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FATE Fate Therapeutics

Document and Entity Information

Document and Entity Information - shares3 Months Ended
Mar. 31, 2021May 03, 2021
Cover [Abstract]
Entity Registrant NameFATE THERAPEUTICS, INC.
Entity Central Index Key0001434316
Document Type10-Q
Document Period End DateMar. 31,
2021
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 Outstanding94,035,763
Document Fiscal Year Focus2021
Document Fiscal Period FocusQ1
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 ThousandsMar. 31, 2021Dec. 31, 2020
Current assets:
Cash and cash equivalents $ 106,413 $ 167,347
Accounts receivable6,945 5,515
Short-term investments and related maturity receivables683,722 315,569
Prepaid expenses and other current assets7,236 5,892
Total current assets804,316 494,323
Long-term investments98,284
Property and equipment, net47,950 32,308
Operating lease right-of-use assets67,295 67,084
Restricted cash15,227 15,227
Collaboration contract assets12,883 13,506
Other assets9 9
Total assets1,045,964 622,457
Current liabilities:
Accounts payable8,998 6,283
Accrued expenses20,931 15,564
CIRM award liability, current portion3,200 3,200
Deferred revenue, current portion21,033 21,144
Operating lease liabilities, current portion4,412 3,355
Stock price appreciation milestones, current portion36,003 36,018
Total current liabilities94,577 85,564
Deferred revenue, net of current portion43,025 46,021
CIRM award liability, net of current portion800 800
Operating lease liabilities, net of current portion106,512 93,943
Stock price appreciation milestones, net of current portion10,955 11,684
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value; authorized shares—5,000,000 at March 31, 2021 and December 31, 2020; Class A Convertible Preferred shares issued and outstanding—2,794,549 at March 31, 2021 and December 31, 20203 3
Common stock, $0.001 par value; authorized shares—150,000,000 at March 31, 2021 and December 31, 2020; issued and outstanding—93,888,679 at March 31, 2021 and 87,722,237 at December 31, 202094 88
Additional paid-in capital1,392,279 941,216
Accumulated other comprehensive gain (loss)(260)70
Accumulated deficit(602,021)(556,932)
Total stockholders’ equity790,095 384,445
Total liabilities and stockholders’ equity $ 1,045,964 $ 622,457

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / sharesMar. 31, 2021Dec. 31, 2020
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 issued93,888,679 87,722,237
Common stock, outstanding shares93,888,679 87,722,237
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 Ended
Mar. 31, 2021Mar. 31, 2020
Income Statement [Abstract]
Collaboration revenue $ 11,142 $ 2,515
Type of Revenue [Extensible List]us-gaap:LicenseMemberus-gaap:LicenseMember
Operating expenses:
Research and development $ 44,852 $ 29,278
General and administrative12,500 7,729
Total operating expenses57,352 37,007
Loss from operations(46,210)(34,492)
Other income:
Interest income377 972
Change in fair value of stock price appreciation milestones744
Total other income, net1,121 972
Net loss(45,089)(33,520)
Other comprehensive income (loss):
Unrealized gain (loss) on available-for-sale securities, net(330)120
Comprehensive loss $ (45,419) $ (33,400)
Net loss per common share, basic and diluted $ (0.48) $ (0.44)
Weighted-average common shares used to compute basic and diluted net loss per share93,431,877 75,886,964

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Operating activities
Net loss $ (45,089) $ (33,520)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization959 705
Stock-based compensation12,976 6,913
Accretion and amortization of premiums and discounts on investments, net1,140 271
Amortization of collaboration contract assets623 168
Deferred revenue(3,107)(515)
Change in fair value of stock price appreciation milestones(744)
Changes in operating assets and liabilities:
Accounts receivable(1,430)
Prepaid expenses and other assets(1,301)636
Accounts payable and accrued expenses6,944 (3,316)
Right-of-use assets and lease liabilities, net1,933 1,985
Net cash used in operating activities(27,096)(26,673)
Investing activities
Purchases of property and equipment(3,981)(1,070)
Purchases of investments(529,907)
Maturities of investments62,000 24,844
Net cash provided by (used in) investing activities(471,888)23,774
Financing activities
Issuance of common stock from equity incentive plans, net of issuance costs5,605 1,011
Proceeds from public offering of common stock and issuance of pre-funded warrants, net of issuance costs432,445
Proceeds from CIRM award440
Net cash provided by financing activities438,050 1,451
Net change in cash, cash equivalents and restricted cash(60,934)(1,448)
Cash, cash equivalents and restricted cash at beginning of the period182,574 100,041
Cash, cash equivalents and restricted cash at end of the period121,640 98,593
Supplemental schedule of noncash investing and financing activities
Purchases of property and equipment in accounts payable2,624 343
Right-of use assets obtained in exchange for lease obligations $ 1,444 $ 47,808

Organization and Summary of Sig

Organization and Summary of Significant Accounting Policies3 Months Ended
Mar. 31, 2021
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 patients with cancer, including off-the-shelf natural killer (NK) and T-cell product candidates derived from clonal master engineered induced pluripotent stem cell (iPSC) lines. As of March 31, 2021, 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 January 2021, the Company completed a public offering of common stock in which investors, certain of which are affiliated with a director of the Company, purchased 5.1 million shares of the Company’s common stock at a price of $85.50 per share under a shelf registration statement. In addition, the Company issued pre-funded warrants, in lieu of common stock to certain investors, to purchase 257,310 shares of the Company’s common stock (Pre-Funded Warrants). The purchase price of t he Pre-Funded Warrants was $85.499 per Pre-Funded Warrant, which equals the per share public offering price for the shares of common stock less the $0.001 exercise price for each such Pre-Funded Warrant. See Note 8 for additional detail. Gross proceeds from the public offering and the issuance of the Pre-Funded Warrants were $460.0 million, and after giving effect to $27.6 million of costs related to the public offering and the issuance of Pre-Funded Warrants, net proceeds were $ million. 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 public offering were $201.3 million, and, after giving effect to $12.5 million of costs related to the public offering, net proceeds were $188.8 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 stock price appreciation milestone obligations, contracts containing leases, accrued expenses, stock-based compensation, 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 three months ended March 31, 2021. 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 the COVID-19 pandemic 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 the ongoing COVID-19 pandemic 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 March 31, 2021 and 2020 (in thousands):
Three Months Ended March 31,
2021
2020
Cash and cash equivalents
$
106,413
$
83,366
Restricted cash
15,227
15,227
Total cash, cash equivalents, and restricted cash shown in the unaudited condensed consolidated statement of cash flows
$
121,640
$
98,593
In January 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 $15.2 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 unaudited 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, 2020, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed by the Company with the SEC on February 24, 2021. 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 months ended March 31, 2021 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 or a service to a customer. The Company identifies each promise to transfer a product or a service (or a bundle of products or services, or a series of products and services that are substantially the same and have the same pattern of transfer) that is distinct. A product or a service is distinct if both ( i ) the customer can benefit from the product or the service either on its own or together with other resources that are readily available to the customer and (ii) the Company’s promise to transfer the product or the service to the customer is separately identifiable from other promises in the contract. Each distinct promise to transfer a product or a service is a unit of accounting for revenue recognition. If a promise to transfer a product or a service is not separately identifiable from other promises in the contract, such promises should be combined into a single performance obligation. 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. Stock Price Appreciation Milestones The Company estimates the fair value of the stock price appreciation milestones associated with the Amended and Restated Exclusive License Agreement with Memorial Sloan Kettering Cancer Center (see Note 2), using a Monte Carlo simulation model, which relies on the Company’s current stock price as well as significant estimates and assumptions to determine the estimated liability associated with the contingent milestone payments. The Company accounts for the fair value of the stock price appreciation milestones in accordance with Accounting Standards Codification (ASC) 815, Derivatives and Hedging . 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 ROU assets and lease obligations 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. 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. The Pre-Funded Warrants associated with the January 2021 public equity offering (see Note 8) are considered outstanding shares in the basic earnings per share calculation given their nominal exercise price. 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 months ended March 31, 2021, the Company realized a net loss of $45.1 million. Shares of potentially dilutive securities totaled 25.5 million for the three months ended March 31, 2021, 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 11.6 million shares of common stock issuable upon the exercise of outstanding stock options and the settlement of outstanding restricted stock units. For the three months ended March 31, 2020, the Company realized a net loss of $33.5 million. Shares of potentially dilutive securities totaled 25.9 million for the three months ended March 31, 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 11.9 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 Issued Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

Collaboration and License Agree

Collaboration and License Agreements3 Months Ended
Mar. 31, 2021
Collaboration And License Agreements Disclosure [Abstract]
Collaboration and License Agreements2.
Collaboration and License Agreements Janssen Collaboration and Option Agreement On April 2, 2020 (the Janssen Agreement 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 Janssen Agreement 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 Janssen Agreement 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 Topic 808, Collaborative Arrangements Revenue from Contracts with Customers 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 initial 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 initial 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 $ 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 $ 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 the conduct of the research and development services . Revenue associated with the research and development services will be recognized in an amount equal to the actual costs incurred during the period in which the research and development services are performed by the Company . 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. The $13.3 million in sublicense consideration represents an asset under ASC Topic 340, Other Assets and Deferred Costs The Company recognized revenue of $8.6 million under the Janssen Agreement for the three months ended March 31, 2021. Such revenue comprised $6.8 million associated with research and development services and $1.8 million associated with the upfront fee and Equity Premium for the three months ended March 31, 2021. As of March 31, 2021, aggregate deferred revenue related to the Janssen Agreement was $57.6 million, of which $16.4 million is classified as current. As of March 31, 2021, the Company has received $10.1 million in aggregate research and development fees from Janssen. Ono Collaboration and Option Agreement On September 14, 2018 (the Ono Agreement Effective Date), 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 ). On December 4, 2020, the Company and Ono entered into a letter agreement (the Ono Letter Agreement) in connection with the Ono Agreement. Pursuant to the Ono Letter Agreement, Ono delivered to the Company proprietary antigen binding domains targeting an antigen expressed on certain solid tumors and nominated such antigen binding domains as the Ono Antigen Binding Domain for incorporation into Candidate 2. In connection with such nomination and pursuant to the original agreement, in December 2020, Ono paid the Company a milestone fee of $10.0 million for further research and development of Candidate 2 and Ono maintains its option to this candidate. In addition, in connection with the Ono Letter Agreement, the Company and Ono agreed to the termination of the Ono Agreement with respect to Candidate 1. The Company retains all rights, in its sole discretion, to research, develop and commercialize Candidate 1 throughout the world without any obligation to Ono. 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 Candidate 2 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 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 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 Candidate 2 and (c) the date that is the later of (i) four years after the Ono Agreement 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 Candidate 2. 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 $20.0 million, subject to the exercise by Ono of the Option (Option Exercise Fees) during the Option Period for Candidate 2. Such fees are in addition to the upfront payment, research and development fees, and the previously paid $10.0 million milestone associated with the Ono Letter Agreement. Subject to Ono’s exercise of the Option and to the achievement of certain clinical, regulatory and commercial milestones (the Ono Milestones) with respect to the Candidate in specified territories, the Company is entitled to receive an aggregate of up to $885.0 million in additional 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 (Royalties) ranging from the mid-single digits to the low-double digits based on annual net sales by Ono for Candidate 2 in specified territories, with such royalties subject to certain reductions. No milestone payments specific to Candidate 1 are payable under the Ono Agreement, given the termination of the agreement with respect to such candidate. 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 to the Ono Agreement and Ono Letter Agreement and determined that the agreements are 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 and the Ono Letter 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 termination of the Ono Agreement with respect to Candidate 1 did not impact this assessment. 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, other than the $10.0 million milestone triggered as part of the Ono Letter Agreement in December 2020, 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. In accordance with ASC 606, the Company concluded that the $10.0 million milestone payment associated with the Ono Letter Agreement represented an increase in the initial transaction price under the Ono Agreement in the form of the receipt of variable consideration that was previously constrained. The milestone payment of $10.0 million was recorded to deferred revenue for the proportional percentage of remaining costs to be incurred under the Ono Agreement as a percentage of the estimated total costs expected to be incurred over the expected term of conduct of the research services and is being recognized as revenue over the expected term in conjunction with the Company’s conduct of research services as the research services are the primary component of the combined performance obligations. The Company recognized revenue associated with the milestone payment for the proportional percentage of actual costs incurred under the Ono Agreement as a percentage of the estimated total costs expected to be incurred over the expected term of conduct of the research services. As a direct result of the Company’s entry into the Ono Agreement and the Ono Letter Agreement, the Company incurred an aggregate of $4.0 million in sublicense consideration to existing licensors of the Company. The $4.0 million in sublicense consideration represents an asset under ASC 340 and is being amortized to research and development expense ratably with the Company’s revenue recognition under the Ono Agreement. During each of the three months ended March 31, 2021 and 2020, the Company recognized $0.2 million of such expense. As of March 31, 2021, the Ono Agreement contract asset balance was $1.3 million. The Company recognized revenue of $2.5 million under the Ono Agreement for both the three months ended March 31, 2021 and 2020. Such revenue comprised $1.3 million associated with research services and $1.2 million associated with the upfront payment for the three months ended March 31, 2021, and $1.7 million associated with research services and $0.8 million associated with the upfront payment for the three months ended March 31, 2020. As of March 31, 2021, aggregate deferred revenue related to the Ono Agreement was $6.4 million, of which $4.6 million is classified as current. As of March 31, 2021, the Company has received $13.5 million in aggregate research and development fees from Ono. Memorial Sloan Kettering Cancer Center License Agreement On May 15, 2018, the Company entered into an Amended and Restated Exclusive License Agreement (the Amended MSK License) with Memorial Sloan Kettering Cancer Center (MSK). The Amended MSK License amends and restates the Exclusive License Agreement entered into between the Company and MSK on August 19, 2016 (the Original MSK License), pursuant to which the Company entered into an exclusive license agreement with MSK for rights relating to compositions and methods covering iPSC-derived cellular immunotherapy, including T-cells and NK-cells derived from iPSCs engineered with CARs. Pursuant to the Amended MSK License, MSK granted to the Company additional licenses to certain patents and patent applications relating to new CAR constructs and off-the-shelf CAR T-cells, including the use of clustered regularly interspaced short palindromic repeat (CRISPR) and other innovative technologies for their production, in each case to research, develop, and commercialize licensed products in the field of all human therapeutic uses worldwide. The Company has the right to grant sublicenses to certain licensed rights in accordance with the terms of the Amended MSK License, in which case it is obligated to pay MSK a percentage of certain sublicense income received by the Company . In the event a licensed product achieves a specified clinical milestone, MSK is then eligible to receive certain milestone payments totaling up to $75.0 million based on the price of the Company’s common stock, where the amount of such payments owed to MSK is contingent upon certain increases in the price of the Company’s common stock following the date of achievement of such clinical milestone. These payments are based on common stock price multiples, with the numerator being the fair value of the ten-trading day trailing average closing price of the Company’s common stock and the denominator being the ten-trading day trailing average closing price of the Company’s common stock as of the effective date of the Amended MSK License, adjusted for any stock splits, cash dividends, stock dividends, other distributions, combinations, recapitalizations, or similar events. Under the terms of the Amended MSK License, upon a change of control of the Company, in certain circumstances, the Company may be required to pay a portion of these payments to MSK based on the price of the Company’s common stock in connection with such change of control . The following table summarizes the common stock multiples and the stock price appreciation milestone payments, none of which have been triggered as of March 31, 2021:
Common stock multiple
5.0x
10.0x
15.0x
Ten-trading day trailing average common stock price
$
50.18
$
100.36
$
150.54
Stock price appreciation milestone payment (in millions)
$
20.0
$
30.0
$
25.0
To determine the estimated fair value of the stock price appreciation milestones, the Company uses a Monte Carlo simulation methodology which models future Company common stock prices based on the current stock price and several key variables. The following variables were incorporated in the calculation of the estimated fair value of the stock price appreciation milestones as of March 31, 2021:
As of March 31,
As of December 31,
2021
2020
Risk-free interest rate
2.3
%
1.5
%
Expected volatility
78.3
%
78.1
%
Estimated term (in years)
17.8
18.0
Closing stock price as of remeasurement date
$
82.45
$
90.93
The key inputs to the Monte Carlo simulation to determine the fair value of the stock price appreciation milestones include the Company’s stock price as of the measurement date; the estimated term, which is based in part on the last valid patent claim date; the expected volatility of the Company’s common stock, estimated using the Company’s historical common stock volatility as of the measurement date; and the risk-free rate based on the U.S. Treasury yield for the estimated term determined. Fair value measurements are highly sensitive to changes in these inputs and significant changes could result in a significantly higher or lower fair value and resulting expense or gain. As the stock price appreciation milestones are first contingent upon the achievement of a specified clinical milestone, the Company estimates the fair value of the stock price appreciation milestones based on the probability of achieving the clinical milestone. This assessment is based on several factors including the successful achievement of technological, manufacturing, and regulatory requirements. At each balance sheet date, the Company remeasures the fair value of the stock price appreciation milestones, with changes in fair value recognized as a component of other income (expense) in the unaudited condensed consolidated statements of operations and comprehensive loss. Amounts are included in current or non-current liabilities based on the estimated timeline associated with the individual potential payments. During the three months ended March 31, 2021, the Company recorded a benefit of $0.7 million associated with the change in fair value of the stock price appreciation milestones. As of March 31, 2021, the Company recorded a liability of $47.0 million associated with the stock price appreciation milestones for the Amended MSK License. To date, no licensed products have achieved the specified clinical milestone, and

California Institute for Regene

California Institute for Regenerative Medicine Award3 Months Ended
Mar. 31, 2021
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 March 31, 2021, 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

Investments3 Months Ended
Mar. 31, 2021
Investments [Abstract]
Investments4.
Investments The Company invests portions of excess cash in United States treasuries, non-U.S. government securities, municipal securities, corporate debt securities and commercial paper 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 March 31, 2021 and December 31, 2020 (in thousands):
Maturity (in years)
Amortized Cost
Unrealized Losses
Unrealized Gains
Estimated Fair Value
March 31, 2021
Classified as current assets:
U.S. Treasury debt securities
1 or less
$
29,984
$

$
13
$
29,997
Non-U.S. government securities
1 or less
46,371
(11
)

46,360
Municipal securities
1 or less
10,822
(3
)

10,819
Corporate debt securities
1 or less
217,954
(125
)
18
217,847
Commercial paper
1 or less
378,743
(47
)
3
378,699
Total short-term investments
683,874
(186
)
34
683,722
Classified as non-current assets:
Municipal securities
Greater than 1
3,050
(2
)

3,048
Corporate debt securities
Greater than 1
95,342
(110
)
4
95,236
Total long-term investments
98,392
(112
)
4
98,284
December 31, 2020
Classified as current assets:
U.S. Treasury debt securities
1 or less
$
39,736
$

$
31
$
39,767
Non-U.S. government securities
1 or less
5,054

2
$
5,056
Municipal securities
1 or less
3,082
(1
)

$
3,081
Corporate debt securities
1 or less
159,947
(68
)
124
$
160,003
Commercial paper
1 or less
107,680
(18
)

$
107,662
Total short-term investments
$
315,499
$
(87
)
$
157
$
315,569
As of March 31, 2021 and December 31, 2020, the Company had $1.9 million and $1.5 million, respectively, of accrued interest on investments recorded in prepaid expenses and other assets on the unaudited condensed consolidated balance sheets. 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 months ended March 31, 2021 and 2020, 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 Measurements3 Months Ended
Mar. 31, 2021
Fair Value Disclosures [Abstract]
Fair Value Measurements5.
Fair Value Measurements The Company’s financial instruments consist primarily of cash and cash equivalents, marketable securities, accounts receivable, stock price appreciation milestones, accounts payable, and accrued liabilities. The carrying amounts of accounts receivable, accounts payable and accrued liabilities are considered to be representative of their respective fair values because of the relatively short-term nature of those instruments. 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. Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020 (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 March 31, 2021:
Financial assets:
Money market funds
$
106,413
$
106,413
$

$

U.S. Treasury debt securities
29,997
29,997
Non-U.S. government securities
46,360

46,360
Municipal securities
13,867

13,867
Corporate debt securities
313,083

313,083
Commercial paper
378,699

378,699
Total financial assets measured at fair value on a recurring basis
$
888,419
$
136,410
$
752,009
$

Financial liabilities:
Stock price appreciation milestones
$
46,958
$

$

$
46,958
Total financial liabilities measured at fair value on a recurring basis
$
46,958
$

$

$
46,958
As of December 31, 2020
Financial assets:
Money market funds
$
167,347
$
167,347
$

$

U.S. Treasury debt securities
39,767
39,767


Non-U.S. government securities
5,056

5,056

Municipal securities
3,081

3,081

Corporate debt securities
160,003

160,003

Commercial paper
107,662

107,662

Total assets measured at fair value on a recurring basis
$
482,916
$
207,114
$
275,802
$

Financial liabilities:
Stock price appreciation milestones
$
47,702
$

$

$
47,702
Total financial liabilities measured at fair value on a recurring basis
$
47,702
$

$

$
47,702
Level 1 assets consisted of money market funds and U.S. Treasury debt securities measured at fair value based on quoted prices in active markets as provided by the Company’s investment managers. Level 2 assets consisted of non-U.S. government securities, municipal securities, corporate debt securities , and commercial paper measured at fair value using standard observable inputs, including reported trades, broker/dealer quotes, and bids and/or offers. The Company validates the quoted market prices provided by its investment managers by comparing the investment managers’ assessment of the fair values of the Company ’ s investment portfolio balance against the fair values of the Company ’ s investment portfolio balance obtained from an independent source. There were no Level 3 assets held by the Company as of March 31, 2021. Level 3 liabilities consisted of stock price appreciation milestones associated with the Amended MSK License as described in detail in Note 2. To determine the estimated fair value of the stock price appreciation milestones, the Company uses a Monte Carlo simulation methodology which models future Company common stock prices based on several key variables. The assumptions used to calculate the fair value of the stock price appreciation milestones are subject to a significant amount of judgment including the expected volatility of the Company’s common stock and estimated term, which is based in part on the last valid patent claim date. Fair value measurements are highly sensitive to changes in these inputs and significant changes could result in a significantly higher or lower fair value and resulting expense or gain. Further, as the stock price appreciation milestones are first contingent upon the achievement of a specified clinical milestone, the Company also estimates the fair value of the stock price appreciation milestones based on the probability of achieving the clinical milestone. This assessment is based on several factors including the successful achievement of technological, manufacturing, and regulatory requirements . A small change in the assumptions and other inputs, such as the price of the Company’s common stock, may have a relatively large change in the estimated fair value of the stock price appreciation milestones and associated liability and expense. For example, keeping all other variables constant, a hypothetical 10% increase in the stock price at March 31, 2021 from $82.45 to $90.70 per share would have increased the expense recorded during the three months ended March 31, 2021 by $2.7 million related to the stock price appreciation milestones. Keeping all other variables constant, a hypothetical 10% decrease in the stock price at March 31, 2021 from $82.45 to $74.21 per share would have decreased the expense recorded during the three months ended March 31, 2021 by $2.9 million related to the stock price appreciation milestones. The following table presents the changes in fair value of the Company’s Level 3 stock price appreciation milestones liability (in thousands):
Balance at December 31, 2020
$
47,702
Changes in fair value of stock price appreciation milestones liability
(744
)
Balance at March 31, 2021
$
46,958
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.

Accrued Expenses

Accrued Expenses3 Months Ended
Mar. 31, 2021
Payables And Accruals [Abstract]
Accrued Expenses6.
Accrued Expenses Accrued Expenses Current accrued expenses consist of the following (in thousands):
March 31, 2021
December 31, 2020
Accrued payroll and other employee benefits
$
8,373
$
4,815
Accrued clinical trial related costs
6,814
5,244
Accrued other
5,744
5,505
Total current accrued expenses
$
20,931
$
15,564

Leases

Leases3 Months Ended
Mar. 31, 2021
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). 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 March 31, 2021, the Company had fully utilized the tenant improvements allowance. 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 March 31, 2021, future undiscounted minimum contractual payments under the Company’s operating leases were $194.1 million, which will be paid over a remaining weighted-average lease term of 13.2 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 March 31,
2021
2020
Straight-line lease expense
$
3,534
$
2,938
Variable lease expense
235
610
Total operating lease expense
$
3,769
$
3,548
Total lease expense associated with short-term leases for the three months ended March 31, 2020 was $0.6 million. No short-term lease expense was recognized during the three months ended March 31, 2021. Future minimum lease payments under the Company’s operating leases as of March 31, 2021 are as follows (in thousands):
Operating Lease Payments
Remaining in 2021
$
10,274
2022
13,217
2023
12,988
2024
13,378
2025
13,779
2026
14,193
Thereafter
116,254
Total undiscounted lease payments
$
194,083
Less: imputed interest
(83,159
)
Total lease liability
$
110,924

Convertible Preferred Stock and

Convertible Preferred Stock and Stockholders' Equity3 Months Ended
Mar. 31, 2021
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. Pre-Funded Warrants In January 2021, in conjunction with a public offering, the Company issued Pre-Funded Warrants, in lieu of common stock to certain investors, to purchase 257,310 shares of the Company’s common stock. The purchase price for the Pre-Funded Warrants was $85.499 per Pre-Funded Warrant, which equals the per share public offering price for the shares of common stock less the $0.001 exercise price for each such Pre-Funded Warrant. Given that the Pre-Funded Warrants are indexed to the Company’s own shares of common stock (and otherwise meet the requirements to be classified in equity), the Company recorded the consideration received from the issuance of the warrants as additional paid-in capital on the Company’s unaudited condensed consolidated balance sheets. The Pre-Funded Warrants are exercisable at any time after the date of issuance. A holder of Pre-Funded Warrants may not exercise the Pre-Funded Warrant if the holder, together with its affiliates, would beneficially own more than 9.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise. A holder of Pre-Funded Warrants may increase or decrease this percentage not in excess of 19.99% by providing at least 61 days’ prior notice to the Company. As of March 31, 2021, there were 257,310 Pre-Funded Warrants outstanding. 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, 2020
10,432,822
$
15.11
Granted
323,909
95.26
Exercised
(613,015
)
9.30
Cancelled
(75,935
)
24.85
Balance at March 31, 2021
10,067,781
$
17.97
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, 2020
1,401,732
$
20.91
Granted
559,648
108.18
Vested
(430,620
)
19.38
Cancelled
(26,653
)
31.64
Balance at March 31, 2021
1,504,107
$
53.63
The allocation of stock-based compensation for all stock awards is as follows (in thousands):
Three Months Ended March 31,
2021
2020
Research and development
$
8,522
$
4,253
General and administrative
4,454
2,660
Total
$
12,976
$
6,913
As of March 31, 2021, the unrecognized compensation cost related to outstanding options was $75.6 million and is expected to be recognized as expense over a weighted-average period of approximately 2.9 years. As of March 31, 2021, the unrecognized compensation cost related to restricted stock units was $75.4 million which is expected to be recognized as expense over a weighted-average period of approximately 3.5 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:
Three Months Ended March 31,
2021
2020
Risk-free interest rate
0.4
%
1.6
%
Expected volatility
76.5
%
77.0
%
Expected term (in years)
5.1
5.6
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 months ended March 31, 2021 (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, 2020
2,794,549
$
3
87,722,237
$
88
$
941,216
$
70
$
(556,932
)
$
384,445
Exercise of stock options, net of issuance costs


613,015
1
5,647


5,648
Issuance of common stock upon vesting of restricted stock units


430,620





Stock-based compensation




12,976


12,976
Public offering of common stock and issuance of pre-funded warrants, net of issuance costs


5,122,807
5
432,440


432,445
Unrealized loss on investments





(330
)

(330
)
Net loss






(45,089
)
(45,089
)
Balance at March 31, 2021
2,794,549
$
3
93,888,679
$
94
$
1,392,279
$
(260
)
$
(602,021
)
$
790,095
The following table summarizes the Company’s changes in stockholders’ equity accounts for the three months ended March 31, 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

979


979
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
$
636,092
$
142
$
(417,065
)
$
219,248

Organization and Summary of S_2

Organization and Summary of Significant Accounting Policies (Policies)3 Months Ended
Mar. 31, 2021
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Public Equity OfferingPublic Equity Offerings In January 2021, the Company completed a public offering of common stock in which investors, certain of which are affiliated with a director of the Company, purchased 5.1 million shares of the Company’s common stock at a price of $85.50 per share under a shelf registration statement. In addition, the Company issued pre-funded warrants, in lieu of common stock to certain investors, to purchase 257,310 shares of the Company’s common stock (Pre-Funded Warrants). The purchase price of t he Pre-Funded Warrants was $85.499 per Pre-Funded Warrant, which equals the per share public offering price for the shares of common stock less the $0.001 exercise price for each such Pre-Funded Warrant. See Note 8 for additional detail. Gross proceeds from the public offering and the issuance of the Pre-Funded Warrants were $460.0 million, and after giving effect to $27.6 million of costs related to the public offering and the issuance of Pre-Funded Warrants, net proceeds were $ million. 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 public offering were $201.3 million, and, after giving effect to $12.5 million of costs related to the public offering, net proceeds were $188.8 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 stock price appreciation milestone obligations, contracts containing leases, accrued expenses, stock-based compensation, 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 three months ended March 31, 2021. 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 the COVID-19 pandemic 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 the ongoing COVID-19 pandemic 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 March 31, 2021 and 2020 (in thousands):
Three Months Ended March 31,
2021
2020
Cash and cash equivalents
$
106,413
$
83,366
Restricted cash
15,227
15,227
Total cash, cash equivalents, and restricted cash shown in the unaudited condensed consolidated statement of cash flows
$
121,640
$
98,593
In January 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 $15.2
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 unaudited 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, 2020, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed by the Company with the SEC on February 24, 2021. 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 months ended March 31, 2021 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 or a service to a customer. The Company identifies each promise to transfer a product or a service (or a bundle of products or services, or a series of products and services that are substantially the same and have the same pattern of transfer) that is distinct. A product or a service is distinct if both ( i ) the customer can benefit from the product or the service either on its own or together with other resources that are readily available to the customer and (ii) the Company’s promise to transfer the product or the service to the customer is separately identifiable from other promises in the contract. Each distinct promise to transfer a product or a service is a unit of accounting for revenue recognition. If a promise to transfer a product or a service is not separately identifiable from other promises in the contract, such promises should be combined into a single performance obligation. 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.
Stock Price Appreciation MilestonesStock Price Appreciation Milestones The Company estimates the fair value of the stock price appreciation milestones associated with the Amended and Restated Exclusive License Agreement with Memorial Sloan Kettering Cancer Center (see Note 2), using a Monte Carlo simulation model, which relies on the Company’s current stock price as well as significant estimates and assumptions to determine the estimated liability associated with the contingent milestone payments. The Company accounts for the fair value of the stock price appreciation milestones in accordance with Accounting Standards Codification (ASC) 815, Derivatives and Hedging .
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 ROU assets and lease obligations 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. 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. The Pre-Funded Warrants associated with the January 2021 public equity offering (see Note 8) are considered outstanding shares in the basic earnings per share calculation given their nominal exercise price. 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 months ended March 31, 2021, the Company realized a net loss of $45.1 million. Shares of potentially dilutive securities totaled 25.5 million for the three months ended March 31, 2021, 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 11.6 million shares of common stock issuable upon the exercise of outstanding stock options and the settlement of outstanding restricted stock units. For the three months ended March 31, 2020, the Company realized a net loss of $33.5 million. Shares of potentially dilutive securities totaled 25.9 million for the three months ended March 31, 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 11.9 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 Issued Accounting PronouncementsRecently Issued Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

Organization and Summary of S_3

Organization and Summary of Significant Accounting Policies (Tables)3 Months Ended
Mar. 31, 2021
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 March 31, 2021 and 2020 (in thousands):
Three Months Ended March 31,
2021
2020
Cash and cash equivalents
$
106,413
$
83,366
Restricted cash
15,227
15,227
Total cash, cash equivalents, and restricted cash shown in the unaudited condensed consolidated statement of cash flows
$
121,640
$
98,593

Collaboration and License Agr_2

Collaboration and License Agreements (Tables)3 Months Ended
Mar. 31, 2021
Collaboration And License Agreements Disclosure [Abstract]
Summary of all Possible Stock Price Appreciation Milestone PaymentsThe following table summarizes the common stock multiples and the stock price appreciation milestone payments, none of which have been triggered as of March 31, 2021:
Common stock multiple
5.0x
10.0x
15.0x
Ten-trading day trailing average common stock price
$
50.18
$
100.36
$
150.54
Stock price appreciation milestone payment (in millions)
$
20.0
$
30.0
$
25.0
Schedule of Determine the Estimated Fair Value of the Stock Price Appreciation Milestones PaymentsThe following variables were incorporated in the calculation of the estimated fair value of the stock price appreciation milestones as of March 31, 2021:
As of March 31,
As of December 31,
2021
2020
Risk-free interest rate
2.3
%
1.5
%
Expected volatility
78.3
%
78.1
%
Estimated term (in years)
17.8
18.0
Closing stock price as of remeasurement date
$
82.45
$
90.93

Investments (Tables)

Investments (Tables)3 Months Ended
Mar. 31, 2021
Investments [Abstract]
Summary of InvestmentsThe following table summarizes the Company’s investments accounted for as available-for-sale securities as of March 31, 2021 and December 31, 2020 (in thousands):
Maturity (in years)
Amortized Cost
Unrealized Losses
Unrealized Gains
Estimated Fair Value
March 31, 2021
Classified as current assets:
U.S. Treasury debt securities
1 or less
$
29,984
$

$
13
$
29,997
Non-U.S. government securities
1 or less
46,371
(11
)

46,360
Municipal securities
1 or less
10,822
(3
)

10,819
Corporate debt securities
1 or less
217,954
(125
)
18
217,847
Commercial paper
1 or less
378,743
(47
)
3
378,699
Total short-term investments
683,874
(186
)
34
683,722
Classified as non-current assets:
Municipal securities
Greater than 1
3,050
(2
)

3,048
Corporate debt securities
Greater than 1
95,342
(110
)
4
95,236
Total long-term investments
98,392
(112
)
4
98,284
December 31, 2020
Classified as current assets:
U.S. Treasury debt securities
1 or less
$
39,736
$

$
31
$
39,767
Non-U.S. government securities
1 or less
5,054

2
$
5,056
Municipal securities
1 or less
3,082
(1
)

$
3,081
Corporate debt securities
1 or less
159,947
(68
)
124
$
160,003
Commercial paper
1 or less
107,680
(18
)

$
107,662
Total short-term investments
$
315,499
$
(87
)
$
157
$
315,569

Fair Value Measurements (Tables

Fair Value Measurements (Tables)3 Months Ended
Mar. 31, 2021
Fair Value Disclosures [Abstract]
Schedule of Assets Measured at Fair Value on Recurring BasisThe following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 and December 31, 2020 (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 March 31, 2021:
Financial assets:
Money market funds
$
106,413
$
106,413
$

$

U.S. Treasury debt securities
29,997
29,997
Non-U.S. government securities
46,360

46,360
Municipal securities
13,867

13,867
Corporate debt securities
313,083

313,083
Commercial paper
378,699

378,699
Total financial assets measured at fair value on a recurring basis
$
888,419
$
136,410
$
752,009
$

Financial liabilities:
Stock price appreciation milestones
$
46,958
$

$

$
46,958
Total financial liabilities measured at fair value on a recurring basis
$
46,958
$

$

$
46,958
As of December 31, 2020
Financial assets:
Money market funds
$
167,347
$
167,347
$

$

U.S. Treasury debt securities
39,767
39,767


Non-U.S. government securities
5,056

5,056

Municipal securities
3,081

3,081

Corporate debt securities
160,003

160,003

Commercial paper
107,662

107,662

Total assets measured at fair value on a recurring basis
$
482,916
$
207,114
$
275,802
$

Financial liabilities:
Stock price appreciation milestones
$
47,702
$

$

$
47,702
Total financial liabilities measured at fair value on a recurring basis
$
47,702
$

$

$
47,702
Summary of Changes in the Fair Value of the Company's Level 3 Enterprise Fair Value Milestone Payment LiabilityThe following table presents the changes in fair value of the Company’s Level 3 stock price appreciation milestones liability (in thousands):
Balance at December 31, 2020
$
47,702
Changes in fair value of stock price appreciation milestones liability
(744
)
Balance at March 31, 2021
$
46,958

Accrued Expenses (Tables)

Accrued Expenses (Tables)3 Months Ended
Mar. 31, 2021
Payables And Accruals [Abstract]
Schedule of accrued expensesCurrent accrued expenses consist of the following (in thousands):
March 31, 2021
December 31, 2020
Accrued payroll and other employee benefits
$
8,373
$
4,815
Accrued clinical trial related costs
6,814
5,244
Accrued other
5,744
5,505
Total current accrued expenses
$
20,931
$
15,564

Leases (Tables)

Leases (Tables)3 Months Ended
Mar. 31, 2021
Leases [Abstract]
Schedule of Components of Lease ExpenseThe components of lease expense were as follows:
Three Months Ended March 31,
2021
2020
Straight-line lease expense
$
3,534
$
2,938
Variable lease expense
235
610
Total operating lease expense
$
3,769
$
3,548
Schedule of Future Minimum Payments Under Non-cancelable Operating LeasesFuture minimum lease payments under the Company’s operating leases as of March 31, 2021 are as follows (in thousands):
Operating Lease Payments
Remaining in 2021
$
10,274
2022
13,217
2023
12,988
2024
13,378
2025
13,779
2026
14,193
Thereafter
116,254
Total undiscounted lease payments
$
194,083
Less: imputed interest
(83,159
)
Total lease liability
$
110,924

Convertible Preferred Stock a_2

Convertible Preferred Stock and Stockholders' Equity (Tables)3 Months Ended
Mar. 31, 2021
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, 2020
10,432,822
$
15.11
Granted
323,909
95.26
Exercised
(613,015
)
9.30
Cancelled
(75,935
)
24.85
Balance at March 31, 2021
10,067,781
$
17.97
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, 2020
1,401,732
$
20.91
Granted
559,648
108.18
Vested
(430,620
)
19.38
Cancelled
(26,653
)
31.64
Balance at March 31, 2021
1,504,107
$
53.63
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 March 31,
2021
2020
Research and development
$
8,522
$
4,253
General and administrative
4,454
2,660
Total
$
12,976
$
6,913
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:
Three Months Ended March 31,
2021
2020
Risk-free interest rate
0.4
%
1.6
%
Expected volatility
76.5
%
77.0
%
Expected term (in years)
5.1
5.6
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 months ended March 31, 2021 (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, 2020
2,794,549
$
3
87,722,237
$
88
$
941,216
$
70
$
(556,932
)
$
384,445
Exercise of stock options, net of issuance costs


613,015
1
5,647


5,648
Issuance of common stock upon vesting of restricted stock units


430,620





Stock-based compensation




12,976


12,976
Public offering of common stock and issuance of pre-funded warrants, net of issuance costs


5,122,807
5
432,440


432,445
Unrealized loss on investments





(330
)

(330
)
Net loss






(45,089
)
(45,089
)
Balance at March 31, 2021
2,794,549
$
3
93,888,679
$
94
$
1,392,279
$
(260
)
$
(602,021
)
$
790,095
The following table summarizes the Company’s changes in stockholders’ equity accounts for the three months ended March 31, 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

979


979
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
$
636,092
$
142
$
(417,065
)
$
219,248

Organization and Summary of S_4

Organization and Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Thousands1 Months Ended3 Months Ended
Jan. 31, 2021Jun. 30, 2020Apr. 30, 2020Mar. 31, 2021Mar. 31, 2020Jan. 31, 2020
Organization and summary of significant accounting policies
Net loss $ (45,089) $ (33,520)
Potentially dilutive securities (in shares)25,500,000 25,900,000
Letters of credit outstanding amount $ 15,200 $ 15,200
Class A Convertible Preferred Stock
Organization and summary of significant accounting policies
Potentially dilutive securities (in shares)14,000,000 14,000,000
Common Stock Options | Restricted Stock Units (RSUs)
Organization and summary of significant accounting policies
Potentially dilutive securities (in shares)11,600,000 11,900,000
Maximum
Organization and summary of significant accounting policies
Short-term leases term excluded from calculation of ROU and lease liabilities12 months
Silicon Valley Bank | Letter of Credit
Organization and summary of significant accounting policies
Letters of credit outstanding amount $ 15,000
Pre-Funded Warrants
Organization and summary of significant accounting policies
Purchase price of prefunded warrants $ 85.499
Exercise price of warrants $ 0.001
January 2021 Public Offering
Organization and summary of significant accounting policies
Issuance of common stock in conjunction with public offering (in shares)5,100,000
Share issue price (in dollars per share) $ 85.50
Aggregate purchase price of common stock $ 460,000
Net proceeds from issuance of shares after related cash costs432,400
Costs related to equity offering $ 27,600
January 2021 Public Offering | Pre Funded Common Stock Warrant [Member]
Organization and summary of significant accounting policies
Number of shares to be purchased257,310
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
Aggregate purchase price of common stock $ 201,300
Net proceeds from issuance of shares after related cash costs188,800
Costs related to equity offering $ 12,500
Private Placement | Common Stock | Johnson Johnson Innovation J J D C Inc
Organization and summary of significant accounting policies
Share issue price (in dollars per share) $ 28.31
Aggregate purchase price of common stock $ 50,000
Net proceeds from issuance of shares after related cash costs $ 50,000
Issuance of common stock during period for private placements (in shares)1,800,000
Private Placement | Common Stock | Stock Purchase Agreement | Johnson Johnson Innovation J J D C Inc
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 ThousandsMar. 31, 2021Dec. 31, 2020Mar. 31, 2020Dec. 31, 2019
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Cash and cash equivalents $ 106,413 $ 167,347 $ 83,366
Restricted cash15,227 15,227
Total cash, cash equivalents, and restricted cash shown in the unaudited condensed consolidated statement of cash flows $ 121,640 $ 182,574 $ 98,593 $ 100,041

Collaboration and License Agr_3

Collaboration and License Agreements - Janssen Collaboration and Option Agreement (Details) - USD ($)Apr. 07, 2020Apr. 02, 2020Jun. 30, 2020Mar. 31, 2021Mar. 31, 2020Dec. 31, 2020
Collaboration agreement
Collaboration contract asset $ 12,883,000 $ 13,506,000
Revenue recognized11,142,000 $ 2,515,000
Janssen Biotech Inc
Collaboration agreement
Upfront, non-refundable and non-creditable payment $ 50,000,000 50,000,000
Transaction price of the agreement66,000,000
Equity premium16,000,000
Non-refundable upfront payments recorded as deferred revenue $ 66,000,000
Collaboration contract asset13,300,000
Sublicense consideration paid13,300,000
Amortization of sublicense consideration400,000
Revenue recognized8,600,000
Deferred revenue57,600,000
Deferred revenue classified as current16,400,000
Research and development fees cash payments received10,100,000
Janssen Biotech Inc | Research And Development
Collaboration agreement
Revenue recognized6,800,000
Janssen Biotech Inc | Upfront Fee and Equity Premium
Collaboration agreement
Revenue recognized1,800,000
Janssen Biotech Inc | Sublicense Consideration
Collaboration agreement
Collaboration contract asset $ 11,600,000
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
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
Share issue price (in dollars per share) $ 28.31
Issuance of common stock during period for private placements (in shares)1,800,000
First Janssen Cancer Target | Maximum | Janssen Agreement
Collaboration agreement
Development, regulatory, and sales milestones $ 898,000,000
Additional candidate milestone Payments460,000,000
Additional Cancer Targets | Maximum | Janssen Agreement
Collaboration agreement
Development, regulatory, and sales milestones706,000,000
Additional candidate milestone Payments $ 340,000,000

Collaboration and License Agr_4

Collaboration and License Agreements - Ono Collaboration and Option Agreement (Details) - USD ($)Sep. 14, 2018Oct. 31, 2018Mar. 31, 2021Mar. 31, 2020Dec. 31, 2020Dec. 04, 2020
Collaboration agreement
Collaboration contract asset $ 12,883,000 $ 13,506,000
Revenue recognized11,142,000 $ 2,515,000
Ono Pharmaceutical Co. Ltd
Collaboration agreement
Non-refundable upfront payments recorded as deferred revenue $ 10,000,000
Aggregate research and development fees payments receivable20,000,000
Collaborative arrangement annual payments receivable recorded as deferred revenue $ 5,000,000 13,500,000
Collaborative arrangement potential additional milestones20,000,000
First-year research and development fees prepayment $ 5,000,000
Transaction price of the agreement $ 30,000,000
Sublicense consideration paid4,000,000
Collaboration contract asset4,000,000
Amortization of sublicense consideration200,000 200,000
Revenue recognized2,500,000 2,500,000
Deferred revenue6,400,000
Deferred revenue classified as current4,600,000
Ono Pharmaceutical Co. Ltd | Candidate 2
Collaboration agreement
Percentage of reduction on milestone payments50.00%
Ono Pharmaceutical Co. Ltd | Maximum | Candidate 2
Collaboration agreement
Aggregate milestone payments $ 885,000,000
Ono Pharmaceutical Co. Ltd | Collaborative Arrangement | Research services
Collaboration agreement
Revenue recognized1,300,000 1,700,000
Ono Pharmaceutical Co. Ltd | Collaborative Arrangement | Upfront Fee
Collaboration agreement
Revenue recognized1,200,000 $ 800,000
Ono Pharmaceutical Co. Ltd | Collaborative Arrangement | Minimum
Collaboration agreement
Profits and losses sharing percentage50.00%
Ono Pharmaceutical Co. Ltd | Sublicense Consideration
Collaboration agreement
Collaboration contract asset $ 1,300,000
Ono Letter Agreement | Ono Pharmaceutical Co. Ltd
Collaboration agreement
Milestone payments $ 10,000,000
Milestone payments recorded to deferred revenue $ 10,000,000

Collaboration and License Agr_5

Collaboration and License Agreements - Memorial Sloan Kettering Cancer Center License Agreement (Details) - Amended MSK License $ in Millions3 Months Ended
Mar. 31, 2021USD ($)
Collaboration agreement
Enterprise value milestone payment $ 75
Change in fair value of enterprise value milestones0.7
Enterprise value milestones liability at fair value $ 47

Collaboration and License Agr_6

Collaboration and License Agreements (Details 1) - Amended MSK License $ / shares in Units, $ in Millions3 Months Ended
Mar. 31, 2021USD ($)$ / shares
Milestone One
Collaboration agreement
Common stock multiple5.0x
Ten-trading day trailing average common stock price | $ / shares $ 50.18
Stock price appreciation milestone payment (in millions) | $ $ 20
Milestone Two
Collaboration agreement
Common stock multiple10.0x
Ten-trading day trailing average common stock price | $ / shares $ 100.36
Stock price appreciation milestone payment (in millions) | $ $ 30
Milestone Three
Collaboration agreement
Common stock multiple15.0x
Ten-trading day trailing average common stock price | $ / shares $ 150.54
Stock price appreciation milestone payment (in millions) | $ $ 25

Collaboration and License Agr_7

Collaboration and License Agreements (Details 2) - $ / shares3 Months Ended12 Months Ended
Mar. 31, 2021Dec. 31, 2020
Determine the estimated fair value of the enterprise value milestone payments
Closing stock price as of remeasurement date $ 82.45
Amended MSK License
Determine the estimated fair value of the enterprise value milestone payments
Risk-free interest rate2.30%1.50%
Expected volatility78.30%78.10%
Estimated term (in years)17 years 9 months 18 days18 years
Closing stock price as of remeasurement date $ 82.45 $ 90.93

California Institute For Rege_2

California Institute For Regenerative Medicine Award (Details) $ in MillionsApr. 05, 2018USD ($)DisbursementMar. 31, 2021USD ($)
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 Ended12 Months Ended
Mar. 31, 2021Mar. 31, 2020Dec. 31, 2020
Schedule Of Available For Sale Securities [Line Items]
Available-for-sale securities, impairment $ 0 $ 0 $ 0
Available-for-sale securities, realized gains (losses) on sales0 0 0
Available-for-sale securities, recognition of expected credit losses0 $ 0 0
Prepaid Expenses And Other Assets
Schedule Of Available For Sale Securities [Line Items]
Accured Interest on investments $ 1,900,000 $ 1,500,000
Treasuries, Non-U.S. Government Securities, Municipal Securities, Corporate Debt Securities and Commercial Paper
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 Thousands3 Months Ended12 Months Ended
Mar. 31, 2021Dec. 31, 2020
Short-term Investments [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost $ 683,874 $ 315,499
Unrealized Losses(186)(87)
Unrealized Gains34 157
Estimated Fair Value683,722 $ 315,569
Long-term Investments [Member]
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost98,392
Unrealized Losses(112)
Unrealized Gains4
Estimated Fair Value $ 98,284
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 $ 29,984 $ 39,736
Unrealized Gains13 31
Estimated Fair Value $ 29,997 $ 39,767
Non-U.S. government securities | Current Assets [Member]
Schedule Of Available For Sale Securities [Line Items]
Maturity (in years)1 or less1 or less
Amortized Cost $ 46,371 $ 5,054
Unrealized Losses(11)
Unrealized Gains2
Estimated Fair Value $ 46,360 $ 5,056
Municipal securities | Current Assets [Member]
Schedule Of Available For Sale Securities [Line Items]
Maturity (in years)1 or less1 or less
Amortized Cost $ 10,822 $ 3,082
Unrealized Losses(3)(1)
Estimated Fair Value $ 10,819 $ 3,081
Municipal securities | Non-current Assets [Member]
Schedule Of Available For Sale Securities [Line Items]
Maturity (in years)Greater than 1
Amortized Cost $ 3,050
Unrealized Losses(2)
Estimated Fair Value $ 3,048
Corporate debt securities | Current Assets [Member]
Schedule Of Available For Sale Securities [Line Items]
Maturity (in years)1 or less1 or less
Amortized Cost $ 217,954 $ 159,947
Unrealized Losses(125)(68)
Unrealized Gains18 124
Estimated Fair Value $ 217,847 $ 160,003
Corporate debt securities | Non-current Assets [Member]
Schedule Of Available For Sale Securities [Line Items]
Maturity (in years)Greater than 1
Amortized Cost $ 95,342
Unrealized Losses(110)
Unrealized Gains4
Estimated Fair Value $ 95,236
Commercial Paper | Current Assets [Member]
Schedule Of Available For Sale Securities [Line Items]
Maturity (in years)1 or less1 or less
Amortized Cost $ 378,743 $ 107,680
Unrealized Losses(47)(18)
Unrealized Gains3
Estimated Fair Value $ 378,699 $ 107,662

Fair Value Measurements (Detail

Fair Value Measurements (Details) - Fair Value Measurements Recurring - USD ($) $ in ThousandsMar. 31, 2021Dec. 31, 2020
Financial assets:
Total financial assets measured at fair value on a recurring basis $ 888,419 $ 482,916
Financial liabilities:
Total financial liabilities measured at fair value on a recurring basis46,958 47,702
Stock price appreciation milestones
Financial liabilities:
Stock price appreciation milestones46,958 47,702
Money market funds
Financial assets:
Money market funds106,413 167,347
U.S. Treasury debt securities
Financial assets:
Investments29,997 39,767
Non-U.S. government securities
Financial assets:
Investments46,360 5,056
Municipal securities
Financial assets:
Investments13,867 3,081
Corporate debt securities
Financial assets:
Investments313,083 160,003
Commercial Paper
Financial assets:
Investments378,699 107,662
Quoted prices in Active Market for Identical Assets (Level 1)
Financial assets:
Total financial assets measured at fair value on a recurring basis136,410 207,114
Quoted prices in Active Market for Identical Assets (Level 1) | Money market funds
Financial assets:
Money market funds106,413 167,347
Quoted prices in Active Market for Identical Assets (Level 1) | U.S. Treasury debt securities
Financial assets:
Investments29,997 39,767
Significant Other Observable Inputs (Level 2)
Financial assets:
Total financial assets measured at fair value on a recurring basis752,009 275,802
Significant Other Observable Inputs (Level 2) | Non-U.S. government securities
Financial assets:
Investments46,360 5,056
Significant Other Observable Inputs (Level 2) | Municipal securities
Financial assets:
Investments13,867 3,081
Significant Other Observable Inputs (Level 2) | Corporate debt securities
Financial assets:
Investments313,083 160,003
Significant Other Observable Inputs (Level 2) | Commercial Paper
Financial assets:
Investments378,699 107,662
Significant Unobservable Inputs (Level 3)
Financial liabilities:
Total financial liabilities measured at fair value on a recurring basis46,958 47,702
Significant Unobservable Inputs (Level 3) | Stock price appreciation milestones
Financial liabilities:
Stock price appreciation milestones $ 46,958 $ 47,702

Fair Value Measurements (Deta_2

Fair Value Measurements (Details 2)3 Months Ended
Mar. 31, 2021USD ($)$ / shares
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Closing stock price as of remeasurement date | $ / shares $ 82.45
Change in fair value of stock price appreciation milestones $ (744,000)
Transfer of assets from level 1 to level 20
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
Total financial liabilities measured at fair value on a recurring basis $ 0
Stock price increased by 10% per share
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Sensitivity analysis fair value inputs stock price increase/decrease10.00%
Sensitivity analysis share price fair value input | $ / shares $ 90.70
Change in fair value of stock price appreciation milestones $ 2,700,000
Stock price decreased by 10% per share
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Sensitivity analysis fair value inputs stock price increase/decrease10.00%
Sensitivity analysis share price fair value input | $ / shares $ 74.21
Change in fair value of stock price appreciation milestones $ 2,900,000

Fair Value Measurements (Deta_3

Fair Value Measurements (Details 3) $ in Thousands3 Months Ended
Mar. 31, 2021USD ($)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Change in fair value of stock price appreciation milestones $ (744)
Significant Unobservable Inputs (Level 3)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Balance at the beginning of the period47,702
Change in fair value of stock price appreciation milestones(744)
Balance at the end of the period $ 46,958

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in ThousandsMar. 31, 2021Dec. 31, 2020
Current accrued expenses
Accrued payroll and other employee benefits $ 8,373 $ 4,815
Accrued clinical trial related costs6,814 5,244
Accrued other5,744 5,505
Total current accrued expenses $ 20,931 $ 15,564

Leases (Details)

Leases (Details) - USD ($) $ in Thousands1 Months Ended3 Months Ended
Jan. 31, 2020Mar. 31, 2021Mar. 31, 2020
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 $ 15,200
Future minimum payments under the operating leases $ 194,083
Remaining weighted-average lease term13 years 2 months 12 days
Operating lease liabilities, weighted-average discount rate8.40%
Total short-term lease expense $ 0 $ 600
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
Early termination fees $ 30,000
Letters of credit outstanding amount15,000
Minimum
Lessee Lease Description [Line Items]
Lease term1 year
Future minimum payments under the operating leases $ 194,100
Maximum
Lessee Lease Description [Line Items]
Lease term16 years
Maximum | The Premises 2020 Lease Agreement
Lessee Lease Description [Line Items]
Renewal term10 years
Aggregate tenant improvements of the premises $ 29,800

Leases (Details 1)

Leases (Details 1) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Lease Cost [Abstract]
Straight-line lease expense $ 3,534 $ 2,938
Variable lease expense235 610
Total operating lease expense $ 3,769 $ 3,548

Leases (Details 2)

Leases (Details 2) $ in ThousandsMar. 31, 2021USD ($)
Operating Lease Liabilities Payments Due [Abstract]
Remaining in 2021 $ 10,274
202213,217
202312,988
202413,378
202513,779
202614,193
Thereafter116,254
Total undiscounted lease payments194,083
Less: imputed interest(83,159)
Total lease liability $ 110,924

Convertible Preferred Stock a_3

Convertible Preferred Stock and Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions1 Months Ended3 Months Ended12 Months Ended
Jan. 31, 2021Nov. 30, 2016Mar. 31, 2021Dec. 31, 2019Dec. 31, 2020May 02, 2017
Convertible preferred stock
Preferred stock, par value (in dollars per share) $ 0.001 $ 0.001
Employee And Non Employee Stock Option
Convertible preferred stock
Unrecognized compensation cost related to outstanding options $ 75.6
Expected recognition weighted average period of unrecognized compensation cost2 years 10 months 24 days
Restricted Stock Units (RSUs)
Convertible preferred stock
Expected recognition weighted average period of unrecognized compensation cost3 years 6 months
Unrecognized compensation cost related to unvested restricted shares $ 75.4
Pre-Funded Warrants
Convertible preferred stock
Number of shares to be purchased257,310 257,310
Purchase price of prefunded warrants $ 85.499
Exercise price of warrants $ 0.001
Terms of exerciseThe Pre-Funded Warrants are exercisable at any time after the date of issuance. A holder of Pre-Funded Warrants may not exercise the Pre-Funded Warrant if the holder, together with its affiliates, would beneficially own more than 9.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise. A holder of Pre-Funded Warrants may increase or decrease this percentage not in excess of 19.99% by providing at least 61 days’ prior notice to the Company.
As of March 31, 2021, there were 257,310 Pre-Funded Warrants outstanding.

Maximum percentage of common stock ownership together with affiliates allowable after exercise of prefunded warrants9.99%
Maximum percentage of common stock ownership after change upon notice19.99%
Common Stock
Convertible preferred stock
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
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 Option3 Months Ended
Mar. 31, 2021$ / sharesshares
Number of Options
Balance at the beginning of the period | shares10,432,822
Granted | shares323,909
Exercised | shares(613,015)
Cancelled | shares(75,935)
Balance at the end of the period | shares10,067,781
Weighted-Average Price
Balance at the beginning of the period | $ / shares $ 15.11
Granted | $ / shares95.26
Exercised | $ / shares9.30
Cancelled | $ / shares24.85
Balance at the end of the period | $ / shares $ 17.97

Convertible Preferred Stock a_5

Convertible Preferred Stock and Stockholders' Equity (Details 3) - Restricted Stock Units (RSUs)3 Months Ended
Mar. 31, 2021$ / sharesshares
Number of Restricted Stock Units
Balance at the beginning of the period | shares1,401,732
Granted | shares559,648
Vested | shares(430,620)
Cancelled | shares(26,653)
Balance at the end of the period | shares1,504,107
Weighted-Average Grant Date Fair Value per Share
Balance at the beginning of the period | $ / shares $ 20.91
Granted | $ / shares108.18
Vested | $ / shares19.38
Cancelled | $ / shares31.64
Balance at the end of the period | $ / shares $ 53.63

Convertible Preferred Stock a_6

Convertible Preferred Stock and Stockholders' Equity (Details 4) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Convertible preferred stock
Total stock-based compensation expense $ 12,976 $ 6,913
Research And Development
Convertible preferred stock
Total stock-based compensation expense8,522 4,253
General And Administrative
Convertible preferred stock
Total stock-based compensation expense $ 4,454 $ 2,660

Convertible Preferred Stock a_7

Convertible Preferred Stock and Stockholders' Equity (Details 5) - Employee And Non Employee Stock Option3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Weighted-average assumptions to determine fair value of stock options
Risk-free interest rate0.40%1.60%
Expected volatility76.50%77.00%
Expected term (in years)5 years 1 month 6 days5 years 7 months 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 Ended
Mar. 31, 2021Mar. 31, 2020
Class Of Stock [Line Items]
Balance $ 384,445 $ 244,756
Exercise of stock options, net of issuance costs5,648 979
Stock-based compensation12,976 6,913
Public offering of common stock and issuance of pre-funded warrants, net of issuance costs432,445
Unrealized gain (loss) on investments(330)120
Net loss(45,089)(33,520)
Balance790,095 219,248
Class A Convertible Preferred Shares
Class Of Stock [Line Items]
Balance $ 3 $ 3
Balance (in shares)2,794,549 2,794,549
Balance $ 3 $ 3
Balance (in shares)2,794,549 2,794,549
Common Stock
Class Of Stock [Line Items]
Balance $ 88 $ 76
Balance (in shares)87,722,237 75,730,260
Exercise of stock options, net of issuance costs $ 1
Exercise of stock options, net of issuance costs (in shares)613,015 188,315
Issuance of common stock upon vesting of restricted stock units (in shares)430,620 77,500
Public offering of common stock and issuance of pre-funded warrants, net of issuance costs $ 5
Public offering of common stock and issuance of pre-funded warrants, net of issuance costs(in shares)5,122,807
Balance $ 94 $ 76
Balance (in shares)93,888,679 75,996,075
Additional Paid In Capital
Class Of Stock [Line Items]
Balance $ 941,216 $ 628,200
Exercise of stock options, net of issuance costs5,647 979
Stock-based compensation12,976 6,913
Public offering of common stock and issuance of pre-funded warrants, net of issuance costs432,440
Balance1,392,279 636,092
Accumulated Other Comprehensive Gain (Loss)
Class Of Stock [Line Items]
Balance70 22
Unrealized gain (loss) on investments(330)120
Balance(260)142
Accumulated Deficit
Class Of Stock [Line Items]
Balance(556,932)(383,545)
Net loss(45,089)(33,520)
Balance $ (602,021) $ (417,065)