Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 28, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | Merus N.V. | ||
Trading Symbol | MRUS | ||
Entity Central Index Key | 0001651311 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Shell Company | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
ICFR Auditor Attestation Flag | false | ||
Entity Interactive Data Current | Yes | ||
Entity Common Stock, Shares Outstanding | 38,126,976 | ||
Entity Public Float | $ 464.9 | ||
Entity File Number | 001-37773 | ||
Entity Incorporation, State or Country Code | P7 | ||
Entity Tax Identification Number | 00-0000000 | ||
Entity Address, Address Line One | Yalelaan 62 | ||
Entity Address, City or Town | Utrecht | ||
Entity Address, Postal Zip Code | 3584 CM | ||
Entity Address, Country | NL | ||
City Area Code | +31 30 | ||
Local Phone Number | 253 8800 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Title of 12(b) Security | Common shares, nominal value €0.09 per share | ||
Security Exchange Name | NASDAQ | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive proxy statement that the registrant intends to file with the Securities and Exchange Commission pursuant to Regulation 14A in connection with the registrant’s 2021 Annual General Meeting of Shareholders are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent stated herein. |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 163,082 | $ 197,612 |
Marketable securities | 44,673 | 42,153 |
Accounts receivable | 46 | 941 |
Accounts receivable (related party) | 1,623 | 1,711 |
Prepaid expenses and other current assets | 8,569 | 4,951 |
Total current assets | 217,993 | 247,368 |
Marketable securities | 2,009 | |
Property and equipment, net | 4,115 | 3,715 |
Operating lease right-of-use assets | 3,907 | 5,215 |
Intangible assets, net | 2,843 | 2,876 |
Deferred tax assets | 410 | 288 |
Other assets | 1,949 | 1,905 |
Total assets | 231,217 | 263,376 |
Current liabilities: | ||
Accounts payable | 3,126 | 3,029 |
Accrued expenses | 21,803 | 13,536 |
Income taxes payable | 206 | |
Current portion of lease obligation | 1,432 | 1,380 |
Current portion of deferred revenue | 625 | 941 |
Current portion of deferred revenue (related party) | 19,554 | 17,901 |
Total current liabilities | 46,746 | 36,787 |
Lease obligation | 2,521 | 3,872 |
Deferred revenue, net of current portion | 237 | 780 |
Deferred revenue, net of current portion (related party) | 79,450 | 90,637 |
Total liabilities | 128,954 | 132,076 |
Commitments and contingencies (Note 10) | ||
Stockholders’ equity: | ||
Common shares | 3,211 | 2,918 |
Additional paid-in capital | 490,093 | 441,395 |
Accumulated other comprehensive income | 9,071 | 1,586 |
Accumulated deficit | (400,112) | (314,599) |
Total stockholders’ equity | 102,263 | 131,300 |
Total liabilities and stockholders’ equity | $ 231,217 | $ 263,376 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - € / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Common shares, par value | € 0.09 | € 0.09 |
Common shares, authorized | 45,000,000 | 45,000,000 |
Common shares, issued | 31,602,953 | 28,882,217 |
Common shares, outstanding | 31,602,953 | 28,882,217 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total revenue | $ 29,943 | $ 31,133 |
Operating expenses: | ||
Research and development | 70,040 | 55,680 |
General and administrative | 35,781 | 34,110 |
Total operating expenses | 105,821 | 89,790 |
Operating loss | (75,878) | (58,657) |
Other income, net: | ||
Interest income, net | 300 | 1,889 |
Foreign exchange (losses) gains | (9,432) | 1,615 |
Miscellaneous income and gains | 0 | 196 |
Other income, net | (9,132) | 3,700 |
Loss before income tax expense | (85,010) | (54,957) |
Income tax expense | 503 | 194 |
Net loss | (85,513) | (55,151) |
Other comprehensive loss: | ||
Currency translation adjustment | 7,485 | (1,308) |
Comprehensive loss | $ (78,028) | $ (56,459) |
Loss per share allocable to common stockholders: | ||
Basic and diluted | $ (2.92) | $ (2.28) |
Weighted average shares outstanding: | ||
Basic and diluted | 29,256,203 | 24,218,083 |
Collaboration Revenue [Member] | ||
Total revenue from contracts with customers | $ 3,363 | $ 5,517 |
Collaboration Revenue (Related Party) [Member] | ||
Total revenue from contracts with customers | 26,580 | 25,831 |
Grant Revenue [Member] | ||
Total revenue from contracts with customers | $ 0 | $ (215) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (85,513) | $ (55,151) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization of property and equipment | 1,165 | 902 |
Amortization of intangible assets | 279 | 236 |
Foreign exchange losses (gains) | 8,957 | (1,068) |
Stock-based compensation expense | 9,372 | 7,834 |
Amortization of discount on investments | 40 | (531) |
Deferred tax benefit | (122) | (89) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,149 | 633 |
Operating lease right-of-use assets and lease obligations | 0 | (112) |
Prepaid expenses and other current assets | (2,895) | (1,029) |
Accounts payable | (110) | 22 |
Accrued expenses | 7,023 | 3,317 |
Deferred revenue | (19,246) | (18,012) |
Net cash used in operating activities | (79,901) | (63,048) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of marketable securities | (66,845) | (60,413) |
Proceeds from maturities of marketable securities | 66,646 | 87,183 |
Purchases of intangible assets | 0 | (375) |
Purchases of property and equipment | (1,287) | (2,223) |
Net cash provided by (used in) investing activities | (1,486) | 24,172 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock, net of issuance costs | 38,072 | 74,184 |
Proceeds from stock options exercised | 1,448 | 48 |
Net cash provided by financing activities | 39,520 | 74,232 |
Foreign exchange impact on cash, cash equivalents and restricted cash | 7,337 | (2,273) |
Net increase (decrease) in cash, cash equivalents and restricted cash | (34,530) | 33,083 |
Cash, cash equivalents, and restricted cash, beginning of period | 197,813 | 164,730 |
Cash, cash equivalents, and restricted cash, end of period | 163,283 | 197,813 |
SUPPLEMENTAL DISCLOSURES: | ||
Non-cash lease obligations acquired from operating lease right-of-use assets | 0 | 3,875 |
Non-cash purchases of property, equipment and intangibles | 36 | 187 |
Non-cash financing costs | 71 | 164 |
Income taxes paid | (322) | (320) |
Income tax refunds received | 24 | 0 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ||
Cash and cash equivalents | 163,082 | 197,612 |
Restricted cash included in other assets | 201 | 201 |
Cash, cash equivalents, and restricted cash, end of period | $ 163,283 | $ 197,813 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income [Member] |
Beginning balance at Dec. 31, 2018 | $ 105,857 | $ 2,366 | $ 360,045 | $ (259,448) | $ 2,894 |
Beginning balance, shares at Dec. 31, 2018 | 23,358,977 | ||||
Issuance of common stock, net | 74,020 | $ 546 | 73,474 | 0 | 0 |
Issuance of common stock, net, shares | 5,462,500 | ||||
Exercise of stock options and vesting of restricted stock units | 48 | $ 6 | 42 | 0 | 0 |
Exercise of stock options and vesting of restricted stock units, shares | 60,740 | ||||
Stock-based compensation | 7,834 | $ 0 | 7,834 | 0 | 0 |
Currency translation adjustment | (1,308) | 0 | 0 | 0 | (1,308) |
Net loss | (55,151) | 0 | 0 | (55,151) | 0 |
Ending balance at Dec. 31, 2019 | 131,300 | $ 2,918 | 441,395 | (314,599) | 1,586 |
Ending balance, shares at Dec. 31, 2019 | 28,882,217 | ||||
Issuance of common stock, net | 38,171 | $ 265 | 37,906 | 0 | 0 |
Issuance of common stock, net, shares | 2,451,281 | ||||
Exercise of stock options and vesting of restricted stock units | 1,448 | $ 28 | 1,420 | 0 | 0 |
Exercise of stock options and vesting of restricted stock units, shares | 269,455 | ||||
Stock-based compensation | 9,372 | $ 0 | 9,372 | 0 | 0 |
Currency translation adjustment | 7,485 | 0 | 0 | 0 | 7,485 |
Net loss | (85,513) | 0 | 0 | (85,513) | 0 |
Ending balance at Dec. 31, 2020 | $ 102,263 | $ 3,211 | $ 490,093 | $ (400,112) | $ 9,071 |
Ending balance, shares at Dec. 31, 2020 | 31,602,953 |
The Company
The Company | 12 Months Ended |
Dec. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
The Company | 1. The Company Merus N.V. is a clinical-stage immuno-oncology company developing innovative bispecific antibody therapeutics, headquartered in Utrecht, the Netherlands. Merus US, Inc. is a wholly-owned subsidiary of Merus N.V. located at 139 Main Street, Cambridge, Massachusetts, United States (collectively, the “Company”). Since inception, the Company has generated an accumulated loss of $400.1 million as of December 31, 2020. The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as its bispecific antibody candidates advance through discovery, pre-clinical development and clinical trials and as it seeks regulatory approval and pursues commercialization of any approved bispecific antibody candidate. As a result, the Company may need additional financing to support its continuing operations. Until the Company can generate significant revenue from product sales, if ever, the Company expects to finance its operations through public equity offerings, debt financings, or other sources, which may include collaborations with third parties and business development opportunities. Adequate additional financing may not be available to the Company on acceptable terms, or at all. The Company’s inability to raise capital as and when needed would have a negative impact on its financial condition and ability to pursue its business strategy. The Company will need to generate significant revenues to achieve profitability and may never do so. Based on our current operating plan, the Company expects that its existing cash, cash equivalents and marketable securities of $207.8 million as of December 31, 2020, combined with the aggregate immediate proceeds from the closing of the collaboration and share purchase agreements with Eli Lilly & Co (Eli Lilly) in January 2021 of $60.0 million and the aggregate net proceeds from the January 2021 follow-on offering of $129.7 million in January 2021, will fund the Company’s operations at least into the second half of 2024. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Preparation The Company prepared its consolidated financial statements in compliance with generally accepted accounting principles in the U.S. ("U.S. GAAP"). Any reference in these notes to applicable guidance is meant to refer to authoritative U.S. GAAP as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). Principles of Consolidation Subsidiaries are entities controlled by the Company, consisting of Merus N.V.’s wholly owned subsidiary Merus US, Inc. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. All significant intercompany balances and transactions have been eliminated in consolidation. Functional and Presentation Currency Items recorded in each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (the " " Use of Estimates The preparation of these consolidated financial statements in accordance with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities, as of the date of the consolidated financial statements, and the reported amounts of collaboration revenue and expenses during the reporting period. Actual results and outcomes may differ materially from management’s estimates, judgments and assumptions. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk include cash, cash equivalents, marketable securities and accounts receivable. The Company attempts to minimize the risks related to cash, cash equivalents and marketable securities by working with highly rated financial institutions that invest in a broad and diverse range of financial instruments as defined by the Company. The Company has established guidelines relative to credit ratings and maturities intended to safeguard principal balances and maintain liquidity. The Company maintains its funds in accordance with its investment policy, which defines allowable investments, specifies credit quality standards and is designed to limit the Company’s credit exposure to any single issuer. Accounts receivable Subsequent Events The Company considers events or transactions that occur after the balance sheet date but before the consolidated financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The Company evaluated all events and transactions through the date these financial statements were filed with the Securities and Exchange Commission. Fair Value Measurements Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows: • Level 1 – Quoted market prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. • Level 2 – Quoted market prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly. Fair value determined through the use of models or other valuation methodologies. • Level 3 – Significant unobservable inputs for assets or liabilities that cannot be corroborated by market data. Fair value is determined by the reporting entity’s own assumptions utilizing the best information available and includes situations where there is little market activity for the asset or liability. The asset’s or liability’s fair value measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. The Company considers its cash, cash equivalents, accounts receivable, marketable securities due with maturities 12 months or less, and accounts payable financial instruments to reflect their fair value given their short maturity and risk profile of the counterparty. Going Concern At each reporting period, the Company evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue The Company’s evaluation entails analyzing prospective operating budgets and forecasts for expectations of the Company’s cash needs, and comparing those Cash and Cash Equivalents The Company considers all highly liquid debt securities with original final maturities of three months or less from the date of purchase to be cash equivalents. Instruments subject to restrictions are not included in cash and cash equivalents. Marketable Securities The Company classifies marketable securities that are debt securities with a remaining maturity when purchased of greater than three months as held-to-maturity as the Company has the positive intent and ability to hold such debt securities through maturity. Debt securities that are classified as held-to-maturity are initially recognized and measured at fair value. Subsequent to initial recognition, they are measured at amortized cost using the effective interest rate method. Interest income from these debt securities is included in interest income. Marketable securities are classified as current if their expected maturity is within one year or less of the balance sheet date and non-current if their maturity is beyond one year of the balance sheet date. Accounts Receivable Accounts receivable are amounts due from collaboration partners as a result of research and development services provided or milestones achieved but not yet paid. Allowance for Credit Losses The Company evaluates its cash equivalents, accounts receivable and held-to-maturity marketable securities financial assets for expected credit losses. Expected credit losses represent the portion of the amortized cost basis of a financial asset that an entity does not expect to collect. An allowance for expected credit losses is meant to reflect a risk of loss even if remote, irrespective of the expectation of collection from a particular issuer or debt security. The Company has not historically experienced any credit losses on any of its financial assets. With respect to cash equivalents and accounts receivable, given consideration of their short maturity, historical losses and the current environment, the Company concluded there is generally no expected credit losses for these financial assets. With respect to held-to-maturity marketable securities which are comprised of debt securities, the Company evaluates expected credit losses on a pooled basis based on issuer-type which have similar credit risk characteristics. The allowance for credit losses is immaterial for all periods presented. Property and Equipment The Company records property and equipment at cost. The Company calculates depreciation and amortization using the straight-line method over the following estimated useful lives: Asset Category Useful Lives Laboratory equipment 5 years Office furniture and equipment 5 years Leasehold improvements Shorter of useful life or term of lease The Company capitalizes expenditures for new property and equipment and improvements to existing facilities and charges the cost of maintenance to expense. The Company eliminates the cost of property retired or otherwise disposed of, along with the corresponding accumulated depreciation or amortization, from the related accounts, and the resulting gain or loss is reflected in the results of operations. Intangible Assets Intangible assets are identifiable non-monetary assets without physical substance. An asset is a resource that is controlled by the enterprise as a result of past events (for example, purchase or self-creation) and from which future economic benefits (inflows of cash or other assets) are expected. The useful lives of intangible assets are assessed to be definite-lived and amortized over the useful economic life. The Company’s intangible assets are comprised of purchased licenses to intellectual property and software licenses. Impairment of Long-Lived Assets The Company reviews long-lived assets to be held and used, including property and equipment, operating lease right-of-use assets and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be recoverable. Evaluation of recoverability is first based on an estimate of undiscounted future cash flows resulting from the use of the asset or asset group and its eventual disposition. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the asset or asset group, the assets are written down to their estimated fair values. No such impairments were recorded in 2020 or 2019. Leases The Company determines if an arrangement is or contains a lease at inception. For leases with a term of 12 months or less, the Company does not recognize a right-of-use asset or lease liability. The Company does not have any finance leases. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease, and excludes non-lease payments. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As the Company’s leases typically do not provide an implicit rate, the Company uses an estimate of its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. Operating lease right-of-use assets also include the effect of any lease payments made and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term. The Company has real estate operating lease agreements with lease and non-lease components, which are generally accounted for separately as operating lease costs and variable lease costs. Non-lease components in real estate leases refer to services provided by the lessor related to the premises. Fixed and variable lease payments are both allocated to lease and non-lease components. The allocation is determined on a relative fair value basis of the services provided relative to the operating lease of premises. With respect to equipment leases, the Company has elected not to allocate payments amongst lease and non-lease components as a practical expedient as afforded under ASC 842, Leases Income Taxes Deferred Taxes The Company records deferred taxes to recognize the future effects of temporary differences between the tax basis and financial statement carrying amount of assets and liabilities. The Company measures the deferred taxes using enacted tax rates expected to apply when the temporary differences are realized and records a valuation allowance to reduce deferred tax assets if it is determined that it is more likely than not that all or a portion of the deferred tax asset will not be realized. The Company considers many factors when assessing the likelihood of future realization of deferred tax assets, including recent earnings results, expectations of future taxable income, carryforward periods available, reversing taxable temporary differences and other relevant factors. The Company records changes in the required valuation allowance in the period that the determination is made. Unrecognized Tax Benefits The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon management’s evaluation of the technical merits, facts, circumstances and information available as of the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50.0% likelihood of being realized upon settlement with a taxing authority having full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, the Company does not recognize a tax benefit in the financial statements. The Company records interest and penalties related to an underpayment of income taxes, if applicable, as a component of income tax expense. Revenue Recognition The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for an arrangement, the Company performs the following five step analysis: i. identify the contract(s) 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 in the contract; and v. recognize revenue when (or as) the entity satisfies a performance obligation. The Company has entered into collaboration and license agreements, which are within the scope of ASC 606, Revenue from Contracts with Customers performed on behalf of the collaboration partner related to the licensed targets. The Company also derives revenue from government grants. As part of the accounting for these arrangements, the Company must use judgment to determine: a) the number of performance obligations based on the determination under step (ii) above and whether those performance obligations are distinct from other performance obligations in the contract; b) the transaction price under step (iii) above; and c) the stand-alone selling price for each performance obligation identified in the contract for the allocation of transaction price in step (iv) above. The Company uses judgment to determine whether milestones or other variable consideration, except for sales-based royalties, should be included in the transaction price as described further below. The transaction price is allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. In validating its estimated stand-alone selling price, the Company evaluates whether changes in the key assumptions used to determine its estimated stand-alone selling price will have a significant effect on the allocation of arrangement consideration between performance obligations. Amounts received prior to revenue recognition are recorded as deferred revenue. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue in the accompanying consolidated balance sheets. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion. Amounts recognized as revenue, but not yet received or invoiced are generally recognized as unbilled receivables. Exclusive Licenses If the license to the Company’s intellectual property is determined to be distinct from the other promises or performance obligations identified in the arrangement, which generally include research and development services, the Company recognizes revenue from non-refundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. In assessing whether a license is distinct from the other promises, the Company considers relevant facts and circumstances of each arrangement, including the rights and obligations set out in the contract, the research and development capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. In addition, the Company considers whether the collaboration partner can benefit from the license for its intended purpose without the receipt of the remaining promises, whether the value of the license is dependent on the unsatisfied promises, whether there are other vendors that could provide the remaining promises, and whether it is separately identifiable from the remaining promises. For licenses that are combined with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The measure of progress, and thereby periods over which revenue should be recognized, are subject to estimates by management and may change over the course of the research and development and licensing agreement. The Company’s arrangements may provide the collaboration partner with the right to select a target for licensing either at the inception of the arrangement or in the future. Under these arrangements, fees may be due to the Company (i) at the inception of the arrangement as an upfront fee or payment, (ii) upon the exercise of an option to acquire a license or (iii) upon extending the selection period as an extension fee or payment. If an arrangement is determined to contain customer options that allow the customer to acquire additional goods or services, the goods and services underlying the customer options are not considered to be performance obligations at the outset of the arrangement, as they are contingent upon option exercise. The Company evaluates the customer options for material rights, or options to acquire additional goods or services for free or at a discount. If the customer options are determined to represent a material right, the material right is recognized as a separate performance obligation at the inception of the arrangement. The Company allocates the transaction price to material rights based on the relative stand-alone selling price, which is determined based on the identified discount and the probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until, at the earliest, the option is exercised or expires. For arrangements that include sales-based milestones and royalties, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any sales-based milestones or royalty revenue resulting from any of its arrangements. Research and Development Services The promises under the Company’s collaboration and license agreements generally include research and development services to be performed by the Company on behalf of the collaboration partner. For performance obligations that include research and development services, the Company recognizes revenue allocated to such performance obligations based on an appropriate measure of progress. The Company utilizes judgment to determine the appropriate method of measuring progress for purposes of recognizing revenue, which is generally an input measure such as costs incurred. The Company evaluates the measure of progress each reporting period as described under Exclusive Licenses Reimbursements from the partner are evaluated as to whether the Company acts as a principal or an agent in such relationships. The Company evaluates whether control over the underlying goods or services were obtained prior to transferring these goods or services to the collaboration partner. Where the Company does not control the goods or services prior to transferring these goods or services to the collaboration partner, such reimbursements are presented net of costs. At the inception of each arrangement that includes development milestone payments in respect of development efforts, the Company evaluates whether the development milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated development milestone value is included in the transaction price. Development milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The Company evaluates factors such as the scientific, clinical, regulatory, commercial, and other risks that must be overcome to achieve the particular development milestone in making this assessment. There is judgment involved in determining whether it is probable that a significant revenue reversal would not occur. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of all development milestones subject to constraint and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. If a milestone or other variable consideration relates specifically to the Company’s efforts to satisfy a single performance obligation or to a specific outcome from satisfying the performance obligation, the Company generally allocates the milestone amount entirely to that performance obligation once it is probable that a significant revenue reversal would not occur. Government Grants The Company receives certain government and regional grants, which support its research efforts in defined projects, and include contributions towards the R&D cost. When there is reasonable assurance that the Company will comply with the conditions attached to a received grant, and when there is reasonable assurance that the grant will be received, government grants are recognized as revenue on a gross basis in the consolidated statement of profit or loss and comprehensive loss on a systematic basis over the periods in which the Company recognizes expenses for the related costs for which the grants are intended to compensate. In the case of grants related to assets, the received grant will be deducted from the carrying amount of the asset. Government grant revenue may be subject to review by a government authority in periods subsequent to their recognition and may result in the reversal of grant revenue previously recognized. Reversals of grant revenue are presented as contra revenue in the consolidated statement of operations. Research and Development Expenses Research and development expenses are expensed as incurred. Research and development expenses are comprised of costs incurred in providing research and development activities, including salaries and benefits, facilities costs, overhead costs, contract research and development services, and other outside costs. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. When third-party service providers’ billing terms do not coincide with the Company’s period-end, the Company is required to make estimates of its obligations to those third parties, including clinical trial and pharmaceutical development costs, contractual services costs and costs for supply of its product candidates incurred in a given accounting period and record accruals at the end of the period. The Company bases its estimates on its knowledge of the research and development programs, services performed for the period, past history in conducting similar activities and the expected duration of the third-party service contract, among other considerations. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to vendors will exceed the level of services provided and result in a prepayment of research and development expenses. The WBSO ( afdrachtvermindering speur- en ontwikkelingswerk this act, a contribution is paid towards the labor costs of employees directly involved in research and development. For the year ended December 31, 2020 and 2019 , the Company recognized $6.0 million and $4.5 million as a reduction of research and development expenses, respectively. Share-Based Payments The Company measures employee share-based compensation based on the grant date fair value of the share-based compensation award. The Company grants stock options at exercise prices equal to the fair value of the Company’s common stock on the date of grant, based on observable market prices. For share-based payments subject time-based vesting, the Company recognizes employee stock-based compensation expense on a straight-line basis over the requisite service period of the awards, generally from the date of grant through each vesting date. The Company recognizes forfeitures at the time they occur. The actual expense recognized over the vesting period will only represent those options that vest; the effect of forfeitures in the recognition of periodic compensation expense are not estimated prior to their occurrence. Earnings (Loss) per Share The Company computes basic earnings (loss) per share by dividing income (loss) allocable to common stockholders by the weighted average number of shares of common stock outstanding. During periods of income, the Company allocates participating securities a proportional share of income determined by dividing total weighted average participating securities by the sum of the total weighted average common shares and participating securities. During periods of loss, the Company allocates no loss to participating securities because they have no contractual obligation to share in the losses of the Company. The Company computes diluted earnings (loss) per share after giving consideration to the dilutive effect of stock options and restricted stock units (“RSU”) that are outstanding during the period, except where such non-participating securities would be anti-dilutive. Segment Information The Company operates in one reportable segment, which comprises the discovery and development of innovative bispecific therapeutics. Pending Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract guidance In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808) arrangement |
Investments in Debt Securities
Investments in Debt Securities | 12 Months Ended |
Dec. 31, 2020 | |
Debt Securities [Abstract] | |
Investments in Debt Securities | 3. Investments in Debt Securities Debt securities are classified in the consolidated balance sheet as follows: December 31, 2020 2019 Balance Balance (in thousands) Cash equivalents $ 17,654 $ 34,053 Current marketable securities 44,673 42,153 Non-current marketable securities — 2,009 Total $ 62,327 $ 78,215 The following table summarizes debt securities by maturity at December 31, 2020 (in thousands): Maturity Amortized Cost Within one year $ 62,327 After one year through five years — Total $ 62,327 The following table summarizes debt securities by credit-quality indicator: Credit Quality Indicator as of December 31, 2020 AAA AA- to AA+ A- to A+ Total (In thousands) Money market funds $ 10,156 $ — $ — $ 10,156 U.S. treasuries — 15,043 — 15,043 U.S. government agency securities — 9,150 — 9,150 Corporate paper and notes 7,498 — 20,480 27,978 Total $ 17,654 $ 24,193 $ 20,480 $ 62,327 The credit quality indicator was derived from publicly available ratings published by Moody’s or a comparable credit rating agency, last updated as of December 31, 2020. The following table summarizes the fair value of debt securities by major security type held at December 31, 2020 (in thousands): Description Amortized Cost Unrealized Gains Unrealized Losses Fair Value Money market funds $ 10,156 $ — $ — $ 10,156 U.S. treasuries 15,043 1 — 15,044 U.S. government agency securities 9,150 — — 9,150 Corporate paper and notes 27,978 2 (2 ) 27,978 Total $ 62,327 $ 3 $ (2 ) $ 62,328 The following table summarizes the fair value of debt securities by major security type held at December 31, 2019 (in thousands): Description Amortized Cost Unrealized Gains Unrealized Losses Fair Value Money market funds $ 34,053 $ — $ — $ 34,053 U.S. treasuries 1,496 2 — 1,498 U.S. government agency securities 3,987 7 — 3,994 Corporate paper and notes 38,679 32 (2 ) 38,709 Total $ 78,215 $ 41 $ (2 ) $ 78,254 The allowance for credit losses applicable to debt securities was immaterial in all periods presented. Fair Value The fair value of money market funds is determined based on publicly available market price for these funds (Level 1). The fair value of other debt securities is determined based on the publicly available inputs which includes a market price for the same or similar instruments adjusted for estimates in interest yield (Level 2). |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets | 12 Months Ended |
Dec. 31, 2020 | |
Prepaid Expense And Other Assets Current [Abstract] | |
Prepaid Expenses and Other Assets | 4. Prepaid Expenses and Other Assets Prepaid expenses and other current assets consisted of the following: December 31, 2020 2019 (In thousands) Prepaid clinical and manufacturing costs $ 4,971 $ 2,779 Prepaid general and administrative costs 2,460 789 Interest receivable 80 259 Other 1,058 1,124 Total $ 8,569 $ 4,951 Restricted cash included in other assets totaled $0.2 million and $0.2 million as of December 31, 2020 and 2019, respectively. The nature of the restriction relates to amounts held as collateral for a credit card borrowing arrangement. |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, net | 5. Property and Equipment, net Property and equipment, net consists of the following: December 31, 2020 2019 (In thousands) Laboratory equipment $ 5,695 $ 4,538 Office equipment and furniture 1,300 1,186 Leasehold improvements 117 79 Construction in progress 496 — Property and equipment 7,608 5,803 Less: accumulated depreciation and amortization (3,493 ) (2,088 ) Property and equipment, net $ 4,115 $ 3,715 Depreciation and amortization expense was $1.2 million and $0.9 million for the years ended December 31, 2020, and 2019, respectively. Property and equipment are predominantly located in the Netherlands. |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | 6. Intangible assets, net Intangible assets, net consists of the following: December 31, 2020 2019 (In thousands) Licenses of intellectual property $ 3,898 $ 3,568 Software licenses 288 264 Intangible assets 4,186 3,832 Less: accumulated amortization (1,343 ) (956 ) Intangible assets, net $ 2,843 $ 2,876 Amortization expense was $0.3 million and $0.2 million for the years ended December 31, 2020, and 2019, respectively. Intangible assets are predominantly located in the Netherlands. Amortization expense over the next five years are expected to be as follows (in thousands): Year Expected amortization 2021 $ 300 2022 300 2023 230 2024 196 2025 166 Thereafter 1,651 Total remaining value $ 2,843 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2020 | |
Payables And Accruals [Abstract] | |
Accrued Expenses | 7. Accrued Expenses Accrued expenses consisted of the following: December 31, 2020 2019 (In thousands) Accrued research and development expenses $ 15,372 $ 6,618 Accrued personnel costs 4,854 4,495 Accrued general and administrative expenses 1,566 2,402 Other 11 21 Accrued expenses $ 21,803 $ 13,536 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes The components of loss from operations before income tax expense are as follows: Year ended December 31, 2020 2019 (In thousands) United States $ (3,832 ) $ (1,363 ) Netherlands (81,178 ) (53,594 ) Total loss before income taxes $ (85,010 ) $ (54,957 ) The components of income tax expense (benefit) from continuing operations are as follows: December 31, 2020 2019 (In thousands) U.S. federal $ 391 $ 243 U.S. state 234 40 Total current tax expense $ 625 $ 283 U.S. federal $ (86 ) $ (63 ) U.S. state (36 ) (26 ) Total deferred tax benefit $ (122 ) $ (89 ) Total income tax expense $ 503 $ 194 The parent company is subject to income tax in the Netherlands where a greater proportion of economic activity is attributed. A reconciliation of the Netherlands statutory income tax rate to the Company’s effective income tax rate is as follows: Year Ended December 31, 2020 2019 Netherlands statutory income tax rate 25.0 % 25.0 % Changes in tax rates 10.6 1.5 Non-deductible expenses (2.4 ) (3.7 ) Change in valuation allowance (33.5 ) (23.3 ) Other (0.3 ) 0.1 Effective income tax rate (0.6 )% (0.4 )% In 2018 and 2020, Dutch tax authorities enacted new tax rates applicable to future periods which impact the measurement of deferred income taxes. The effect of the change in the valuation allowance each year reflects the increase or decrease in the valuation allowance against deferred tax assets attributable to the Netherlands. The components of the Company’s deferred tax assets (liabilities) consist of the following: December 31, 2020 2019 (In thousands) Deferred tax assets: Net operating loss carryforwards $ 66,572 $ 33,917 Deferred revenue 24,966 23,926 Excess interest carryforward 2,080 — Lease obligation 1,058 1,333 Accrued expenses and other 494 319 Total deferred tax assets 95,170 59,495 Deferred tax asset valuation allowance (93,645 ) (57,876 ) Total deferred tax assets, net of valuation allowance 1,525 1,619 Deferred tax liabilities: Operating lease right-of-use assets $ 1,048 $ 1,331 Other 67 — Total deferred tax liabilities 1,115 1,331 Net deferred tax asset $ 410 $ 288 After consideration of all positive and negative evidence, the Company believes that it is more-likely-than-not that our Netherlands deferred tax assets that are not supported by reversing temporary differences will not be realized. As a result, the Company established a valuation allowance of $93.6 million and $57.9 million as of December 31, 2020 and 2019, respectively. The increase in the valuation allowance of $35.8 million and $13.2 million As of December 31, 2020, the Company did not have any net operating losses for U.S. federal or state income tax purposes. The Company had net operating loss carryforwards for Dutch income tax purposes, the amount and expiry are as follows (in thousands): Expiry Year Netherlands Tax Loss Carryforward 2024 $ 23,129 2025 110,165 2026 95,568 2027 37,426 Total $ 266,288 As of December 31, 2020, the Company had no unrecognized tax benefits. As of December 31, 2020, the Company had no accrued interest or penalties related to underpayments of income taxes and no amounts have been recognized in the consolidated statements of operations. The Company will recognize interest and penalties related to an underpayment of income taxes in income tax expense. The Company files income tax returns in the U.S. federal and Massachusetts jurisdictions as well as in the Netherlands. The statute of limitations for assessment by the Internal Revenue Service (IRS), and Massachusetts tax authorities is closed for tax years prior to 2017. The statute of limitations for assessment by the Netherlands tax authorities is closed for tax years prior to 2015. The Company is not currently under examination by the IRS or any other jurisdictions for any tax years. |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Operating Leases | 9. Operating Leases Merus N.V. leases its corporate headquarters under an agreement term of five years, which expires in the fourth quarter of 2021. On May 1, 2018, Merus N.V. leased additional space to expand its corporate headquarters under a separate agreement. Under the terms of the new agreement, the term began on May 1, 2018 and also expires in the fourth quarter of 2021. Given the Company’s current plans, the renewal term has not been included in the estimate of the lease term. Fixed lease payments increase annually and include an increase based on an inflationary measure. Variable payments include amounts due to t he lessor for additional services and cost reimbursements . In March 2019, Merus US, Inc. entered into a lease agreement for office space in Cambridge, Massachusetts. The lease commenced in the second quarter of 2019 and has a term of seven years, and may be extended for another five years. Given the Company’s current plans, the renewal term has not been included in the estimate of the lease term. Fixed lease payments increase annually and include an increase on an inflationary measure. Variable payments include amounts due to the lessor for additional services and cost reimbursements. The Company’s operating leases relate to its real estate leases that are not classified as finance leases. In July 2019, the Company entered into a lease with Kadans Science Partner XII B.V. (“Kadans”), pursuant to which the Company agreed to lease approximately 5,070 square meters of office and laboratory space in a new multi-tenant office building that is to be constructed in Utrecht, the Netherlands. The initial term of the lease is ten years from the date that the premises are completed in accordance with certain specifications provided in a development agreement (described below), which is expected to occur in mid-2022. The lease will renew for two 5-year terms following the initial term, unless earlier terminated by the Company or Kadans, except that the earliest Kadans may terminate the lease is 20 years from the completion date. The lease provides for an estimated initial rent of approximately €1.3 million per annum. The rent amount is subject to adjustment based on the consumer price index (the “CPI”) beginning on January 1, 2019 through the completion date and then annually thereafter, subject to certain limitations if the CPI is greater than 3.0%. The final initial rent amount is contingent upon, among other things, the parameters of the final constructed premises, the final floor area, and the CPI adjustment described above, and will be determined upon the completion date and recorded in a first rider, signed by the Company and Kadans, to the lease. The Company is also responsible for certain fit-out costs and service fees related to the premises. In July 2019, the Company also entered into a development agreement with Kadans and another party, Genmab B.V., which provides for the design, development and construction of the new multi-tenant office building of which the premises is a part. The components of lease cost recorded in the Company’s consolidated statement of operations and statement of cash flows were as follows: For the Year Ended December 31, 2020 2019 (In thousands) Operating lease cost $ 1,611 $ 1,386 Variable lease cost 375 297 Total lease cost included in operating expenses $ 1,986 $ 1,683 Cash paid to lessors included in operating cash outflows $ 2,478 $ 2,273 The Company’s non-lease cost and other costs paid to the lessor are primarily related to services provided by the lessor in operating the premises that includes fees, operating costs, taxes and insurance related to the leased premises. Maturities of the Company’s operating lease obligations as of December 31, 2020 were as follows (in thousands): Year Operating Leases 2021 $ 1,577 2022 614 2023 630 2024 645 2025 662 Thereafter 222 Total lease payments 4,350 Less: amount representing interest (397 ) Total lease obligations $ 3,953 The weighted-average remaining lease terms and discount rates related to the Company’s leases were as follows: As of December 31, 2020 2019 Weighted-average remaining operating lease term (in years) 4.2 4.8 Weighted-average discount rate for operating leases 4.9 % 5.0 % |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies Indemnities The Company indemnifies its officers and directors for certain events or occurrences while the officer or director is, or was, serving at the Company’s request in such capacity. The maximum potential amount of future payments the Company could be required to make is unlimited; however, the Company has directors’ and officers’ insurance coverage that is intended to limit its exposure and enable it to recover a portion of any future amounts paid. The Company enters into certain agreements with other parties in the ordinary course of business that contain indemnification provisions. These typically include agreements with directors and officers, business partners, contractors, landlords, clinical sites and customers. Under these provisions, the Company may indemnify and hold harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities, such as gross negligence, willful misconduct or at times, other activities. These indemnification provisions may survive termination of the underlying agreements. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions may be unlimited. However, to date the Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the estimated fair value of these obligations is minimal. Accordingly, the Company did not have any liabilities recorded for these obligations as of December 31, 2020. Litigation On April 5, 2018, an unnamed third party and Regeneron Pharmaceuticals Inc., or Regeneron filed notices of opposition against the Company’s EP 2604625 patent, entitled “Generation of Binding Molecules,” in the European Opposition Division of the European Patent Office (the “EPO”). The notices asserted, as applicable, added subject matter, lack of novelty, lack of inventive step, and insufficiency. Regeneron withdrew its opposition pursuant to a global December 20, 2018 settlement with the Company. On August 20, 2018, the Company timely responded to these submissions with respect to the unnamed third party. An opposition hearing was held in June 2019, wherein the EPO revoked the EP 2604625 patent in its entirety under Art. 123(2) EPC. The Company timely appealed that decision in December 2019 before the Technical Board of Appeals for the EPO seeking reinstatement of the patent and proposing auxiliary requests for certain amended claims, with further proceedings to be scheduled in the future. As this opposition proceeding continues, the Company cannot be certain that it will ultimately prevail. From time to time, the Company may be involved in various other claims and legal proceedings relating to claims arising out of the Company’s operations. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | 11. Stockholders’ Equity Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to dividends when and if declared by the board of directors. Share Issuances On November 7, 2019, the Company completed an underwritten public offering in which the Company sold 5,462,500 common shares, including 715,500 common shares pursuant to the underwriters’ option to purchase additional shares, at a price to the public of $14.50 for aggregate net proceeds of $74.0 million. On November 23, 2020, the Company sold 766,666 common shares, at a price of $15.00 for aggregate proceeds of $11.5 million. On November 24, 2020, the Company sold 384,615 common shares, at a price of $15.60 for aggregate proceeds of $6.0 million. On December 3, 2020, the Company sold 1,300,000 common shares, at a price of $16.90 for aggregate proceeds of $22.0 million. Equity Compensation Plan As of January 1, 2021, a total of 2,336,997 shares of common stock were reserved for additional grants of stock awards under the Company’s 2016 Incentive Award Plan. Stock-based compensation expense related to the equity compensation plan is more fully described in Note 13, Employee Benefit Plans |
Collaborations
Collaborations | 12 Months Ended |
Dec. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Collaborations | 12. Collaborations Incyte In December 2016, pending regulatory clearance, Incyte agreed to pay the Company a $120.0 million, non-refundable upfront payment, and purchased 3.2 million common shares at a stated price per share of $25.00, for an aggregate purchase price of $80.0 million. In exchange, the Company granted Incyte with a license to certain of its intellectual property and committed to collaborate with Incyte to research, discover and develop monospecific or bispecific antibodies utilizing the Company’s proprietary bispecific technology platform. The collaboration is managed by a joint steering committee in which both parties are represented and is tasked with overseeing the activities which significantly contributes to the collaboration. The collaboration may encompass up to 11 product candidates that result from the Company’s application of its proprietary Biclonics ® At inception of the collaboration, two potential bispecific product candidates were under preliminary evaluation. After further research, a lead candidate was ultimately selected for the first product candidate, designated MCLA-145, and the other potential product candidate was not pursued. For the designated product candidate (MCLA-145), the Company retains the exclusive right to develop and commercialize products and product candidates in the United States, while Incyte has the exclusive right to develop and commercialize products and product candidates arising from such program outside the United States. For MCLA-145, the parties will conduct and share equally the costs of mutually agreed global development activities and will be solely responsible for independent development activities in each party’s respective territories. For all other programs under the arrangement to be selected by Incyte, Incyte will be responsible for all research, development and commercialization costs. The Company may elect to co-fund the development of certain of the other programs in the future, in which case costs and benefits would be shared. The Company has not elected to co-fund any programs to date. At inception of the arrangement, the Company identified a performance obligation comprised of a combined delivery of a license and related activities, including the activities of the joint steering committee, to which to allocate consideration. The arrangement also allowed for optional future research services to advance selected product candidates through discovery and research. The transaction price was comprised of fixed consideration of an upfront payment of $120.0 million and proceeds from the sale of shares of $80.0 million. All other consideration under the arrangement was determined to be variable consideration and fully constrained at inception. $152.6 million of the transaction price was allocated to the license and related activities performance obligation after accounting for the purchase of common shares by Incyte On January 23, 2017, the Company completed the sale of shares and exchange of the license. The Company initially deferred the transaction price allocated to the license and related activities performance obligation as deferred revenue, to be recognized as revenue over time as the primary benefit of the license to Incyte is access to the platform for the generation of potential product candidates. Development milestones, commercialization milestones and royalties are variable consideration, fully constrained, to be recognized in future periods in accordance with the Company’s revenue recognition policy. Cost reimbursements for research services are recognized as they are performed over time as these are considered a separate performance obligation. At December 31, 2020, the Company is currently engaged in research and development activities for MCLA-145 and developing candidates for the other programs. No development or commercialization milestones have been achieved to date. ONO On March 14, 2018, the Company granted ONO an exclusive, worldwide, royalty-bearing license, with the right to sublicense, research, test, make, use and market bispecific antibody candidates based on the Company’s Biclonics ® agreed upon research plan. The Company retains all rights to use and commercialize any antibodies that are generated under the collaborative research program, excluding the up to five lead and/or selected antibodies against the targets ONO is pursuing, provided that the use and commercialization is not with respect to the particular target combination. ONO agreed to pay the Company an upfront, non-refundable payment of € 0.7 million. In addition, the Company was entitled to € 0.3 million intended to compensate the Company for research services already completed upon entering into the agreement, and € 0.2 million to be paid to the Company over time for full time equivalent funding. The Company is entitled to research and development milestones in addition to royalties on future sales . The Company identified performance obligations for : (1) provision of a license for the target combination , and (2) research and development services. The Company concluded that Ono would be able to develop and benefit from the license, independent of the research and development services. The research and development services are capable of being performed by third parties with an appropriate sub-license, and are recognized over time as these services are delivered. Milestone payments are fully constrained as variable consideration to be recognized in future periods in accordance with the Company’s revenue recognition policy. On March 3, 2016, the Company was engaged to perform manufacturing services for Ono in support of their clinical trials that was the subject of a prior arrangement with Ono initiated in 2014. The Company was entitled to compensation to oversee and support a manufacturing process with the use of an outside third-party and to deliver quantities of manufactured product. The Company identified one performance obligation to provide manufacturing supervision services involving the transfer of know-how and the development of a manufacturing The Company received €3.7 million (approximately $4.1 million) for the year ended December 31, 2019 for development milestones received from Ono based on their progress. The amounts are recognized as revenue in the consolidated statement of operations for the year ended December 31, 2019. No comparable development milestones were received in the year ended December 31, 2020. Research and development services were completed in 2018. Simcere In January 2018, the Company granted Simcere an exclusive license to develop and commercialize up to three bispecific antibodies to be produced by Merus utilizing the Company’s Biclonics ® At inception of the arrangement, the Company identified three performance obligations comprised of the combined delivery of a license and performance of research and development activities with respect to each program. The Company performs research and development activities to achieve candidate nomination. The Company concluded that these activities were not distinct from the underlying license for each program as Simcere would not be able to benefit from the license apart from research and development activities at this phase of development The transaction price under the arrangement comprised fixed consideration of $2.75 million. The transaction price was allocated to each separate performance obligation on a relative standalone fair value basis. The Company deferred the portion of the upfront payment allocated to the three performance obligations as deferred revenue, to be recognized over time . Compensation for research and development services prior to candidate nomination are allocated to each program performance obligation and also recognized over time. Development milestone payments allocated to each of the program performance obligations are constrained as variable consideration to be recognized in future periods in accordance with the Company’s revenue recognition policy To date, the Company has achieved two milestones under this agreement and has received an aggregate of $1.3 million in milestone payments, including a milestone payment of $0.5 million for the quarter ended September 30, 2020, concerning the generation of functional data associated with the second bispecific antibody research program. At December 31, 2020, research and development for one of the three programs is on-going. Betta On December 10, 2018, the Company granted Betta an exclusive license to develop and commercialize in China MCLA-129, a proprietary Biclonics ® ® materials in China, which the Company intends to use to assist regulatory filing and early stage clinical development in the rest of the world. In addition to a non-refundable upfront payment of $1.0 million, Betta and the Company will share equally the cost of the transfer of the manufacturing technology to a contract manufacturing organization. The Company is also eligible to receive an aggregate of $12.0 million in milestone payments contingent upon Betta achieving certain specified development and commercial goals as well as tiered royalty payments of net sales of any products resulting from the collaboration in China. In turn, Betta is also entitled to milestone payments based on the Company’s progress. The Company identified a single combined performance obligation, being the delivery of the MCLA-129 license including activities necessary to complete the technology transfer. The Company had no other commitments. The transaction price is comprised of fixed consideration of $1.0 million and fully allocated to the single performance obligation which would be fulfilled at a point in time. The technology transfer to deliver the license was completed in 2018 and Company recognized the revenue related to this performance obligation of $1.0 million as revenue for the year ended December 31, 2018. Development milestone payments allocated to the performance obligation are constrained as variable consideration to be recognized in future periods in accordance with the Company’s revenue recognition policy In the quarter ended December 31, 2020, both the Company and Betta achieved a development milestone both valued at $2.0 million. The amounts are recognized as milestone revenue of $2.0 million and research and development cost of $2.0 million in the Company’s statement of operations for the year ended December 31, 2020. Contract Assets, Liabilities, Revenues and Expenses The following tables provide amounts by year indicated and by line item included in the Company's accompanying consolidated financial statements attributable to transactions arising from its collaboration arrangements. The dollar amounts in the tables below are in thousands. Related Party Third Party Incyte Ono Other Total Contract assets Accounts receivable Balance at January 1, 2020 $ — $ 786 $ — $ 786 Billings 6,546 — 644 644 Cash receipts (6,587 ) (772 ) (607 ) (1,379 ) Adjustments — — (11 ) (11 ) Foreign exchange 41 (14 ) 20 6 Balance at December 31, 2020 — — 46 46 Unbilled receivables Balance at January 1, 2020 $ 1,711 $ — $ 155 $ 155 Accrued receivables 6,354 — 581 581 Billings (6,546 ) — (644 ) (644 ) Adjustments — (94 ) (94 ) Foreign exchange 104 — 2 2 Balance at December 31, 2020 1,623 — — — Contract liabilities Deferred revenue Balance at January 1, 2020 $ 108,538 $ 336 $ 1,385 $ 1,721 Revenue recognized in the period (18,194 ) (200 ) (743 ) (943 ) Foreign exchange 8,660 15 69 84 Balance at December 31, 2020 99,004 151 711 862 Less: current portion (19,554 ) (151 ) (474 ) (625 ) Non-current balance at December 31, 2020 79,450 — 237 237 The balance of unbilled receivables predominantly represents reimbursement revenue under the Company’s collaboration arrangements earned in the period to be billed and collected in the next period, generally quarterly. Incyte is a related party as a shareholder, as more fully described in Note 15. For the Year Ended December 31, 2020 Related Party Third Party Incyte Ono Other Total Upfront payments $ 18,193 $ 200 $ 695 $ 895 Reimbursement revenue 8,387 — (12 ) (12 ) Milestones — — 2,480 2,480 Total collaboration revenue $ 26,580 $ 200 $ 3,163 $ 3,363 Operating expenses: Research and development expense $ 2,036 $ — $ 1,944 $ 1,944 General and administrative expense — — — — Total operating expenses from collaborations $ 2,036 $ — $ 1,944 $ 1,944 Revenue recognized that was included in deferred revenue at the beginning of the period $ 18,193 $ 200 $ 738 $ 938 For the Year Ended December 31, 2019 Related Party Third Party Incyte Ono Other Total Upfront payments $ 17,839 $ 196 $ 643 $ 839 Reimbursement revenue 7,992 99 153 252 Milestones — 4,142 284 4,426 Total collaboration revenue $ 25,831 $ 4,437 $ 1,080 $ 5,517 Operating expenses: Research and development expense $ 680 $ — $ — $ — General and administrative expense — — — — Total operating expenses from collaborations $ 680 $ — $ — $ — Revenue recognized that was included in deferred revenue at the beginning of the period $ 17,839 $ 196 $ 945 $ 1,141 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | 13. Employee Benefit Plans Share-Based Payments 2010 Plan In 2010, the Company established the Merus B.V. 2010 Employee Option Plan (the “2010 Plan”) that entitled key management personnel, staff and consultants providing similar services to purchase shares in the Company. Under the 2010 Plan, holders of vested options were entitled to purchase depositary receipts for common shares at the exercise price determined at the date of grant. Upon exercise of the option, common shares were issued to a foundation established to facilitate administration of share-based compensation awards and pool the voting interests of the underlying shares, and depositary receipts were issued by the foundation to the individual holders. In connection with the IPO, the 2010 Plan was amended to cancel the depositary receipts and allow individual holders to directly hold the common shares obtained upon exercise of their options. Options granted under the 2010 Plan generally vest in installments over a four-year 36 month 2016 Plan In 2016, the Company established the 2016 Incentive Award Plan (the “2016 Plan”). All incentive award grants since 2016 are being made under the 2016 Plan. Options granted to employees under the 2016 Plan generally vest in installments over a four-year 36 month 10 years Options granted to non-executive directors consist of initial option grants as well as subsequent annual awards. The initial award of options granted vest in installments over a three-year 24 month one-year 12 month The RSUs granted to employees under the 2016 Plan vest in installments over a four-year The number of common shares authorized for issuance for future grants under the 2016 Plan as of January 1, 2021 totaled 2,336,997. Share-Based Compensation Expense Share-based compensation expense is classified in the consolidated statements of operations and comprehensive loss as follows: Year Ended December 31, 2020 2019 (In thousands) Research and development $ 2,969 $ 3,186 General and administrative 6,403 4,648 Total $ 9,372 $ 7,834 As of December 31, 2020, there was $8.0 million in unrecognized stock-based compensation that are expected to vest. These costs are expected to be recognized over a weighted average remaining vesting period of 1.3 years. Stock Option Valuation The Company uses the Black-Scholes option-pricing model to measure the fair value of stock option awards. In prior years, a Hull-White option-pricing model was used. Key weighted average assumptions used in this pricing model on the date of grant for options granted to employees are as follows: Year Ended December 31, 2020 2019 Risk-free interest rate 1.3 % 2.5 % Contractual life of options (years) 10.0 10.0 Expected term of options (years) 6.3 N/A Expected volatility of underlying stock 86.1 % 87.0 % Expected dividend yield 0.0 % 0.0 % The risk-free interest rate is based upon the U.S. Treasury yield curve in effect at the time of grant, with a term that approximates the expected life of the option. The Company determines the expected volatility using a blended approach encompassing its historical experience and the historical volatility of a peer group of comparable publicly traded companies with product candidates in similar stages of development to the Company’s product candidates. A simplified method using a weighted-average mid-point between an award’s vesting date and expiry is used to estimate the expected life of options in all periods presented as a sufficient history of participant exercise behavior is not readily observable. The Company has applied an expected dividend yield of 0.0% as the Company has not historically declared a dividend and does not anticipate declaring a dividend during the expected life of the options. Stock Option Activity The following is a summary of stock option activity for the year ended December 31, 2020: Number of Options Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (years) (In thousands) Outstanding at January 1, 2020 3,314,871 $ 14.67 Granted 1,258,341 16.16 Exercised (202,207 ) 7.16 Forfeited or expired (622,094 ) 16.62 Outstanding at December 31, 2020 3,748,911 $ 15.59 5.9 $ 11,454 Exercisable at December 31, 2020 2,140,953 $ 15.85 4.1 $ 7,122 Year Ended December 31, 2020 2019 Weighted-average fair value of options granted $ 11.75 $ 7.54 RSU Activity The following is a summary of RSU activity for the year ended December 31, 2020: Number of RSUs Weighted Average Grant-date Fair Value Non-vested at January 1, 2020 82,642 $ 19.68 Granted 46,474 16.00 Vested (67,248 ) 19.94 Forfeited (2,093 ) 21.11 Non-vested at December 31, 2020 59,775 $ 16.48 Intrinsic Value of Stock Options Exercised and Vested RSUs Year Ended December 31, (In thousands) 2020 2019 Total fair value of RSUs vested $ 961 $ 726 Aggregate intrinsic value of options exercised 1,750 112 Post-Employment Benefit Plan The Company has established a post-employment benefit plan for employees of the Netherlands that entitles executive officers and other staff members to retire at the age of 67 and receive annual payments based upon the average salary earned during the service period. The Company has insured the benefit liabilities through purchased non-participating annuities from an insurance company and has no other obligation other than to pay the annual insurance premiums to the insurance company. After purchasing the insurance, the Company has no further obligation (legal or constructive) to pay further amounts if the insurance fund has insufficient assets to pay all employee benefits relating to current and prior service. Contributions to purchase non-participating annuities are expensed as incurred as service costs. Company contributions to the post-employment benefit plan totaled $2.0 million and $1.3 million in the years ended December 31, 2020 and 2019, respectively. 401(k) Savings Plan The Company has a defined contribution 401(k) savings plan (the “401(k) Plan”). The 401(k) Plan covers substantially all U.S. employees, and allows participants to defer a portion of their annual compensation on a pretax basis. The Company matches contributions to the 401(k) Plan, matching 50% of an employee’s contribution up to a maximum of 3% of the participant’s compensation. Company contributions to the 401(k) Plan totaled $0.1 million and $0.1 million in the years ended December 31, 2020 and 2019, respectively. Executive Settlement In December 2019, in connection with the departure of the Chief Executive Officer of the Company, the Company awarded benefits, including the following: cash compensation of $0.9 million, a grant of 30,000 RSUs, extended vesting of his equity incentive awards through June 30, 2021 and extended exercisability of his equity incentive awards through December 31, 2021. The cash compensation is to be paid by the Company by January 31, 2020. There were no substantive service conditions associated with the benefits awarded other than the passage of time. The Company incrementally recognized $1.8 million in general and administrative expense associated with these benefits in the consolidated statement of operations for the year ended December 31, 2019. |
Loss per Share
Loss per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Loss per Share | 14. Loss per Share The two-class method was not applied for the years ended December 31, 2020 and 2019 due to the net loss recognized in each of those periods. Basic and diluted loss per share allocable to common stockholders are computed as follows: Year Ended December 31, 2020 2019 (In thousands except per share data) Net loss $ (85,513 ) $ (55,151 ) Weighted average shares outstanding 29,256,203 24,218,083 Basic and diluted loss per share allocable to common stockholders $ (2.92 ) $ (2.28 ) |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 15. Related Party Transactions The Company has entered into the Incyte collaboration and license agreement and the Incyte share subscription agreement in which the terms and transactional amounts incurred between Incyte and the Company are more fully described in Note 12. Incyte is a shareholder with holdings representing approximately 10.1% of the outstanding shares of the Company as of December 31, 2020, and 11.1% as of December 31, 2019. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events On January 18, 2021, the Company entered into a Collaboration and License Agreement (the “Collaboration Agreement”) and Share Subscription Agreement (the “Subscription Agreement”) with Eli Lilly and Company, an Indiana corporation (“Eli Lilly”). Eli Lilly has agreed to pay an upfront, non-refundable payment of $40 million for the rights granted under the Collaboration Agreement within 30 days following the Effective Date. Eli Lilly will fund the research and development activities to be conducted by the Company for each program under an agreed research plan and budget. With respect to each product arising from each program, the Company is eligible to receive up to $290 million in future contingent development and regulatory milestones and up to $250 million in commercial sales milestones, for a total of up to approximately $1.6 billion for a single product generated from all three programs. The Company is further eligible to receive, on a product-by-product and country-by-country basis, tiered royalties based on the level of worldwide aggregate annual net sales at percentages ranging from the mid-single digits to low double digits until the royalty term expires. In connection with entering into the Collaboration Agreement, pursuant to the Subscription Agreement, on January 18, 2021, Eli Lilly agreed to purchase 706,834 common shares of the Company at a price per share of $28.295 for aggregate gross proceeds to the Company of approximately $20 million. Eli Lilly agreed not to transfer, sell, or otherwise dispose of the Shares for a period of time following the Closing Date, subject to certain customary exceptions. On January 21, 2021, the Company entered into an underwriting agreement with Jefferies LLC and SVB Leerink LLC, as representatives of the several underwriters named therein (collectively, the “Underwriters”), in connection with the issuance and sale by the Company in a public offering of 4,848,485 common shares of the Company, nominal value €0.09 per share, at a public offering price of $24.75 per share, less underwriting discounts and commissions. The Company also granted the Underwriters an option exercisable for 30 days to purchase up to an additional 727,272 common shares at the public offering price, less underwriting discounts and commissions. On January 21, 2021, the Underwriters exercised this option in full. The closing of the offering occurred on January 25, 2021, resulting in aggregate net proceeds to the Company of $129.7 million. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Preparation | Basis of Preparation The Company prepared its consolidated financial statements in compliance with generally accepted accounting principles in the U.S. ("U.S. GAAP"). Any reference in these notes to applicable guidance is meant to refer to authoritative U.S. GAAP as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). |
Principles of Consolidation | Principles of Consolidation Subsidiaries are entities controlled by the Company, consisting of Merus N.V.’s wholly owned subsidiary Merus US, Inc. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. All significant intercompany balances and transactions have been eliminated in consolidation. |
Functional and Presentation Currency | Functional and Presentation Currency Items recorded in each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (the " " |
Use of Estimates | Use of Estimates The preparation of these consolidated financial statements in accordance with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities, as of the date of the consolidated financial statements, and the reported amounts of collaboration revenue and expenses during the reporting period. Actual results and outcomes may differ materially from management’s estimates, judgments and assumptions. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk include cash, cash equivalents, marketable securities and accounts receivable. The Company attempts to minimize the risks related to cash, cash equivalents and marketable securities by working with highly rated financial institutions that invest in a broad and diverse range of financial instruments as defined by the Company. The Company has established guidelines relative to credit ratings and maturities intended to safeguard principal balances and maintain liquidity. The Company maintains its funds in accordance with its investment policy, which defines allowable investments, specifies credit quality standards and is designed to limit the Company’s credit exposure to any single issuer. Accounts receivable |
Subsequent Events | Subsequent Events The Company considers events or transactions that occur after the balance sheet date but before the consolidated financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The Company evaluated all events and transactions through the date these financial statements were filed with the Securities and Exchange Commission. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as an exit price, representing the amount that would be received upon the sale of an asset or payment to transfer a liability in an orderly transaction between market participants. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows: • Level 1 – Quoted market prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. • Level 2 – Quoted market prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly. Fair value determined through the use of models or other valuation methodologies. • Level 3 – Significant unobservable inputs for assets or liabilities that cannot be corroborated by market data. Fair value is determined by the reporting entity’s own assumptions utilizing the best information available and includes situations where there is little market activity for the asset or liability. The asset’s or liability’s fair value measurement within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. The Company considers its cash, cash equivalents, accounts receivable, marketable securities due with maturities 12 months or less, and accounts payable financial instruments to reflect their fair value given their short maturity and risk profile of the counterparty. |
Going Concern | Going Concern At each reporting period, the Company evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue The Company’s evaluation entails analyzing prospective operating budgets and forecasts for expectations of the Company’s cash needs, and comparing those |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid debt securities with original final maturities of three months or less from the date of purchase to be cash equivalents. Instruments subject to restrictions are not included in cash and cash equivalents. |
Marketable Securities | Marketable Securities The Company classifies marketable securities that are debt securities with a remaining maturity when purchased of greater than three months as held-to-maturity as the Company has the positive intent and ability to hold such debt securities through maturity. Debt securities that are classified as held-to-maturity are initially recognized and measured at fair value. Subsequent to initial recognition, they are measured at amortized cost using the effective interest rate method. Interest income from these debt securities is included in interest income. Marketable securities are classified as current if their expected maturity is within one year or less of the balance sheet date and non-current if their maturity is beyond one year of the balance sheet date. |
Accounts Receivable | Accounts Receivable Accounts receivable are amounts due from collaboration partners as a result of research and development services provided or milestones achieved but not yet paid. |
Allowance for Credit Losses | Allowance for Credit Losses The Company evaluates its cash equivalents, accounts receivable and held-to-maturity marketable securities financial assets for expected credit losses. Expected credit losses represent the portion of the amortized cost basis of a financial asset that an entity does not expect to collect. An allowance for expected credit losses is meant to reflect a risk of loss even if remote, irrespective of the expectation of collection from a particular issuer or debt security. The Company has not historically experienced any credit losses on any of its financial assets. With respect to cash equivalents and accounts receivable, given consideration of their short maturity, historical losses and the current environment, the Company concluded there is generally no expected credit losses for these financial assets. With respect to held-to-maturity marketable securities which are comprised of debt securities, the Company evaluates expected credit losses on a pooled basis based on issuer-type which have similar credit risk characteristics. The allowance for credit losses is immaterial for all periods presented. |
Property and Equipment | Property and Equipment The Company records property and equipment at cost. The Company calculates depreciation and amortization using the straight-line method over the following estimated useful lives: Asset Category Useful Lives Laboratory equipment 5 years Office furniture and equipment 5 years Leasehold improvements Shorter of useful life or term of lease The Company capitalizes expenditures for new property and equipment and improvements to existing facilities and charges the cost of maintenance to expense. The Company eliminates the cost of property retired or otherwise disposed of, along with the corresponding accumulated depreciation or amortization, from the related accounts, and the resulting gain or loss is reflected in the results of operations. |
Intangible Assets | Intangible Assets Intangible assets are identifiable non-monetary assets without physical substance. An asset is a resource that is controlled by the enterprise as a result of past events (for example, purchase or self-creation) and from which future economic benefits (inflows of cash or other assets) are expected. The useful lives of intangible assets are assessed to be definite-lived and amortized over the useful economic life. The Company’s intangible assets are comprised of purchased licenses to intellectual property and software licenses. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets to be held and used, including property and equipment, operating lease right-of-use assets and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be recoverable. Evaluation of recoverability is first based on an estimate of undiscounted future cash flows resulting from the use of the asset or asset group and its eventual disposition. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the asset or asset group, the assets are written down to their estimated fair values. No such impairments were recorded in 2020 or 2019. |
Leases | Leases The Company determines if an arrangement is or contains a lease at inception. For leases with a term of 12 months or less, the Company does not recognize a right-of-use asset or lease liability. The Company does not have any finance leases. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease, and excludes non-lease payments. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As the Company’s leases typically do not provide an implicit rate, the Company uses an estimate of its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. Operating lease right-of-use assets also include the effect of any lease payments made and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term. The Company has real estate operating lease agreements with lease and non-lease components, which are generally accounted for separately as operating lease costs and variable lease costs. Non-lease components in real estate leases refer to services provided by the lessor related to the premises. Fixed and variable lease payments are both allocated to lease and non-lease components. The allocation is determined on a relative fair value basis of the services provided relative to the operating lease of premises. With respect to equipment leases, the Company has elected not to allocate payments amongst lease and non-lease components as a practical expedient as afforded under ASC 842, Leases |
Income Taxes | Income Taxes Deferred Taxes The Company records deferred taxes to recognize the future effects of temporary differences between the tax basis and financial statement carrying amount of assets and liabilities. The Company measures the deferred taxes using enacted tax rates expected to apply when the temporary differences are realized and records a valuation allowance to reduce deferred tax assets if it is determined that it is more likely than not that all or a portion of the deferred tax asset will not be realized. The Company considers many factors when assessing the likelihood of future realization of deferred tax assets, including recent earnings results, expectations of future taxable income, carryforward periods available, reversing taxable temporary differences and other relevant factors. The Company records changes in the required valuation allowance in the period that the determination is made. Unrecognized Tax Benefits The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon management’s evaluation of the technical merits, facts, circumstances and information available as of the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50.0% likelihood of being realized upon settlement with a taxing authority having full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, the Company does not recognize a tax benefit in the financial statements. The Company records interest and penalties related to an underpayment of income taxes, if applicable, as a component of income tax expense. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for an arrangement, the Company performs the following five step analysis: i. identify the contract(s) 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 in the contract; and v. recognize revenue when (or as) the entity satisfies a performance obligation. The Company has entered into collaboration and license agreements, which are within the scope of ASC 606, Revenue from Contracts with Customers performed on behalf of the collaboration partner related to the licensed targets. The Company also derives revenue from government grants. As part of the accounting for these arrangements, the Company must use judgment to determine: a) the number of performance obligations based on the determination under step (ii) above and whether those performance obligations are distinct from other performance obligations in the contract; b) the transaction price under step (iii) above; and c) the stand-alone selling price for each performance obligation identified in the contract for the allocation of transaction price in step (iv) above. The Company uses judgment to determine whether milestones or other variable consideration, except for sales-based royalties, should be included in the transaction price as described further below. The transaction price is allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. In validating its estimated stand-alone selling price, the Company evaluates whether changes in the key assumptions used to determine its estimated stand-alone selling price will have a significant effect on the allocation of arrangement consideration between performance obligations. Amounts received prior to revenue recognition are recorded as deferred revenue. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue in the accompanying consolidated balance sheets. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion. Amounts recognized as revenue, but not yet received or invoiced are generally recognized as unbilled receivables. Exclusive Licenses If the license to the Company’s intellectual property is determined to be distinct from the other promises or performance obligations identified in the arrangement, which generally include research and development services, the Company recognizes revenue from non-refundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. In assessing whether a license is distinct from the other promises, the Company considers relevant facts and circumstances of each arrangement, including the rights and obligations set out in the contract, the research and development capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. In addition, the Company considers whether the collaboration partner can benefit from the license for its intended purpose without the receipt of the remaining promises, whether the value of the license is dependent on the unsatisfied promises, whether there are other vendors that could provide the remaining promises, and whether it is separately identifiable from the remaining promises. For licenses that are combined with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The measure of progress, and thereby periods over which revenue should be recognized, are subject to estimates by management and may change over the course of the research and development and licensing agreement. The Company’s arrangements may provide the collaboration partner with the right to select a target for licensing either at the inception of the arrangement or in the future. Under these arrangements, fees may be due to the Company (i) at the inception of the arrangement as an upfront fee or payment, (ii) upon the exercise of an option to acquire a license or (iii) upon extending the selection period as an extension fee or payment. If an arrangement is determined to contain customer options that allow the customer to acquire additional goods or services, the goods and services underlying the customer options are not considered to be performance obligations at the outset of the arrangement, as they are contingent upon option exercise. The Company evaluates the customer options for material rights, or options to acquire additional goods or services for free or at a discount. If the customer options are determined to represent a material right, the material right is recognized as a separate performance obligation at the inception of the arrangement. The Company allocates the transaction price to material rights based on the relative stand-alone selling price, which is determined based on the identified discount and the probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until, at the earliest, the option is exercised or expires. For arrangements that include sales-based milestones and royalties, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any sales-based milestones or royalty revenue resulting from any of its arrangements. Research and Development Services The promises under the Company’s collaboration and license agreements generally include research and development services to be performed by the Company on behalf of the collaboration partner. For performance obligations that include research and development services, the Company recognizes revenue allocated to such performance obligations based on an appropriate measure of progress. The Company utilizes judgment to determine the appropriate method of measuring progress for purposes of recognizing revenue, which is generally an input measure such as costs incurred. The Company evaluates the measure of progress each reporting period as described under Exclusive Licenses Reimbursements from the partner are evaluated as to whether the Company acts as a principal or an agent in such relationships. The Company evaluates whether control over the underlying goods or services were obtained prior to transferring these goods or services to the collaboration partner. Where the Company does not control the goods or services prior to transferring these goods or services to the collaboration partner, such reimbursements are presented net of costs. At the inception of each arrangement that includes development milestone payments in respect of development efforts, the Company evaluates whether the development milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated development milestone value is included in the transaction price. Development milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The Company evaluates factors such as the scientific, clinical, regulatory, commercial, and other risks that must be overcome to achieve the particular development milestone in making this assessment. There is judgment involved in determining whether it is probable that a significant revenue reversal would not occur. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of all development milestones subject to constraint and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. If a milestone or other variable consideration relates specifically to the Company’s efforts to satisfy a single performance obligation or to a specific outcome from satisfying the performance obligation, the Company generally allocates the milestone amount entirely to that performance obligation once it is probable that a significant revenue reversal would not occur. Government Grants The Company receives certain government and regional grants, which support its research efforts in defined projects, and include contributions towards the R&D cost. When there is reasonable assurance that the Company will comply with the conditions attached to a received grant, and when there is reasonable assurance that the grant will be received, government grants are recognized as revenue on a gross basis in the consolidated statement of profit or loss and comprehensive loss on a systematic basis over the periods in which the Company recognizes expenses for the related costs for which the grants are intended to compensate. In the case of grants related to assets, the received grant will be deducted from the carrying amount of the asset. Government grant revenue may be subject to review by a government authority in periods subsequent to their recognition and may result in the reversal of grant revenue previously recognized. Reversals of grant revenue are presented as contra revenue in the consolidated statement of operations. |
Research and Development Expenses | Research and Development Expenses Research and development expenses are expensed as incurred. Research and development expenses are comprised of costs incurred in providing research and development activities, including salaries and benefits, facilities costs, overhead costs, contract research and development services, and other outside costs. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. When third-party service providers’ billing terms do not coincide with the Company’s period-end, the Company is required to make estimates of its obligations to those third parties, including clinical trial and pharmaceutical development costs, contractual services costs and costs for supply of its product candidates incurred in a given accounting period and record accruals at the end of the period. The Company bases its estimates on its knowledge of the research and development programs, services performed for the period, past history in conducting similar activities and the expected duration of the third-party service contract, among other considerations. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to vendors will exceed the level of services provided and result in a prepayment of research and development expenses. The WBSO ( afdrachtvermindering speur- en ontwikkelingswerk this act, a contribution is paid towards the labor costs of employees directly involved in research and development. For the year ended December 31, 2020 and 2019 , the Company recognized $6.0 million and $4.5 million as a reduction of research and development expenses, respectively. |
Share-Based Payments | Share-Based Payments The Company measures employee share-based compensation based on the grant date fair value of the share-based compensation award. The Company grants stock options at exercise prices equal to the fair value of the Company’s common stock on the date of grant, based on observable market prices. For share-based payments subject time-based vesting, the Company recognizes employee stock-based compensation expense on a straight-line basis over the requisite service period of the awards, generally from the date of grant through each vesting date. The Company recognizes forfeitures at the time they occur. The actual expense recognized over the vesting period will only represent those options that vest; the effect of forfeitures in the recognition of periodic compensation expense are not estimated prior to their occurrence. |
Earnings (Loss) per Share | Earnings (Loss) per Share The Company computes basic earnings (loss) per share by dividing income (loss) allocable to common stockholders by the weighted average number of shares of common stock outstanding. During periods of income, the Company allocates participating securities a proportional share of income determined by dividing total weighted average participating securities by the sum of the total weighted average common shares and participating securities. During periods of loss, the Company allocates no loss to participating securities because they have no contractual obligation to share in the losses of the Company. The Company computes diluted earnings (loss) per share after giving consideration to the dilutive effect of stock options and restricted stock units (“RSU”) that are outstanding during the period, except where such non-participating securities would be anti-dilutive. |
Segment Information | Segment Information The Company operates in one reportable segment, which comprises the discovery and development of innovative bispecific therapeutics. |
Pending Accounting Pronouncements | Pending Accounting Pronouncements In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract guidance In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808) arrangement |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Estimated Useful Lives of Property and Equipment | The Company records property and equipment at cost. The Company calculates depreciation and amortization using the straight-line method over the following estimated useful lives: Asset Category Useful Lives Laboratory equipment 5 years Office furniture and equipment 5 years Leasehold improvements Shorter of useful life or term of lease |
Investments in Debt Securities
Investments in Debt Securities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Securities [Abstract] | |
Summary of Classification of Debt Securities in Consolidated Balance Sheet | Debt securities are classified in the consolidated balance sheet as follows: December 31, 2020 2019 Balance Balance (in thousands) Cash equivalents $ 17,654 $ 34,053 Current marketable securities 44,673 42,153 Non-current marketable securities — 2,009 Total $ 62,327 $ 78,215 |
Summary of Debt Securities by Maturity | The following table summarizes debt securities by maturity at December 31, 2020 (in thousands): Maturity Amortized Cost Within one year $ 62,327 After one year through five years — Total $ 62,327 |
Summary of Debt Securities by Credit Quality Indicator | The following table summarizes debt securities by credit-quality indicator: Credit Quality Indicator as of December 31, 2020 AAA AA- to AA+ A- to A+ Total (In thousands) Money market funds $ 10,156 $ — $ — $ 10,156 U.S. treasuries — 15,043 — 15,043 U.S. government agency securities — 9,150 — 9,150 Corporate paper and notes 7,498 — 20,480 27,978 Total $ 17,654 $ 24,193 $ 20,480 $ 62,327 |
Summary of Fair Value of Debt Securities by Major Security Type | The following table summarizes the fair value of debt securities by major security type held at December 31, 2020 (in thousands): Description Amortized Cost Unrealized Gains Unrealized Losses Fair Value Money market funds $ 10,156 $ — $ — $ 10,156 U.S. treasuries 15,043 1 — 15,044 U.S. government agency securities 9,150 — — 9,150 Corporate paper and notes 27,978 2 (2 ) 27,978 Total $ 62,327 $ 3 $ (2 ) $ 62,328 The following table summarizes the fair value of debt securities by major security type held at December 31, 2019 (in thousands): Description Amortized Cost Unrealized Gains Unrealized Losses Fair Value Money market funds $ 34,053 $ — $ — $ 34,053 U.S. treasuries 1,496 2 — 1,498 U.S. government agency securities 3,987 7 — 3,994 Corporate paper and notes 38,679 32 (2 ) 38,709 Total $ 78,215 $ 41 $ (2 ) $ 78,254 |
Prepaid Expenses and Other As_2
Prepaid Expenses and Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Prepaid Expense And Other Assets Current [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following: December 31, 2020 2019 (In thousands) Prepaid clinical and manufacturing costs $ 4,971 $ 2,779 Prepaid general and administrative costs 2,460 789 Interest receivable 80 259 Other 1,058 1,124 Total $ 8,569 $ 4,951 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Summary of Property and Equipment, Net | Property and equipment, net consists of the following: December 31, 2020 2019 (In thousands) Laboratory equipment $ 5,695 $ 4,538 Office equipment and furniture 1,300 1,186 Leasehold improvements 117 79 Construction in progress 496 — Property and equipment 7,608 5,803 Less: accumulated depreciation and amortization (3,493 ) (2,088 ) Property and equipment, net $ 4,115 $ 3,715 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Intangible Assets Gross Excluding Goodwill [Abstract] | |
Summary of Intangible Assets, Net | Intangible assets, net consists of the following: December 31, 2020 2019 (In thousands) Licenses of intellectual property $ 3,898 $ 3,568 Software licenses 288 264 Intangible assets 4,186 3,832 Less: accumulated amortization (1,343 ) (956 ) Intangible assets, net $ 2,843 $ 2,876 |
Schedule of Expected Amortization Expense | Amortization expense over the next five years are expected to be as follows (in thousands): Year Expected amortization 2021 $ 300 2022 300 2023 230 2024 196 2025 166 Thereafter 1,651 Total remaining value $ 2,843 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables And Accruals [Abstract] | |
Summary of Accrued Expenses | Accrued expenses consisted of the following: December 31, 2020 2019 (In thousands) Accrued research and development expenses $ 15,372 $ 6,618 Accrued personnel costs 4,854 4,495 Accrued general and administrative expenses 1,566 2,402 Other 11 21 Accrued expenses $ 21,803 $ 13,536 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Summary of Components of Loss from Operations Before Income Tax Expense | The components of loss from operations before income tax expense are as follows: Year ended December 31, 2020 2019 (In thousands) United States $ (3,832 ) $ (1,363 ) Netherlands (81,178 ) (53,594 ) Total loss before income taxes $ (85,010 ) $ (54,957 ) |
Summary of Components of Expense for (Benefit) from Income Taxes | The components of income tax expense (benefit) from continuing operations are as follows: December 31, 2020 2019 (In thousands) U.S. federal $ 391 $ 243 U.S. state 234 40 Total current tax expense $ 625 $ 283 U.S. federal $ (86 ) $ (63 ) U.S. state (36 ) (26 ) Total deferred tax benefit $ (122 ) $ (89 ) Total income tax expense $ 503 $ 194 |
Reconciliation of Netherlands Statutory Income Tax Rate and Effective Income Tax Rate | The parent company is subject to income tax in the Netherlands where a greater proportion of economic activity is attributed. A reconciliation of the Netherlands statutory income tax rate to the Company’s effective income tax rate is as follows: Year Ended December 31, 2020 2019 Netherlands statutory income tax rate 25.0 % 25.0 % Changes in tax rates 10.6 1.5 Non-deductible expenses (2.4 ) (3.7 ) Change in valuation allowance (33.5 ) (23.3 ) Other (0.3 ) 0.1 Effective income tax rate (0.6 )% (0.4 )% |
Summary of Components of Deferred Tax Assets (Liabilities) | The components of the Company’s deferred tax assets (liabilities) consist of the following: December 31, 2020 2019 (In thousands) Deferred tax assets: Net operating loss carryforwards $ 66,572 $ 33,917 Deferred revenue 24,966 23,926 Excess interest carryforward 2,080 — Lease obligation 1,058 1,333 Accrued expenses and other 494 319 Total deferred tax assets 95,170 59,495 Deferred tax asset valuation allowance (93,645 ) (57,876 ) Total deferred tax assets, net of valuation allowance 1,525 1,619 Deferred tax liabilities: Operating lease right-of-use assets $ 1,048 $ 1,331 Other 67 — Total deferred tax liabilities 1,115 1,331 Net deferred tax asset $ 410 $ 288 |
Summary of Net Operating Loss Carryforwards for Dutch Income Tax Purposes | The Company had net operating loss carryforwards for Dutch income tax purposes, the amount and expiry are as follows (in thousands): Expiry Year Netherlands Tax Loss Carryforward 2024 $ 23,129 2025 110,165 2026 95,568 2027 37,426 Total $ 266,288 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Summary of Components of Lease Cost | The components of lease cost recorded in the Company’s consolidated statement of operations and statement of cash flows were as follows: For the Year Ended December 31, 2020 2019 (In thousands) Operating lease cost $ 1,611 $ 1,386 Variable lease cost 375 297 Total lease cost included in operating expenses $ 1,986 $ 1,683 Cash paid to lessors included in operating cash outflows $ 2,478 $ 2,273 |
Schedule of Maturities of Operating Lease Obligations | Maturities of the Company’s operating lease obligations as of December 31, 2020 were as follows (in thousands): Year Operating Leases 2021 $ 1,577 2022 614 2023 630 2024 645 2025 662 Thereafter 222 Total lease payments 4,350 Less: amount representing interest (397 ) Total lease obligations $ 3,953 |
Schedule of Weighted Average Remaining Lease Terms and Discount Rates | The weighted-average remaining lease terms and discount rates related to the Company’s leases were as follows: As of December 31, 2020 2019 Weighted-average remaining operating lease term (in years) 4.2 4.8 Weighted-average discount rate for operating leases 4.9 % 5.0 % |
Collaborations (Tables)
Collaborations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Summary of Company's Accompanying Consolidated Financial Statements Attributable to Transactions Arising From Collaboration Arrangements | The following tables provide amounts by year indicated and by line item included in the Company's accompanying consolidated financial statements attributable to transactions arising from its collaboration arrangements. The dollar amounts in the tables below are in thousands. Related Party Third Party Incyte Ono Other Total Contract assets Accounts receivable Balance at January 1, 2020 $ — $ 786 $ — $ 786 Billings 6,546 — 644 644 Cash receipts (6,587 ) (772 ) (607 ) (1,379 ) Adjustments — — (11 ) (11 ) Foreign exchange 41 (14 ) 20 6 Balance at December 31, 2020 — — 46 46 Unbilled receivables Balance at January 1, 2020 $ 1,711 $ — $ 155 $ 155 Accrued receivables 6,354 — 581 581 Billings (6,546 ) — (644 ) (644 ) Adjustments — (94 ) (94 ) Foreign exchange 104 — 2 2 Balance at December 31, 2020 1,623 — — — Contract liabilities Deferred revenue Balance at January 1, 2020 $ 108,538 $ 336 $ 1,385 $ 1,721 Revenue recognized in the period (18,194 ) (200 ) (743 ) (943 ) Foreign exchange 8,660 15 69 84 Balance at December 31, 2020 99,004 151 711 862 Less: current portion (19,554 ) (151 ) (474 ) (625 ) Non-current balance at December 31, 2020 79,450 — 237 237 |
Summary of Company's Collaboration Arrangements Earned in Period to Be Billed and Collected in Next Period | The balance of unbilled receivables predominantly represents reimbursement revenue under the Company’s collaboration arrangements earned in the period to be billed and collected in the next period, generally quarterly. Incyte is a related party as a shareholder, as more fully described in Note 15. For the Year Ended December 31, 2020 Related Party Third Party Incyte Ono Other Total Upfront payments $ 18,193 $ 200 $ 695 $ 895 Reimbursement revenue 8,387 — (12 ) (12 ) Milestones — — 2,480 2,480 Total collaboration revenue $ 26,580 $ 200 $ 3,163 $ 3,363 Operating expenses: Research and development expense $ 2,036 $ — $ 1,944 $ 1,944 General and administrative expense — — — — Total operating expenses from collaborations $ 2,036 $ — $ 1,944 $ 1,944 Revenue recognized that was included in deferred revenue at the beginning of the period $ 18,193 $ 200 $ 738 $ 938 For the Year Ended December 31, 2019 Related Party Third Party Incyte Ono Other Total Upfront payments $ 17,839 $ 196 $ 643 $ 839 Reimbursement revenue 7,992 99 153 252 Milestones — 4,142 284 4,426 Total collaboration revenue $ 25,831 $ 4,437 $ 1,080 $ 5,517 Operating expenses: Research and development expense $ 680 $ — $ — $ — General and administrative expense — — — — Total operating expenses from collaborations $ 680 $ — $ — $ — Revenue recognized that was included in deferred revenue at the beginning of the period $ 17,839 $ 196 $ 945 $ 1,141 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
Summary of Share-based Compensation Expense Classified in Consolidated Statements of Operations and Comprehensive Loss | Share-based compensation expense is classified in the consolidated statements of operations and comprehensive loss as follows: Year Ended December 31, 2020 2019 (In thousands) Research and development $ 2,969 $ 3,186 General and administrative 6,403 4,648 Total $ 9,372 $ 7,834 |
Summary of Key Weighted Average Assumptions Used in Pricing Model on Date of Grant for Options Granted to Employees | The Company uses the Black-Scholes option-pricing model to measure the fair value of stock option awards. In prior years, a Hull-White option-pricing model was used. Key weighted average assumptions used in this pricing model on the date of grant for options granted to employees are as follows: Year Ended December 31, 2020 2019 Risk-free interest rate 1.3 % 2.5 % Contractual life of options (years) 10.0 10.0 Expected term of options (years) 6.3 N/A Expected volatility of underlying stock 86.1 % 87.0 % Expected dividend yield 0.0 % 0.0 % |
Summary of Stock Option Activity | The following is a summary of stock option activity for the year ended December 31, 2020: Number of Options Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (years) (In thousands) Outstanding at January 1, 2020 3,314,871 $ 14.67 Granted 1,258,341 16.16 Exercised (202,207 ) 7.16 Forfeited or expired (622,094 ) 16.62 Outstanding at December 31, 2020 3,748,911 $ 15.59 5.9 $ 11,454 Exercisable at December 31, 2020 2,140,953 $ 15.85 4.1 $ 7,122 Year Ended December 31, 2020 2019 Weighted-average fair value of options granted $ 11.75 $ 7.54 |
Summary of RSU Activity | The following is a summary of RSU activity for the year ended December 31, 2020: Number of RSUs Weighted Average Grant-date Fair Value Non-vested at January 1, 2020 82,642 $ 19.68 Granted 46,474 16.00 Vested (67,248 ) 19.94 Forfeited (2,093 ) 21.11 Non-vested at December 31, 2020 59,775 $ 16.48 |
Intrinsic Value of Stock Options Exercised and Vested RSUs | Intrinsic Value of Stock Options Exercised and Vested RSUs Year Ended December 31, (In thousands) 2020 2019 Total fair value of RSUs vested $ 961 $ 726 Aggregate intrinsic value of options exercised 1,750 112 |
Loss per Share (Tables)
Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Loss per Share | Basic and diluted loss per share allocable to common stockholders are computed as follows: Year Ended December 31, 2020 2019 (In thousands except per share data) Net loss $ (85,513 ) $ (55,151 ) Weighted average shares outstanding 29,256,203 24,218,083 Basic and diluted loss per share allocable to common stockholders $ (2.92 ) $ (2.28 ) |
The Company - Additional Inform
The Company - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||
Accumulated loss | $ (400,112) | $ (314,599) | |
Cash and cash equivalents and marketable securities | 207,800 | ||
Issuance of common stock, net | $ 38,171 | $ 74,020 | |
Follow-on Offering | Subsequent Event | |||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||
Issuance of common stock, net | $ 129,700 | ||
Collaboration and Share Purchase Agreements | Subsequent Event | |||
Organization Consolidation and Presentation of Financial Statements [Line Items] | |||
Issuance of common stock, net | $ 60,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($)Segment | Dec. 31, 2019USD ($) | |
Accounting Policies [Abstract] | ||
Cash and cash equivalents, maturities | three months or less | |
Impairment charges of long-lived assets | $ 0 | $ 0 |
Reduction in research and development expenses | $ 6,000,000 | $ 4,500,000 |
Number of reportable segment | Segment | 1 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Estimated Useful Lives of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Laboratory Equipment | |
Property Plant And Equipment [Line Items] | |
Property and equipment, estimated useful life | 5 years |
Office Furniture and Equipment | |
Property Plant And Equipment [Line Items] | |
Property and equipment, estimated useful life | 5 years |
Leasehold Improvements | |
Property Plant And Equipment [Line Items] | |
Property and equipment, estimated useful life | Shorter of useful life or term of lease |
Investments in Debt Securitie_2
Investments in Debt Securities - Summary of Classification of Debt Securities in Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Securities Held To Maturity Nonaccrual [Line Items] | ||
Balance | $ 62,327 | $ 78,215 |
Cash equivalents [member] | ||
Debt Securities Held To Maturity Nonaccrual [Line Items] | ||
Balance | 17,654 | 34,053 |
Current marketable securities [member] | ||
Debt Securities Held To Maturity Nonaccrual [Line Items] | ||
Balance | 44,673 | 42,153 |
Non-current marketable securities [member] | ||
Debt Securities Held To Maturity Nonaccrual [Line Items] | ||
Balance | $ 0 | $ 2,009 |
Investments in Debt Securitie_3
Investments in Debt Securities - Summary of Debt Securities by Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Held To Maturity Securities Debt Maturities Single Maturity Date Amortized Cost Basis [Abstract] | ||
Within one year | $ 62,327 | |
After one year through five years | 0 | |
Total | $ 62,327 | $ 78,215 |
Investments in Debt Securitie_4
Investments in Debt Securities - Summary of Debt Securities by Credit Quality Indicator (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | $ 62,327 | $ 78,215 |
AAA [member] | ||
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | 17,654 | |
AA- to AA+ [member] | ||
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | 24,193 | |
A- to A+ [member] | ||
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | 20,480 | |
Money market funds [member] | ||
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | 10,156 | 34,053 |
Money market funds [member] | AAA [member] | ||
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | 10,156 | |
Money market funds [member] | AA- to AA+ [member] | ||
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | 0 | |
Money market funds [member] | A- to A+ [member] | ||
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | 0 | |
Corporate paper and notes [member] | ||
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | 27,978 | 38,679 |
Corporate paper and notes [member] | AAA [member] | ||
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | 7,498 | |
Corporate paper and notes [member] | AA- to AA+ [member] | ||
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | 0 | |
Corporate paper and notes [member] | A- to A+ [member] | ||
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | 20,480 | |
U.S. government agency securities [member] | ||
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | 9,150 | 3,987 |
U.S. government agency securities [member] | AAA [member] | ||
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | 0 | |
U.S. government agency securities [member] | AA- to AA+ [member] | ||
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | 9,150 | |
U.S. government agency securities [member] | A- to A+ [member] | ||
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | 0 | |
U.S. treasuries [member] | ||
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | 15,043 | $ 1,496 |
U.S. treasuries [member] | AAA [member] | ||
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | 0 | |
U.S. treasuries [member] | AA- to AA+ [member] | ||
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | 15,043 | |
U.S. treasuries [member] | A- to A+ [member] | ||
Debt Securities Held To Maturity Credit Quality Indicator [Line Items] | ||
Balance | $ 0 |
Investments in Debt Securitie_5
Investments in Debt Securities - Summary of Fair Value of Debt Securities by Major Security Type (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule Of Held To Maturity Securities [Line Items] | ||
Total | $ 62,327 | $ 78,215 |
Unrealized Gains | 3 | 41 |
Unrealized Losses | (2) | (2) |
Fair Value | 62,328 | 78,254 |
Money market funds [member] | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Total | 10,156 | 34,053 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 10,156 | 34,053 |
Corporate paper and notes [member] | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Total | 27,978 | 38,679 |
Unrealized Gains | 2 | 32 |
Unrealized Losses | (2) | (2) |
Fair Value | 27,978 | 38,709 |
U.S. government agency securities [member] | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Total | 9,150 | 3,987 |
Unrealized Gains | 0 | 7 |
Unrealized Losses | 0 | 0 |
Fair Value | 9,150 | 3,994 |
U.S. treasuries [member] | ||
Schedule Of Held To Maturity Securities [Line Items] | ||
Total | 15,043 | 1,496 |
Unrealized Gains | 1 | 2 |
Unrealized Losses | 0 | 0 |
Fair Value | $ 15,044 | $ 1,498 |
Prepaid Expenses and Other As_3
Prepaid Expenses and Other Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Prepaid Expense And Other Assets Current [Abstract] | ||
Prepaid clinical and manufacturing costs | $ 4,971 | $ 2,779 |
Prepaid general and administrative costs | 2,460 | 789 |
Interest receivable | 80 | 259 |
Other | 1,058 | 1,124 |
Total | $ 8,569 | $ 4,951 |
Prepaid Expenses and Other As_4
Prepaid Expenses and Other Assets - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Other Assets | ||
Restricted cash held on account as collateral | $ 0.2 | $ 0.2 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property Plant And Equipment [Line Items] | ||
Property and Equipment, gross | $ 7,608 | $ 5,803 |
Less: accumulated depreciation and amortization | (3,493) | (2,088) |
Property and equipment, net | 4,115 | 3,715 |
Laboratory Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and Equipment, gross | 5,695 | 4,538 |
Office Equipment and Furniture | ||
Property Plant And Equipment [Line Items] | ||
Property and Equipment, gross | 1,300 | 1,186 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and Equipment, gross | 117 | 79 |
Construction in Progress | ||
Property Plant And Equipment [Line Items] | ||
Property and Equipment, gross | $ 496 | $ 0 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Netherlands | ||
Property Plant And Equipment [Line Items] | ||
Depreciation and amortization expense | $ 1.2 | $ 0.9 |
Intangible Assets, Net - Summar
Intangible Assets, Net - Summary of Intangible Assets, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 4,186 | $ 3,832 |
Less: accumulated amortization | (1,343) | (956) |
Intangible assets, net | 2,843 | 2,876 |
Licenses of Intellectual Property [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 3,898 | 3,568 |
Software Licenses [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 288 | $ 264 |
Intangible Assets, Net - Additi
Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Intangible Assets Net Excluding Goodwill [Abstract] | ||
Amortization of intangible assets | $ 279 | $ 236 |
Intangible Assets, Net - Schedu
Intangible Assets, Net - Schedule of Expected Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Finite Lived Intangible Assets Future Amortization Expense Current And Five Succeeding Fiscal Years [Abstract] | ||
2021 | $ 300 | |
2022 | 300 | |
2023 | 230 | |
2024 | 196 | |
2025 | 166 | |
Thereafter | 1,651 | |
Intangible assets, net | $ 2,843 | $ 2,876 |
Accrued Expenses - Summary of A
Accrued Expenses - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Payables And Accruals [Abstract] | ||
Accrued research and development expenses | $ 15,372 | $ 6,618 |
Accrued personnel costs | 4,854 | 4,495 |
Accrued general and administrative expenses | 1,566 | 2,402 |
Other | 11 | 21 |
Accrued expenses | $ 21,803 | $ 13,536 |
Income Taxes - Summary of Compo
Income Taxes - Summary of Components of Loss from Operations Before Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
United States | $ (3,832) | $ (1,363) |
Netherlands | (81,178) | (53,594) |
Loss before income tax expense | $ (85,010) | $ (54,957) |
Income Taxes - Summary of Com_2
Income Taxes - Summary of Components of Expense for (Benefit) from Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal | $ 391 | $ 243 |
U.S. state | 234 | 40 |
Total current tax expense | 625 | 283 |
U.S. federal | (86) | (63) |
U.S. state | (36) | (26) |
Total deferred tax benefit | (122) | (89) |
Total income tax expense | $ 503 | $ 194 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Netherlands Statutory Income Tax Rate and Effective Income Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Netherlands statutory income tax rate | 25.00% | 25.00% |
Changes in tax rates | 10.60% | 1.50% |
Non-deductible expenses | (2.40%) | (3.70%) |
Change in valuation allowance | (33.50%) | (23.30%) |
Other | (0.30%) | 0.10% |
Effective income tax rate | (0.60%) | (0.40%) |
Income Taxes - Summary of Com_3
Income Taxes - Summary of Components of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 66,572 | $ 33,917 |
Deferred revenue | 24,966 | 23,926 |
Excess interest carryforward | 2,080 | 0 |
Lease obligation | 1,058 | 1,333 |
Accrued expenses and other | 494 | 319 |
Total deferred tax assets | 95,170 | 59,495 |
Deferred tax asset valuation allowance | (93,645) | (57,876) |
Total deferred tax assets, net of valuation allowance | 1,525 | 1,619 |
Deferred tax liabilities: | ||
Operating lease right-of-use assets | 1,048 | 1,331 |
Other | 67 | 0 |
Total deferred tax liabilities | 1,115 | 1,331 |
Net deferred tax asset | $ 410 | $ 288 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Deferred tax asset valuation allowance | $ 93,645,000 | $ 57,876,000 |
Increase in valuation allowance, attributable to increase in net operating loss carryforward deferred tax assets | 35,800,000 | $ 13,200,000 |
Deferred tax asset valuation allowance | 2,100 | |
Unrecognized tax benefits | 0 | |
Accrued interest or penalties related to uncertain tax positions | 0 | |
Unrecognized tax benefits, tax related penalties and interest expense | $ 0 |
Income Taxes - Summary of Net O
Income Taxes - Summary of Net Operating Loss Carryforwards for Dutch Income Tax Purposes (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Netherlands Tax Loss Carryforward | $ 266,288 |
Tax Year 2024 | |
Operating Loss Carryforwards [Line Items] | |
Expiry Year | 2024 |
Netherlands Tax Loss Carryforward | $ 23,129 |
Tax Year 2025 | |
Operating Loss Carryforwards [Line Items] | |
Expiry Year | 2025 |
Netherlands Tax Loss Carryforward | $ 110,165 |
Tax Year 2026 | |
Operating Loss Carryforwards [Line Items] | |
Expiry Year | 2026 |
Netherlands Tax Loss Carryforward | $ 95,568 |
Tax Year 2027 | |
Operating Loss Carryforwards [Line Items] | |
Expiry Year | 2027 |
Netherlands Tax Loss Carryforward | $ 37,426 |
Operating Leases - Additional I
Operating Leases - Additional Information (Details) € in Millions | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2019EUR (€)m²RenewalTerm | Mar. 31, 2019 | Dec. 31, 2018 | |
Lessee Lease Description [Line Items] | |||
Operating lease, term of agreement | 5 years | ||
Operating lease, description | Merus N.V. leases its corporate headquarters under an agreement term of five years, which expires in the fourth quarter of 2021. On May 1, 2018, Merus N.V. leased additional space to expand its corporate headquarters under a separate agreement. Under the terms of the new agreement, the term began on May 1, 2018 and also expires in the fourth quarter of 2021. | ||
Operating lease, expiration period | fourth quarter of 2021. | ||
Scenario Plan [Member] | Kadans Science Partner XII BV | Office Building | |||
Lessee Lease Description [Line Items] | |||
Operating lease, term of agreement | 10 years | ||
Area of property available for operating lease | m² | 5,070 | ||
Operating lease, renewal term | 5 years | ||
Operating lease, number of renewal term | RenewalTerm | 2 | ||
Operating lease, termination term | 20 years | ||
Operating lease, estimated rent expense | € | € 1.3 | ||
Operating lease, rent adjustment description | The rent amount is subject to adjustment based on the consumer price index (the “CPI”) beginning on January 1, 2019 through the completion date and then annually thereafter, subject to certain limitations if the CPI is greater than 3.0%. | ||
Scenario Plan [Member] | Kadans Science Partner XII BV | Minimum | Office Building | |||
Lessee Lease Description [Line Items] | |||
Consumer price Index | 3.00% | ||
Merus US Inc | |||
Lessee Lease Description [Line Items] | |||
Operating lease, term of agreement | 7 years | ||
Operating lease, description | Merus US, Inc. entered into a lease agreement for office space in Cambridge, Massachusetts. The lease commenced in the second quarter of 2019 and has a term of seven years, and may be extended for another five years. Given the Company’s current plans, the renewal term has not been included in the estimate of the lease term. | ||
Operating lease, extended term of agreement | 5 years | ||
Operating lease, option to extend | true | ||
Operating lease, options to extend description | may be extended for another five years. |
Operating Leases - Summary of C
Operating Leases - Summary of Components of Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Lease Cost [Abstract] | ||
Operating lease cost | $ 1,611 | $ 1,386 |
Variable lease cost | 375 | 297 |
Total lease cost included in operating expenses | 1,986 | 1,683 |
Cash paid to lessors included in operating cash outflows | $ 2,478 | $ 2,273 |
Operating Leases - Schedule of
Operating Leases - Schedule of Maturities of Operating Lease Obligations (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Lease Cost [Abstract] | |
2021 | $ 1,577 |
2022 | 614 |
2023 | 630 |
2024 | 645 |
2025 | 662 |
Thereafter | 222 |
Total lease payments | 4,350 |
Less: amount representing interest | (397) |
Total lease obligations | $ 3,953 |
Operating Leases - Schedule o_2
Operating Leases - Schedule of Weighted Average Remaining Lease Terms and Discount Rates (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Weighted-average remaining operating lease term (in years) | 4 years 2 months 12 days | 4 years 9 months 18 days |
Weighted-average discount rate for operating leases | 4.90% | 5.00% |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 03, 2020 | Nov. 24, 2020 | Nov. 23, 2020 | Nov. 07, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2021 |
Class Of Stock [Line Items] | |||||||
Common stock voting rights | one vote | ||||||
Proceeds from issuance of common stock, net of issuance costs | $ 38,072 | $ 74,184 | |||||
2016 Incentive Award Plan | Subsequent Event | |||||||
Class Of Stock [Line Items] | |||||||
Common stock reserved for additional grants | 2,336,997 | ||||||
Underwritten Public Offering | |||||||
Class Of Stock [Line Items] | |||||||
Issuance of common stock, net, shares | 1,300,000 | 384,615 | 766,666 | 5,462,500 | |||
Issue price per share | $ 16.90 | $ 15.60 | $ 15 | $ 14.50 | |||
Net proceeds from public offering | $ 74,000 | ||||||
Number of common shares pursuant to underwriters' option to purchase additional shares | 715,500 | ||||||
Proceeds from issuance of common stock, net of issuance costs | $ 22,000 | $ 6,000 | $ 11,500 |
Collaborations - Additional Inf
Collaborations - Additional Information (Details) $ / shares in Units, € in Millions, shares in Millions | Mar. 14, 2018EUR (€)Antibody | Jan. 31, 2018USD ($)AntibodyPerformanceObligation | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($)Milestone | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2018USD ($) | Dec. 10, 2018USD ($) |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||
Development milestones received | $ 0 | $ 4,100,000 | € 3.7 | |||||||
Research and development | $ 70,040,000 | $ 55,680,000 | ||||||||
Incyte Collaboration and License Agreement | ||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||
Non-refundable upfront payment receivable | $ 120,000,000 | |||||||||
Issuance of common stock, net, shares | shares | 3.2 | |||||||||
Purchase price per share | $ / shares | $ 25 | |||||||||
Collaborations, transaction price as revenue | $ 80,000,000 | |||||||||
Incyte Collaboration and License Agreement | License and Related Activities | ||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||
Collaborations, transaction price as revenue | $ 152,600,000 | |||||||||
Second ONO Research and License Agreement | ||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||
Non-refundable upfront payment receivable | € | € 0.7 | |||||||||
Payment to compensate research services | € | 0.3 | |||||||||
Over time payment for full time equivalent funding | € | € 0.2 | |||||||||
Second ONO Research and License Agreement | Maximum [Member] | ||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||
Number of bispecific antibodies under collaboration and license agreement | Antibody | 5 | |||||||||
Simcere Collaboration and License Agreement | ||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||
Collaborations, transaction price as revenue | $ 2,750,000 | |||||||||
Non-refundable upfront payment received | $ 2,750,000 | |||||||||
Number of milestones achieved | Milestone | 2,000,000 | |||||||||
Milestone payments received | $ 1,300,000 | |||||||||
Description of transaction price under fixed consideration | research and development for one of the three programs is on-going. | |||||||||
Simcere Collaboration and License Agreement | Second Bispecific Antibody Research Program | ||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||
Milestone payments received | $ 500,000 | |||||||||
Simcere Collaboration and License Agreement | Maximum [Member] | ||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||
Number of bispecific antibodies under collaboration and license agreement | Antibody | 3 | |||||||||
Simcere Collaboration and License Agreement | License and Performance | Research and Development | ||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||
Number of performance obligation | PerformanceObligation | 3 | |||||||||
Betta Collaboration and License Agreement | ||||||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||||||
Non-refundable upfront payment receivable | $ 1,000,000 | |||||||||
Development milestones received | $ 2,000,000 | |||||||||
Contingent milestone payments receivable | $ 12,000,000 | |||||||||
Revenue related performance obligation as revenue | $ 1,000,000 | |||||||||
Milestone revenue | 2,000,000 | |||||||||
Research and development | $ 2,000,000 |
Collaborations - Summary of Com
Collaborations - Summary of Company's Accompanying Consolidated Financial Statements Attributable to Transactions Arising From Collaboration Arrangements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Accrued expenses | $ 21,803 | $ 13,536 |
Incyte | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Revenue recognized in the period | 18,193 | 17,839 |
Ono | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Revenue recognized in the period | 200 | 196 |
Other | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Revenue recognized in the period | 738 | 945 |
Collaboration Agreement | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Revenue recognized in the period | 938 | 1,141 |
Accounts Receivable | Incyte | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Balance at January 1, 2020 | 0 | |
Billings | 6,546 | |
Cash receipts | (6,587) | |
Adjustments | 0 | |
Foreign exchange | 41 | |
Balance at December 31, 2020 | 0 | 0 |
Accounts Receivable | Ono | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Balance at January 1, 2020 | 786 | |
Billings | 0 | |
Cash receipts | (772) | |
Adjustments | 0 | |
Foreign exchange | (14) | |
Balance at December 31, 2020 | 0 | 786 |
Accounts Receivable | Other | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Balance at January 1, 2020 | 0 | |
Billings | 644 | |
Cash receipts | (607) | |
Adjustments | (11) | |
Foreign exchange | 20 | |
Balance at December 31, 2020 | 46 | 0 |
Accounts Receivable | Collaboration Agreement | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Balance at January 1, 2020 | 786 | |
Billings | 644 | |
Cash receipts | (1,379) | |
Adjustments | (11) | |
Foreign exchange | 6 | |
Balance at December 31, 2020 | 46 | 786 |
Unbilled Receivables | Incyte | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Balance at January 1, 2020 | 1,711 | |
Billings | (6,546) | |
Adjustments | 0 | |
Foreign exchange | 104 | |
Balance at December 31, 2020 | 1,623 | 1,711 |
Accrued expenses | 6,354 | |
Unbilled Receivables | Ono | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Balance at January 1, 2020 | 0 | |
Billings | 0 | |
Adjustments | 0 | |
Foreign exchange | 0 | |
Balance at December 31, 2020 | 0 | 0 |
Accrued expenses | 0 | |
Unbilled Receivables | Other | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Balance at January 1, 2020 | 155 | |
Billings | (644) | |
Adjustments | (94) | |
Foreign exchange | 2 | |
Balance at December 31, 2020 | 0 | 155 |
Accrued expenses | 581 | |
Unbilled Receivables | Collaboration Agreement | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Balance at January 1, 2020 | 155 | |
Billings | (644) | |
Adjustments | (94) | |
Foreign exchange | 2 | |
Balance at December 31, 2020 | 0 | 155 |
Accrued expenses | 581 | |
Deferred Revenue | Incyte | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Foreign exchange | 8,660 | |
Balance at January 1, 2020 | 108,538 | |
Revenue recognized in the period | (18,194) | |
Balance at December 31, 2020 | 99,004 | 108,538 |
Less: current portion | (19,554) | |
Non-current balance at December 31, 2020 | 79,450 | |
Deferred Revenue | Ono | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Foreign exchange | 15 | |
Balance at January 1, 2020 | 336 | |
Revenue recognized in the period | (200) | |
Balance at December 31, 2020 | 151 | 336 |
Less: current portion | (151) | |
Non-current balance at December 31, 2020 | 0 | |
Deferred Revenue | Other | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Foreign exchange | 69 | |
Balance at January 1, 2020 | 1,385 | |
Revenue recognized in the period | (743) | |
Balance at December 31, 2020 | 711 | 1,385 |
Less: current portion | (474) | |
Non-current balance at December 31, 2020 | 237 | |
Deferred Revenue | Collaboration Agreement | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Foreign exchange | 84 | |
Balance at January 1, 2020 | 1,721 | |
Revenue recognized in the period | (943) | |
Balance at December 31, 2020 | 862 | $ 1,721 |
Less: current portion | (625) | |
Non-current balance at December 31, 2020 | $ 237 |
Collaborations - Summary of C_2
Collaborations - Summary of Company's Collaboration Arrangements Earned in Period to Be Billed and Collected in Next Period (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating expenses: | ||
Research and development | $ 70,040 | $ 55,680 |
General and administrative | 35,781 | 34,110 |
Total operating expenses | 105,821 | 89,790 |
Incyte | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Upfront payments | 18,193 | 17,839 |
Reimbursement revenue | 8,387 | 7,992 |
Milestones | 0 | 0 |
Total collaboration revenue | 26,580 | 25,831 |
Operating expenses: | ||
Research and development | 2,036 | 680 |
General and administrative | 0 | 0 |
Total operating expenses | 2,036 | 680 |
Revenue recognized in the period | 18,193 | 17,839 |
Ono | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Upfront payments | 200 | 196 |
Reimbursement revenue | 0 | 99 |
Milestones | 0 | 4,142 |
Total collaboration revenue | 200 | 4,437 |
Operating expenses: | ||
Research and development | 0 | 0 |
General and administrative | 0 | 0 |
Total operating expenses | 0 | 0 |
Revenue recognized in the period | 200 | 196 |
Other | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Upfront payments | 695 | 643 |
Reimbursement revenue | (12) | 153 |
Milestones | 2,480 | 284 |
Total collaboration revenue | 3,163 | 1,080 |
Operating expenses: | ||
Research and development | 1,944 | 0 |
General and administrative | 0 | 0 |
Total operating expenses | 1,944 | 0 |
Revenue recognized in the period | 738 | 945 |
Collaboration Agreement | ||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||
Upfront payments | 895 | 839 |
Reimbursement revenue | (12) | 252 |
Milestones | 2,480 | 4,426 |
Total collaboration revenue | 3,363 | 5,517 |
Operating expenses: | ||
Research and development | 1,944 | 0 |
General and administrative | 0 | 0 |
Total operating expenses | 1,944 | 0 |
Revenue recognized in the period | $ 938 | $ 1,141 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2021 | |
401 (K) Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Defined contribution plan , description | The 401(k) Plan covers substantially all U.S. employees, and allows participants to defer a portion of their annual compensation on a pretax basis. The Company matches contributions to the 401(k) Plan, matching 50% of an employee’s contribution up to a maximum of 3% of the participant’s compensation. | ||
Percentage of employer matching contribution | 50.00% | ||
Defined contribution plan, cost | $ 0.1 | $ 0.1 | |
401 (K) Plan | Maximum [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Employer matching contribution, percent of employees compensation | 3.00% | ||
Postemployment Retirement Benefits | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Contributions to post-employment benefit plan | $ 2 | 1.3 | |
Executive settlement, cash compensation to be paid | 0.9 | ||
Executive settlement expense | $ 1.8 | ||
Stock Option Activity | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Unrecognized stock-based compensation | $ 8 | ||
Weighted average remaining vesting period | 1 year 3 months 18 days | ||
Expected dividend yield | 0.00% | 0.00% | |
Share-Based Payments | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Expected dividend yield | 0.00% | ||
Share-Based Payments | 2010 Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting period of options granted share-based payments | 4 years | ||
Options expiration period | 8 years | ||
Share-Based Payments | 2010 Plan | First Anniversary | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Award vesting rights, percentage | 25.00% | ||
Share-Based Payments | 2010 Plan | Thereafter | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Award vesting rights, percentage | 75.00% | ||
Award vesting rights, required service period | 36 months | 36 months | |
Share-Based Payments | 2016 Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting period of options granted share-based payments | 4 years | 4 years | |
Options expiration period | 10 years | 10 years | |
Share-Based Payments | 2016 Plan | Subsequent Event | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of common shares authorized for issuance for future grants | 2,336,997 | ||
Share-Based Payments | 2016 Plan | Non-Executive Directors | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting period of options granted share-based payments | 3 years | 3 years | |
Share-Based Payments | 2016 Plan | Non-Executive Directors | Subsequent Award | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting period of options granted share-based payments | 1 year | 1 year | |
Award vesting rights, required service period | 12 months | 12 months | |
Share-Based Payments | 2016 Plan | First Anniversary | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Award vesting rights, percentage | 25.00% | 25.00% | |
Share-Based Payments | 2016 Plan | First Anniversary | Non-Executive Directors | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Award vesting rights, percentage | 33.00% | 33.00% | |
Share-Based Payments | 2016 Plan | Thereafter | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Award vesting rights, percentage | 75.00% | 75.00% | |
Award vesting rights, required service period | 36 months | 36 months | |
Share-Based Payments | 2016 Plan | Thereafter | Non-Executive Directors | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Award vesting rights, percentage | 67.00% | 67.00% | |
Award vesting rights, required service period | 24 months | 24 months | |
RSUs | Postemployment Retirement Benefits | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Grant of RSUs | 30,000 | ||
RSUs | 2016 Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Description of RSUs granted to employees | Each RSU represents the right to receive one common share. | ||
Vesting period of RSUs granted share-based payments | 4 years | 4 years |
Employee Benefit Plans - Summar
Employee Benefit Plans - Summary of Share-based Compensation Expense Classified in Consolidated Statements of Operations and Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total | $ 9,372 | $ 7,834 |
Research and Development | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total | 2,969 | 3,186 |
General and Administrative | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total | $ 6,403 | $ 4,648 |
Employee Benefit Plans - Summ_2
Employee Benefit Plans - Summary of Key Weighted Average Assumptions used in Pricing Model on date of Grant for Options Granted to Employees (Details) - Stock Option Activity | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Risk-free interest rate | 1.30% | 2.50% |
Contractual life of options (years) | 10 years | 10 years |
Expected term of options (years) | 6 years 3 months 18 days | |
Expected volatility of underlying stock | 86.10% | 87.00% |
Expected dividend yield | 0.00% | 0.00% |
Employee Benefit Plans - Summ_3
Employee Benefit Plans - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Number of Options, Outstanding, Beginning balance | 3,314,871 | |
Number of Options, Granted | 1,258,341 | |
Number of Options, Exercised | (202,207) | |
Number of Options, Forfeited or expired | (622,094) | |
Number of Options, Outstanding, Ending balance | 3,748,911 | 3,314,871 |
Number of Options, Exercisable | 2,140,953 | |
Weighted Average Exercise Price per Share, Outstanding, Beginning balance | $ 14.67 | |
Weighted Average Exercise Price per Share, Granted | 16.16 | |
Weighted Average Exercise Price per Share, Exercised | 7.16 | |
Weighted Average Exercise Price per Share, Forfeited or expired | 16.62 | |
Weighted Average Exercise Price per Share, Outstanding, Ending balance | 15.59 | $ 14.67 |
Weighted Average Exercise Price per Share, Exercisable | $ 15.85 | |
Weighted Average Remaining Contractual Term, Outstanding | 5 years 10 months 24 days | |
Weighted Average Remaining Contractual Term, Exercisable | 4 years 1 month 6 days | |
Aggregate Intrinsic Value, Outstanding | $ 11,454 | |
Aggregate Intrinsic Value, Exercisable | $ 7,122 | |
Weighted-average fair value of options granted | $ 11.75 | $ 7.54 |
Employee Benefit Plans - Summ_4
Employee Benefit Plans - Summary of RSU Activity (Details) - RSUs | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of RSUs, Non-vested, Beginning balance | shares | 82,642 |
Number of RSUs, Granted | shares | 46,474 |
Number of RSUs, Vested | shares | (67,248) |
Number of RSUs, Forfeited | shares | (2,093) |
Number of RSUs, Non-vested, Ending balance | shares | 59,775 |
Weighted Average Grant-date Fair Value, Non-vested, Beginning balance | $ / shares | $ 19.68 |
Weighted Average Grant-date Fair Value, Granted | $ / shares | 16 |
Weighted Average Grant-date Fair Value, Vested | $ / shares | 19.94 |
Weighted Average Grant-date Fair Value, Forfeited | $ / shares | 21.11 |
Weighted Average Grant-date Fair Value, Non-vested, Ending balance | $ / shares | $ 16.48 |
Employee Benefit Plans - Intrin
Employee Benefit Plans - Intrinsic Value of Stock Options Exercised and Vested RSUs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Aggregate intrinsic value of options exercised | $ 1,750 | $ 112 |
RSUs | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Total fair value of RSUs vested | $ 961 | $ 726 |
Loss per Share - Summary of Bas
Loss per Share - Summary of Basic and Diluted Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (85,513) | $ (55,151) |
Weighted average shares outstanding | 29,256,203 | 24,218,083 |
Basic and diluted | $ (2.92) | $ (2.28) |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Incyte | Merus N V [Member] | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 10.10% | 11.10% |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) $ / shares in Units, $ in Thousands | Jan. 21, 2021USD ($)shares | Jan. 18, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jan. 21, 2021€ / shares | Jan. 21, 2021$ / shares |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Proceeds from issuance of common stock, net of issuance costs | $ 38,072 | $ 74,184 | ||||
Subsequent Event | Underwriters | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Issuance of common stock, net, shares | shares | 4,848,485 | |||||
Purchase price per share | € / shares | € 0.09 | |||||
Public offering price per share | $ / shares | $ 24.75 | |||||
Net proceeds from public offering | $ 129,700 | |||||
Subsequent Event | Maximum [Member] | Underwriters | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Sale of common stock | shares | 727,272 | |||||
Collaboration and License Agreement and Share Subscription Agreement | Subsequent Event | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Non-refundable upfront payment receivable | $ 40,000 | |||||
Milestone payments receivable | $ 1,600,000 | |||||
Issuance of common stock, net, shares | shares | 706,834 | |||||
Purchase price per share | $ / shares | $ 28.295 | |||||
Proceeds from issuance of common stock, net of issuance costs | $ 20,000 | |||||
Collaboration and License Agreement and Share Subscription Agreement | Subsequent Event | Maximum [Member] | ||||||
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | ||||||
Future contingent development and regulatory milestones receivable | 290,000 | |||||
Commercial sales milestones | $ 250,000 |