Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 06, 2020 | Jun. 28, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Well Known Seasoned Issuer | No | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | ODT | ||
Entity Registrant Name | Odonate Therapeutics, Inc. | ||
Entity Central Index Key | 0001717452 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Entity Emerging Growth Company | true | ||
Entity Small Business | true | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false | ||
Entity Public float | $ 457,185,321 | ||
Entity Common Stock, Shares Outstanding | 32,063,135 | ||
Title of 12(b) Security | Common Stock, $0.01 par value per share | ||
Security Exchange Name | NASDAQ | ||
Entity File Number | 001-38318 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 82-2493065 | ||
Entity Address, Address Line One | 4747 Executive Drive | ||
Entity Address, Address Line Two | Suite 510 | ||
Entity Address, City or Town | San Diego | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92121 | ||
City Area Code | 858 | ||
Local Phone Number | 731-8180 | ||
Document Annual Report | true | ||
Document Transition Report | false |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 180,460 | $ 139,050 |
Prepaid expenses and other current assets | 3,468 | 750 |
Total current assets | 183,928 | 139,800 |
Property and equipment, net | 1,663 | 1,899 |
Right-of-use lease assets | 1,581 | |
Restricted cash | 714 | 251 |
Other | 941 | 723 |
Total assets | 188,827 | 142,673 |
Current liabilities: | ||
Accounts payable | 15,583 | 10,777 |
Accrued expenses | 8,881 | 7,365 |
Lease liabilities, current portion | 315 | |
Deferred rent, current portion | 66 | |
Total current liabilities | 24,779 | 18,208 |
Lease liabilities, less current portion | 1,748 | |
Deferred rent, less current portion | 461 | |
Total liabilities | 26,527 | 18,669 |
Commitments and contingencies (Note 5) | ||
Stockholders' equity: | ||
Common stock, $0.01 par value—100,000,000 shares authorized; 32,050,906 and 26,747,438 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively | 300 | 244 |
Additional paid-in capital | 402,077 | 252,012 |
Accumulated deficit | (240,077) | (128,252) |
Total stockholders' equity | 162,300 | 124,004 |
Total liabilities and stockholders' equity | $ 188,827 | $ 142,673 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Common stock, par or stated value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 32,050,906 | 26,747,438 |
Common stock, shares outstanding | 32,050,906 | 26,747,438 |
Statements of Operations
Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating expenses: | ||
Research and development | $ 104,034 | $ 79,948 |
General and administrative | 10,896 | 10,816 |
Total operating expenses | 114,930 | 90,764 |
Loss from operations | (114,930) | (90,764) |
Interest income | 3,105 | 1,804 |
Net loss | $ (111,825) | $ (88,960) |
Net loss per share: | ||
Basic and diluted | $ (4.05) | $ (3.64) |
Weighted-average shares outstanding: | ||
Basic and diluted | 27,625,468 | 24,462,293 |
Statements of Stockholders' Equ
Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning balance at Dec. 31, 2017 | $ 195,982 | $ 240 | $ 235,034 | $ (39,292) |
Beginning balance, shares at Dec. 31, 2017 | 26,890,356 | |||
Issuance of common stock, net of issuance costs | 9,848 | $ 4 | 9,844 | |
Issuance of common stock, net of issuance costs, shares | 441,073 | |||
Issuance of common stock under employee stock plans | 349 | 349 | ||
Issuance of common stock under employee stock plans, shares | 21,624 | |||
Forfeiture of common stock underlying incentive units, shares | (605,615) | |||
Non-cash contributions for expenses | 64 | 64 | ||
Equity-based compensation expense | 6,721 | 6,721 | ||
Net loss | (88,960) | (88,960) | ||
Ending balance at Dec. 31, 2018 | 124,004 | $ 244 | 252,012 | (128,252) |
Ending balance, shares at Dec. 31, 2018 | 26,747,438 | |||
Issuance of common stock, net of issuance costs | 135,096 | $ 55 | 135,041 | |
Issuance of common stock, net of issuance costs, shares | 5,462,500 | |||
Issuance of common stock under employee stock plans | 3,581 | $ 1 | 3,580 | |
Issuance of common stock under employee stock plans, shares | 150,694 | |||
Forfeiture of common stock underlying incentive units, shares | (309,726) | |||
Equity-based compensation expense | 11,444 | 11,444 | ||
Net loss | (111,825) | (111,825) | ||
Ending balance at Dec. 31, 2019 | $ 162,300 | $ 300 | $ 402,077 | $ (240,077) |
Ending balance, shares at Dec. 31, 2019 | 32,050,906 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (111,825) | $ (88,960) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Equity-based compensation expense | 11,444 | 6,721 |
Depreciation and amortization | 381 | 350 |
Non-cash contributions for expenses | 64 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other assets | (2,936) | 3,751 |
Accounts payable | 4,782 | 6,392 |
Accrued expenses | 1,516 | 4,155 |
Deferred rent | 433 | |
Net cash used in operating activities | (96,638) | (67,094) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (166) | (1,907) |
Net cash used in investing activities | (166) | (1,907) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock, net of issuance costs | 135,096 | 9,848 |
Proceeds from issuance of common stock under employee stock plans | 3,581 | 349 |
Net cash provided by financing activities | 138,677 | 10,197 |
Net increase (decrease) in cash and restricted cash | 41,873 | (58,804) |
Cash and restricted cash, beginning of period | 139,301 | 198,105 |
Cash and restricted cash, end of period | 181,174 | 139,301 |
Supplemental disclosure of cash flow information: | ||
Initial recognition of right-of-use lease assets | 2,215 | |
Property and equipment purchases included in accounts payable | $ 24 | $ 83 |
Business
Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Business | 1. Business Odonate Therapeutics, Inc. (“Odonate” or the “Company”) is a pharmaceutical company dedicated to the development of best-in-class therapeutics that improve and extend the lives of patients with cancer. The Company’s initial focus is on the development of tesetaxel, an investigational, orally administered chemotherapy agent that belongs to a class of drugs known as taxanes, which are widely used in the treatment of cancer. Tesetaxel has several pharmacologic properties that make it unique among taxanes, including: oral administration with a low pill burden; a long (~8-day) terminal plasma half-life in humans, enabling the maintenance of adequate drug levels with relatively infrequent dosing; no history of hypersensitivity (allergic) reactions; and significant activity against chemotherapy-resistant tumors. In patients with metastatic breast cancer (“MBC”), tesetaxel was shown to have significant, single-agent antitumor activity in two multicenter, Phase 2 studies. The Company is currently conducting three studies in breast cancer, including a multinational, multicenter, randomized, Phase 3 study in patients with MBC, known as CONTESSA. The Company’s goal for tesetaxel is to develop an effective chemotherapy choice for patients that provides quality-of-life advantages over current alternatives. On June 28, 2019, the Company closed an underwritten public offering (the “June 2019 Offering”) of 4,750,000 shares of common stock at a public offering price of $26.00 per share. On July 2, 2019, the underwriters exercised in full their option to purchase 712,500 additional shares of common stock. The aggregate gross proceeds from the June 2019 Offering were $142.0 million, and the net proceeds were $135.1 million after deducting underwriting discounts and commissions and offering costs. On December 11, 2017, the Company closed its initial public offering (“IPO”) of 6,250,000 shares of common stock at a public offering price of $24.00 per share. On January 10, 2018, the underwriters exercised their option to purchase 441,073 additional shares of common stock. The aggregate gross proceeds from the IPO were $160.6 million, and the net proceeds were $147.3 million after deducting underwriting discounts and commissions and offering costs. As of December 31, 2019, the Company had $180.5 million in cash. The Company has incurred operating losses and negative cash flows from operations since inception. Management believes the Company’s existing cash will be sufficient to meet the Company’s anticipated cash requirements through at least one year from the date this Annual Report on Form 10-K is filed with the U.S. Securities and Exchange Commission (the “SEC”). |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Use of Estimates The Company’s financial statements are prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”). The preparation of the Company’s financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes. The most significant estimates in the Company’s financial statements relate to accrued expenses and equity-based compensation expense. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected. Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. Fair Value Measurements The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or non-recurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets. Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly. Level 3: Unobservable inputs for which there are little or no market data, which require the reporting entity to develop its own assumptions. The carrying amounts of the Company’s cash, prepaid expenses and other current assets, accounts payable and accrued expenses are considered to be representative of their respective fair values because of the short-term nature of those instruments. As of December 31, 2019 and 2018, the Company had no financial assets or liabilities measured at fair value on a recurring basis. Cash and Restricted Cash The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. The Company maintains its cash in checking and savings accounts. Income generated from cash held in savings accounts is recorded as interest income. As of December 31, 2019 and 2018, the Company held no cash equivalents. Cash is classified as restricted cash when it is reserved for a specific purpose and, therefore, is not available for immediate or general business use. Concentrations of Risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash. The Company maintains deposits at federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts, and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. Property and Equipment Property and equipment consists of office equipment, software, furniture and fixtures and leasehold improvements. Office equipment, software and furniture and fixtures are stated at cost and depreciated on a straight-line basis over the estimated useful life of the related assets, which generally ranges from three to five years. Leasehold improvements are amortized over the lesser of the estimated useful life or the remaining term of the lease. Leases At lease commencement, the Company records a lease liability based on the present value of lease payments over the expected lease term. The Company calculates the present value of lease payments using the discount rate implicit in the lease, unless that rate cannot be readily determined. In that case, the Company uses its incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis an amount equal to the lease payments over the expected lease term. The Company records a corresponding right-of-use lease asset based on the lease liability, adjusted for any lease incentives received and any initial direct costs paid to the lessor prior to the lease commencement date. After lease commencement, the Company measures its leases as follows: (i) the lease liability based on the present value of the remaining lease payments using the discount rate determined at lease commencement; and (ii) the right-of-use lease asset based on the remeasured lease liability, adjusted for any unamortized lease incentives received, any unamortized initial direct costs and the cumulative difference between rent expense and amounts paid under the lease agreement. Any lease incentives received and any initial direct costs are amortized on a straight-line basis over the expected lease term. Rent expense is recorded on a straight-line basis over the expected lease term. Research and Development Expense Research and development expense consists primarily of costs associated with the development of the Company’s product candidates and includes: (i) salaries, benefits, travel, equity-based compensation expense and facility-related expense for personnel engaged in research and development functions; (ii) expense incurred under agreements with contract research organizations (“CROs”), investigative sites and consultants that conduct the Company’s nonclinical and clinical studies; (iii) manufacturing development and scale-up expense and the cost of acquiring and manufacturing clinical study materials and commercial materials, including manufacturing registration and validation batches; (iv) payments to consultants engaged in the development of the Company’s product candidates, including equity-based compensation expense, travel and other expense; and (v) costs related to compliance with quality and regulatory requirements. Research and development expense is charged to operations as incurred when the expenditures relate to the Company’s research and development efforts and have no alternative future uses. Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received. Patent Costs Costs related to filing and pursuing patent applications are recorded as general and administrative expense and are expensed as incurred, since recoverability of such expenditures is uncertain. Equity-based Compensation Expense The Company issues stock options and had historically issued incentive units, considered “profits interests” within the meaning of U.S. federal and state tax rules, to employees, consultants and certain directors. Equity-based compensation expense represents the cost of the grant-date fair value of the awards recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis. Income Taxes Income taxes are accounted for using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial carrying amounts of existing assets and liabilities and their respective tax bases, net operating losses incurred and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates applicable to taxable income in the years in which those assets or liabilities are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period of enactment. A valuation allowance against deferred tax assets is recorded if, based on the weight of all available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. For uncertain tax positions that meet a “more likely than not” threshold, the Company recognizes the benefit of uncertain tax positions in the financial statements. The Company records interest and penalties, if any, related to uncertain tax positions as a component of income tax expense. Comprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. There have been no items qualifying as other comprehensive loss, and, therefore, for all periods presented, the Company’s comprehensive loss was the same as its reported net loss. Net Loss per Share Basic net loss per share is calculated by dividing net loss by the weighted average common shares outstanding during the period, without consideration of common stock equivalents. Basic net loss per share excludes 1,454,577 and 2,096,758 outstanding shares of common stock held by Odonate Holdings, LLC (“Odonate Holdings”) as of December 31, 2019 and 2018, respectively, to be used to settle incentive units previously issued under the Odonate Management Holdings Equity Incentive Plan (the “Management Plan”). These shares of common stock are subject to transfer to the Company and cancellation until such incentive units are vested and exercised and, as such, are considered common stock equivalents. Therefore, the shares of common stock held by Odonate Holdings are excluded from the basic net loss per share calculation until the incentive units are exercised. Diluted net loss per share is calculated by adjusting weighted average common stock outstanding for the dilutive effect of common stock equivalents outstanding for the period. Common stock equivalents, which consist of shares of common stock underlying incentive units and vested stock options, were excluded from the calculation of diluted net loss per stock because they were anti-dilutive. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases The Company adopted ASU 2016-02 on January 1, 2019 utilizing the alternative transition method allowed for under ASU 2018-11. As a result, the Company recorded lease liabilities and right-of-use lease assets of $2.7 million and $2.2 million, respectively, on its balance sheet as of January 1, 2019. The lease liabilities represent the present value of the remaining lease payments of the Company’s San Diego Lease and New York Lease (see Note 4), discounted using the Company’s incremental borrowing rate as of January 1, 2019. The corresponding right-of-use lease assets are recorded based on the lease liabilities, adjusted for the unamortized lease incentives received and the cumulative difference between rent expense and amounts paid under the San Diego Lease and New York Lease. The adoption of ASU 2016-02 did not have a material impact on either the statement of operations or statement of cash flows for the year ended December 31, 2019. |
Balance Sheet Details
Balance Sheet Details | 12 Months Ended |
Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Details | 3. Balance Sheet Details Property and equipment consisted of the following (in thousands): December 31, December 31, 2019 2018 Leasehold improvements $ 1,113 $ 1,113 Office equipment 698 504 Furniture and fixtures 420 432 Software 130 126 Total gross property and equipment 2,361 2,175 Less accumulated depreciation (698 ) (276 ) Property and equipment, net $ 1,663 $ 1,899 Depreciation expense was $0.4 million and $0.3 for the years ended December 31, 2019 and 2018, respectively. Accrued expenses consisted of the following (in thousands): December 31, December 31, 2019 2018 Accrued clinical development costs $ 6,667 $ 5,732 Accrued compensation and related expenses 2,122 1,619 Other accrued expenses 92 14 Total accrued expenses $ 8,881 $ 7,365 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 4. Commitments and Contingencies Lease Commitments In March 2018, the Company entered into an agreement to lease office space in San Diego, California (the “San Diego Lease”) with aggregate payments of approximately $0.8 million over the term of the lease. The San Diego Lease originally provided for expiration on December 31, 2019. In August 2019, the Company entered into a First Amendment to the San Diego Lease to extend the term of the lease through the earlier of May 30, 2020 or 30 days from the date the Company provides written notice to the landlord. The San Diego Lease is classified as an operating lease. In October 2019, the Company entered into an agreement to lease office space in San Diego, California (the “New San Diego Lease”) with aggregate payments of approximately $4.3 million over the 7.5-year term of the lease. The San Diego Lease terminates on commencement of the New San Diego Lease. The Company has an option to extend the New San Diego Lease for an additional 5 years at the end of the initial term. Further, the Company provided a standby letter of credit of $0.5 million as a security deposit during the term of the lease, subject to certain reductions beginning 4 years after the lease commencement. As of December 31, 2019, $0.5 million was pledged as collateral for the letter of credit and recorded as restricted cash. In February 2018, the Company entered into an agreement to lease office space in New York, New York (the “New York Lease”) with aggregate payments of approximately $2.8 million over the 7-year term of the lease. The Company has an option to extend the New York Lease for an additional three years at the end of the initial term. Further, the Company provided a standby letter of credit of $0.3 million in lieu of a security deposit during the term of the lease, subject to a reduction 3.5 years after the lease commencement. As of December 31, 2019, $0.3 million was pledged as collateral for the letter of credit and recorded as restricted cash. Future minimum lease payments under the New York Lease as of December 31, 2019 are as follows (in thousands): 2020 $ 496 2021 386 2022 401 2023 428 2024 439 Thereafter 362 Total future minimum lease payments 2,512 Less discount (449 ) Total lease liabilities $ 2,063 The Company recorded lease liabilities and right-of-use lease assets for the New York Lease based on the present value of lease payments over the expected lease term, discounted using the Company’s incremental borrowing rate. The option to extend the New York Lease was not recognized as part of the Company’s lease liability and right-of-use lease asset. Rent expense under leases was $0.8 million and $0.7 million for the years ended December 31, 2019 and 2018, respectively. Amortization of the right-of-use lease assets was $45,000 for the year ended December 31, 2019. Other Commitments The Company enters into contracts in the normal course of business with third-party contract research organizations, contract development and manufacturing organizations and other service providers and vendors. These contracts generally provide for termination on notice and, therefore, are cancellable contracts and not considered contractual obligations and commitments. Contingencies From time to time, the Company may become subject to claims and litigation arising in the ordinary course of business. The Company is not a party to any material legal proceedings, nor is it aware of any material pending or threatened litigation. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 5. Stockholders’ Equity Common Stock Sales On June 28, 2019, the Company closed the June 2019 Offering of 4,750,000 shares of common stock at a public offering price of $26.00 per share. On July 2, 2019, the underwriters exercised in full their option to purchase 712,500 additional shares of common stock. The aggregate gross proceeds from the June 2019 Offering were $142.0 million, and the net proceeds were $135.1 million after deducting underwriting discounts and commissions and offering costs. On December 11, 2017, the Company closed its IPO of 6,250,000 shares of common stock at a public offering price of $24.00 per share. On January 10, 2018, the underwriters exercised their option to purchase 441,073 additional shares of common stock. The aggregate gross proceeds from the IPO were $160.6 million, and the net proceeds were $147.3 million after deducting underwriting discounts and commissions and offering costs. Non-cash Contributions for Expenses Non-cash contributions for expenses represent certain services and other benefits received by the Company from an affiliate without charge to the Company (see Note 9). These services and other benefits are recorded as expense with corresponding increases to additional paid-in capital. The Company recorded expense, and corresponding increases to additional paid-in capital, of $0.1 million for the year ended December 31, 2018 for services and other benefits provided without charge to the Company. |
Equity Incentive Plans
Equity Incentive Plans | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity Incentive Plans | 6. Equity Incentive Plans 2017 Stock Option Plan In November 2017, the Company adopted the Odonate Therapeutics, Inc. 2017 Stock Option Plan (the “2017 Plan”) in order to grant stock options to employees, officers, directors and consultants of the Company. Recipients of stock options are eligible to purchase shares of the Company’s common stock at an exercise price equal to the fair market value of such stock on the date of grant. The maximum term of options granted under the 2017 Plan is 10 years. Stock options granted prior to July 2019 generally vest A total of 6,300,000 shares of common stock have been reserved for issuance under the 2017 Plan. As of December 31, 2019, 1,657,008 shares of common stock remained available for future grants under the 2017 Plan. 2017 Employee Stock Purchase Plan In November 2017, the Company adopted the Odonate Therapeutics, Inc. 2017 Employee Stock Purchase Plan (the “ESPP”) in order to provide a means for eligible employees to accumulate shares of the Company’s common stock over time through regular payroll deductions. Under the ESPP, eligible employees may purchase shares of the Company’s common stock twice per month at a price equal to 85% of the closing price of shares of the Company’s common stock on the date of each purchase. Eligible employees purchasing shares under the ESPP are subject to an annual cap equal to the lesser of $25,000 or 10% of the employee’s annual cash compensation. Shares purchased under the ESPP cannot be sold for a period of one year following the purchase date (or such shorter period of time if the participating employee’s employment terminates before this one-year anniversary). A total of 500,000 shares of common stock have been reserved for issuance under the ESPP. As of December 31, 2019, 452,486 shares of common stock remained available for future grants under the ESPP. Management Plan In August 2016, the Company adopted the Management Plan in order to allow for directors, officers, employees and consultants of Odonate (the “Management Plan Participants”) to share in the performance of the Company. The incentive units issued under the Management Plan were issued to Odonate Management Holdings, LLC, which issued incentive units to the Management Plan Participants on the same terms and conditions. The incentive units generally vest over a 4-year period from either the date of grant or the commencement of service and are subject to continued service requirements. Generally, on termination of services, unvested incentive units are forfeited. The vested incentive units may be exercised by the Management Plan Participants, with the value received by the Management Plan Participants in the form of cash or shares of common stock equal to the fair market value on the date of exercise less the exercise price of the incentive unit. The Company issued an aggregate of 2,931,402 incentive units under the Management Plan. Following the IPO, the Company has not granted, and will no longer grant, incentive units. Equity Awards The activity related to equity awards, which are comprised of stock options and incentive units, during the year ended December 31, 2019 is summarized as follows: Equity Awards Weighted- average Exercise Price per Share Weighted- average Remaining Contractual Term ( 1) (years) Aggregate Intrinsic Value ( 2) (millions) Outstanding at December 31, 2018 5,361,920 $ 12.63 Granted 2,069,656 $ 29.08 Exercised (492,562 ) $ 7.99 Cancelled/forfeited (966,249 ) $ 14.21 Outstanding at December 31, 2019 5,972,765 $ 18.46 9.1 $ 84.2 Exercisable at December 31, 2019 1,868,546 $ 10.26 8.6 $ 41.5 (1) Represents the weighted-average remaining contractual term of stock options. The incentive units have no expiration. (2 ) Aggregate intrinsic value represents the product of the number of equity awards outstanding or equity awards exercisable multiplied by the difference between the Company’s closing stock price per share on the last trading day of the period, which was $32.45 as of December 31, 2019, and the exercise price. The total intrinsic value of equity awards exercised during the years ended December 31, 2019 and 2018 was $11.6 million and $4.2 million, respectively. The total fair value of equity awards vested during the years ended December 31, 2019 and 2018 was $14.8 million and $7.5 million, respectively. Equity-based Compensation Expense For the years ended December 31, 2019 and 2018, the weighted average grant-date fair value per equity award was $22.83 and $11.92, respectively. The Company estimated the fair value of each equity award on the grant date using the Black-Scholes option-pricing model with the following assumptions: Year Ended December 31, 2019 2018 Expected volatility 73–80% 70–75% Expected life 6–10 years 6 years Risk-free interest rate 1.7–2.5% 2.3–3.0% Expected dividend yield 0% 0% Expected Volatility. Due to the lack of Company-specific historical or implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar public companies in the life sciences industry. The Company selected the peer group based on comparable characteristics, including development stage, product pipeline and enterprise value. The Company computed historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the equity-based awards. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own share price becomes available. Expected Life. The expected life represents the period that the equity awards are expected to be outstanding. For stock options with service conditions, it is based on the “simplified method” for developing the estimate of the expected life. Under this approach, the expected life is presumed to be the midpoint between the average vesting date and the end of the contractual term. For stock options with a performance condition, it is based on the contractual term. Risk-free Interest Rate. The Company bases the risk-free interest rate assumption on U.S. Treasury constant maturities with maturities similar to those of the expected term of the equity award being valued. Expected Dividend Yield. The Company bases the expected dividend yield assumption on the fact that it has never paid dividends and does not expect to pay dividends in the foreseeable future. In addition to assumptions used in the Black-Scholes option-pricing model, the Company estimates a forfeiture rate to calculate the equity-based compensation expense for equity awards. The forfeiture rate is based on an analysis of actual and estimated forfeitures. Under the ESPP, eligible employees may purchase shares of the Company’s common stock twice per month at a price equal to 85% of the closing price of shares of the Company’s common stock on the date of each purchase. The benefit received by the employees, which is equal to a 15% discount on the shares of the Company’s common stock purchased, is recognized as equity-based compensation expense on the date of each purchase. The classification of equity-based compensation expense is summarized as follows (in thousands): Year Ended December 31, 2019 2018 Equity-based compensation expense: Research and development $ 9,940 $ 5,659 General and administrative 1,504 1,062 Total equity-based compensation expense $ 11,444 $ 6,721 As of December 31, 2019, total unrecognized compensation cost related to unvested equity awards was $61.8 million, which is estimated to be recognized over a weighted average period of 3.0 years. As of December 31, 2019, there was no unrecognized equity-based compensation expense related to shares of common stock issued under the ESPP. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes For the years ended December 31, 2019 and 2018, the Company did not recognize a provision for income taxes, as the Company has recorded a full valuation allowance against its deferred tax assets. The difference between income taxes computed using the U.S. federal income effective tax rate and the provision for income taxes is as follows (in thousands): Year Ended December 31, 2019 2018 Federal statutory rate $ (23,483 ) $ (18,682 ) State taxes, net of federal benefit (7,809 ) (6,213 ) Research and development credits (3,333 ) (2,725 ) Change in valuation allowance 33,232 26,295 Equity-based compensation expense 1,688 1,227 Other permanent differences (295 ) 98 Income tax provision $ - $ - Deferred tax assets are as follows (in thousands): December 31, December 31, 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 50,760 $ 23,450 Capitalized research and development 7,748 3,594 Equity-based compensation expense 2,276 714 Depreciation and amortization 556 574 Other accrued expenses 224 - Total gross deferred tax assets 61,564 28,332 Less valuation allowance (61,564 ) (28,332 ) Total deferred tax assets $ - $ - As of December 31, 2019 and 2018, the Company established a full valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such assets. As of December 31, 2019 and 2018, the Company had federal net operating loss carryforwards of $180.4 million and $83.3 million, respectively, and state net operating loss carryforwards of $185.6 million and $85.4 million, respectively. Federal and state net operating loss carryforwards recorded before January 1, 2018 will begin to expire in 2037, unless utilized. Federal net operating loss carryforwards recorded after January 1, 2018 will carry forward indefinitely, unless utilized, and state net operating loss carryforwards recorded after January 1, 2018 will begin to expire in 2037, unless utilized. As of December 31, 2019 and 2018, the Company had federal research and development credit carryforwards of $6.9 million and $3.2 million, respectively, and state research development credit carryforwards of $1.1 million and $0.4 million, respectively. The federal research and development credit carryforwards will begin to expire in 2037, unless utilized, and the state research and development credit carryforwards will carry forward indefinitely, unless utilized. Pursuant to Section 382 and 383 of the Internal Revenue Code (“IRC”), utilization of the Company’s federal net operating loss carryforwards and research and development credit carryforwards may be subject to annual limitations in the event of any significant changes in its ownership structure. These annual limitations may result in the expiration of net operating loss carryforwards and research and development credit carryforwards prior to utilization. The Company has not completed an IRC Section 382 and 383 analysis regarding the limitation of net operating loss carryforwards and research and development credit carryforwards. As of December 31, 2019 and 2018, the Company had no unrecognized tax benefits. The Company does not anticipate there will be a significant change in unrecognized tax benefits within the next 12 months. The Company had no accrual for interest or penalties on the balance sheets as of December 31, 2019 and 2018 and has not recognized interest or penalties in the statements of operations for the years ended December 31, 2019 and 2018. The Company is subject to taxation in the U.S. and various state jurisdictions. The Company’s tax returns for the tax years 2016 through 2018 are open and are subject to examination by federal and state taxing authorities. The Company is not currently undergoing a tax audit in any federal or state jurisdiction. |
License Agreement
License Agreement | 12 Months Ended |
Dec. 31, 2019 | |
License Agreement [Abstract] | |
License Agreement | 8. License Agreement In 2013, the Company licensed rights to tesetaxel in all major markets from Daiichi Sankyo Company, Limited (“Daiichi Sankyo”), the original inventor of the product. Under the Daiichi Sankyo license agreement, the Company is obligated to use commercially reasonable efforts to develop and commercialize tesetaxel in the following countries: France, Germany, Italy, Spain, the United Kingdom and the U.S. The Company is required to make aggregate future milestone payments of up to $31.0 million, contingent on attainment of certain regulatory milestones. Additionally, the Company is obligated to pay Daiichi Sankyo a tiered royalty that ranges from the low to high single digits, depending on annual net sales of tesetaxel. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 9. Related Party Transactions During the year ended December 31, 2018, the Company received certain services and other benefits from an affiliate (the “Affiliate”) of the Chairman and Chief Executive Officer of the Company. The Company was not charged any fees for these services and other benefits, which included personnel costs for research and development and administrative functions, rent and facility costs and other direct expenses. The Company recorded expense, and corresponding increases to additional paid-in capital, of $0.1 million for the year ended December 31, 2018 for services and other benefits provided without charge to the Company. Personnel costs were based on actual costs incurred by the Affiliate, which were allocated based on the estimated percentage of time employees spent on Odonate on an employee-by-employee basis. Rent and facility costs were based on actual costs incurred by the Affiliate and allocated based on the Company’s use of shared space using headcount. Other direct expenses paid by the Affiliate were specifically identifiable to the Company and were allocated directly to the Company. The Chairman and Chief Executive Officer of the Company has elected to receive an annual salary of $1.00 and to not receive any bonuses, equity or other compensation. Management believes that the method used to allocate costs is a fair and reasonable reflection of the utilization of the services provided to, or the benefit received by, the Company during the periods presented. The allocations may not, however, reflect the costs that the Company would have incurred if the Company had not received these services. Actual costs would depend on a number of factors, including strategic decisions in the areas of hiring, facility location and whether to outsource certain functions. |
401(k) Plan
401(k) Plan | 12 Months Ended |
Dec. 31, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
401(k) Plan | 10. 401(k) Plan In 2016, the Company adopted a defined contribution 401(k) plan available to eligible employees. Employee contributions are voluntary, determined on an individual basis and limited to the maximum amount allowable under U.S. federal tax regulations. The Company makes a mandatory annual contribution of 3% of the eligible employees’ compensation to the 401(k) plan. In addition, the Company makes matching contributions of up to 6% of the eligible employees’ compensation to the 401(k) plan. For the years ended December 31, 2019 and 2018, the Company incurred costs of $1.4 million and $1.0 million, respectively, related to the 401(k) plan. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates The Company’s financial statements are prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”). The preparation of the Company’s financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the Company’s financial statements and accompanying notes. The most significant estimates in the Company’s financial statements relate to accrued expenses and equity-based compensation expense. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations will be affected. |
Segment Reporting | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. |
Fair Value Measurements | Fair Value Measurements The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or non-recurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets. Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly. Level 3: Unobservable inputs for which there are little or no market data, which require the reporting entity to develop its own assumptions. The carrying amounts of the Company’s cash, prepaid expenses and other current assets, accounts payable and accrued expenses are considered to be representative of their respective fair values because of the short-term nature of those instruments. As of December 31, 2019 and 2018, the Company had no financial assets or liabilities measured at fair value on a recurring basis. |
Cash and Restricted Cash | Cash and Restricted Cash The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. The Company maintains its cash in checking and savings accounts. Income generated from cash held in savings accounts is recorded as interest income. As of December 31, 2019 and 2018, the Company held no cash equivalents. Cash is classified as restricted cash when it is reserved for a specific purpose and, therefore, is not available for immediate or general business use. |
Concentrations of Risk | Concentrations of Risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash. The Company maintains deposits at federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts, and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. |
Property and Equipment | Property and Equipment Property and equipment consists of office equipment, software, furniture and fixtures and leasehold improvements. Office equipment, software and furniture and fixtures are stated at cost and depreciated on a straight-line basis over the estimated useful life of the related assets, which generally ranges from three to five years. Leasehold improvements are amortized over the lesser of the estimated useful life or the remaining term of the lease. |
Leases | Leases At lease commencement, the Company records a lease liability based on the present value of lease payments over the expected lease term. The Company calculates the present value of lease payments using the discount rate implicit in the lease, unless that rate cannot be readily determined. In that case, the Company uses its incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis an amount equal to the lease payments over the expected lease term. The Company records a corresponding right-of-use lease asset based on the lease liability, adjusted for any lease incentives received and any initial direct costs paid to the lessor prior to the lease commencement date. After lease commencement, the Company measures its leases as follows: (i) the lease liability based on the present value of the remaining lease payments using the discount rate determined at lease commencement; and (ii) the right-of-use lease asset based on the remeasured lease liability, adjusted for any unamortized lease incentives received, any unamortized initial direct costs and the cumulative difference between rent expense and amounts paid under the lease agreement. Any lease incentives received and any initial direct costs are amortized on a straight-line basis over the expected lease term. Rent expense is recorded on a straight-line basis over the expected lease term. |
Research and Development Expense | Research and Development Expense Research and development expense consists primarily of costs associated with the development of the Company’s product candidates and includes: (i) salaries, benefits, travel, equity-based compensation expense and facility-related expense for personnel engaged in research and development functions; (ii) expense incurred under agreements with contract research organizations (“CROs”), investigative sites and consultants that conduct the Company’s nonclinical and clinical studies; (iii) manufacturing development and scale-up expense and the cost of acquiring and manufacturing clinical study materials and commercial materials, including manufacturing registration and validation batches; (iv) payments to consultants engaged in the development of the Company’s product candidates, including equity-based compensation expense, travel and other expense; and (v) costs related to compliance with quality and regulatory requirements. Research and development expense is charged to operations as incurred when the expenditures relate to the Company’s research and development efforts and have no alternative future uses. Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received. |
Patent Costs | Patent Costs Costs related to filing and pursuing patent applications are recorded as general and administrative expense and are expensed as incurred, since recoverability of such expenditures is uncertain. |
Equity-based Compensation Expense | Equity-based Compensation Expense The Company issues stock options and had historically issued incentive units, considered “profits interests” within the meaning of U.S. federal and state tax rules, to employees, consultants and certain directors. Equity-based compensation expense represents the cost of the grant-date fair value of the awards recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis. |
Income Taxes | Income Taxes Income taxes are accounted for using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial carrying amounts of existing assets and liabilities and their respective tax bases, net operating losses incurred and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates applicable to taxable income in the years in which those assets or liabilities are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period of enactment. A valuation allowance against deferred tax assets is recorded if, based on the weight of all available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. For uncertain tax positions that meet a “more likely than not” threshold, the Company recognizes the benefit of uncertain tax positions in the financial statements. The Company records interest and penalties, if any, related to uncertain tax positions as a component of income tax expense. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. There have been no items qualifying as other comprehensive loss, and, therefore, for all periods presented, the Company’s comprehensive loss was the same as its reported net loss. |
Net Loss per Share | Net Loss per Share Basic net loss per share is calculated by dividing net loss by the weighted average common shares outstanding during the period, without consideration of common stock equivalents. Basic net loss per share excludes 1,454,577 and 2,096,758 outstanding shares of common stock held by Odonate Holdings, LLC (“Odonate Holdings”) as of December 31, 2019 and 2018, respectively, to be used to settle incentive units previously issued under the Odonate Management Holdings Equity Incentive Plan (the “Management Plan”). These shares of common stock are subject to transfer to the Company and cancellation until such incentive units are vested and exercised and, as such, are considered common stock equivalents. Therefore, the shares of common stock held by Odonate Holdings are excluded from the basic net loss per share calculation until the incentive units are exercised. Diluted net loss per share is calculated by adjusting weighted average common stock outstanding for the dilutive effect of common stock equivalents outstanding for the period. Common stock equivalents, which consist of shares of common stock underlying incentive units and vested stock options, were excluded from the calculation of diluted net loss per stock because they were anti-dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases The Company adopted ASU 2016-02 on January 1, 2019 utilizing the alternative transition method allowed for under ASU 2018-11. As a result, the Company recorded lease liabilities and right-of-use lease assets of $2.7 million and $2.2 million, respectively, on its balance sheet as of January 1, 2019. The lease liabilities represent the present value of the remaining lease payments of the Company’s San Diego Lease and New York Lease (see Note 4), discounted using the Company’s incremental borrowing rate as of January 1, 2019. The corresponding right-of-use lease assets are recorded based on the lease liabilities, adjusted for the unamortized lease incentives received and the cumulative difference between rent expense and amounts paid under the San Diego Lease and New York Lease. The adoption of ASU 2016-02 did not have a material impact on either the statement of operations or statement of cash flows for the year ended December 31, 2019. |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Summary of Property and Equipment | Property and equipment consisted of the following (in thousands): December 31, December 31, 2019 2018 Leasehold improvements $ 1,113 $ 1,113 Office equipment 698 504 Furniture and fixtures 420 432 Software 130 126 Total gross property and equipment 2,361 2,175 Less accumulated depreciation (698 ) (276 ) Property and equipment, net $ 1,663 $ 1,899 |
Summary of Accrued Expenses | Accrued expenses consisted of the following (in thousands): December 31, December 31, 2019 2018 Accrued clinical development costs $ 6,667 $ 5,732 Accrued compensation and related expenses 2,122 1,619 Other accrued expenses 92 14 Total accrued expenses $ 8,881 $ 7,365 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payments | Future minimum lease payments under the New York Lease as of December 31, 2019 are as follows (in thousands): 2020 $ 496 2021 386 2022 401 2023 428 2024 439 Thereafter 362 Total future minimum lease payments 2,512 Less discount (449 ) Total lease liabilities $ 2,063 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Activity Related to Equity Awards Comprised of Stock Options and Incentive Units | The activity related to equity awards, which are comprised of stock options and incentive units, during the year ended December 31, 2019 is summarized as follows: Equity Awards Weighted- average Exercise Price per Share Weighted- average Remaining Contractual Term ( 1) (years) Aggregate Intrinsic Value ( 2) (millions) Outstanding at December 31, 2018 5,361,920 $ 12.63 Granted 2,069,656 $ 29.08 Exercised (492,562 ) $ 7.99 Cancelled/forfeited (966,249 ) $ 14.21 Outstanding at December 31, 2019 5,972,765 $ 18.46 9.1 $ 84.2 Exercisable at December 31, 2019 1,868,546 $ 10.26 8.6 $ 41.5 (1) Represents the weighted-average remaining contractual term of stock options. The incentive units have no expiration. (2 ) Aggregate intrinsic value represents the product of the number of equity awards outstanding or equity awards exercisable multiplied by the difference between the Company’s closing stock price per share on the last trading day of the period, which was $32.45 as of December 31, 2019, and the exercise price. |
Schedule of Estimated Fair Value of Equity Award on Grant Date Using Black-Scholes Option-pricing Model | The Company estimated the fair value of each equity award on the grant date using the Black-Scholes option-pricing model with the following assumptions: Year Ended December 31, 2019 2018 Expected volatility 73–80% 70–75% Expected life 6–10 years 6 years Risk-free interest rate 1.7–2.5% 2.3–3.0% Expected dividend yield 0% 0% |
Summary of Equity-based Compensation Expense | The classification of equity-based compensation expense is summarized as follows (in thousands): Year Ended December 31, 2019 2018 Equity-based compensation expense: Research and development $ 9,940 $ 5,659 General and administrative 1,504 1,062 Total equity-based compensation expense $ 11,444 $ 6,721 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Summary of difference between income taxes computed using the U.S. federal income effective tax rate and the provision for income taxes | The difference between income taxes computed using the U.S. federal income effective tax rate and the provision for income taxes is as follows (in thousands): Year Ended December 31, 2019 2018 Federal statutory rate $ (23,483 ) $ (18,682 ) State taxes, net of federal benefit (7,809 ) (6,213 ) Research and development credits (3,333 ) (2,725 ) Change in valuation allowance 33,232 26,295 Equity-based compensation expense 1,688 1,227 Other permanent differences (295 ) 98 Income tax provision $ - $ - |
Summary of deferred tax assets | Deferred tax assets are as follows (in thousands): December 31, December 31, 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 50,760 $ 23,450 Capitalized research and development 7,748 3,594 Equity-based compensation expense 2,276 714 Depreciation and amortization 556 574 Other accrued expenses 224 - Total gross deferred tax assets 61,564 28,332 Less valuation allowance (61,564 ) (28,332 ) Total deferred tax assets $ - $ - |
Business - Additional Informati
Business - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 02, 2019 | Jun. 28, 2019 | Jan. 10, 2018 | Dec. 11, 2017 | Dec. 31, 2019 | Dec. 31, 2018 |
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||||
Sale of common stock, number of shares issued | 712,500 | 4,750,000 | ||||
Sale of common stock, price per share | $ 26 | |||||
Gross proceeds from sale of common stock | $ 142,000 | |||||
Net proceeds from sale of common stock | $ 135,100 | |||||
Cash | $ 180,460 | $ 139,050 | ||||
Cash requirements minimum period | 1 year | |||||
IPO | ||||||
Organization Consolidation And Presentation Of Financial Statements [Line Items] | ||||||
Sale of common stock, number of shares issued | 441,073 | 6,250,000 | ||||
Sale of common stock, price per share | $ 24 | |||||
Net proceeds from sale of common stock | $ 147,300 | |||||
Sale of common stock, gross proceeds from IPO | $ 160,600 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Cash equivalents | $ 0 | $ 0 | |
Lease liabilities | 2,063,000 | $ 2,700,000 | |
Right-of-use lease assets | $ 1,581,000 | $ 2,200,000 | |
Management Plan | |||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Outstanding shares of common stock underlying incentive units | 1,454,577 | 2,096,758 | |
Minimum | |||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Property and equipment, estimated useful life | 3 years | ||
Maximum | |||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Property and equipment, estimated useful life | 5 years | ||
Fair value measurements on recurring basis | |||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | |||
Financial assets measured at fair value | $ 0 | $ 0 | |
Financial liabilities measured at fair value | $ 0 | $ 0 |
Balance Sheet Details - Summary
Balance Sheet Details - Summary of Property And Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property Plant And Equipment [Line Items] | ||
Total gross property and equipment | $ 2,361 | $ 2,175 |
Less accumulated depreciation | (698) | (276) |
Property and equipment, net | 1,663 | 1,899 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Total gross property and equipment | 1,113 | 1,113 |
Office Equipment | ||
Property Plant And Equipment [Line Items] | ||
Total gross property and equipment | 698 | 504 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Total gross property and equipment | 420 | 432 |
Software | ||
Property Plant And Equipment [Line Items] | ||
Total gross property and equipment | $ 130 | $ 126 |
Balance Sheet Details - Additio
Balance Sheet Details - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | ||
Depreciation Expense | $ 0.4 | $ 0.3 |
Balance Sheet Details - Summa_2
Balance Sheet Details - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Payables And Accruals [Abstract] | ||
Accrued clinical development costs | $ 6,667 | $ 5,732 |
Accrued compensation and related expenses | 2,122 | 1,619 |
Other accrued expenses | 92 | 14 |
Total accrued expenses | $ 8,881 | $ 7,365 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Oct. 31, 2019 | Aug. 31, 2019 | Mar. 31, 2018 | Feb. 28, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Lease [Line Items] | ||||||
Aggregate payments under lease | $ 2,512,000 | |||||
Aggregate payments under lease | 2,512,000 | |||||
Aggregate payment of rental expense | 800,000 | $ 700,000 | ||||
Amortization of right-of-use lease assets | 45,000 | |||||
San Diego | ||||||
Operating Lease [Line Items] | ||||||
Aggregate payments under lease | $ 4,300,000 | $ 800,000 | ||||
Initial lease expiration date | Dec. 31, 2019 | |||||
Amended lease agreement, description | First Amendment to the San Diego Lease to extend the term of the lease through the earlier of May 30, 2020 or 30 days from the date the Company provides written notice to the landlord. | |||||
Amended lease extended date | May 30, 2020 | |||||
Aggregate payments under lease | $ 4,300,000 | $ 800,000 | ||||
Lease initial term | 7 years 6 months | |||||
Existence of option to extend | true | |||||
Additional lease extended term | 5 years | |||||
Restricted cash | 500,000 | |||||
New York | ||||||
Operating Lease [Line Items] | ||||||
Aggregate payments under lease | $ 2,800,000 | |||||
Aggregate payments under lease | $ 2,800,000 | |||||
Lease initial term | 7 years | |||||
Existence of option to extend | true | |||||
Additional lease extended term | 3 years | |||||
Restricted cash | $ 300,000 | |||||
Letter of Credit | San Diego | ||||||
Operating Lease [Line Items] | ||||||
Security deposit | $ 500,000 | |||||
Period of reduction in security deposit | 4 years | |||||
Letter of Credit | New York | ||||||
Operating Lease [Line Items] | ||||||
Security deposit | $ 300,000 | |||||
Period of reduction in security deposit | 3 years 6 months |
Commitments and Contingencies_2
Commitments and Contingencies - Future minimum lease payments (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 |
Commitments And Contingencies Disclosure [Abstract] | ||
2020 | $ 496 | |
2021 | 386 | |
2022 | 401 | |
2023 | 428 | |
2024 | 439 | |
Thereafter | 362 | |
Total future minimum lease payments | 2,512 | |
Less discount | (449) | |
Total lease liabilities | $ 2,063 | $ 2,700 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 02, 2019 | Jun. 28, 2019 | Jan. 10, 2018 | Dec. 11, 2017 | Dec. 31, 2018 |
Subsidiary Sale Of Stock [Line Items] | |||||
Net proceeds from sale of common stock | $ 135,100 | ||||
Gross proceeds from sale of common stock | $ 142,000 | ||||
Sale of common stock, number of shares issued | 712,500 | 4,750,000 | |||
Sale of common stock, price per share | $ 26 | ||||
Non-cash contributions for expenses | $ 64 | ||||
IPO | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Net proceeds from sale of common stock | $ 147,300 | ||||
Sale of common stock, number of shares issued | 441,073 | 6,250,000 | |||
Sale of common stock, price per share | $ 24 | ||||
Sale of common stock, gross proceeds from IPO | $ 160,600 |
Equity Incentive Plans - Additi
Equity Incentive Plans - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Aug. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share Price | $ 32.45 | |||
Total intrinsic value of equity awards exercised | $ 11,600,000 | $ 4,200,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 14,800,000 | $ 7,500,000 | ||
Weighted average grant-date fair value per equity award | $ 22.83 | $ 11.92 | ||
Unrecognized equity-based compensation expense not yet recognized | $ 61,800,000 | |||
Unrecognized equity-based compensation expense not yet recognized, period for recognition | 3 years | |||
2017 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Maximum term of options granted | 10 years | |||
Vested and expected to vest at the end of the period | 4 years | |||
Number of common stock reserved for issuance | 6,300,000 | |||
Common stock available for future grants | 1,657,008 | |||
ESPP | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of common stock reserved for issuance | 500,000 | |||
Common stock available for future grants | 452,486 | |||
Purchase price of common stock as percentage of fair value of common stock | 85.00% | 85.00% | ||
Percentage of annual cash compensation authorized for purchase of shares | 10.00% | |||
Amount of annual cash compensation of an employee authorized for purchase of shares | $ 25,000 | |||
Percentage of discount to employees on purchase of common stock | 15.00% | |||
Unrecognized equity-based compensation expense not yet recognized | $ 0 | |||
Management Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Aggregate number of incentive units issued | 2,931,402 | |||
Outstanding shares of common stock underlying incentive units | 1,454,577 |
Equity Incentive Plans - Summar
Equity Incentive Plans - Summary of Activity Related to Equity Awards Comprised of Stock Options and Incentive Units (Details) $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Equity Awards | |
Equity awards outstanding, Beginning balance | shares | 5,361,920 |
Equity awards, Granted | shares | 2,069,656 |
Equity awards, Exercised | shares | (492,562) |
Equity awards, Cancelled/forfeited | shares | (966,249) |
Equity awards outstanding, Ending balance | shares | 5,972,765 |
Equity awards exercisable | shares | 1,868,546 |
Weighted Average Exercise Price per Share | |
Weighted average exercise price per share outstanding, Beginning balance | $ / shares | $ 12.63 |
Weighted average exercise price per share outstanding, Granted | $ / shares | 29.08 |
Weighted average exercise price per share outstanding, Exercised | $ / shares | 7.99 |
Weighted average exercise price per share outstanding, Cancelled/forfeited | $ / shares | 14.21 |
Weighted average exercise price per share outstanding, Ending balance | $ / shares | 18.46 |
Weighted average exercise price per share, Exercisable | $ / shares | $ 10.26 |
Weighted-Average Remaining Contractual Term | |
Weighted average remaining contractual term (years), outstanding | 9 years 1 month 6 days |
Weighted average remaining contractual term (years), exercisable | 8 years 7 months 6 days |
Aggregate Intrinsic Value, Outstanding | $ | $ 84.2 |
Aggregate Intrinsic Value, Exercisable | $ | $ 41.5 |
Equity Incentive Plans - Schedu
Equity Incentive Plans - Schedule of Estimated Fair Value of Equity Award on Grant Date Using Black-Scholes Option-pricing Model (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected volatility, minimum | 73.00% | 70.00% |
Expected volatility, maximum | 80.00% | 75.00% |
Expected life | 6 years | |
Risk-free interest rate, minimum | 1.70% | 2.30% |
Risk-free interest rate, maximum | 2.50% | 3.00% |
Expected dividend yield | 0.00% | 0.00% |
Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected life | 6 years | |
Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected life | 10 years |
Equity Incentive plans - Summ_2
Equity Incentive plans - Summary of Equity-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total equity-based compensation expense | $ 11,444 | $ 6,721 |
Research and Development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total equity-based compensation expense | 9,940 | 5,659 |
General and Administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Total equity-based compensation expense | $ 1,504 | $ 1,062 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 0 | $ 0 |
Net operating loss carryforwards | 180,400,000 | 83,300,000 |
State net operating loss carryforwards | 185,600,000 | 85,400,000 |
Federal research and development credit carryforwards | $ 6,900,000 | 3,200,000 |
Federal and state net operating loss carryforwards begin to expiration year | 2037 | |
State research development credit carryforwards | $ 1,100,000 | 400,000 |
Federal research and development credit carryforwards begin to expiration year | 2037 | |
Unrecognized tax benefits | $ 0 | 0 |
Accrual for interest or penalties | 0 | 0 |
Recognized interest or penalties expense | $ 0 | $ 0 |
Income Taxes - Summary of diffe
Income Taxes - Summary of difference between income taxes computed using the U.S. federal income effective tax rate and the provision for income taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | $ (23,483,000) | $ (18,682,000) |
State taxes, net of federal benefit | (7,809,000) | (6,213,000) |
Research and development credits | (3,333,000) | (2,725,000) |
Change in valuation allowance | 33,232,000 | 26,295,000 |
Equity-based compensation expense | 1,688,000 | 1,227,000 |
Other permanent differences | (295,000) | 98,000 |
Income tax provision | $ 0 | $ 0 |
Income Taxes - Summary of defer
Income Taxes - Summary of deferred tax assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 50,760 | $ 23,450 |
Capitalized research and development | 7,748 | 3,594 |
Equity-based compensation expense | 2,276 | 714 |
Depreciation and amortization | 556 | 574 |
Other accrued expenses | 224 | 0 |
Total gross deferred tax assets | 61,564 | 28,332 |
Less valuation allowance | (61,564) | (28,332) |
Total deferred tax assets | $ 0 | $ 0 |
License Agreement - Additional
License Agreement - Additional Information (Details) $ in Millions | Dec. 31, 2013USD ($) |
Tesetaxel | Daiichi Sankyo | |
License Agreement [Line Items] | |
Aggregate future milestone payments | $ 31 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | ||
Non-cash contributions for expenses | $ 64,000 | |
Chairman and Chief Executive Officer | ||
Related Party Transaction [Line Items] | ||
Annual salary of chairman and chief executive officer of the company | $ 1 |
401(k) Plan - Additional Inform
401(k) Plan - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | ||
Annual contribution | 3.00% | |
Matching contribution | 6.00% | |
Employer contributions for the year | $ 1.4 | $ 1 |