Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 06, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Entity Registrant Name | MORPHIC HOLDING, INC. | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 30,602,863 | |
Entity Central Index Key | 0001679363 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 107,035 | $ 101,559 |
Marketable securities | 111,977 | 135,457 |
Accounts receivable | 3,685 | 3,467 |
Prepaid expenses and other current assets | 2,856 | 3,090 |
Total current assets | 225,553 | 243,573 |
Property and equipment, net | 3,222 | 3,446 |
Restricted cash | 275 | 275 |
Other assets | 108 | 141 |
Total assets | 229,158 | 247,435 |
Current liabilities: | ||
Accounts payable | 4,623 | 5,167 |
Accrued expenses | 5,615 | 6,639 |
Deferred revenue, current portion | 26,497 | 23,450 |
Deferred rent, current portion | 106 | 94 |
Total current liabilities | 36,841 | 35,350 |
Long-term liabilities: | ||
Deferred revenue, net of current portion | 64,002 | 70,954 |
Deferred rent, net of current portion | 180 | 213 |
Total liabilities | 101,023 | 106,517 |
Stockholders’ Equity | ||
Preferred shares, $0.0001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of March 31, 2020 and December 31, 2019 | ||
Common shares, $0.0001 par value, 400,000,000 shares authorized, 30,283,725 shares issued and outstanding as of March 31, 2020 and 30,110,251 shares issued and outstanding as of December 31, 2019 | 3 | 3 |
Additional paid‑in capital | 241,776 | 238,384 |
Accumulated deficit | (114,259) | (97,513) |
Accumulated other comprehensive income | 615 | 44 |
Total stockholders’ equity | 128,135 | 140,918 |
Total liabilities and stockholders’ equity | $ 229,158 | $ 247,435 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Preferred shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred shares, shares authorized | 10,000,000 | 10,000,000 |
Preferred shares, shares issued | 0 | 0 |
Preferred shares, shares outstanding | 0 | 0 |
Common shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 400,000,000 | 400,000,000 |
Common shares, shares issued | 30,283,725 | 30,110,251 |
Common shares, shares outstanding | 30,283,725 | 30,110,251 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Collaboration revenue | $ 5,594 | $ 6,068 |
Operating expenses: | ||
Research and development | 18,960 | 10,370 |
General and administrative | 4,423 | 1,832 |
Total operating expenses | 23,383 | 12,202 |
Loss from operations | (17,789) | (6,134) |
Other income: | ||
Interest income, net | 886 | 1,063 |
Total other income, net | 886 | 1,063 |
Loss before benefit from (provision for) income taxes | (16,903) | (5,071) |
Benefit from (provision for) income taxes | 157 | (129) |
Net loss | $ (16,746) | $ (5,200) |
Net loss per share, basic and diluted | $ (0.55) | $ (2.77) |
Weighted average common shares outstanding, basic and diluted | 30,188,575 | 1,879,986 |
Comprehensive loss: | ||
Net loss | $ (16,746) | $ (5,200) |
Other comprehensive income: | ||
Unrealized holding gains on marketable securities | 571 | 25 |
Total other comprehensive income | 571 | 25 |
Comprehensive loss | (16,175) | (5,175) |
AbbVie | ||
Collaboration revenue | 3,392 | 5,570 |
Janssen | ||
Collaboration revenue | $ 2,202 | $ 498 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF PREFERRED SHARES AND STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands | Series Seed Preferred Shares | Series A Preferred Shares | Series B Preferred Shares | Common shares | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total |
Balance at beginning of period at Dec. 31, 2018 | $ 1,633 | $ (54,185) | $ (52,552) | |||||
Balance at beginning of period ( in shares) at Dec. 31, 2018 | 1,832,923 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity-based compensation expense | 499 | 499 | ||||||
Vesting of restricted shares (in shares) | 99,911 | |||||||
Unrealized holding gains on marketable securities | $ 25 | 25 | ||||||
Net loss | (5,200) | (5,200) | ||||||
Balance at end of period at Mar. 31, 2019 | 2,132 | (59,385) | 25 | (57,228) | ||||
Balance at end of period ( in shares) at Mar. 31, 2019 | 1,932,834 | |||||||
Balance at beginning of period at Dec. 31, 2018 | $ 8,658 | $ 51,320 | $ 79,831 | |||||
Balance at beginning of period ( in shares) at Dec. 31, 2018 | 2,045,556 | 8,411,368 | 10,553,483 | |||||
Balance at end of period at Mar. 31, 2019 | $ 8,658 | $ 51,320 | $ 79,831 | |||||
Balance at end of period ( in shares) at Mar. 31, 2019 | 2,045,556 | 8,411,368 | 10,553,483 | |||||
Balance at beginning of period at Dec. 31, 2019 | $ 3 | 238,384 | (97,513) | 44 | 140,918 | |||
Balance at beginning of period ( in shares) at Dec. 31, 2019 | 30,110,251 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity-based compensation expense | 2,544 | 2,544 | ||||||
Vesting of restricted shares (in shares) | 84,247 | |||||||
Issuance of common shares upon stock option exercise | 167 | $ 167 | ||||||
Issuance of common shares upon stock option exercise (in shares) | 35,822 | 35,822 | ||||||
Issuance of common stock under the Employee Stock Purchase Plan | 681 | $ 681 | ||||||
Issuance of common stock under the Employee Stock Purchase Plan (in shares) | 53,405 | |||||||
Unrealized holding gains on marketable securities | 571 | 571 | ||||||
Net loss | (16,746) | (16,746) | ||||||
Balance at end of period at Mar. 31, 2020 | $ 3 | $ 241,776 | $ (114,259) | $ 615 | $ 128,135 | |||
Balance at end of period ( in shares) at Mar. 31, 2020 | 30,283,725 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (16,746) | $ (5,200) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 283 | 166 |
Premium amortization and discount accretion on marketable securities | 139 | (516) |
Equity‑based compensation | 2,544 | 499 |
Change in operating assets and liabilities: | ||
Accounts receivable | (218) | (378) |
Prepaid expenses and other current assets | 279 | (58) |
Other assets | 33 | 9 |
Accounts payable | (307) | 1,142 |
Accrued expenses | (1,024) | 224 |
Deferred revenue | (3,905) | 4,309 |
Deferred rent | (21) | (9) |
Net cash (used in) provided by operating activities | (18,943) | 188 |
Cash flows from investing activities: | ||
Purchases of marketable securities | (9,089) | (143,111) |
Proceeds from maturities of marketable securities | 33,000 | |
Purchase of property and equipment | (295) | (559) |
Net cash provided by (used in) investing activities | 23,616 | (143,670) |
Cash flows from financing activities: | ||
Proceeds from issuance of Common Stock pursuant to stock options exercise | 122 | |
Proceeds from issuance of Common Stock under Employee Stock Purchase Plan | 681 | |
Net cash provided by financing activities | 803 | |
Net (decrease) increase in cash and cash equivalents and restricted cash | 5,476 | (143,482) |
Cash and cash equivalents and restricted cash, beginning of period | 101,834 | 186,176 |
Cash and cash equivalents and restricted cash, end of period | 107,310 | $ 42,694 |
Non-cash investing and financing activities: | ||
Purchases of property and equipment in accounts payable and accrued expenses | 30 | |
Amounts from exercise of stock options included in prepaid expenses and other current assets | 45 | |
Supplemental cash flow information: | ||
Cash paid for taxes | $ 480 |
Nature of the Business and Basi
Nature of the Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Nature of the Business and Basis of Presentation | |
Nature of the Business and Basis of Presentation | 1. Nature of the Business and Basis of Presentation Organization Morphic Holding, Inc. (the “Company”) was formed under the laws of the State of Delaware in August 2014. The Company is a biopharmaceutical company applying proprietary insights into integrin medicine to discover and develop first-in-class oral small molecule integrin therapeutics. Integrins are a validated target class with multiple approved drugs for the treatment of serious chronic diseases. Despite significant biopharmaceutical industry investment, no oral integrin therapies have been approved. The Company has created the Morphic integrin technology platform, or MInT Platform, by leveraging our unique understanding of integrin structure and biology, to develop a pipeline of novel product candidates designed to achieve potency, high selectivity, and the pharmaceutical properties required for oral administration. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. The Company expects to continue to incur losses from operations for the foreseeable future; the Company expects that its cash and cash equivalents and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements through at least the next 12 months from the date these financial statements were issued. On July 1, 2019, the Company completed its initial public offering (“IPO”), in which the Company issued and sold 6,900,000 shares of its common stock at a public offering price of $15.00 per share, including 900,000 shares of common stock sold pursuant to the underwriters’ exercise of their option to purchase additional shares of common stock, for aggregate gross proceeds of $103.5 million. The Company raised approximately $93.3 million in net proceeds after deducting underwriting discounts and commissions and offering expenses payable by the Company. Upon the closing of the IPO, all of the outstanding shares of convertible preferred stock automatically converted into 21,010,407 shares of common stock; the warrants to purchase 6,825 convertible preferred shares automatically converted into warrants to purchase 6,825 common shares. Subsequent to the closing of the IPO, there were no shares of preferred stock outstanding. In connection with the closing of the IPO, the Company amended and restated its Fourth Amended and Restated Certificate of Incorporation to change the authorized capital stock to 400,000,000 shares designated as common stock and 10,000,000 shares designated as preferred stock, all with a par value of $0.0001 per share. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Basis of Presentation and Significant Accounting Policies | |
Basis of Presentation and Significant Accounting Policies | 2. Basis of Presentation and Significant Accounting Policies Basis of Presentation The consolidated financial statements include the accounts of Morphic Holding, Inc. and its wholly owned subsidiaries described above. All intercompany balances have been eliminated in consolidation. On June 10, 2019, the Company's board of directors and stockholders approved a 5.8311-to-one reverse stock split of the Company's issued and outstanding shares of common stock and convertible preferred stock. All unit, per unit, share and per share amounts in the consolidated financial statements and notes thereto have been retrospectively adjusted for all periods presented to give effect of the reverse stock split. The accompanying condensed consolidated financial statements are unaudited and have been prepared by the Company in accordance with accounting principles generally accepted in the United States (“GAAP”) as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These unaudited interim condensed consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods ended March 31, 2020 and 2019. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2019, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 27, 2020. Use of Estimates and Summary of Significant Accounting Policies The preparation of financial statements in accordance with GAAP requires management to make estimates and judgments that may affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the date of the financial statements and the related reporting of revenues and expenses during the reporting period. Significant estimates of accounting reflected in these consolidated financial statements include, but are not limited to, estimates related to revenue recognition, accrued research and development expenses, the valuation of equity‑based compensation, and income taxes. Actual results could differ from those estimates. Significant accounting policies The significant accounting policies used in preparation of these condensed consolidated financial statements for the three months ended March 31, 2020 are consistent with those discussed in Note 2 to the consolidated financial statements in the Company’s 2019 Annual Report on Form 10-K. Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Simplifying Accounting for Income Taxes, a new standard intended to simplify the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The Company adopted ASU 2019-12 effective January 1, 2020, using the prospective method. Adoption of the standard did not have a material impact on the condensed consolidated financial statements. Recently Issued Accounting Pronouncements not yet Adopted As an “emerging growth company,” or EGC, under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, the Company has made an election under Section 107 of the JOBS Act to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. Thus, the Company follows requirements applicable to the private companies for adopting new and updated accounting standards. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates (“ASU 2019-10”), which finalizes effective date delays for private companies, not-for-profit organizations, and certain smaller reporting companies as follows: · January 1, 2023 as the effective date for adoption of the Topic 326 for annual and interim reporting periods; · January 1, 2021 and January 1, 2022 as the effective dates for adoption of the Topic 815 amendments for annual and interim periods, respectively; and · January 1, 2021 and January 1, 2022 as the effective dates for adoption of the Topic 842 for annual and interim periods, respectively. In June 2016, the FASB issued ASU 2016-13, Financial Instruments Credit Losses (Topic 326) (“ASU 2016-13”), which requires consideration of a broader range of reasonable and supportable information in developing credit loss estimates. In April 2019, the FASB issued ASU 2019-04, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”). Certain provisions of ASU 2019-04 amend the guidance of ASU 2016-13, are applicable to the Company’s investments portfolio, and allow the Company to make certain accounting policy elections regarding establishing allowance for credit losses for the accrued interest receivable and the corresponding disclosures. In November 2019, the FASB issued ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (“ASU 2019-11”), which clarifies certain areas of the guidance to ensure all companies and organizations can make a smoother transition to the standard. Following the issuance of ASU 2019-10 described above, the guidance is effective for the Company for the fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and will be adopted using the modified retrospective approach. The Company is currently evaluating the impact of ASU 2019-11 and the related ASU 2019-04 and ASU 2016-13 on the consolidated financial statements, including the impact of the available accounting policy elections. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), with guidance regarding the accounting for and disclosure of leases. In general, for lease arrangements exceeding a twelve-month term, these arrangements must now be recognized as assets and liabilities on the balance sheet of the lessee. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The balance sheet amount recorded for existing leases at the date of adoption of ASU 2016-02 must be calculated using the applicable incremental borrowing rate at the date of adoption. This update also requires lessees and lessors to disclose key information about their leasing transactions. In July 2018, the FASB issued ASU 2018-11, Leases - Targeted Improvements, intended to ease the implementation of the new lease standard for financial statement preparers by, among other things, allowing for an additional transition method. In lieu of presenting transition requirements to comparative periods, as previously required, an entity may now elect to show a cumulative effect adjustment on the date of adoption without the requirement to recast prior period financial statements or disclosures presented in accordance with ASU 2016-02. The Company currently expects to elect the available package of practical expedients which allows the Company to not reassess previous accounting conclusions around whether arrangements are or contain leases, the classification of leases, and the treatment of initial direct costs. The Company also expects it will make an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. The Company is in the process of assessing the impact of the standard and while not complete, it expects that it will record a material asset and liability related to its current operating lease; however, the full impact of adoption to the Company’s financial statements is yet to be determined. Effective with the issuance of ASU 2019-10, described above, this standard is effective for the Company for the annual periods beginning after December 15, 2020, which will be the initial date of application, and interim periods within fiscal years beginning after December 15, 2021. |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value of Financial Assets and Liabilities | |
Fair Value of Financial Assets and Liabilities | 3. Fair Value of Financial Assets and Liabilities The Company has certain financial assets and liabilities that are recorded at fair value which have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements: · Level 1 — Quoted market prices in active markets for identical assets or liabilities. · Level 2 — Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves. · Level 3 — Unobservable inputs developed using estimates of assumptions developed by the Company, which reflect those that a market participant would use. To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The tables below present information about the Company’s financial assets that are measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 (in thousands) and indicate the level within the fair value hierarchy where each measurement is classified. Fair Value Measurements at March 31, 2020 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 106,807 $ 106,807 $ — $ — U.S. Treasury obligations 111,977 — 111,977 — Total assets $ 218,784 $ 106,807 $ 111,977 $ — Fair Value Measurements at December 31, 2019 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 91,332 $ 91,332 $ — $ — U.S. Treasury obligations, included in cash and cash equivalents 9,995 — 9,995 — U.S. Treasury obligations 135,457 — 135,457 — Total assets $ 236,784 $ 91,332 $ 145,452 $ — The money market funds included in the table above invest in U.S. government securities that are valued using quoted market prices. Accordingly, money market funds are categorized as Level 1 as of March 31, 2020 and December 31, 2019. Marketable securities included in the table above consist exclusively of U.S. Treasury securities that are valued using prices provided by third party pricing vendors, using observable market inputs such as interest rates, yield curves, and credit risk. Accordingly, these securities are categorized as Level 2 as of March 31, 2020 and December 31, 2019. During the three months ended March 31, 2020, no assets were transferred between the fair value hierarchy categories. The Company had no liabilities measured at fair value on recurring basis at March 31, 2020 or December 31, 2019. The Company believes that the carrying amounts of the Company’s consolidated financial instruments, including prepaid expenses and other current assets, accounts receivable, accounts payable, and accrued expenses approximate fair value due to the short-term nature of those instruments. |
Marketable securities
Marketable securities | 3 Months Ended |
Mar. 31, 2020 | |
Marketable securities. | |
Marketable securities | 4. Marketable securities The following tables summarize the Company’s investments in marketable securities classified as available for sale (in thousands): As of March 31, 2020 Gross Gross Aggregate Amortized unrealized unrealized estimated Maturity cost holding gains holding losses fair value U.S. Treasury securities less than 1 year $ 111,336 $ 641 $ — $ 111,977 As of December 31, 2019 Gross Gross Aggregate Amortized unrealized unrealized estimated Maturity cost holding gains holding losses fair value U.S. Treasury securities less than 1 year $ 135,389 $ 70 $ (2) $ 135,457 As of March 31, 2020, the Company held no marketable securities in an unrealized loss position. As of December 31, 2019, the aggregate fair value of three securities in an unrealized loss position was $30.2 million and the aggregate unrealized losses were $2,000. Th e value. |
Cash, Cash Equivalents, and Res
Cash, Cash Equivalents, and Restricted Cash | 3 Months Ended |
Mar. 31, 2020 | |
Cash, Cash Equivalents, and Restricted Cash | |
Cash, Cash Equivalents, and Restricted Cash | 5. Cash, Cash Equivalents, and Restricted Cash Restricted cash consists of a letter of credit in the amount of $275,000 issued to the landlord of the Company’s facility lease. The terms of the letter of credit extend beyond one year. The following table reconciles cash and cash equivalents and restricted cash per the balance sheet to the statements of cash flows: March 31, December 31, March 31, December 31, 2020 2019 2019 2018 Cash and cash equivalents $ 107,035 $ 101,559 $ 42,419 $ 185,901 Restricted cash 275 275 275 275 Total cash, cash equivalents, and restricted cash $ 107,310 $ 101,834 $ 42,694 $ 186,176 |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2020 | |
Accrued Expenses | |
Accrued Expenses | 6. Accrued Expenses At March 31, 2020 and December 31, 2019 accrued expenses consist of the following (in thousands): March 31, December 31, 2020 2019 Payroll and related expenses $ 1,891 $ 3,159 Research and development activities 3,005 2,465 Other expenses 719 1,015 $ 5,615 $ 6,639 |
Equity Based Compensation
Equity Based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Equity Based Compensation | |
Equity Based Compensation | 7. Equity Based Compensation In connection with the Company’s initial public offering in July 2019, the Company adopted the 2019 Equity Incentive Plan (the “2019 Plan”) in June 2019, which replaced the 2018 Stock Incentive Plan. The 2019 Plan provides for the grant of stock options, restricted stock awards, stock bonus awards, cash awards, stock appreciation right, RSUs, and performance awards to directors, officers and employees of the Company, as well as consultants and advisors of the Company. On January 1, 2020, the number of shares of common stock available for issuance under the 2019 Plan increased by 1,204,410 shares as a result of the automatic increase provision of the 2019 Plan. As of March 31, 2020, there were a total of 1,796,999 shares available for future award grants under the 2019 Plan. The Company recognized equity-based compensation expense in the condensed consolidated statements of operations and comprehensive loss, by award type, as follows (in thousands): Three Months Ended March 31, 2020 2019 ESPP $ 110 $ — Restricted stock 562 187 Stock option 1,872 312 $ 2,544 $ 499 The following table summarizes the allocation of equity-based compensation expense in the condensed consolidated statements of operations and comprehensive loss, by expense category: Three Months Ended March 31, 2020 2019 Research and development expense $ 1,792 $ 282 General and administrative expense 752 217 $ 2,544 $ 499 Restricted Common Stock The following table summarizes the restricted stock awards activity during the three months ended March 31, 2020: Weighted Average Fair Number Value per Share of Shares at Issuance Unvested restricted common stock as of December 31, 2019 379,770 $ 4.32 Granted — — Vested (84,247) 4.32 Forfeited (12,694) 4.32 Unvested restricted common stock as of March 31, 2020 282,829 $ 4.32 As of March 31, 2020, the Company had unrecognized equity‑based compensation expense of $752,000 related to the restricted stock awards, which is expected to be recognized over a weighted average period of 0.6 years. Restricted Stock Units During the three months ended March 31, 2020, the Company granted restricted stock units. The following table summarizes the restricted stock units activity during the three months ended March 31, 2020: Weighted Average Fair Number Value per Share of Shares at Issuance Unvested restricted common stock units as of December 31, 2019 — $ — Granted 66,216 10.84 Vested — — Forfeited — — Unvested restricted common stock units as of March 31, 2020 66,216 $ 10.84 As of March 31, 2020, the Company had unrecognized equity‑based compensation expense of $708,000 related to the restricted stock units, which is expected to be recognized over a weighted average period of 3.2 years. Stock Options The following table summarizes the Company’s stock option activity during the three months ended March 31, 2020: Weighted Weighted Average Number of Average Remaining Aggregate Shares Exercise Price Contractual Term Intrinsic Value (in years) (in thousands) Outstanding as of December 31, 2019 2,987,403 $ 8.67 9.22 $ 26,254 Granted 1,468,885 14.68 — — Exercised (35,822) 4.67 — — Forfeited (64,917) 6.24 — — Outstanding as of March 31, 2020 4,355,549 $ 10.77 9.19 $ 20,121 Options vested and expected to vest as of March 31, 2020 4,355,549 $ 10.77 9.19 $ 20,121 Options exercisable as of March 31, 2020 655,162 $ 5.31 8.28 $ 6,165 As of March 31, 2020, the Company had unrecognized equity‑based compensation expense of $27.5 million related to stock options issued to employees and non-employees, which is expected to be recognized over a weighted average period of 3.2 years. The weighted average grant‑date fair value per share of stock options granted to employees and non-employees for stock option awards with service‑based vesting conditions during the three months ended March 31, 2020 was $10.02 per share. The following table summarizes assumptions used in determining the fair value of the options granted during the three months ended March 31, 2020: Three months ended March 31, 2020 Risk‑free interest rate 0.48% Expected dividend yield - Expected term (in years) 6.0 Expected Volatility 80.85% The Company determined the volatility for options granted in 2020 based on reported data for a guideline group of companies that issued options with substantially similar terms. The risk-free interest rate is based on a zero-coupon United States Treasury instrument with terms consistent with the expected life of the stock options. The expected term of options granted by the Company has been determined based upon the simplified method, because the Company does not have sufficient historical information regarding its options to derive the expected term. Under this approach, the expected term is the mid-point between the weighted average of vesting period and the contractual term. The Company has not paid and does not anticipate paying cash dividends on shares of common stock; therefore, the expected dividend yield is assumed to be zero. ESPP In June 2019, the Company adopted the 2019 Employee Stock Purchase Plan (“ESPP”), which became effective on June 26, 2019. The Company initially reserved 300,000 shares of common stock for sale under the ESPP. On January 1, 2020, the number of shares of common stock available for issuance under the ESPP increased by 301,102 shares as a result of the automatic increase provision of the ESPP. The ESPP is a qualified, compensatory plan under Section 423 of the Internal Revenue Code and offers substantially all employees opportunity to purchase up to $25,000 of common stock per year at 15% discount to the lower of the beginning of the offering period price or the end of the offering period price. Compensation expense for discounted purchases under the ESPP is measured using the Black-Scholes model to compute the fair value of the lookback provision plus the purchase discount and is recognized as compensation expense over the course of the offering period. During the three months ended March 31, 2020, the Company granted awards with a weighted average grant date fair value of $6.37. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Taxes | |
Income Taxes | 8. Income Taxes Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using statutory rates. A valuation allowance is recorded against deferred tax assets if it is more likely than not that some or all of the deferred tax assets will not be realized. The Company’s ability to use its operating loss carryforwards and tax credits to offset future taxable income is subject to restrictions under Sections 382 and 383 of the United States Internal Revenue Code, or the Internal Revenue Code. Net operating loss and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50 percent, as defined under Sections 382 and 383 of the Internal Revenue Code. Such changes would limit the Company’s use of its operating loss carryforwards and tax credits. In such a situation, the Company may be required to pay income taxes, even though significant operating loss carryforwards and tax credits exist. On March 27, 2020, the President signed into law the Coronavirus Aid Relief and Economic Security (“CARES”) Act. The CARES Act included several income tax changes, included allowing for the carryback of net operating losses, expanding interest deductibility, and allowing for accelerated expensing of certain capital improvements. The Company has not and does not intend to apply for a Payroll Protection Program Loan based on its current financial position. The Company records a provision or benefit for income taxes on ordinary pre-tax income or loss based on its estimated effective tax rate for the year. Based on the forecasted net operating loss for fiscal year 2020 and the carryback allowance under the CARES Act, the Company anticipates a full recovery of the federal income tax paid for the year ended December 31, 2019. Accordingly, the Company recognized an income tax benefit of $0.2 million for the three months ended March 31, 2020. The income tax expense of $0.1 million recognized for the three months ended March 31, 2019 was driven largely by the projected tax liability associated with the tax recognition of the upfront AbbVie collaboration payment received in 2018. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 9. Commitments and Contingencies Guarantees and Indemnifications The Company entered, and intends to continue to enter, into separate indemnification agreements with directors, officers, and certain of key employees, in addition to the indemnification provided for in the restated certificate of incorporation and restated bylaws. These agreements, among other things, require the Company to indemnify directors, officers, and key employees for certain expenses, including attorneys' fees, judgments, penalties, fines, and settlement amounts actually incurred by these individuals in any action or proceeding arising out of their service to the Company or any of its subsidiaries or any other company or enterprise to which these individuals provide services at the Company’s request. Subject to certain limitations, the indemnification agreements also require the Company to advance expenses incurred by directors, officers, and key employees for the defense of any action for which indemnification is required or permitted. The Company has standard indemnification arrangements in its leases for laboratory and office space that require it to indemnify the landlord against any liability for injury, loss, accident, or damage from any claims, actions, proceedings, or costs resulting from certain acts, breaches, violations, or non-performance under the Company’s lease. Through March 31, 2020, the Company had not experienced any losses related to these indemnification obligations, and no material claims were outstanding. The Company does not expect significant claims related to these indemnification obligations and, consequently, concluded that the fair value of these obligations is negligible, and no related reserves were established. Operating Leases Facility Lease The Company recognizes rent expense for the space it currently occupies and records a deferred rent obligation, representing the cumulative difference between actual rent payments and rent expense recognized ratably over the lease period, which is included in the Company’s consolidated balance sheets as of March 31, 2020 and December 31, 2019. Minimum annual rent payments under this lease for the remaining term of the amended lease, excluding operating expenses and taxes, which are not fixed for future periods as of March 31, 2020, are as follows (in thousands): Total Minimum Year ending December 31, Lease Payments 2020 846 2021 1,175 2022 495 Total minimum lease payments $ 2,516 The Company recorded approximately $257,000 and $218,000 in rent expense for three months ended March 31, 2020 and 2019, respectively. Legal Proceedings The Company is not currently a party to any material legal proceedings. |
Option and License Agreements
Option and License Agreements | 3 Months Ended |
Mar. 31, 2020 | |
Option and License Agreements | |
Option and License Agreements | 10. Option and License Agreements Detailed description of contractual terms and the Company’s accounting for agreements described below were included in the Company’s audited financial statements and notes in the Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2020. AbbVie Agreement During the three months ended March 31, 2020, the Company continued to perform under its agreement with AbbVie, pursuant to which the Company recognizes revenues in proportion to the costs incurred. As a result, the Company will recognize the $100 million up-front payment as research and development services are performed, which is expected to be completed through 2024. During the three months ended March 31, 2020, the Company incurred $4.5 million in research and development costs and recognized revenue of $3.4 million. As of March 31, 2020, the Company had $82.5 million of deferred revenue, which is classified as either current or long-term deferred revenue in the accompanying condensed consolidated balance sheets based on the period over which the revenue is expected to be recognized. This deferred revenue balance represents the aggregate amount of the transaction price allocated to the performance obligations that are partially unsatisfied as of March 31, 2020. On November 12, 2019, the Company announced that its selective oral α v β 6 - specific integrin inhibitor program for patients with fibrotic disease, MORF-720, conducted in collaboration with AbbVie, will require additional development activities, extending into the second half of 2020 based on feedback received during pre-IND interactions with the FDA, which increased the Company’s expected costs to complete the research and development services and had a corresponding decrease to revenue recognized to date that was recognized in the fourth quarter of 2019. As the Company progresses towards satisfaction of performance obligations under the AbbVie agreement, the estimated costs associated with the remaining effort required to complete the performance obligations may change, which may materially impact revenue recognition. The Company regularly evaluates and, when necessary, updates the costs associated with the remaining effort pursuant to each performance obligation under the AbbVie agreement. Accordingly, revenue may fluctuate from period to period due to revisions to estimated costs, resulting in a change in the measure of progress for a performance obligation. Such changes can also impact the allocation of deferred revenue between current and long term based on changes in expected timing of the satisfaction of performance obligations. Janssen Agreement During the three months ended March 31, 2020, the Company continued to perform under its agreement with Janssen, pursuant to which the Company recognizes revenue in proportion to the costs incurred to date. The Company expects to provide research services and recognize through 2024. During the three months ended March 31, 2020, the Company incurred $1.7 million in research and development costs and recognized revenue of $2.2 million related to research services. The Company had $3.7 million and $3.5 million due from Janssen included in accounts receivable on the condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019, respectively. As of March 31, 2020, $8.0 million of deferred revenue is classified as either current or long-term deferred revenue in the accompanying consolidated balance sheets based on the period over which the revenue is expected to be recognized. This deferred revenue balance represents the portion of the upfront payment received allocated to the performance obligations that are partially unsatisfied as of March 31, 2020. |
Net Loss per Unit and Share
Net Loss per Unit and Share | 3 Months Ended |
Mar. 31, 2020 | |
Net Loss per Unit and Share | |
Net Loss per Unit and Share | 11. Net Loss per Unit and Share Basic and diluted net loss per share is calculated as follows (in thousands, except share and per share data) for the three months ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 March 31, 2019 Net loss $ (16,746) $ (5,200) Weighted average common shares outstanding, basic and diluted 30,188,575 1,879,986 Net loss per share, basic and diluted $ (0.55) $ (2.77) The following table sets forth the outstanding common stock equivalents, presented based on amounts outstanding at each period end, that have been excluded from the calculation of diluted net loss per share for the periods indicated because their inclusion would have been anti‑dilutive (in common stock equivalent shares, as applicable): Three Months Ended March 31, 2020 2019 Convertible preferred stock — 21,010,407 Restricted common stock 282,829 653,142 Restricted stock units 66,216 — Warrant — 6,825 Stock options 4,355,549 1,786,551 4,704,594 23,456,925 In addition to the securities listed in the table above, as of March 31, 2020 the Company had reserved 548,000 shares of common stock for sale under the ESPP, which, if issued, would be anti-dilutive if included in calculation of diluted net loss per share. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Basis of Presentation and Significant Accounting Policies | |
Use of Estimates and Summary of Significant Accounting Policies | Use of Estimates and Summary of Significant Accounting Policies The preparation of financial statements in accordance with GAAP requires management to make estimates and judgments that may affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the date of the financial statements and the related reporting of revenues and expenses during the reporting period. Significant estimates of accounting reflected in these consolidated financial statements include, but are not limited to, estimates related to revenue recognition, accrued research and development expenses, the valuation of equity‑based compensation, and income taxes. Actual results could differ from those estimates. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Simplifying Accounting for Income Taxes, a new standard intended to simplify the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The Company adopted ASU 2019-12 effective January 1, 2020, using the prospective method. Adoption of the standard did not have a material impact on the condensed consolidated financial statements. |
Recently Issued Accounting Pronouncements not yet Adopted | Recently Issued Accounting Pronouncements not yet Adopted As an “emerging growth company,” or EGC, under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, the Company has made an election under Section 107 of the JOBS Act to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. Thus, the Company follows requirements applicable to the private companies for adopting new and updated accounting standards. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates (“ASU 2019-10”), which finalizes effective date delays for private companies, not-for-profit organizations, and certain smaller reporting companies as follows: · January 1, 2023 as the effective date for adoption of the Topic 326 for annual and interim reporting periods; · January 1, 2021 and January 1, 2022 as the effective dates for adoption of the Topic 815 amendments for annual and interim periods, respectively; and · January 1, 2021 and January 1, 2022 as the effective dates for adoption of the Topic 842 for annual and interim periods, respectively. In June 2016, the FASB issued ASU 2016-13, Financial Instruments Credit Losses (Topic 326) (“ASU 2016-13”), which requires consideration of a broader range of reasonable and supportable information in developing credit loss estimates. In April 2019, the FASB issued ASU 2019-04, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments (“ASU 2019-04”). Certain provisions of ASU 2019-04 amend the guidance of ASU 2016-13, are applicable to the Company’s investments portfolio, and allow the Company to make certain accounting policy elections regarding establishing allowance for credit losses for the accrued interest receivable and the corresponding disclosures. In November 2019, the FASB issued ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (“ASU 2019-11”), which clarifies certain areas of the guidance to ensure all companies and organizations can make a smoother transition to the standard. Following the issuance of ASU 2019-10 described above, the guidance is effective for the Company for the fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and will be adopted using the modified retrospective approach. The Company is currently evaluating the impact of ASU 2019-11 and the related ASU 2019-04 and ASU 2016-13 on the consolidated financial statements, including the impact of the available accounting policy elections. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), with guidance regarding the accounting for and disclosure of leases. In general, for lease arrangements exceeding a twelve-month term, these arrangements must now be recognized as assets and liabilities on the balance sheet of the lessee. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The balance sheet amount recorded for existing leases at the date of adoption of ASU 2016-02 must be calculated using the applicable incremental borrowing rate at the date of adoption. This update also requires lessees and lessors to disclose key information about their leasing transactions. In July 2018, the FASB issued ASU 2018-11, Leases - Targeted Improvements, intended to ease the implementation of the new lease standard for financial statement preparers by, among other things, allowing for an additional transition method. In lieu of presenting transition requirements to comparative periods, as previously required, an entity may now elect to show a cumulative effect adjustment on the date of adoption without the requirement to recast prior period financial statements or disclosures presented in accordance with ASU 2016-02. The Company currently expects to elect the available package of practical expedients which allows the Company to not reassess previous accounting conclusions around whether arrangements are or contain leases, the classification of leases, and the treatment of initial direct costs. The Company also expects it will make an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. The Company is in the process of assessing the impact of the standard and while not complete, it expects that it will record a material asset and liability related to its current operating lease; however, the full impact of adoption to the Company’s financial statements is yet to be determined. Effective with the issuance of ASU 2019-10, described above, this standard is effective for the Company for the annual periods beginning after December 15, 2020, which will be the initial date of application, and interim periods within fiscal years beginning after December 15, 2021. |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value of Financial Assets and Liabilities | |
Summary of financial assets measured at fair value on recurring basis | Fair Value Measurements at March 31, 2020 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 106,807 $ 106,807 $ — $ — U.S. Treasury obligations 111,977 — 111,977 — Total assets $ 218,784 $ 106,807 $ 111,977 $ — Fair Value Measurements at December 31, 2019 Total Level 1 Level 2 Level 3 Assets: Money market funds, included in cash and cash equivalents $ 91,332 $ 91,332 $ — $ — U.S. Treasury obligations, included in cash and cash equivalents 9,995 — 9,995 — U.S. Treasury obligations 135,457 — 135,457 — Total assets $ 236,784 $ 91,332 $ 145,452 $ — |
Marketable securities (Tables)
Marketable securities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Marketable securities. | |
Schedule of investments in marketable securities classified as available for sale | The following tables summarize the Company’s investments in marketable securities classified as available for sale (in thousands): As of March 31, 2020 Gross Gross Aggregate Amortized unrealized unrealized estimated Maturity cost holding gains holding losses fair value U.S. Treasury securities less than 1 year $ 111,336 $ 641 $ — $ 111,977 As of December 31, 2019 Gross Gross Aggregate Amortized unrealized unrealized estimated Maturity cost holding gains holding losses fair value U.S. Treasury securities less than 1 year $ 135,389 $ 70 $ (2) $ 135,457 |
Cash, Cash Equivalents, and R_2
Cash, Cash Equivalents, and Restricted Cash (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Cash, Cash Equivalents, and Restricted Cash | |
Schedule of reconciled cash, cash equivalents, and restricted cash | March 31, December 31, March 31, December 31, 2020 2019 2019 2018 Cash and cash equivalents $ 107,035 $ 101,559 $ 42,419 $ 185,901 Restricted cash 275 275 275 275 Total cash, cash equivalents, and restricted cash $ 107,310 $ 101,834 $ 42,694 $ 186,176 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accrued Expenses | |
Schedule of accrued expenses | At March 31, 2020 and December 31, 2019 accrued expenses consist of the following (in thousands): March 31, December 31, 2020 2019 Payroll and related expenses $ 1,891 $ 3,159 Research and development activities 3,005 2,465 Other expenses 719 1,015 $ 5,615 $ 6,639 |
Equity Based Compensation (Tabl
Equity Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity Based Compensation | |
Summary of equity based compensation expense | The Company recognized equity-based compensation expense in the condensed consolidated statements of operations and comprehensive loss, by award type, as follows (in thousands): Three Months Ended March 31, 2020 2019 ESPP $ 110 $ — Restricted stock 562 187 Stock option 1,872 312 $ 2,544 $ 499 The following table summarizes the allocation of equity-based compensation expense in the condensed consolidated statements of operations and comprehensive loss, by expense category: Three Months Ended March 31, 2020 2019 Research and development expense $ 1,792 $ 282 General and administrative expense 752 217 $ 2,544 $ 499 |
Summary of restricted stock units | Weighted Average Fair Number Value per Share of Shares at Issuance Unvested restricted common stock units as of December 31, 2019 — $ — Granted 66,216 10.84 Vested — — Forfeited — — Unvested restricted common stock units as of March 31, 2020 66,216 $ 10.84 |
2019 Equity Incentive Plan | |
Equity Based Compensation | |
Summary of restricted common stock | Weighted Average Fair Number Value per Share of Shares at Issuance Unvested restricted common stock as of December 31, 2019 379,770 $ 4.32 Granted — — Vested (84,247) 4.32 Forfeited (12,694) 4.32 Unvested restricted common stock as of March 31, 2020 282,829 $ 4.32 |
Summary of stock option activity | Weighted Weighted Average Number of Average Remaining Aggregate Shares Exercise Price Contractual Term Intrinsic Value (in years) (in thousands) Outstanding as of December 31, 2019 2,987,403 $ 8.67 9.22 $ 26,254 Granted 1,468,885 14.68 — — Exercised (35,822) 4.67 — — Forfeited (64,917) 6.24 — — Outstanding as of March 31, 2020 4,355,549 $ 10.77 9.19 $ 20,121 Options vested and expected to vest as of March 31, 2020 4,355,549 $ 10.77 9.19 $ 20,121 Options exercisable as of March 31, 2020 655,162 $ 5.31 8.28 $ 6,165 |
Summary of assumptions used in determining the fair value of the options granted | Three months ended March 31, 2020 Risk‑free interest rate 0.48% Expected dividend yield - Expected term (in years) 6.0 Expected Volatility 80.85% |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies | |
Summary of minimum annual rent payments | Minimum annual rent payments under this lease for the remaining term of the amended lease, excluding operating expenses and taxes, which are not fixed for future periods as of March 31, 2020, are as follows (in thousands): Total Minimum Year ending December 31, Lease Payments 2020 846 2021 1,175 2022 495 Total minimum lease payments $ 2,516 |
Net Loss per Unit and Share (Ta
Net Loss per Unit and Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Net Loss per Unit and Share | |
Schedule of basic and diluted net loss per share | Basic and diluted net loss per share is calculated as follows (in thousands, except share and per share data) for the three months ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 March 31, 2019 Net loss $ (16,746) $ (5,200) Weighted average common shares outstanding, basic and diluted 30,188,575 1,879,986 Net loss per share, basic and diluted $ (0.55) $ (2.77) |
Schedule of outstanding common stock equivalent shares | Three Months Ended March 31, 2020 2019 Convertible preferred stock — 21,010,407 Restricted common stock 282,829 653,142 Restricted stock units 66,216 — Warrant — 6,825 Stock options 4,355,549 1,786,551 4,704,594 23,456,925 |
Nature of the Business and Ba_2
Nature of the Business and Basis of Presentation (Details) $ / shares in Units, $ in Millions | Jul. 01, 2019USD ($)$ / sharesshares | Sep. 30, 2019shares | Dec. 31, 2019shares | Mar. 31, 2020shares |
Subsidiary or Equity Method Investee [Line Items] | ||||
Common stock issued (in shares) | 6,900,000 | |||
Public offering price (in dollars per share) | $ / shares | $ 15 | |||
Gross proceeds | $ | $ 103.5 | |||
Net proceeds | $ | $ 93.3 | |||
Reverse stock split | 5.8311 | |||
Conversion of warrant to purchase shares of convertible preferred stock | 6,825 | |||
Outstanding warrants | 6,825 | |||
Series Preferred shares, shares outstanding | 0 | |||
Common stock, authorized (in shares) | 400,000,000 | 400,000,000 | ||
Series Preferred shares, shares authorized | 10,000,000 | |||
Series Preferred shares, par value (in dollars per share) | $ / shares | $ 0.0001 | |||
Common shares | ||||
Subsidiary or Equity Method Investee [Line Items] | ||||
Conversion of convertible preferred stock into common stock (in shares) | 21,010,407 | |||
Common stock, authorized (in shares) | 400,000,000 | |||
Underwriters' exercise | ||||
Subsidiary or Equity Method Investee [Line Items] | ||||
Common stock issued (in shares) | 900,000 |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies - Marketable securities and interest income (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Basis of Presentation and Significant Accounting Policies | |
Reverse stock split | 5.8311 |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Assets: | ||
Aggregate estimated fair value | $ 111,977 | $ 135,457 |
Level 1 to level 2 | 0 | 0 |
Level 2 to level 1 | 0 | 0 |
Transfers into level 3 | 0 | 0 |
Transfers out of level 3 | 0 | 0 |
U.S. Treasury obligations | ||
Assets: | ||
Aggregate estimated fair value | 111,977 | 135,457 |
Fair value on a recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial liabilities | 0 | 0 |
Assets: | ||
Total assets | 218,784 | 236,784 |
Fair value on a recurring basis | Money market funds | ||
Assets: | ||
Assets included in cash and cash equivalents | 106,807 | 91,332 |
Fair value on a recurring basis | U.S. Treasury obligations | ||
Assets: | ||
Assets included in cash and cash equivalents | 9,995 | |
Aggregate estimated fair value | 111,977 | 135,457 |
Fair value on a recurring basis | Level 1 | ||
Assets: | ||
Total assets | 106,807 | 91,332 |
Fair value on a recurring basis | Level 1 | Money market funds | ||
Assets: | ||
Assets included in cash and cash equivalents | 106,807 | 91,332 |
Fair value on a recurring basis | Level 2 | ||
Assets: | ||
Total assets | 111,977 | 145,452 |
Fair value on a recurring basis | Level 2 | U.S. Treasury obligations | ||
Assets: | ||
Assets included in cash and cash equivalents | 9,995 | |
Aggregate estimated fair value | $ 111,977 | $ 135,457 |
Marketable securities (Details)
Marketable securities (Details) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($)security |
Marketable securities | ||
Aggregate estimated fair value | $ 111,977,000 | $ 135,457,000 |
Unrealized loss position | 0 | $ 30,200,000 |
Unrealized loss position (Number of securities) | security | 3 | |
U.S. Treasury obligations | ||
Marketable securities | ||
Amortized cost | 111,336,000 | $ 135,389,000 |
Gross unrealized holding gains | 641,000 | 70,000 |
Gross unrealized holding losses | (2,000) | |
Aggregate estimated fair value | $ 111,977,000 | $ 135,457,000 |
Cash, Cash Equivalents, and R_3
Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Cash, Cash Equivalents, and Restricted Cash | ||||
Letter of credit | $ 275,000 | |||
Term of letter of credit (in years) | 1 year | |||
Cash and cash equivalents | $ 107,035,000 | $ 101,559,000 | $ 42,419,000 | $ 185,901,000 |
Restricted cash | 275,000 | 275,000 | 275,000 | 275,000 |
Total cash, cash equivalents, and restricted cash | $ 107,310,000 | $ 101,834,000 | $ 42,694,000 | $ 186,176,000 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accrued Expenses | ||
Payroll and related expenses | $ 1,891 | $ 3,159 |
Research and development activities | 3,005 | 2,465 |
Other expenses | 719 | 1,015 |
Total | $ 5,615 | $ 6,639 |
Equity Based Compensation - 201
Equity Based Compensation - 2019 equity incentive plan (Details) - 2019 Equity Incentive Plan - shares | Mar. 31, 2020 | Jan. 01, 2020 |
Equity Based Compensation | ||
Number of shares available for issuance | 1,204,410 | |
Shares available for future issuance | 1,796,999 |
Equity Based Compensation - Equ
Equity Based Compensation - Equity based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Equity Based Compensation | ||
Total equity-based compensation expense | $ 2,544 | $ 499 |
Research and development expense | ||
Equity Based Compensation | ||
Total equity-based compensation expense | 1,792 | 282 |
General and administrative expense | ||
Equity Based Compensation | ||
Total equity-based compensation expense | 752 | 217 |
ESPP | ||
Equity Based Compensation | ||
Total equity-based compensation expense | 110 | |
Restricted stock | ||
Equity Based Compensation | ||
Total equity-based compensation expense | 562 | 187 |
Stock option | ||
Equity Based Compensation | ||
Total equity-based compensation expense | $ 1,872 | $ 312 |
Equity Based Compensation - Res
Equity Based Compensation - Restricted common stock activity (Details) - Restricted stock | 3 Months Ended |
Mar. 31, 2020USD ($)$ / sharesshares | |
Weighted Average Grant Date Fair Value per Unit | |
Unrecognized equity based compensation expense | $ | $ 752,000 |
Unrecognized equity based compensation expense expected period for recognition | 7 months 6 days |
2019 Equity Incentive Plan | |
Number of Shares | |
Outstanding at the beginning | shares | 379,770 |
Vested | shares | (84,247) |
Forfeited | shares | (12,694) |
Outstanding at the end | shares | 282,829 |
Weighted Average Grant Date Fair Value per Unit | |
Outstanding at the beginning (in dollars per share) | $ / shares | $ 4.32 |
Vested as of the Reorganization | $ / shares | 4.32 |
Forfeited (in dollars per share) | $ / shares | 4.32 |
Outstanding at the end (in dollars per share) | $ / shares | $ 4.32 |
Equity Based Compensation - R_2
Equity Based Compensation - Restricted stock units activity (Details) - Restricted stocks units | 3 Months Ended |
Mar. 31, 2020USD ($)$ / sharesshares | |
Weighted Average Grant Date Fair Value per Unit | |
Unrecognized equity based compensation expense | $ | $ 708,000 |
Unrecognized equity based compensation expense expected period for recognition | 3 years 2 months 12 days |
2019 Equity Incentive Plan | |
Number of Shares | |
Outstanding at the beginning | shares | |
Granted | shares | 66,216 |
Outstanding at the end | shares | 66,216 |
Weighted Average Grant Date Fair Value per Unit | |
Outstanding at the beginning (in dollars per share) | $ / shares | |
Granted (in dollars per share) | $ / shares | 10.84 |
Outstanding at the end (in dollars per share) | $ / shares | $ 10.84 |
Equity Based Compensation - Sto
Equity Based Compensation - Stock option awards (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Number of Shares | ||
Outstanding at the beginning | 2,987,403 | |
Granted | 1,468,885 | |
Exercised | (35,822) | |
Forfeited | (64,917) | |
Outstanding at the end | 4,355,549 | 2,987,403 |
Options vested and expected to vest at the end | 4,355,549 | |
Options exercisable at the end | 655,162 | |
Weighted Average Exercise Price | ||
Outstanding at the beginning (in dollars per share) | $ 8.67 | |
Granted (in dollars per share) | 14.68 | |
Exercised (in dollars per share) | 4.67 | |
Forfeited (in dollars per share) | 6.24 | |
Outstanding at the end (in dollars per share) | 10.77 | $ 8.67 |
Options vested and expected to vest at the end (in dollars per share) | 10.77 | |
Options exercisable at the end (in dollars per share) | $ 5.31 | |
Weighted Average Remaining Contractual Term and Aggregate Intrinsic Value | ||
Expected term (in years) | 9 years 2 months 9 days | 9 years 2 months 19 days |
Options vested and expected to vest at the end | 9 years 2 months 9 days | |
Options exercisable at the end (in years) | 8 years 3 months 11 days | |
Outstanding at the beginning (in dollars) | $ 26,254 | |
Outstanding at the end (in dollars) | 20,121 | $ 26,254 |
Options vested and expected to vest at the end | 20,121 | |
Options exercisable at the end (in dollars) | $ 6,165 | |
Weighted average grant date fair value per share of stock options granted to employees and non-employees for stock option awards | $ 6.37 | |
Stock option | ||
Weighted Average Remaining Contractual Term and Aggregate Intrinsic Value | ||
Unrecognized equity based compensation expense | $ 27,500 | |
Unrecognized equity based compensation expense expected period for recognition | 3 years 2 months 12 days | |
Weighted average grant date fair value per share of stock options granted to employees and non-employees for stock option awards | $ 10.02 | |
2019 Equity Incentive Plan | Stock option | ||
Assumptions used in determining the fair value of the options granted | ||
Risk-free interest rate | 0.48% | |
Expected term (in years) | 6 years | |
Expected volatility | 80.85% |
Equity Based Compensation - ESP
Equity Based Compensation - ESPP (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Jan. 01, 2020 | Jun. 30, 2019 | |
Equity Based Compensation | ||||
Equity based compensation expense | $ 2,544,000 | $ 499,000 | ||
ESPP | ||||
Equity Based Compensation | ||||
Shares authorized | 301,102 | 300,000 | ||
Discount rate to purchase common stock | 15.00% | |||
ESPP | Maximum | ||||
Equity Based Compensation | ||||
Amount of common shares available for purchase per employee per year | $ 25,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Taxes | ||
Income tax expense (benefit) | $ (157) | $ 129 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Commitments and Contingencies | ||
Monthly lease payments | $ 257,000 | $ 218,000 |
Total Minimum Lease Payments | ||
2020 | 846,000 | |
2021 | 1,175,000 | |
2022 | 495,000 | |
Total minimum lease payments | $ 2,516,000 |
Option and License Agreements (
Option and License Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 60 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2024 | Dec. 31, 2019 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Research and development | $ 18,960 | $ 10,370 | ||
Net loss | (16,746) | $ (5,200) | ||
Accounts receivable | 3,685 | $ 3,467 | ||
Forecast | AbbVie | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Upfront fees received | $ 100,000 | |||
Collaboration and option agreement with AbbVie | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Deferred revenue | 82,500 | |||
Research and development | 4,500 | |||
Revenue related to research services | 3,400 | |||
Research collaboration and option agreement | Janssen | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Research and development | 1,700 | |||
Revenue related to research services | 2,200 | |||
Accounts receivable | 3,700 | $ 3,500 | ||
Deferred revenue | $ 8,000 |
Net Loss per Unit and Share - B
Net Loss per Unit and Share - Basic and diluted net loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net Loss per Unit and Share | ||
Net loss | $ (16,746) | $ (5,200) |
Weighted average common shares outstanding, basic and diluted | 30,188,575 | 1,879,986 |
Net loss per share, basic and diluted | $ (0.55) | $ (2.77) |
Net Loss per Unit and Share - O
Net Loss per Unit and Share - Outstanding common stock equivalent shares (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti‑dilutive securities | 4,704,594 | 23,456,925 |
Convertible preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti‑dilutive securities | 21,010,407 | |
Restricted stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti‑dilutive securities | 282,829 | 653,142 |
Restricted stocks units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti‑dilutive securities | 66,216 | |
Warrant | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti‑dilutive securities | 6,825 | |
Stock option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti‑dilutive securities | 4,355,549 | 1,786,551 |
ESPP | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti‑dilutive securities | 548,000 |