standing financial instruments according to certain criteria. These criteria include circumstances when (i) the economic characteristics and risks of the embedded derivative instruments are not clearly and closely related to the economic characteristics and risks of the host contract, (ii) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable accounting principles with changes in fair value reported in earnings as they occurred, and (iii) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The derivative is subsequently measured at fair value at each reporting date, with the changes in fair value reported in earnings. Comprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non‑owner sources. Other comprehensive loss includes unrealized gains and losses, other than losses attributable to a credit loss which are included in other income and expense, on investments classified as available-for-sale securities, which was the only difference between net loss and comprehensive loss for the applicable periods. Net Loss per Common Share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration for common stock equivalents. Dilutive common stock equivalents for the periods presented include convertible preferred stock, warrants for the purchase of common stock, and common stock options and restricted stock units outstanding under the Company’s stock option and incentive plans. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. For the three and six months ended June 30, 2020, the Company realized a net loss of $28.1 million and $61.6 million, respectively. Shares of potentially dilutive securities totaled 25.8 million for the three and six months ended June 30, 2020, including 14.0 million shares associated with a hypothetical conversion of all outstanding shares of the Company’s Class A convertible preferred stock, and an aggregate of 11.8 million shares of common stock issuable upon the exercise of outstanding stock options and the settlement of outstanding restricted stock units. For the three and six months ended June 30, 2019, the Company realized a net loss of $23.5 million and $43.2 million, respectively. Shares of potentially dilutive securities totaled 24.1 million for the three and six months ended June 30, 2019, including 14.1 million shares associated with a hypothetical conversion of all outstanding shares of the Company’s Class A convertible preferred stock, and an aggregate of 9.9 million shares of common stock issuable upon the exercise of outstanding stock options and the settlement of outstanding restricted stock units. Going Concern Assessment Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year from the financial statement issuance date. The Company determined that there are no conditions or events that raise substantial doubt about its ability to continue as a going concern for a period of at least twelve months from the date of issuance of these financial statements. Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, Simplifying the Accounting for Income Taxes, In November 2018, the FASB issued ASU 2018-18, which clarifies the interaction between ASC Topic 808, Collaborative Arrangements Revenue from Contracts with Customers In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement amends the disclosure requirements in 820 by adding, changing, or removing certain disclosures. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019. The Company adopted the standard effective January 1, 2020, and such adoption did not have a material impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments , which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables and available-for-sale debt securities. The standard is effective for fiscal years beginning after December 15, 2019 , with early adoption permitted. The Company adopted the standard effective January 1, 2020 using the modified retrospective approach. Due to the nature of the Company’s investment portfolio, the adoption of the guidance did not have a material effect on the Company’s unaudited condensed consolidated financial statements and no allowance was recorded for expected credit losses.

Collaboration and License Agree

Collaboration and License Agreements6 Months Ended
Jun. 30, 2020
Collaboration And License Agreements Disclosure [Abstract]
Collaboration and License Agreements2.
Collaboration and License Agreements Janssen Collaboration and Option Agreement On April 2, 2020 (the Effective Date), the Company entered into a Collaboration and Option Agreement (the Janssen Agreement) with Janssen Biotech, Inc. (Janssen), part of the Janssen Pharmaceutical Companies of Johnson & Johnson. Additionally, on the Effective Date, the Company entered into a Stock Purchase Agreement (the Stock Purchase Agreement) with Johnson & Johnson Innovation – JJDC, Inc. (JJDC). Upon entering the Janssen Agreement, the Company received an upfront, non-refundable and non-creditable payment of $50.0 million. Under the Janssen Agreement, Janssen and the Company will collaborate to develop iPSC-derived CAR NK and CAR T-cell product candidates for the treatment of cancer. Janssen will contribute proprietary antigen binding domains directed to up to four tumor-associated antigen targets (the Janssen Cancer Targets). The Company will research and construct iPSC-derived CAR NK and CAR T-cell product candidates directed to each of the Janssen Cancer Targets (the Collaboration Candidates) and perform preclinical development of Collaboration Candidates. Upon the Company’s completion of activities sufficient to allow the filing of an Investigational New Drug (IND) application for a Collaboration Candidate, Janssen will have the right to exercise an exclusive option and obtain an exclusive license to the Company’s intellectual property rights for the development and commercialization of such Collaboration Candidate. Upon the exercise of such exclusive option, Janssen will be solely responsible for the worldwide clinical development and commercialization of such Collaboration Candidate, and the Company will be primarily responsible for the manufacture, at Janssen’s cost, of such Collaboration Candidate. For each Collaboration Candidate, upon attaining clinical proof-of-concept, the Company shall have the right to elect to co-commercialize and share equally in the profits and losses in the United States, subject to the Company sharing in certain development costs. Under the Stock Purchase Agreement, the Company sold 1.6 million shares of common stock to JJDC at $31.00 per share, for an aggregate purchase price of approximately $50.0 million, on April 7, 2020. The Company determined that this common stock purchase represented a premium of $9.93 per share, or $16.0 million in aggregate (the Equity Premium), and the remaining $34.0 million was recorded as an issuance of common stock in shareholders’ equity. In addition, under the Stock Purchase Agreement, the Company had the right to require that JJDC purchase an aggregate of $50.0 million in shares of the Company’s common stock in a private placement at the same price per share as that paid by investors in a public offering. In June 2020, in connection with the Company’s June 2020 public offering, the Company exercised this right and JJDC purchased in a private placement 1.8 million shares of the Company’s common stock at a price of $28.31 per share, for aggregate proceeds of $50.0 million. Under the terms of the Janssen Agreement, the Company is entitled to receive full funding for all research, preclinical development and IND-enabling activities performed by the Company for Collaboration Candidates, and is eligible to receive (i) with respect to the first Janssen Cancer Target, payments of up to $898.0 million upon the achievement of specified development, regulatory and sales milestones (the Janssen Milestone Payments) for the first Collaboration Candidate, and up to $460.0 million in Janssen Milestone Payments for each additional Collaboration Candidate, directed to the first Janssen Cancer Target; and (ii) with respect to each of the second, third and fourth Janssen Cancer Targets, up to $706.0 million in Janssen Milestone Payments for each of the first Collaboration Candidates, and up to $340.0 million in Janssen Milestone Payments for each additional Collaboration Candidate, directed to the applicable Janssen Cancer Target, where certain Janssen Milestone Payments under (i) and (ii) are subject to reduction in the event the Company elects to co-commercialize and share equally in the profits and losses in the United States of a respective Collaboration Candidate. The Company is further eligible to receive double-digit tiered royalties ranging up to the mid-teens on net sales of Collaboration Candidates that are commercialized by Janssen under the Janssen Agreement, subject to reduction under certain circumstances. Janssen may terminate the Janssen Agreement with respect to one or more Janssen Cancer Targets, or in its entirety, at any time on or after the second anniversary of the Effective Date, and the Company may terminate the Janssen Agreement with respect to a particular Janssen Cancer Target if a Collaboration Candidate has not been selected for IND-enabling studies for such Janssen Cancer Target within specified time periods under certain conditions. The Janssen Agreement contains customary provisions for termination by either party in the event of a material breach of the Janssen Agreement, subject to cure, by the other party and in the event of any bankruptcy, insolvency or similar events with respect to the other party. The Company applied ASC 808, Collaborative Arrangements and determined the Janssen Agreement is applicable to such guidance. The Company concluded that Janssen represented a customer and applied relevant guidance from ASC 606, Revenue from Contracts with Customers (ASC 606) to evaluate the appropriate accounting for the Janssen Agreement. In accordance with this guidance, the Company identified its potential performance obligations, including its grant of a license to Janssen to certain of its intellectual property subject to certain conditions, its conduct of research and development services, and its participation in various joint oversight committees . The Company determined that its grant of a license to Janssen to certain of its intellectual property subject to certain conditions was not distinct from other performance obligations because such grant is dependent on the conduct and results of the research and development service s. Accordingly, the Company determined that its grant of a license to Janssen and its conduct of research and development services should be accounted for as one combined performance obligation, and that the combined performance obligation is transferred over the expected term of the conduct of the research and development services, which is estimated to be four years. Additionally , the Company determined that participation in the various joint oversight committees did not constitute a performance obligation as the Company’s participation in the various joint oversight committees does not transfer a service . The Company also assessed the effects of any variable elements under the Janssen Agreement. Such assessment evaluated, among other things, the funding to be received by the Company for its conduct of research and development services. Based on its assessment, the Company concluded that the total amount to be received by the Company for its conduct of research and development services is variable and cannot be readily estimated and, therefore, no amounts associated with such services were included in the transaction price. In addition, the Company also assessed its likelihood of receiving (i) preclinical milestones, (ii) various clinical, regulatory and commercial milestone payments, and (iii) royalties on net sales of the Collaboration Candidates. Based on the likelihood of receiving such milestone payments and royalties, no amounts associated with milestones or royalties were included in the transaction price. In accordance with ASC 606, the Company determined that the initial transaction price under the Janssen Agreement equals $66.0 million, consisting of the upfront, non-refundable and non-creditable payment of $50.0 million and the Equity Premium of $16.0 million. The Company concluded that there was not a significant financing component under the Janssen Agreement. The upfront payment of $66.0 million was recorded as deferred revenue and is being recognized as revenue consistent with the Company’s efforts related to the conduct of research and development services, as the research and development services are the primary component of the combined performance obligation. Since the total amount to be received by the Company for its research and development services under the Janssen Agreement could not be readily estimated, revenue associated with the upfront payment will be recognized based on actual headcount utilized as a percentage of total headcount expected to be utilized over the expected term of conduct of the research and development services As a direct result of the Company’s entry into the Janssen Agreement, the Company incurred $13.3 million in sublicense fees to certain of its existing licensors (of which $4.3 million was paid as of June 30, 2020). The $13.3 million in sublicense consideration represents an asset under ASC 340, Other Assets and Deferred Costs The Company recognized revenue of $3.5 million under the Janssen Agreement for both the three and six months ended June 30, 2020. Such revenue comprised $1.7 million associated with research and development services and $1.8 million associated with the upfront fee and Equity Premium for both the three and six months ended June 30, 2020. As of June 30, 2020, aggregate deferred revenue related to the Janssen Agreement was $64.2 million, of which $12.1 million is classified as current. Ono Collaboration and Option Agreement On September 14, 2018, the Company entered into a Collaboration and Option Agreement (the Ono Agreement) with Ono Pharmaceutical Co. Ltd. (Ono) for the joint development and commercialization of two off-the-shelf iPSC-derived chimeric antigen receptor (CAR) T-cell product candidates. The first off-the-shelf, iPSC-derived CAR T-cell candidate (Candidate 1) targets an antigen expressed on certain lymphoblastic leukemias, and the second off-the-shelf, iPSC-derived CAR T-cell candidate (Candidate 2) targets a novel antigen identified by Ono expressed on certain solid tumors (each a Candidate and collectively the Candidates ). Pursuant to the Ono Agreement, the Company and Ono are jointly conducting research and development activities under a joint development plan, with the goal of advancing each Candidate to a pre-defined preclinical milestone. The Company has granted to Ono, during a specified period of time, an option to obtain an exclusive license under certain intellectual property rights to develop and commercialize (a) Candidate 1 in Asia, with the Company retaining rights for development and commercialization in all other territories of the world and (b) Candidate 2 in all territories of the world, with the Company retaining the right to co-develop and co-commercialize Candidate 2 in the United States and Europe under a joint arrangement whereby it is eligible to share at least 50 For each Candidate, the Option will expire upon the earliest of: (a) the achievement of the pre-defined preclinical milestone, (b) termination by Ono of research and development activities for the Candidate and (c) the date that is the later of (i) four years after the Effective Date and (ii) completion of all applicable activities contemplated under the joint development plan (the Option Period). The Company has maintained worldwide rights of manufacture for both Candidates. Under the terms of the Ono Agreement, Ono paid the Company an upfront, non-refundable and non-creditable payment of $10.0 million in connection with entering into the Ono Agreement. Additionally, as consideration for the Company’s conduct of research and preclinical development under a joint development plan, Ono pays the Company annual research and development fees set forth in the annual budget included in the joint development plan, which fees are estimated to be $20.0 million in aggregate over the course of the joint development plan. Further, under the terms of the Ono Agreement, Ono has agreed to pay the Company up to an additional $40.0 million, subject to the achievement of a preclinical milestone (Ono Option Milestone) and the exercise by Ono of the Options (Ono Option Exercise Fees) during the Option Period. Such fees are in addition to the upfront payment and research and development fees. Subject to Ono’s exercise of the Options and to the achievement of certain clinical, regulatory and commercial milestones (Ono Milestones) with respect to each Candidate in specified territories, the Company is eligible to receive an aggregate of up to $285.0 million in milestone payments for Candidate 1 and an aggregate of up to $895.0 million in milestone payments for Candidate 2, with the applicable milestone payments for Candidate 2 for the United States and Europe subject to reduction by 50% if the Company elects to co-develop and co-commercialize Candidate 2 as described above. The Company is also eligible to receive tiered royalties (Ono Royalties) ranging from the mid-single digits to the low-double digits based on annual net sales by Ono of each Candidate in specified territories, with such royalties subject to certain reductions. The Ono Agreement will terminate with respect to a Candidate if Ono does not exercise its Option for a Candidate within the Option Period, or in its entirety if Ono does not exercise any of its Options for the Candidates within their respective Option Periods. In addition, either party may terminate the Ono Agreement in the event of breach, insolvency or patent challenges by the other party; provided, that Ono may terminate the Ono Agreement in its sole discretion (x) on a Candidate-by-Candidate basis at any time after the second anniversary of the effective date of the Ono Agreement or (y) on a Candidate-by-Candidate or country-by-country basis at any time after the expiration of the Option Period, subject to certain limitations. The Ono Agreement will expire on a Candidate-by-Candidate and country-by-country basis upon the expiration of the applicable royalty term, or in its entirety upon the expiration of all applicable payment obligations under the Ono Agreement. The Company applied ASC 808 and determined that the Ono Agreement is applicable to such guidance. The Company concluded that Ono represented a customer and applied relevant guidance from ASC 606 to evaluate the appropriate accounting for the Ono Agreement. In accordance with this guidance, the Company identified its performance obligations, including its grant of a license to Ono to certain of its intellectual property subject to certain conditions, its conduct of research services, and its participation in a joint steering committee. The Company determined that its grant of a license to Ono to certain of its intellectual property subject to certain conditions was not distinct from other performance obligations because such grant is dependent on the conduct and results of the research services. Additionally, the Company determined that its conduct of research services was not distinct from other performance obligations since such conduct is dependent on the guidance of the joint steering committee. Accordingly, the Company determined that all performance obligations should be accounted for as one combined performance obligation, and that the combined performance obligation is transferred over the expected term of the conduct of the research services, which is estimated to be four years. The Company also assessed, in connection with the upfront, non-refundable and non-creditable payment of $10.0 million received in September 2018 and the $5.0 million prepayment of the first-year research and development fees in October 2018 and concluded that there was not a significant financing component to the Ono Agreement. The Company also assessed the effects of any variable elements under the Ono Agreement. Such assessment evaluated, among other things, the likelihood of receiving (i) preclinical milestone and option fees, (ii) various clinical, regulatory and commercial milestone payments, and (iii) royalties on net sales of either product Candidate. Based on its assessment, the Company concluded that, based on the likelihood of these variable components occurring, there was not a significant variable element included in the transaction price. Accordingly, the Company has not assigned a transaction price to any Ono Option Milestone, Ono Milestones or Ono Option Exercise Fees given the substantial uncertainty related to their achievement and has not assigned a transaction price to any Ono Royalties. In accordance with ASC 606, the Company determined that the initial transaction price under the Ono Agreement equals $30.0 million, consisting of the upfront, non-refundable and non-creditable payment of $10.0 million and the aggregate estimated research and development fees of $20.0 million. The upfront payment of $10.0 million was recorded as deferred revenue and is being recognized as revenue over time in conjunction with the Company’s conduct of research services as the research services are the primary component of the combined performance obligations. Revenue associated with the upfront payment will be recognized based on actual costs incurred as a percentage of the estimated total costs expected to be incurred over the expected term of conduct of the research services. The Company recorded the $5.0 million prepayment of the first-year research and development fees as deferred revenue, and such fees were recognized as revenue as the research services were delivered. The Company has not assigned a transaction price to any Ono Option Milestone, Ono Milestones or Ono Option Exercise Fees given the substantial uncertainty related to their achievement and has not assigned a transaction price to any Ono Royalties. As a direct result of the Company’s entry into the Ono Agreement, the Company incurred an aggregate of $2.0 million in sublicense consideration to existing licensors of the Company. The $2.0 million in sublicense consideration represents an asset under ASC 340, Other Assets and Deferred Costs The Company recognized revenue of $2.0 million and $4.5 million under the Ono Agreement for the three and six months ended June 30, 2020, respectively. Such revenue comprised $1.3 million associated with research services and $0.7 million associated with the upfront payment for the three months ended June 30, 2020, and $3.0 million associated with research services and $1.5 million associated with the upfront payment for the six months ended June 30, 2020. During the three and six months ended June 30, 2019, t he Company recognized revenue of $2.5 million and $4.1 million under the Ono Agreement, respectively. Such revenue comprised $1.7 million associated with research services and $0.8 million associated with the upfront payment for the three months ended June 30, 2019, and $2.7 million associated with research services and $1.4 million associated with the upfront payment for the six months ended June 30, 2019. As of June 30, 2020, the Company has received $9.5 million in aggregate research and development fees from Ono. Juno Collaboration and License Agreement On May 4, 2015, the Company entered into a strategic research collaboration and license agreement (the Juno Agreement) with Juno Therapeutics, Inc. (Juno) to screen for and identify small molecules that enhance the therapeutic properties of Juno’s genetically-engineered T-cell immunotherapies. The four-year No revenue was recognized under the Juno Agreement for the three and six months ended June 30, 2020. During the three and six months ended June 30, 2019 was $0.4 million and $1.4 million, respectively, under the Juno Agreement. No additional revenue is expected to be recognized under the Juno Agreement in future periods.

California Institute for Regene

California Institute for Regenerative Medicine Award6 Months Ended
Jun. 30, 2020
Award From California Institute For Regenerative Medicine Abstract
California Institute for Regenerative Medicine Award3.
California Institute for Regenerative Medicine Award On April 5, 2018, the Company executed an award agreement with the California Institute for Regenerative Medicine (CIRM) pursuant to which CIRM awarded the Company $4.0 million to advance the Company’s FT516 product candidate into a first-in-human clinical trial for the treatment of subjects with advanced solid tumors, including in combination with monoclonal antibody therapy (the Award). Pursuant to the terms of the Award, the Company is eligible to receive five disbursements in varying amounts totaling $4.0 million, with one disbursement receivable upon the execution of the Award, and four disbursements receivable upon the completion of certain milestones throughout the project period. The Award is subject to certain co-funding requirements by the Company, and the Company is required to provide CIRM progress and financial update reports under the Award. Pursuant to the terms of the Award, the Company, in its sole discretion, has the option to treat the Award either as a loan or as a grant. In the event the Company elects to treat the Award as a loan, the Company will be obligated to repay (i) 60%, (ii) 80%, (iii) 100% or (iv) 100% plus interest at 7% plus LIBOR, of the total Award to CIRM, where such repayment rate is dependent upon the phase of clinical development of FT516 at the time of the Company’s election. If the Company does not elect to treat the Award as a loan within 10 years of the date of the Award, the Award will be considered a grant and the Company will be obligated to pay to CIRM a royalty on commercial sales of FT516 until such royalty payments equal nine times the total amount awarded to the Company under the Award. Since the Company may, at its election, repay some or all of the Award, the Company accounts for the Award as a liability until the time of election. As of June 30, 2020, the Company has received aggregate disbursements under the Award in the amount of $4.0 million. The aggregate amount received is recorded as a CIRM Liability on the accompanying unaudited condensed consolidated balance sheets and classified as current or non-current based on the potential amount payable within twelve months of the current balance sheet.

Investments

Investments6 Months Ended
Jun. 30, 2020
Investments [Abstract]
Investments4.
Investments The Company invests portions of excess cash in United States treasuries and corporate debt securities with maturities ranging from three to eighteen months from the purchase date. These securities are classified as short-term and long-term investments in the accompanying unaudited condensed consolidated balance sheets based on each security’s contractual maturity date and are accounted for as available-for-sale securities. The following table summarizes the Company’s investments accounted for as available-for-sale securities as of June 30, 2020 and December 31, 2019 (in thousands):
Maturity (in years)
Amortized Cost
Unrealized Losses
Unrealized Gains
Estimated Fair Value
June 30, 2020
Classified as current assets:
U.S. Treasury debt securities
1 or less
$
34,349
$

$
171
$
34,520
Corporate debt securities
1 or less
65,363

452
65,815
Total short-term investments
$
99,712
$

$
623
$
100,335
December 31, 2019
Classified as current assets:
U.S. Treasury debt securities
1 or less
$
50,445
$
(4
)
$
16
$
50,457
Corporate debt securities
1 or less
71,171
(24
)
9
71,156
Total short-term investments
$
121,616
$
(28
)
$
25
$
121,613
Classified as non-current assets:
U.S. Treasury debt securities
Greater than 1
$
9,841
$

$
5
$
9,846
Corporate debt securities
Greater than 1
29,572
(1
)
23
29,594
Total long-term investments
$
39,413
$
(1
)
$
28
$
39,440
The Company reviews its investment holdings at the end of each reporting period and evaluates any unrealized losses using the expected credit loss model to determine if the unrealized loss is a result of a credit loss or other factors. The Company also evaluates its investment holdings for impairment using a variety of factors including the Company’s intent to sell the underlying securities prior to maturity and whether it is more likely than not that the Company would be required to sell the securities before the recovery of their amortized basis. During each of the three and six months ended June 30, 2020 and 2019, the Company did not recognize any impairment or realized gains or losses on sales of investments, and the Company did not record an allowance for, or recognize, any expected credit losses.

Fair Value Measurements

Fair Value Measurements6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]
Fair Value Measurements5.
Fair Value Measurements The carrying amounts of accounts payable and accrued liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments. Based on the borrowing rates available to the Company for loans with similar terms, which is considered a Level 2 input as described below, the Company believes that the fair value of long-term debt approximated its carrying value during the periods the debt was outstanding. The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Financial assets measured at fair value on a recurring basis consist of the Company’s cash equivalents and investments. Cash equivalents consisted of money market funds and investments consisted of U nited States t reasuries and corporate debt securities . The following table presents the Company’s assets which were measured at fair value on a recurring basis as of June 30 , 2020 and December 31, 201 9 (in thousands):
Fair Value Measurements at Reporting Date Using
Total
Quoted Prices in Active Markets for Identical Assets (Level 1)
Significant Other Observable Inputs (Level 2)
Significant Unobservable Inputs (Level 3)
As of June 30, 2020:
Cash equivalents
Money market funds
$
433,074
$
433,074
$

$

Investments
U.S. Treasury debt securities
34,520
34,520


Corporate debt securities
65,815

65,815

Total assets measured at fair value on a recurring basis
$
533,409
$
467,594
$
65,815
$

As of December 31, 2019
Cash equivalents
Money market funds
$
84,814
$
84,814

$

Investments
U.S. Treasury debt securities
60,303
60,303


Corporate debt securities
100,750

100,750

Total assets measured at fair value on a recurring basis
$
245,867
$
145,117
$
100,750
$

The Company obtains pricing information from quoted market prices from its investment manager and generally determines the fair value of investment securities using standard observable inputs, including reported trades, broker/dealer quotes, and bids and/or offers. None of the Company’s non-financial assets or liabilities are recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented. As of June 30, 2020, and December 31, 2019, the Company had no material financial liabilities measured at fair value on a recurring basis.

Accrued Expenses and Long-Term

Accrued Expenses and Long-Term Debt6 Months Ended
Jun. 30, 2020
Accrued Expenses And Long Term Debt Disclosure [Abstract]
Accrued Expenses and Long-Term Debt6.
Accrued Expenses and Long-Term Debt Accrued Expenses Current accrued expenses consist of the following (in thousands):
June 30, 2020
December 31, 2019
Accrued payroll and other employee benefits
$
4,371
$
5,329
Accrued clinical trial related costs
4,098
5,976
Accrued other
3,149
3,392
Total current accrued expenses
$
11,618
$
14,697
Long- T erm D ebt Silicon Valley Bank Debt In 2009, the Company entered into a Loan and Security Agreement with Silicon Valley Bank, which was collateralized by substantially all of the Company’s assets excluding certain intellectual property. This Loan and Security Agreement was subsequently amended in 2014 and in 2017. On November 13, 2019, the Company repaid in full all outstanding obligations under the Loan and Security Agreement, as amended. The Company used cash on hand in the amount of $14.2 million for the repayment of such obligations, including the repayment of $13.0 million in principal and $1.2 million associated with the final fee and outstanding interest. For the three and six months ended June 30, 2019, the Company recorded $0.4 million and $0.8 million, respectively, in debt interest expense.

Leases

Leases6 Months Ended
Jun. 30, 2020
Leases [Abstract]
Leases7.
Leases The Company has lease agreements for office, laboratory and manufacturing spaces that are classified as operating leases on the unaudited condensed consolidated balance sheets. These leases have terms varying from one to approximately sixteen years, with renewal options of up to ten years, as well as early termination options. Extension and termination options are included in the total lease term when the Company is reasonably certain to exercise them. The leases are subject to additional variable charges, including common area maintenance, property taxes, property insurance and other variable costs. Given the variable nature of such costs, they are recognized as expense as incurred. Additionally, some of the Company’s leases are subject to certain fixed fees which the Company has determined to be non-lease components. The Company has elected to combine and account for lease and non-lease components as a single lease component for purposes of determining the total future lease payments. In January 2020, the Company entered into a lease agreement for certain office, laboratory and manufacturing spaces (the Premises), and such lease is accounted for as an operating lease. The Premises are located in San Diego, California and the Company intends to move its corporate headquarters to the Premises in the middle of 2021. Lease payments shall commence, subject to certain conditions, in May 2021 (the Rent Commencement Date) and the lease has a lease term of 15 years starting from the Rent Commencement Date. The Company has the option to extend the lease for two successive five-year periods. The Company also has a one-time option to terminate the lease after 10 years from the Rent Commencement Date, subject to payment of a $30.0 million early termination fee. The landlord of the Premises is obligated to contribute an aggregate of up to $29.8 million toward tenant improvements of the Premises. As of June 30, 2020, the Company had utilized $4.9 million associated with the tenant improvements allowance and expects the remainder of the tenant improvements to be utilized within the next twelve months. In connection with the lease, the Company maintains a letter of credit for the benefit of the landlord in an amount equal to $15.0 million, which amount is subject to reduction over time. As of June 30, 2020, future undiscounted minimum contractual payments under the Company’s operating leases were $195.1 million, which will be paid over a remaining weighted-average lease term of 13.4 years. The weighted-average discount rate for the operating lease liabilities was 8.4%, which was the Company's incremental borrowing rate at lease commencement, as the discount rates implicit in the leases could not be readily determined. The components of lease expense were as follows:
Three Months Ended June 30,
Six Months Ended June 30,
2020
2019
2020
2019
Straight-line lease expense
$
2,972
$
945
$
5,910
$
1,890
Variable lease expense
415
567
1,025
1,154
Total operating lease expense
$
3,387
$
1,512
$
6,935
$
3,044
Total lease expense associated with short-term leases was $0.2 million for both the three months ended June 30, 2020 and 2019. Total lease expense associated with short-term leases for the six months ended June 30, 2020 and 2019 was $0.7 million and $0.2 million, respectively. Future minimum lease payments under the Company’s operating leases as of June 30, 2020 are as follows (in thousands):
Operating Lease Payments
Remaining in 2020
$
2,159
2021
9,741
2022
12,610
2023
12,988
2024
13,378
2025
13,779
Thereafter
130,446
Total undiscounted lease payments
$
195,101
Less: imputed interest
(89,111
)
Less: amounts associated with tenant improvement allowance not yet utilized
(24,952
)
Total lease liability
$
81,038

Convertible Preferred Stock and

Convertible Preferred Stock and Stockholders' Equity6 Months Ended
Jun. 30, 2020
Convertible Preferred Stock And Stockholders Deficit Disclosure [Abstract]
Convertible Preferred Stock and Stockholders’ Equity8 .
Convertible Preferred Stock and Stockholders’ Equity Convertible Preferred Stock In November 2016, the Company completed a private placement of stock in which investors, including investors affiliated with the directors and officers of the Company The Class A Preferred are non-voting shares and have a stated par value of $0.001 per share and are convertible into five shares of the Company’s common stock at a conversion price of $2.66 per share, which was the fair value of the Company’s common stock on the date of issuance. Holders of the Class A Preferred have the same dividend rights as holders of the Company’s common stock. Additionally, the liquidation preferences of the Class A Preferred are pari passu During the year ended December 31, 2019, 25,000 shares of the Class A Preferred were converted into 125,000 shares of the Company’s common stock. Stock Options and Restricted Stock Units Stock option activity under all equity and stock option plans is summarized as follows:
Number of Options
Weighted- Average Price
Balance at December 31, 2019
9,327,742
$
9.67
Granted
1,796,588
23.03
Exercised
(499,042
)
7.04
Cancelled
(166,100
)
16.03
Balance at June 30, 2020
10,459,188
$
11.99
Restricted stock unit activity under all equity and stock option plans is summarized as follows:
Number of Restricted Stock Units
Weighted- Average Grant Date Fair Value per Share
Balance at December 31, 2019
520,000
$
16.41
Granted
979,323
21.95
Vested
(85,000
)
16.34
Cancelled
(33,706
)
21.94
Balance at June 30, 2020
1,380,617
$
20.21
The allocation of stock-based compensation for all stock awards is as follows (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2020
2019
2020
2019
Research and development
$
4,360
$
2,479
$
8,613
$
4,662
General and administrative
2,876
1,907
5,536
3,592
Total
$
7,236
$
4,386
$
14,149
$
8,254
As of June 30, 2020, the unrecognized compensation cost related to outstanding options was $54.0 million and is expected to be recognized as expense over a weighted-average period of approximately 2.8 years. As of June 30, 2020, the unrecognized compensation cost related to restricted stock units was $23.3 million which is expected to be recognized as expense over a weighted-average period of approximately 3.2 years. The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee and nonemployee stock option grants were as follows:
Six Months Ended June 30,
2020
2019
Risk-free interest rate
1.4
%
2.5
%
Expected volatility
77.2
%
79.8
%
Expected term (in years)
5.6
6.1
Expected dividend yield
0.0
%
0.0
% Reconciliation of Consolidated Stockholders’ Equity Accounts The following table summarizes the Company’s changes in stockholders’ equity accounts for the three and six months ended June 30, 2020 (in thousands, except share data):
Convertible Preferred Stock
Common Stock
Additional Paid-in
Accumulated Other Comprehensive
Accumulated
Total Stockholders'
Shares
Amount
Shares
Amount
Capital
Gain
Deficit
Equity
Balance at December 31, 2019
2,794,549
$
3
75,730,260
$
76
$
628,200
$
22
$
(383,545
)
$
244,756
Exercise of stock options, net of issuance costs


188,315

949


949
Issuance of common stock upon vesting of restricted stock units


77,500





Stock-based compensation




6,913


6,913
Unrealized gain on investments





120

120
Net loss






(33,520
)
(33,520
)
Balance at March 31, 2020
2,794,549
$
3
75,996,075
$
76
$
636,062
$
142
$
(417,065
)
$
219,218
Exercise of stock options, net of issuance costs


310,727

2,548


2,548
Issuance of common stock upon vesting of restricted stock units


7,500





Stock-based compensation




7,236


7,236
Public offering of common stock, net of issuance costs


7,108,796
7
188,784


188,791
Private placement of common stock, net of issuance costs


1,766,160
2
49,973


49,975
Issuance of stock to collaboration partner, net of issuance costs


1,612,904
2
33,932


33,934
Unrealized gain on investments





481

481
Net loss






(28,072
)
(28,072
)
Balance at June 30, 2020
2,794,549
$
3
86,802,162
$
87
$
918,535
$
623
$
(445,137
)
$
474,111
The following table summarizes the Company’s changes in stockholders’ equity accounts for the three and six months ended June 30, 2019 (in thousands, except share data):
Convertible Preferred Stock
Common Stock
Additional Paid-in
Accumulated Other Comprehensive
Accumulated
Total Stockholders'
Shares
Amount
Shares
Amount
Capital
Gain (Loss)
Deficit
Equity
Balance at December 31, 2018
2,819,549
$
3
64,693,681
$
65
$
445,799
$
(2
)
$
(285,396
)
$
160,469
Exercise of stock options, net of issuance costs


420,920

1,258


1,258
Issuance of common stock upon cashless warrant exercise


1,245





Stock-based compensation




3,868


3,868
Unrealized gain on investments





2

2
Net loss






(19,760
)
(19,760
)
Balance at March 31, 2019
2,819,549
$
3
65,115,846
$
65
$
450,925
$

$
(305,156
)
$
145,837
Exercise of stock options, net of issuance costs


194,045

688


688
Stock-based compensation




4,386


4,386
Unrealized gain on investments





93

93
Net loss






(23,478
)
(23,478
)
Balance at June 30, 2019
2,819,549
$
3
65,309,891
$
65
$
455,999
$
93
$
(328,634
)
$
127,526

Organization and Summary of S_2

Organization and Summary of Significant Accounting Policies (Policies)6 Months Ended
Jun. 30, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Public Equity OfferingPublic Equity Offerings In June 2020, the Company completed a public offering of common stock in which investors, certain of which are affiliated with a director of the Company, purchased 7.1 million shares of the Company’s common stock at a price of $28.31 per share under a shelf registration statement. Gross proceeds from the offering were $201.3 million, and, after giving effect to $12.5 million of costs related to the offering (of which $0.3 million was unpaid as of June 30, 2020), net proceeds were $188.8 million. In September 2019, the Company completed a public offering of common stock in which investors, certain of which are affiliated with a director of the Company, purchased 9.9 million shares of the Company’s common stock at a price of $17.50 per share under a shelf registration statement. Gross proceeds from the offering were $173.1 million, and, after giving effect to $10.7 million of costs related to the offering, net proceeds were $162.4 million.
Private Placements of Common StockPrivate Placements In June 2020, in connection with the June 2020 public offering of common stock, the Company exercised its right to cause an existing shareholder, Johnson & Johnson Innovation-JJDC, Inc (JJDC), to purchase $50.0 million of the Company’s common stock, and JJDC purchased in a private placement 1.8 million shares of the Company’s common stock at a price of $28.31 per share, for aggregate proceeds of $50.0 million. In April 2020, in connection with the Janssen Agreement described in Note 2, JJDC purchased in a private placement 1.6 million shares of the Company’s common stock at a price of $31.00 per share, for aggregate proceeds of $50.0 million. The shares of common stock purchased in the private placements were not subject to any underwriting discounts or commissions.
Use of EstimatesUse of Estimates The Company’s unaudited condensed consolidated financial statements are prepared in accordance with United States generally accepted accounting principles (U.S. GAAP). The preparation of the Company’s unaudited condensed consolidated financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in the Company’s unaudited condensed consolidated financial statements and accompanying notes. The most significant estimates and assumptions in the Company’s unaudited condensed consolidated financial statements relate to its contracts containing leases, accrued expenses and the estimated total costs expected to be incurred under the Company’s collaboration agreements. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions.
Risks and UncertaintiesRisks and Uncertainties Due to the global outbreak of SARS-CoV-2, the novel strain of coronavirus that causes Coronavirus disease 19 (COVID-19), the Company experienced impacts on certain aspects of its business, including its clinical trial and research and development activities, during the six months ended June 30, 2020. For example, certain of the Company’s research and development activities have been delayed or disrupted as a result of measures the Company implemented in response to governmental “stay at home” orders and in the interests of public health and safety, and the Company has experienced delays or disruptions in the initiation and conduct of its clinical trials as a result of prioritization of hospital and other medical resources toward pandemic efforts, policies and procedures implemented at clinical sites with respect to the conduct of clinical trials, and other precautionary measures taken in treating patients or in practicing medicine in response to the COVID-19 pandemic. The scope and duration of these delays and disruptions, and the ultimate impacts of COVID-19 on the Company’s operations, are currently unknown. The Company is continuing to actively monitor the situation and may take further precautionary and preemptive actions as may be required by federal, state or local authorities or that it determines are in the best interests of public health and safety and that of the Company’s patient community, employees, partners, and stockholders. The Company cannot predict the effects that such actions, or the impact of COVID-19 on global business operations and economic conditions, may have on its business, strategy, collaborations, or financial and operating results.
Principles of ConsolidationPrinciples of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries, Fate Therapeutics Ltd., incorporated in the United Kingdom, Fate Therapeutics, B.V., incorporated in the Netherlands and Tfinity Therapeutics, Inc., incorporated in the United States. To date, the aggregate operations of these subsidiaries have not been significant and all intercompany transactions and balances have been eliminated in consolidation.
Cash, Cash Equivalents and Restricted CashCash, Cash Equivalents and Restricted Cash Cash and cash equivalents include cash in readily available checking and savings accounts, money market accounts and money market funds. The Company considers all highly liquid investments with an original maturity of three months or less from the date of purchase to be cash equivalents. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same such amount shown in the unaudited condensed consolidated statements of cash flows as of June 30, 2020 and 2019 (in thousands):
Six Months Ended June 30,
2020
2019
Cash and cash equivalents
$
433,074
$
71,435
Restricted cash
15,227
227
Total cash, cash equivalents, and restricted cash shown in the unaudited condensed consolidated statement of cash flows
$
448,301
$
71,662
During the six months ended June 30, 2020, the Company entered into a lease for a facility in San Diego that it intends to use as its new corporate headquarters. In lieu of a security deposit, Silicon Valley Bank issued a $15.0 million letter of credit on the Company’s behalf, which letter of credit is secured by a deposit of equal amount
InvestmentsInvestments Investments are accounted for as available-for-sale securities and are carried at fair value on the unaudited condensed consolidated balance sheets. Upon initial recognition of the investment and at each reporting period, the Company evaluates whether any unrealized losses on investments are attributable to a credit loss or other factors. Any unrealized losses attributable to credit loss are recorded through an allowance for credit losses, limited to the amount by which the fair value is below amortized cost, with the offsetting amount recorded in other income or expense in the unaudited condensed consolidated statement of operations and comprehensive loss. Unrealized losses not attributable to an expected credit loss and unrealized gains on investments are recorded in other comprehensive income (loss) on the condensed consolidated statements of operations and comprehensive loss. Realized gains and losses, if any, on investments classified as available-for-sale securities are included in other income or expense. The amortized cost of investments classified as available-for-sale debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion are included in interest income. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in interest income .
Unaudited Interim Financial InformationUnaudited Interim Financial Information The accompanying interim condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and following the requirements of the United States Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required can be condensed or omitted. The interim unaudited condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and accompanying notes for the fiscal year ended December 31, 2019, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed by the Company with the SEC on March 2, 2020. In management’s opinion, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position and its results of operations and comprehensive loss and its cash flows for the periods presented. The results for the three and six months ended June 30, 2020 are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period.
Revenue RecognitionRevenue Recognition The Company recognizes revenue in a manner that depicts the transfer of control of a product or a service to a customer and reflects the amount of the consideration the Company is entitled to receive in exchange for such product or service. In doing so, the Company follows a five-step approach: (i) identify the contract with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) the customer obtains control of the product or service. A customer is a party that has entered into a contract with the Company, where the purpose of the contract is to obtain a product or a service that is an output of the Company’s ordinary activities in exchange for consideration. To be considered a contract, (i) the contract must be approved (in writing, orally, or in accordance with other customary business practices), (ii) each party’s rights regarding the product product product A performance obligation is defined as a promise to transfer a product The transaction price is the amount of consideration the Company is entitled to receive in exchange for the transfer of control of a product or a service to If a contract has multiple performance obligations, the Company allocates the transaction price to each distinct performance obligation in an amount that reflects the consideration the Company is entitled to receive in exchange for satisfying each distinct performance obligation. For each distinct performance obligation, revenue is recognized when (or as) the Company transfers control of the product or the service applicable to such performance obligation. In those instances where the Company first receives consideration in advance of satisfying its performance obligation, the Company classifies such consideration as deferred revenue until (or as) the Company satisfies such performance obligation. In those instances where the Company first satisfies its performance obligation prior to its receipt of consideration, the consideration is recorded as accounts receivable. The Company expenses incremental costs of obtaining and fulfilling a contract as and when incurred if the expected amortization period of the asset that would be recognized is one year or less, or if the amount of the asset is immaterial. Otherwise, such costs are capitalized as contract assets if they are incremental to the contract and amortized to expense proportionate to revenue recognition of the underlying contract.
LeasesLeases The Company determines if a contract contains a lease at the inception of the contract. The Company currently has leases related to its facilities leased for office and laboratory space, which are classified as operating leases. These leases result in operating right-of-use (ROU) assets, current operating lease liabilities, and non-current operating lease liabilities in the unaudited condensed consolidated balance sheets. The Company does not have any financing leases. Leases with a term of 12 months or less are considered short-term and a ROU asset and lease obligation are not recognized. Payments associated with short-term leases are expensed on a straight-line basis over the lease term. Lease liabilities represent an obligation to make lease payments arising from the lease and ROU assets represent the right to use the underlying asset identified in the lease for the lease term. Lease liabilities are measured at the present value of the lease payments not yet paid discounted using the discount rate for the lease established at the lease commencement date. To determine the present value, the implicit rate is used when readily determinable. For those leases where the implicit rate is not provided, the Company determines an incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. ROU assets are measured as the present value of the lease payments and also include any prepaid lease payments made and any other indirect costs incurred, and exclude any lease incentives received. Lease terms may include the impact of options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term. The Company aggregates all lease and non-lease components for each class of underlying assets into a single lease component.
Stock-Based CompensationStock-Based Compensation Stock-based compensation expense represents the cost of the grant date fair value of employee stock option and restricted stock unit grants recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis. For stock option grants for which vesting is subject to performance-based milestones, the expense is recorded over the remaining service period after the point when the achievement of the milestone is probable or the performance condition has been achieved. For stock option grants for which vesting is subject to both performance-based milestones and market conditions, expense is recorded over the derived service period after the point when the achievement of the performance-based milestone is probable or the performance condition has been achieved. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model, with the exception of option grants for which vesting is subject to both performance-based milestones and market conditions, which are valued using a lattice-based model. The fair value of restricted stock units is based on the closing price of the Company’s common stock as reported on The Nasdaq Global Market on the date of grant. The Company recognizes forfeitures for all awards as such forfeitures occur.
Convertible Preferred StockConvertible Preferred Stock The Company applies the relevant accounting standards to distinguish liabilities from equity when assessing the classification and measurement of preferred stock. Preferred shares subject to mandatory redemptions are considered liabilities and measured at fair value. Conditionally redeemable preferred shares are considered temporary equity. All other preferred shares are considered as stockholders’ equity. The Company applies the relevant accounting standards for derivatives and hedging (in addition to distinguishing liabilities from equity) when accounting for hybrid contracts that contain conversion options. Conversion options must be bifurcated from the host instruments and accounted for as free-standing financial instruments according to certain criteria. These criteria include circumstances when (i) the economic characteristics and risks of the embedded derivative instruments are not clearly and closely related to the economic characteristics and risks of the host contract, (ii) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable accounting principles with changes in fair value reported in earnings as they occurred, and (iii) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The derivative is subsequently measured at fair value at each reporting date, with the changes in fair value reported in earnings.
Comprehensive LossComprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non‑owner sources. Other comprehensive loss includes unrealized gains and losses, other than losses attributable to a credit loss which are included in other income and expense, on investments classified as available-for-sale securities, which was the only difference between net loss and comprehensive loss for the applicable periods.
Net Loss per Common ShareNet Loss per Common Share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period, without consideration for common stock equivalents. Dilutive common stock equivalents for the periods presented include convertible preferred stock, warrants for the purchase of common stock, and common stock options and restricted stock units outstanding under the Company’s stock option and incentive plans. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. For the three and six months ended June 30, 2020, the Company realized a net loss of $28.1 million and $61.6 million, respectively. Shares of potentially dilutive securities totaled 25.8 million for the three and six months ended June 30, 2020, including 14.0 million shares associated with a hypothetical conversion of all outstanding shares of the Company’s Class A convertible preferred stock, and an aggregate of 11.8 million shares of common stock issuable upon the exercise of outstanding stock options and the settlement of outstanding restricted stock units. For the three and six months ended June 30, 2019, the Company realized a net loss of $23.5 million and $43.2 million, respectively. Shares of potentially dilutive securities totaled 24.1 million for the three and six months ended June 30, 2019, including 14.1 million shares associated with a hypothetical conversion of all outstanding shares of the Company’s Class A convertible preferred stock, and an aggregate of 9.9 million shares of common stock issuable upon the exercise of outstanding stock options and the settlement of outstanding restricted stock units.
Going Concern AssessmentGoing Concern Assessment Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year from the financial statement issuance date. The Company determined that there are no conditions or events that raise substantial doubt about its ability to continue as a going concern for a period of at least twelve months from the date of issuance of these financial statements.
Recently Adopted Accounting PronouncementsRecently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, Simplifying the Accounting for Income Taxes, In November 2018, the FASB issued ASU 2018-18, which clarifies the interaction between ASC Topic 808, Collaborative Arrangements Revenue from Contracts with Customers In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement amends the disclosure requirements in 820 by adding, changing, or removing certain disclosures. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019. The Company adopted the standard effective January 1, 2020, and such adoption did not have a material impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments , which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables and available-for-sale debt securities. The standard is effective for fiscal years beginning after December 15, 2019 , with early adoption permitted. The Company adopted the standard effective January 1, 2020 using the modified retrospective approach. Due to the nature of the Company’s investment portfolio, the adoption of the guidance did not have a material effect on the Company’s unaudited condensed consolidated financial statements and no allowance was recorded for expected credit losses.

Organization and Summary of S_3

Organization and Summary of Significant Accounting Policies (Tables)6 Months Ended
Jun. 30, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Reconciliation of Cash, Cash Equivalents, and Restricted CashThe following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same such amount shown in the unaudited condensed consolidated statements of cash flows as of June 30, 2020 and 2019 (in thousands):
Six Months Ended June 30,
2020
2019
Cash and cash equivalents
$
433,074
$
71,435
Restricted cash
15,227
227
Total cash, cash equivalents, and restricted cash shown in the unaudited condensed consolidated statement of cash flows
$
448,301
$
71,662

Investments (Tables)

Investments (Tables)6 Months Ended
Jun. 30, 2020
Investments [Abstract]
Summary of InvestmentsThe following table summarizes the Company’s investments accounted for as available-for-sale securities as of June 30, 2020 and December 31, 2019 (in thousands):
Maturity (in years)
Amortized Cost
Unrealized Losses
Unrealized Gains
Estimated Fair Value
June 30, 2020
Classified as current assets:
U.S. Treasury debt securities
1 or less
$
34,349
$

$
171
$
34,520
Corporate debt securities
1 or less
65,363

452
65,815
Total short-term investments
$
99,712
$

$
623
$
100,335
December 31, 2019
Classified as current assets:
U.S. Treasury debt securities
1 or less
$
50,445
$
(4
)
$
16
$
50,457
Corporate debt securities
1 or less
71,171
(24
)
9
71,156
Total short-term investments
$
121,616
$
(28
)
$
25
$
121,613
Classified as non-current assets:
U.S. Treasury debt securities
Greater than 1
$
9,841
$

$
5
$
9,846
Corporate debt securities
Greater than 1
29,572
(1
)
23
29,594
Total long-term investments
$
39,413
$
(1
)
$
28
$
39,440

Fair Value Measurements (Tables

Fair Value Measurements (Tables)6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]
Schedule of Assets Measured at Fair Value on Recurring BasisThe following table presents the Company’s assets which were measured at fair value on a recurring basis as of June 30 , 2020 and December 31, 201 9 (in thousands):
Fair Value Measurements at Reporting Date Using
Total
Quoted Prices in Active Markets for Identical Assets (Level 1)
Significant Other Observable Inputs (Level 2)
Significant Unobservable Inputs (Level 3)
As of June 30, 2020:
Cash equivalents
Money market funds
$
433,074
$
433,074
$

$

Investments
U.S. Treasury debt securities
34,520
34,520


Corporate debt securities
65,815

65,815

Total assets measured at fair value on a recurring basis
$
533,409
$
467,594
$
65,815
$

As of December 31, 2019
Cash equivalents
Money market funds
$
84,814
$
84,814

$

Investments
U.S. Treasury debt securities
60,303
60,303


Corporate debt securities
100,750

100,750

Total assets measured at fair value on a recurring basis
$
245,867
$
145,117
$
100,750
$

Accrued Expenses and Long-Ter_2

Accrued Expenses and Long-Term Debt (Tables)6 Months Ended
Jun. 30, 2020
Accrued Expenses And Long Term Debt Disclosure [Abstract]
Schedule of accrued expensesCurrent accrued expenses consist of the following (in thousands):
June 30, 2020
December 31, 2019
Accrued payroll and other employee benefits
$
4,371
$
5,329
Accrued clinical trial related costs
4,098
5,976
Accrued other
3,149
3,392
Total current accrued expenses
$
11,618
$
14,697

Leases (Tables)

Leases (Tables)6 Months Ended
Jun. 30, 2020
Leases [Abstract]
Schedule of Components of Lease ExpenseThe components of lease expense were as follows:
Three Months Ended June 30,
Six Months Ended June 30,
2020
2019
2020
2019
Straight-line lease expense
$
2,972
$
945
$
5,910
$
1,890
Variable lease expense
415
567
1,025
1,154
Total operating lease expense
$
3,387
$
1,512
$
6,935
$
3,044
Schedule of Future Minimum Payments Under Non-cancelable Operating LeasesFuture minimum lease payments under the Company’s operating leases as of June 30, 2020 are as follows (in thousands):
Operating Lease Payments
Remaining in 2020
$
2,159
2021
9,741
2022
12,610
2023
12,988
2024
13,378
2025
13,779
Thereafter
130,446
Total undiscounted lease payments
$
195,101
Less: imputed interest
(89,111
)
Less: amounts associated with tenant improvement allowance not yet utilized
(24,952
)
Total lease liability
$
81,038

Convertible Preferred Stock a_2

Convertible Preferred Stock and Stockholders' Equity (Tables)6 Months Ended
Jun. 30, 2020
Convertible Preferred Stock And Stockholders Equity Disclosure [Abstract]
Summary of stock option activity under the PlanStock option activity under all equity and stock option plans is summarized as follows:
Number of Options
Weighted- Average Price
Balance at December 31, 2019
9,327,742
$
9.67
Granted
1,796,588
23.03
Exercised
(499,042
)
7.04
Cancelled
(166,100
)
16.03
Balance at June 30, 2020
10,459,188
$
11.99
Summary of restricted stock unit activity under the PlanRestricted stock unit activity under all equity and stock option plans is summarized as follows:
Number of Restricted Stock Units
Weighted- Average Grant Date Fair Value per Share
Balance at December 31, 2019
520,000
$
16.41
Granted
979,323
21.95
Vested
(85,000
)
16.34
Cancelled
(33,706
)
21.94
Balance at June 30, 2020
1,380,617
$
20.21
Schedule of allocation of stock-based compensation for all stock awardsThe allocation of stock-based compensation for all stock awards is as follows (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2020
2019
2020
2019
Research and development
$
4,360
$
2,479
$
8,613
$
4,662
General and administrative
2,876
1,907
5,536
3,592
Total
$
7,236
$
4,386
$
14,149
$
8,254
Schedule of weighted-average assumptions used to determine the fair value of employee and nonemployee stock option grantsThe weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the employee and nonemployee stock option grants were as follows:
Six Months Ended June 30,
2020
2019
Risk-free interest rate
1.4
%
2.5
%
Expected volatility
77.2
%
79.8
%
Expected term (in years)
5.6
6.1
Expected dividend yield
0.0
%
0.0
%
Summary of changes in stockholders' equityThe following table summarizes the Company’s changes in stockholders’ equity accounts for the three and six months ended June 30, 2020 (in thousands, except share data):
Convertible Preferred Stock
Common Stock
Additional Paid-in
Accumulated Other Comprehensive
Accumulated
Total Stockholders'
Shares
Amount
Shares
Amount
Capital
Gain
Deficit
Equity
Balance at December 31, 2019
2,794,549
$
3
75,730,260
$
76
$
628,200
$
22
$
(383,545
)
$
244,756
Exercise of stock options, net of issuance costs


188,315

949


949
Issuance of common stock upon vesting of restricted stock units


77,500





Stock-based compensation




6,913


6,913
Unrealized gain on investments





120

120
Net loss






(33,520
)
(33,520
)
Balance at March 31, 2020
2,794,549
$
3
75,996,075
$
76
$
636,062
$
142
$
(417,065
)
$
219,218
Exercise of stock options, net of issuance costs


310,727

2,548


2,548
Issuance of common stock upon vesting of restricted stock units


7,500





Stock-based compensation




7,236


7,236
Public offering of common stock, net of issuance costs


7,108,796
7
188,784


188,791
Private placement of common stock, net of issuance costs


1,766,160
2
49,973


49,975
Issuance of stock to collaboration partner, net of issuance costs


1,612,904
2
33,932


33,934
Unrealized gain on investments





481

481
Net loss






(28,072
)
(28,072
)
Balance at June 30, 2020
2,794,549
$
3
86,802,162
$
87
$
918,535
$
623
$
(445,137
)
$
474,111
The following table summarizes the Company’s changes in stockholders’ equity accounts for the three and six months ended June 30, 2019 (in thousands, except share data):
Convertible Preferred Stock
Common Stock
Additional Paid-in
Accumulated Other Comprehensive
Accumulated
Total Stockholders'
Shares
Amount
Shares
Amount
Capital
Gain (Loss)
Deficit
Equity
Balance at December 31, 2018
2,819,549
$
3
64,693,681
$
65
$
445,799
$
(2
)
$
(285,396
)
$
160,469
Exercise of stock options, net of issuance costs


420,920

1,258


1,258
Issuance of common stock upon cashless warrant exercise


1,245





Stock-based compensation




3,868


3,868
Unrealized gain on investments





2

2
Net loss






(19,760
)
(19,760
)
Balance at March 31, 2019
2,819,549
$
3
65,115,846
$
65
$
450,925
$

$
(305,156
)
$
145,837
Exercise of stock options, net of issuance costs


194,045

688


688
Stock-based compensation




4,386


4,386
Unrealized gain on investments





93

93
Net loss






(23,478
)
(23,478
)
Balance at June 30, 2019
2,819,549
$
3
65,309,891
$
65
$
455,999
$
93
$
(328,634
)
$
127,526

Organization and Summary of S_4

Organization and Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Thousands1 Months Ended3 Months Ended6 Months Ended
Jun. 30, 2020Apr. 30, 2020Sep. 30, 2019Jun. 30, 2020Mar. 31, 2020Jun. 30, 2019Mar. 31, 2019Jun. 30, 2020Jun. 30, 2019
Organization and summary of significant accounting policies
Gross proceeds from issuance of shares $ 189,054
Aggregate purchase price of common stock $ 188,791
Net loss $ (28,072) $ (33,520) $ (23,478) $ (19,760) $ (61,592) $ (43,238)
Potentially dilutive securities (in shares)25,800,000 24,100,000 25,800,000 24,100,000
Letters of credit outstanding amount $ 15,200 $ 15,200 $ 200 $ 15,200 $ 200
Class A Convertible Preferred Stock
Organization and summary of significant accounting policies
Potentially dilutive securities (in shares)14,000,000 14,100,000 14,000,000 14,100,000
Common Stock Options | Restricted Stock Units (RSUs)
Organization and summary of significant accounting policies
Potentially dilutive securities (in shares)11,800,000 9,900,000 11,800,000 9,900,000
Maximum
Organization and summary of significant accounting policies
Short-term leases term excluded from calculation of ROU and lease liabilities12 months
Common Stock
Organization and summary of significant accounting policies
Issuance of common stock in conjunction with public offering (in shares)7,108,796
Aggregate purchase price of common stock $ 7
Silicon Valley Bank | Letter of Credit
Organization and summary of significant accounting policies
Letters of credit outstanding amount $ 15,000 $ 15,000 $ 15,000
June 2020 Public Offering
Organization and summary of significant accounting policies
Issuance of common stock in conjunction with public offering (in shares)7,100,000
Share issue price (in dollars per share) $ 28.31 $ 28.31 $ 28.31
Gross proceeds from issuance of shares $ 201,300
Net proceeds from issuance of shares after related cash costs188,800
Costs related to equity offering12,500
Costs related to equity offering unpaid $ 300 $ 300 $ 300
September 2019 Public Equity Offering
Organization and summary of significant accounting policies
Issuance of common stock in conjunction with public offering (in shares)9,900,000
Share issue price (in dollars per share) $ 17.50
Gross proceeds from issuance of shares $ 173,100
Net proceeds from issuance of shares after related cash costs162,400
Costs related to equity offering $ 10,700
Private Placement | Johnson Johnson Innovation J J D C Inc | Common Stock
Organization and summary of significant accounting policies
Share issue price (in dollars per share) $ 28.31 $ 28.31 $ 28.31
Net proceeds from issuance of shares after related cash costs $ 50,000
Aggregate purchase price of common stock $ 50,000
Issuance of common stock during period for private placements (in shares)1,800,000
Private Placement | Stock Purchase Agreement | Johnson Johnson Innovation J J D C Inc | Common Stock
Organization and summary of significant accounting policies
Share issue price (in dollars per share) $ 31
Net proceeds from issuance of shares after related cash costs $ 50,000
Issuance of common stock during period for private placements (in shares)1,600,000

Organization and Summary of S_5

Organization and Summary of Significant Accounting Policies (Details 2) - USD ($) $ in ThousandsJun. 30, 2020Dec. 31, 2019Jun. 30, 2019Dec. 31, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Cash and cash equivalents $ 433,074 $ 99,814 $ 71,435
Restricted cash15,227 227
Total cash, cash equivalents, and restricted cash shown in the unaudited condensed consolidated statement of cash flows $ 448,301 $ 100,041 $ 71,662 $ 190,741

Collaboration and License Agr_2

Collaboration and License Agreements (Details) - USD ($)Apr. 07, 2020Apr. 02, 2020May 04, 2019Sep. 14, 2018Jun. 30, 2020Oct. 31, 2018Jun. 30, 2020Jun. 30, 2019Jun. 30, 2020Jun. 30, 2019Dec. 31, 2019May 31, 2019
Collaboration agreement
Aggregate purchase price of common stock $ 188,791,000
Proceeds from public offering of common stock, net of issuance costs $ 189,054,000
Collaboration contract asset $ 13,972,000 13,972,000 13,972,000 $ 1,338,000
Revenue recognized5,465,000 $ 2,817,000 7,980,000 $ 5,449,000
Janssen Biotech Inc
Collaboration agreement
Transaction price of the agreement $ 66,000,000
Non-refundable upfront payments recorded as deferred revenue50,000,000
Equity premium16,000,000
Non-refundable upfront payments recorded as deferred revenue $ 66,000,000
Payment of sublicense fees4,300,000 4,300,000 4,300,000
Collaboration contract asset13,300,000 13,300,000 13,300,000
Total sublicense consideration owed13,300,000 13,300,000 13,300,000
Amortization of sublicense consideration300,000 300,000
Revenue recognized3,500,000 3,500,000
Deferred revenue64,200,000 64,200,000 64,200,000
Deferred revenue classified as current12,100,000 12,100,000 12,100,000
Ono Pharmaceutical Co. Ltd
Collaboration agreement
Transaction price of the agreement $ 30,000,000
Non-refundable upfront payments recorded as deferred revenue10,000,000
Non-refundable upfront payments recorded as deferred revenue10,000,000
Collaboration contract asset2,000,000 2,000,000 2,000,000
Amortization of sublicense consideration100,000 200,000 300,000 300,000
Revenue recognized2,000,000 2,500,000 4,500,000 4,100,000
Deferred revenue5,100,000 5,100,000 5,100,000
Deferred revenue classified as current2,500,000 2,500,000 2,500,000
Aggregate research and development fees payments receivable20,000,000
Collaborative arrangement annual payments receivable recorded as deferred revenue $ 5,000,000 9,500,000
Collaborative arrangement potential additional milestones $ 40,000,000
Payments for research and development fees $ 5,000,000
Sublicense consideration paid2,000,000 2,000,000 2,000,000
Ono Pharmaceutical Co. Ltd | Candidate 2
Collaboration agreement
Percentage of reduction on milestone payments50.00%
Maximum | Ono Pharmaceutical Co. Ltd | Candidate 1
Collaboration agreement
Aggregate milestone payments $ 285,000,000
Maximum | Ono Pharmaceutical Co. Ltd | Candidate 2
Collaboration agreement
Aggregate milestone payments $ 895,000,000
Janssen Agreement
Collaboration agreement
Upfront, non-refundable and non-creditable payment50,000,000
Sublicense Consideration | Janssen Biotech Inc
Collaboration agreement
Collaboration contract asset13,000,000 13,000,000 13,000,000
Sublicense Consideration | Ono Pharmaceutical Co. Ltd
Collaboration agreement
Collaboration contract asset $ 1,000,000 1,000,000 1,000,000
Collaborative Arrangement | Juno Therapeutics, Inc
Collaboration agreement
Revenue recognized $ 0 $ 400,000 0 $ 1,400,000
Research term4 years
Collaboration agreement expiration dateMay 4,
2019
Agreement to terminate upon the receipt of research payment $ 200,000
Additional revenue expected to be recognized $ 0
Collaborative Arrangement | Minimum | Ono Pharmaceutical Co. Ltd
Collaboration agreement
Profits and losses sharing percentage50.00%
JJDC, Inc | Stock Purchase Agreement
Collaboration agreement
Issuance of common stock in conjunction with public offering (in shares)1,600,000
Common stock per share $ 31 $ 31 $ 31
Aggregate purchase price of common stock $ 50,000,000
Equity premium per share $ 9.93
Aggregate equity premium on shares $ 16,000,000
Proceeds from public offering of common stock, net of issuance costs34,000,000
JJDC, Inc | Stock Purchase Agreement | Private Placement
Collaboration agreement
Proceeds from public offering of common stock, net of issuance costs $ 50,000,000
Aggregate value of common stock $ 50,000,000 $ 50,000,000 $ 50,000,000
Share issue price (in dollars per share) $ 28.31 $ 28.31 $ 28.31
Issuance of common stock during period for private placements (in shares)1,800,000
First Janssen Cancer Target | Janssen Agreement | Maximum
Collaboration agreement
Development, regulatory, and sales milestones $ 898,000,000
Additional candidate milestone Payments460,000,000
Additional Cancer Targets | Janssen Agreement | Maximum
Collaboration agreement
Development, regulatory, and sales milestones706,000,000
Additional candidate milestone Payments $ 340,000,000

California Institute For Rege_2

California Institute For Regenerative Medicine Award (Details) $ in MillionsApr. 05, 2018USD ($)DisbursementJun. 30, 2020USD ($)
Award from California institute for regenerative medicine
Period to treat award as grant, if award not treated as loan10 years
California Institute for Regenerative Medicine
Award from California institute for regenerative medicine
Receipt of first disbursement under the Award | $ $ 4
California Institute for Regenerative Medicine | LIBOR
Award from California institute for regenerative medicine
Award considered as a loan, interest rate7.00%
California Institute for Regenerative Medicine | Loan Repayment Rate One
Award from California institute for regenerative medicine
Repayment percentage of award amount60.00%
California Institute for Regenerative Medicine | Loan Repayment Rate Two
Award from California institute for regenerative medicine
Repayment percentage of award amount80.00%
California Institute for Regenerative Medicine | Loan Repayment Rate Three
Award from California institute for regenerative medicine
Repayment percentage of award amount100.00%
California Institute for Regenerative Medicine | Loan Repayment Rate Four
Award from California institute for regenerative medicine
Repayment percentage of award amount100.00%
California Institute for Regenerative Medicine | FT516
Award from California institute for regenerative medicine
Award agreement executed dateApr. 5,
2018
Award for first-in-human clinical trial | $ $ 4
Number of disbursements5
Number of disbursement receivable upon the execution of the award1
Number of disbursements receivable based on completion of certain operating milestones4

Investments (Details)

Investments (Details) - USD ($)3 Months Ended6 Months Ended
Jun. 30, 2020Jun. 30, 2019Jun. 30, 2020Jun. 30, 2019
Schedule Of Available For Sale Securities [Line Items]
Available-for-sale securities, impairment $ 0 $ 0 $ 0 $ 0
Available-for-sale securities, realized gains (losses) on sales0 0 0 0
Available-for-sale securities, recognition of expected credit losses $ 0 $ 0 $ 0 $ 0
Treasuries and Corporate Debt Securities
Schedule Of Available For Sale Securities [Line Items]
Short term investments, maturity start range3 months
Short term investments, maturity end range18 months

Investments (Details 2)

Investments (Details 2) - USD ($) $ in Thousands6 Months Ended12 Months Ended
Jun. 30, 2020Dec. 31, 2019
Short-term Investments [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost $ 99,712 $ 121,616
Unrealized Losses(28)
Unrealized Gains623 25
Estimated Fair Value $ 100,335 121,613
Long-term Investments [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost39,413
Unrealized Losses(1)
Unrealized Gains28
Estimated Fair Value $ 39,440
U.S. Treasury debt securities | Current Assets [Member]
Schedule Of Available For Sale Securities [Line Items]
Maturity (in years)1 or less1 or less
Amortized Cost $ 34,349 $ 50,445
Unrealized Losses(4)
Unrealized Gains171 16
Estimated Fair Value $ 34,520 $ 50,457
U.S. Treasury debt securities | Non-current Assets [Member]
Schedule Of Available For Sale Securities [Line Items]
Maturity (in years)Greater than 1
Amortized Cost $ 9,841
Unrealized Gains5
Estimated Fair Value $ 9,846
Corporate debt securities | Current Assets [Member]
Schedule Of Available For Sale Securities [Line Items]
Maturity (in years)1 or less1 or less
Amortized Cost $ 65,363 $ 71,171
Unrealized Losses(24)
Unrealized Gains452 9
Estimated Fair Value $ 65,815 $ 71,156
Corporate debt securities | Non-current Assets [Member]
Schedule Of Available For Sale Securities [Line Items]
Maturity (in years)Greater than 1
Amortized Cost $ 29,572
Unrealized Losses(1)
Unrealized Gains23
Estimated Fair Value $ 29,594

Fair Value Measurements (Detail

Fair Value Measurements (Details) - Fair Value Measurements Recurring - USD ($) $ in ThousandsJun. 30, 2020Dec. 31, 2019
Investments
Total assets measured at fair value on a recurring basis $ 533,409 $ 245,867
Money market funds
Cash equivalents
Money market funds433,074 84,814
U.S. Treasury debt securities
Investments
Investments34,520 60,303
Corporate debt securities
Investments
Investments65,815 100,750
Quoted prices in Active Market for Identical Assets (Level 1)
Investments
Total assets measured at fair value on a recurring basis467,594 145,117
Quoted prices in Active Market for Identical Assets (Level 1) | Money market funds
Cash equivalents
Money market funds433,074 84,814
Quoted prices in Active Market for Identical Assets (Level 1) | U.S. Treasury debt securities
Investments
Investments34,520 60,303
Significant Other Observable Inputs (Level 2)
Investments
Total assets measured at fair value on a recurring basis65,815 100,750
Significant Other Observable Inputs (Level 2) | Corporate debt securities
Investments
Investments $ 65,815 $ 100,750

Fair Value Measurements (Deta_2

Fair Value Measurements (Details 2) - USD ($)Jun. 30, 2020Dec. 31, 2019
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Transfer of assets from level 1 to level 2 $ 0
Transfer of assets from level 2 to level 10
Transfer of liabilities from level 1 to level 20
Transfer of liabilities from level 2 to level 10
Fair Value Measurements Nonrecurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial assets/ Non-financial assets0
Non-financial liabilities0
Fair Value Measurements Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Financial assets/ Non-financial assets533,409,000 $ 245,867,000
Liabilities measured at fair value $ 0 $ 0

Accrued Expenses and Long-Ter_3

Accrued Expenses and Long-Term Debt (Details) - USD ($) $ in ThousandsJun. 30, 2020Dec. 31, 2019
Current accrued expenses
Accrued payroll and other employee benefits $ 4,371 $ 5,329
Accrued clinical trial related costs4,098 5,976
Accrued other3,149 3,392
Total current accrued expenses $ 11,618 $ 14,697

Accrued Expenses and Long-Ter_4

Accrued Expenses and Long-Term Debt (2017 Term Loan) (Details 2) - USD ($) $ in MillionsNov. 13, 2019Jun. 30, 2019Jun. 30, 2019
Debt
Aggregate interest expense $ 0.4 $ 0.8
Loan and Security Agreement
Debt
Repayments of debt amount $ 14.2
Principal amount of the final fee payment13
Final payment fee $ 1.2

Leases (Details)

Leases (Details) - USD ($) $ in Thousands1 Months Ended3 Months Ended6 Months Ended
Jan. 31, 2020Jun. 30, 2020Jun. 30, 2019Jun. 30, 2020Jun. 30, 2019
Lessee Lease Description [Line Items]
Lessee, operating lease, option to extendThese leases have terms varying from one to approximately sixteen years, with renewal options of up to ten years
Lessee, operating lease, existence of option to extendtrue
Letters of credit outstanding amount $ 15,200 $ 200 $ 15,200 $ 200
Future minimum payments under the operating leases $ 195,101 $ 195,101
Remaining weighted-average lease term13 years 4 months 24 days13 years 4 months 24 days
Operating lease liabilities, weighted-average discount rate8.40%8.40%
Total short-term lease expense $ 200 $ 200 $ 700 $ 200
The Premises 2020 Lease Agreement
Lessee Lease Description [Line Items]
Lessee, operating lease, option to extendThe Company has the option to extend the lease for two successive five-year periods. The Company also has a one-time option to terminate the lease after 10 years from the Rent Commencement Date
Lessee, operating lease, existence of option to extendtrue
Lease term15 years
Option to terminate lease10 years
Tenant improvements $ 4,900 $ 4,900
Early termination fees $ 30,000
Letters of credit outstanding amount15,000
Minimum
Lessee Lease Description [Line Items]
Lease term1 year1 year
Future minimum payments under the operating leases $ 195,100 $ 195,100
Maximum
Lessee Lease Description [Line Items]
Lease term16 years16 years
Maximum | The Premises 2020 Lease Agreement
Lessee Lease Description [Line Items]
Renewal term10 years10 years
Aggregate tenant improvements of the premises $ 29,800

Leases (Details 1)

Leases (Details 1) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2020Jun. 30, 2019Jun. 30, 2020Jun. 30, 2019
Lease Cost [Abstract]
Straight-line lease expense $ 2,972 $ 945 $ 5,910 $ 1,890
Variable lease expense415 567 1,025 1,154
Total operating lease expense $ 3,387 $ 1,512 $ 6,935 $ 3,044

Leases (Details 2)

Leases (Details 2) $ in ThousandsJun. 30, 2020USD ($)
Operating Lease Liabilities Payments Due [Abstract]
Remaining in 2020 $ 2,159
20219,741
202212,610
202312,988
202413,378
202513,779
Thereafter130,446
Total undiscounted lease payments195,101
Less: imputed interest(89,111)
Less: amounts associated with tenant improvement allowance not yet utilized(24,952)
Total lease liability $ 81,038

Convertible Preferred Stock a_3

Convertible Preferred Stock and Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions1 Months Ended3 Months Ended6 Months Ended12 Months Ended
Nov. 30, 2016Jun. 30, 2020Jun. 30, 2020Dec. 31, 2019May 02, 2017
Convertible preferred stock
Preferred stock, par value (in dollars per share) $ 0.001 $ 0.001 $ 0.001
Employee And Non Employee Stock Option
Convertible preferred stock
Unrecognized compensation cost related to outstanding options $ 54 $ 54
Expected recognition weighted average period of unrecognized compensation cost2 years 9 months 18 days
Restricted Stock Units (RSUs)
Convertible preferred stock
Expected recognition weighted average period of unrecognized compensation cost3 years 2 months 12 days
Unrecognized compensation cost related to unvested restricted shares $ 23.3 $ 23.3
Common Stock
Convertible preferred stock
Common stock issued7,108,796
Conversion of preferred shares to common stock125,000
Non-Voting Class A Preferred Stock | Redmile Group, LLC and Affiliates
Convertible preferred stock
Terms of conversionThe Class A Preferred were purchased exclusively by entities affiliated with Redmile Group, LLC (collectively, Redmile). The terms of the CoD prohibited Redmile from converting the Class A Preferred into shares of the Company’s common stock if, as a result of conversion, Redmile, together with its affiliates, would own more than 9.99% of the Company’s common stock then issued and outstanding (the Redmile Percentage Limitation), which percentage could change at Redmile’s election upon 61 days’ notice to the Company to (i) any other number less than or equal to 19.99% or (ii) subject to approval of the Company’s stockholders to the extent required in accordance with the Nasdaq Global Market rules, any number in excess of 19.99%. On May 2, 2017, the Company’s stockholders approved the issuance of up to an aggregate of 14,097,745 shares of common stock upon the conversion of the outstanding shares of Class A Preferred. As a result, Redmile has the right to increase the Redmile Percentage Limitation to any percentage in excess of 19.99% at its election.
Non-Voting Class A Preferred Stock | Maximum
Convertible preferred stock
Number of shares to be issued upon conversion14,097,745
Non-Voting Class A Preferred Stock | Maximum | Redmile Group, LLC and Affiliates
Convertible preferred stock
Percentage of common stock ownership upon preferred stock conversion9.99%
Preferred shares converted into common stock percentage of ownership change upon notice19.99%
Class A Convertible Preferred Shares
Convertible preferred stock
Preferred stock, issued shares2,794,549 2,794,549 2,794,549
Conversion of preferred shares to common stock(25,000)
November 2016 Placement | Common Stock
Convertible preferred stock
Share issue price (in dollars per share) $ 2.66
Common stock issued7,236,837
November 2016 Placement | Non-Voting Class A Preferred Stock
Convertible preferred stock
Preferred stock, issued shares2,819,549
Share issue price (in dollars per share) $ 13.30
Number of shares to be issued upon conversion5
Preferred stock, par value (in dollars per share) $ 0.001
Conversion price $ 2.66

Convertible Preferred Stock a_4

Convertible Preferred Stock and Stockholders' Equity (Details 2) - Employee And Non Employee Stock Option6 Months Ended
Jun. 30, 2020$ / sharesshares
Number of Options
Balance at the beginning of the period | shares9,327,742
Granted | shares1,796,588
Exercised | shares(499,042)
Cancelled | shares(166,100)
Balance at the end of the period | shares10,459,188
Weighted-Average Price
Balance at the beginning of the period | $ / shares $ 9.67
Granted | $ / shares23.03
Exercised | $ / shares7.04
Cancelled | $ / shares16.03
Balance at the end of the period | $ / shares $ 11.99

Convertible Preferred Stock a_5

Convertible Preferred Stock and Stockholders' Equity (Details 3) - Restricted Stock Units (RSUs)6 Months Ended
Jun. 30, 2020$ / sharesshares
Number of Restricted Stock Units
Balance at the beginning of the period | shares520,000
Granted | shares979,323
Vested | shares(85,000)
Cancelled | shares(33,706)
Balance at the end of the period | shares1,380,617
Weighted-Average Grant Date Fair Value per Share
Balance at the beginning of the period | $ / shares $ 16.41
Granted | $ / shares21.95
Vested | $ / shares16.34
Cancelled | $ / shares21.94
Balance at the end of the period | $ / shares $ 20.21

Convertible Preferred Stock a_6

Convertible Preferred Stock and Stockholders' Equity (Details 4) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2020Jun. 30, 2019Jun. 30, 2020Jun. 30, 2019
Convertible preferred stock
Total stock-based compensation expense $ 7,236 $ 4,386 $ 14,149 $ 8,254
Research And Development
Convertible preferred stock
Total stock-based compensation expense4,360 2,479 8,613 4,662
General And Administrative
Convertible preferred stock
Total stock-based compensation expense $ 2,876 $ 1,907 $ 5,536 $ 3,592

Convertible Preferred Stock a_7

Convertible Preferred Stock and Stockholders' Equity (Details 5) - Employee And Non Employee Stock Option6 Months Ended
Jun. 30, 2020Jun. 30, 2019
Weighted-average assumptions to determine fair value of stock options
Risk-free interest rate1.40%2.50%
Expected volatility77.20%79.80%
Expected term (in years)5 years 7 months 6 days6 years 1 month 6 days
Expected dividend yield0.00%0.00%

Convertible Preferred Stock a_8

Convertible Preferred Stock and Stockholders' Equity (Details 6) - USD ($) $ in Thousands3 Months Ended6 Months Ended
Jun. 30, 2020Mar. 31, 2020Jun. 30, 2019Mar. 31, 2019Jun. 30, 2020Jun. 30, 2019
Class Of Stock [Line Items]
Balance $ 219,218 $ 244,756 $ 145,837 $ 160,469 $ 244,756 $ 160,469
Exercise of stock options, net of issuance costs2,548 949 688 1,258
Stock-based compensation7,236 6,913 4,386 3,868
Public offering of common stock, net of issuance costs188,791
Private placement of common stock, net of issuance costs49,975
Unrealized gain on investments481 120 93 2
Net loss(28,072)(33,520)(23,478)(19,760)(61,592)(43,238)
Balance474,111 219,218 127,526 145,837 474,111 127,526
Issuance of stock to collaboration partner, net of issuance costs33,934
Class A Convertible Preferred Shares
Class Of Stock [Line Items]
Balance $ 3 $ 3 $ 3 $ 3 $ 3 $ 3
Balance (in shares)2,794,549 2,794,549 2,819,549 2,819,549 2,794,549 2,819,549
Balance $ 3 $ 3 $ 3 $ 3 $ 3 $ 3
Balance (in shares)2,794,549 2,794,549 2,819,549 2,819,549 2,794,549 2,819,549
Common Stock
Class Of Stock [Line Items]
Balance $ 76 $ 76 $ 65 $ 65 $ 76 $ 65
Balance (in shares)75,996,075 75,730,260 65,115,846 64,693,681 75,730,260 64,693,681
Exercise of stock options, net of issuance costs (in shares)310,727 188,315 194,045 420,920
Issuance of common stock upon vesting of restricted stock units $ 7,500
Issuance of common stock upon vesting of restricted stock units (in shares)77,500
Issuance of common stock upon cashless warrant exercises (in shares)1,245
Public offering of common stock, net of issuance costs $ 7
Issuance of common stock in conjunction with public offering (in shares)7,108,796
Private placement of common stock, net of issuance costs $ 2
Private placement issuances of common stock, net of offering costs (in shares)1,766,160
Balance $ 87 $ 76 $ 65 $ 65 $ 87 $ 65
Balance (in shares)86,802,162 65,309,891 86,802,162 65,309,891
Balance (in shares)75,996,075 65,115,846
Issuance of stock to collaboration partner, net of issuance costs $ 2
Issuance of stock to collaboration partner, net of issuance costs (in shares)1,612,904
Additional Paid In Capital
Class Of Stock [Line Items]
Balance $ 636,062 $ 628,200 $ 450,925 $ 445,799 $ 628,200 $ 445,799
Exercise of stock options, net of issuance costs2,548 949 688 1,258
Stock-based compensation7,236 6,913 4,386 3,868
Public offering of common stock, net of issuance costs188,784
Private placement of common stock, net of issuance costs49,973
Balance918,535 636,062 455,999 450,925 918,535 455,999
Issuance of stock to collaboration partner, net of issuance costs33,932
Accumulated Other Comprehensive Gain (Loss)
Class Of Stock [Line Items]
Balance142 22 (2)22 (2)
Unrealized gain on investments481 120 93 2
Balance623 142 93 623 93
Accumulated Deficit
Class Of Stock [Line Items]
Balance(417,065)(383,545)(305,156)(285,396)(383,545)(285,396)
Net loss(28,072)(33,520)(23,478)(19,760)
Balance $ (445,137) $ (417,065) $ (328,634) $ (305,156) $ (445,137) $ (328,634)