Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 10, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | SPRINGWORKS THERAPEUTICS, INC. | |
Entity Central Index Key | 0001773427 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 43,018,360 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 226,666 | $ 327,652 |
Marketable securities | 64,567 | |
Prepaid expenses and other current assets | 2,563 | 3,709 |
Total current assets | 293,796 | 331,361 |
Property and equipment, net | 1,072 | 795 |
Equity investment | 4,147 | 976 |
Restricted cash | 565 | 540 |
Other assets | 1,440 | 1,159 |
Total assets | 301,020 | 334,831 |
Current liabilities: | ||
Accounts payable | 909 | 2,654 |
Accrued expenses | 8,265 | 8,953 |
Deferred rent | 377 | 363 |
Total current liabilities | 9,551 | 11,970 |
Long-term portion of deferred rent | 595 | 789 |
Total liabilities | 10,146 | 12,759 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock, $0.0001 par value, 150,000,000 shares authorized, 43,016,501 and 43,006,077 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively. | 4 | 4 |
Additional paid-in capital | 399,130 | 395,097 |
Accumulated other comprehensive income (loss) | (44) | |
Accumulated deficit | (108,216) | (73,029) |
Total stockholders’ equity | 290,874 | 322,072 |
Total liabilities and stockholders’ equity | $ 301,020 | $ 334,831 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Condensed Consolidated Balance Sheets | ||
Common stock, Par value | $ 0.0001 | $ 0.0001 |
Common stock, Shares authorized | 150,000,000 | 150,000,000 |
Common stock, Shares issued | 43,016,501 | 43,006,077 |
Common stock, Shares outstanding | 43,016,501 | 43,006,077 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Operating expenses: | ||||
Research and development | $ 12,947 | $ 11,205 | $ 22,674 | $ 19,628 |
General and administrative | 6,874 | 3,646 | 13,277 | 6,911 |
Total operating expenses | 19,821 | 14,851 | 35,951 | 26,539 |
Loss from operations | (19,821) | (14,851) | (35,951) | (26,539) |
Other income: | ||||
Interest income, net | 157 | 1,004 | 1,093 | 1,283 |
Total other income | 157 | 1,004 | 1,093 | 1,283 |
Equity investment loss | (229) | (329) | ||
Net loss | (19,893) | (13,847) | (35,187) | (25,256) |
Reconciliation of net loss to net loss attributable to common stockholders: | ||||
Net loss | (19,893) | (13,847) | (35,187) | (25,256) |
Net gain attributable to extinguishment of Series A convertible preferred and Junior Series A convertible preferred units | 7,729 | |||
Net loss attributable to common stockholders | $ (19,893) | $ (13,847) | $ (35,187) | $ (17,527) |
Net loss per share, basic and diluted | $ (0.47) | $ (15.75) | $ (0.84) | $ (22.47) |
Weighted average common shares outstanding, basic and diluted | 41,945,058 | 879,018 | 41,867,089 | 780,066 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Condensed Consolidated Statements of Comprehensive Income (Loss) | ||||
Net loss | $ (19,893) | $ (13,847) | $ (35,187) | $ (25,256) |
Changes in other comprehensive income: | ||||
Unrealized holding loss on marketable securities, net | (44) | (44) | ||
Total changes in other comprehensive income (loss) | (44) | (44) | ||
Comprehensive income (loss) | (19,937) | (13,847) | (35,231) | (25,256) |
Net gain attributable to extinguishment of Series A convertible preferred and Junior Series A convertible preferred units | 7,729 | |||
Comprehensive income (loss) attributable to common stockholders | $ (19,937) | $ (13,847) | $ (35,231) | $ (17,527) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Preferred Stock and Members'/Stockholders’ Equity/(Deficit) - USD ($) $ in Thousands | Junior Series A convertible preferred | Common | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Total |
Beginning balance at Dec. 31, 2018 | $ 2,014 | $ 1,069 | $ (22,452) | $ (19,369) | ||
Beginning balance (in shares) at Dec. 31, 2018 | 6,437,500 | 3,101,206 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Convertible preferred extinguishment | $ 1,868 | (1,868) | ||||
Forfeiture of restricted stock awards (in shares) | (12,570) | |||||
Stock-based compensation | 1,371 | 1,371 | ||||
Convertible preferred extinguishment | 9,597 | 9,597 | ||||
Net loss | (25,256) | (25,256) | ||||
Ending balance at Jun. 30, 2019 | $ 3,882 | 2,440 | (39,979) | (33,657) | ||
Ending balance (in shares) at Jun. 30, 2019 | 6,437,500 | 3,088,636 | ||||
Beginning balance at Mar. 31, 2019 | $ 3,882 | 1,792 | (26,132) | (20,458) | ||
Beginning balance (in shares) at Mar. 31, 2019 | 6,437,500 | 3,088,636 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 648 | 648 | ||||
Net loss | (13,847) | (13,847) | ||||
Ending balance at Jun. 30, 2019 | $ 3,882 | 2,440 | (39,979) | (33,657) | ||
Ending balance (in shares) at Jun. 30, 2019 | 6,437,500 | 3,088,636 | ||||
Beginning balance at Dec. 31, 2019 | $ 4 | 395,097 | (73,029) | 322,072 | ||
Beginning balance (in shares) at Dec. 31, 2019 | 43,006,077 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Forfeiture of restricted stock awards (in shares) | (5,228) | |||||
Stock-based compensation | 3,949 | 3,949 | ||||
Exercise of stock options | 84 | 84 | ||||
Exercise of stock options (in shares) | 15,652 | |||||
Other comprehensive income, net of tax | $ (44) | (44) | ||||
Net loss | (35,187) | (35,187) | ||||
Ending balance at Jun. 30, 2020 | $ 4 | 399,130 | (44) | (108,216) | 290,874 | |
Ending balance (in shares) at Jun. 30, 2020 | 43,016,501 | |||||
Beginning balance at Mar. 31, 2020 | $ 4 | 396,453 | (88,323) | 308,134 | ||
Beginning balance (in shares) at Mar. 31, 2020 | 43,003,733 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | 2,599 | 2,599 | ||||
Exercise of stock options | 78 | 78 | ||||
Exercise of stock options (in shares) | 12,768 | |||||
Other comprehensive income, net of tax | (44) | (44) | ||||
Net loss | (19,893) | (19,893) | ||||
Ending balance at Jun. 30, 2020 | $ 4 | $ 399,130 | $ (44) | $ (108,216) | $ 290,874 | |
Ending balance (in shares) at Jun. 30, 2020 | 43,016,501 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Preferred Stock and Members'/Stockholders’ Deficit - Temporary Equity - USD ($) $ in Thousands | Series A convertible preferred stock | Series B convertible preferred stock | Series A and B Convertible Preferred Stock | Total |
Beginning balance at Dec. 31, 2018 | $ 62,930 | |||
Beginning balance (in shares) at Dec. 31, 2018 | 63,600,000 | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Issuance of convertible preferred units, net | $ 39,367 | $ 124,590 | ||
Issuance of convertible preferred units, net (in shares) | 39,400,000 | 86,639,279 | ||
Convertible preferred extinguishment | $ (9,597) | $ 9,597 | ||
Ending balance at Jun. 30, 2019 | $ 217,290 | |||
Ending balance (in shares) at Jun. 30, 2019 | 189,639,279 | |||
Beginning balance at Mar. 31, 2019 | $ 217,290 | |||
Beginning balance (in shares) at Mar. 31, 2019 | 189,639,279 | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Issuance of convertible preferred units, net (in shares) | ||||
Convertible preferred extinguishment | ||||
Ending balance at Jun. 30, 2019 | $ 217,290 | |||
Ending balance (in shares) at Jun. 30, 2019 | 189,639,279 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Preferred Stock and Members'/Stockholders’ Deficit (Parenthetical) | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Series B convertible preferred stock | |
Legal Costs | $ 413,063 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating Activities | ||
Net loss | $ (35,187) | $ (25,256) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 144 | 64 |
Stock compensation expense | 3,949 | 1,371 |
Equity investment loss | 329 | |
Unrealized loss on marketable securities | (44) | |
Changes in Operating Assets and Liabilities | ||
Prepaid expenses and other current assets | 1,146 | (1,506) |
Other assets | (281) | (1,111) |
Accounts payable | (1,745) | 1,370 |
Accrued expenses | (688) | 4,966 |
Deferred rent | (180) | (166) |
Net cash used in operating activities | (32,557) | (20,268) |
Investing activities | ||
Capital expenditures | (421) | (546) |
Equity investments | (3,500) | (3,500) |
Purchases of marketable securities | (64,567) | |
Net cash used in investing activities | (68,488) | (4,046) |
Financing Activities | ||
Proceeds from issuance of Series A convertible preferred shares, net of issuance costs | 39,367 | |
Proceeds from issuance of Series B convertible preferred shares, net of issuance costs | 124,590 | |
Proceeds from stock option exercises | 84 | |
Net cash provided by financing activities | 84 | 163,957 |
Net increase (decrease) in cash and cash equivalents | (100,961) | 139,643 |
Cash and cash equivalents including Restricted cash, beginning of period | 328,192 | 46,188 |
Cash and cash equivalents including Restricted cash, end of period | $ 227,231 | $ 185,831 |
Nature of Operations
Nature of Operations | 6 Months Ended |
Jun. 30, 2020 | |
Nature of Operations | |
Nature of Operations | 1. Nature of Operations SpringWorks Therapeutics, Inc. (the “Company”) was formed in Delaware on August 18, 2017. Prior to March 29, 2019, the Company conducted its business through SpringWorks Therapeutics, LLC, a Delaware limited liability company. On March 29, 2019, it completed a series of transactions pursuant to which SpringWorks MergerSub LLC, a wholly owned subsidiary of the Company, merged with SpringWorks Therapeutics, LLC, with SpringWorks Therapeutics, LLC surviving the merger as a wholly owned subsidiary of the Company. The Company is a clinical-stage biopharmaceutical company applying a precision medicine approach to acquiring, developing and commercializing life-changing medicines for underserved patient populations suffering from devastating rare diseases and cancer. The Company has a differentiated portfolio of small molecule targeted oncology product candidates and is advancing two potentially registrational clinical trials in rare tumor types, as well as several other programs addressing highly prevalent, genetically defined cancers. Two of the programs are late stage clinical product candidates: nirogacestat and mirdametinib. The Company has incurred losses and negative operating cash flows since inception and had an accumulated deficit of $108.2 million and $73.0 million and working capital of $284.2 million and $319.4 million at June 30, 2020 and December 31, 2019, respectively. The Company is subject to those risks associated with any biopharmaceutical company that has substantial expenditures for development. There can be no assurance that the Company’s development projects will be successful, that products developed will obtain necessary regulatory approval, or that any approved product will be commercially viable. In addition, the Company operates in an environment of rapid technological change and is largely dependent on the services of its employees, advisors, consultants and vendors. The Company had cash, cash equivalents and marketable securities of $291.2 million as of June 30, 2020 and $327.7 million as of December 31, 2019. Based on the Company's cash, cash equivalents and marketable securities at June 30, 2020, management estimates that its current liquidity will enable it to meet operating expenses through at least twelve months after the date that these financial statements are issued. COVID-19 Pandemic On March 11, 2020, the World Health Organization designated the outbreak of the disease associated with the novel strain of coronavirus known as COVID-19 as a global pandemic. Governments and businesses around the world have taken unprecedented actions to mitigate the spread of COVID-19, including, but not limited to, shelter-in-place orders, quarantines, significant restrictions on travel, as well as restrictions that prohibit many employees from going to work. Uncertainty with respect to the economic impacts of the pandemic has introduced significant volatility in the financial markets. The Company did not observe significant impacts on its business or results of operations for the three and six months ended June 30, 2020 due to the global emergence of COVID-19. While the extent to which COVID-19 impacts the Company’s future results will depend on future developments, the pandemic and associated economic impacts could result in a material impact to the Company’s future financial condition, results of operations and cash flows. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
Basis of Presentation | |
Basis of Presentation | 2. Basis of Presentation The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information and Article 10 of Regulation S-X of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the Company's consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 ("2019 Form 10-K") filed with the SEC. The condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q are unaudited; however, in the opinion of management, such financial statements reflect all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, accrued expenses and deferred tax asset valuation allowances. Management bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates as there are changes in circumstances, facts and experience. Actual results may differ from those estimates or assumptions. Research and Development Expenses Research and development expenses consist of expenses incurred in performing development activities, including salaries and benefits, equity-based compensation expenses, materials and supplies, preclinical expenses, clinical trial and related clinical manufacturing expenses, depreciation of equipment, contract services and other outside expenses. Costs for certain development activities, such as manufacturing and clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using either time-based measures or data such as information provided to the Company by its vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the condensed consolidated financial statements as prepaid or accrued development expenses. Nonrefundable advance payments for goods or services to be received in the future for use in development activities are deferred and capitalized. The capitalized amounts are expensed as the related goods are delivered or the services are performed. Segment Information Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment functioning exclusively in the United States. Emerging Growth Company Status The Company qualifies as an emerging growth company (“EGC”) as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”) enacted in April 2012. As of June 30, 2020, the last business day of the Company’s most recently completed second fiscal quarter, the market value of the Company’s common stock that was held by non-affiliates was greater than $700 million. As a result, as of the close of the current fiscal year on December 31, 2020, the Company will become a large accelerated filer and will no longer qualify as an EGC. Recently Issued Accounting Pronouncements (not yet adopted) In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842).” This standard requires entities that lease assets to recognize on the balance sheet the assets and liabilities of the rights and obligations created by those leases. The Company will use the new transition option and is also utilizing the package of practical expedients that allows it to not reassess: (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases, and (3) initial direct costs for any expired or existing leases. The Company additionally expects to use the practical expedient that allows it to treat the lease and non-lease components of its leases as a single component. The Company has is currently assessing the financial impact on the consolidated balance sheet. ASU 2016-02 is effective for the Company for annual reporting periods beginning after December 15, 2020, and early adoption is permitted. In August 2018, the FASB issued ASU No. 2018-15, Intangibles, Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”). The FASB issued ASU 2018-15 to align the requirements for capitalizing implementation costs incurred in a cloud-based hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for the Company for annual and interim reporting periods beginning after December 15, 2020, and early adoption is permitted. In 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires entities to record expected credit losses for certain financial instruments, including trade receivables, as an allowance that reflects the entity's current estimate of credit losses expected to be incurred. For available-for-sale debt securities in unrealized loss positions, ASU 2016-13 requires allowances to be recorded instead of reducing the amortized cost of the investment. The guidance in ASU No. 2016-13 is effective for the company for annual and interim periods beginning after December 15, 2022, and early adoption is permitted. Effective as the close of the current fiscal year on December 31, 2020, when the Company will cease to qualify as an EGC, the Company will be required to comply with the requirements for adoption of new or revised accounting pronouncements applicable to public companies. Specifically, the Company will be required to accelerate the adoption of certain accounting standards disclosed above, as follows: Accounting Pronouncement Effective Date Accelerated ASU No. 2016‑02, Leases (Topic 842) Fiscal years beginning after December 15, 2020 Fiscal year ending December 31, 2020 ASU No. 2018-15, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Fiscal years beginning after December 15, 2020 Fiscal year ending December 31, 2020 ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments Fiscal years beginning after December 15, 2022 Fiscal year ending December 31, 2020 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Measurements | |
Fair Value Measurements | 3. Fair Value Measurements The Company classifies financial assets and liabilities measured on a recurring basis in one of the following three categories: Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets, or liabilities. Level 2 — Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the instrument. Level 3 — Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity's pricing based upon their own market assumptions. The following table sets forth the Company’s financial assets subject to fair value measurements: As of June 30, 2020 Fair Value Hierarchy (in thousands) Total Level 1 Level 2 Level 3 Financial instruments carried at fair value (asset position): Cash equivalents: Money market funds $ 205,627 $ 205,627 $ — $ — Short-term investments: U.S. Government securities 13,237 13,237 — — Corporate debt securities 24,911 — 24,911 — Commercial paper 26,419 — 26,419 — Total $ 270,194 $ 218,864 $ 51,330 $ — As of June 30, 2020, the Company’s financial assets measured at fair value on a recurring basis using a market approach included cash equivalents, which consist of money market funds, and marketable securities, which consist of high-quality, highly liquid available-for-sale debt securities including corporate debt securities, U.S. government securities and commercial paper. The Company’s money market funds are readily convertible into cash and the net asset value of each fund on the last day of the quarter is used to determine fair value. The U.S. Government securities are classified as Level 1 and valued utilizing quoted market prices. The Company’s corporate debt securities and commercial paper are classified as Level 2 and valued utilizing various market and industry inputs. The Company had cash and cash equivalents at December 31, 2019 of $327.7 million. As of December 31, 2019, the Company had no other financial assets or liabilities that were measured at fair value on a recurring basis. The Company considers all highly liquid instruments that have maturities of three months or less when acquired to be cash equivalents. The carrying amounts reflected in the Company’s Condensed Consolidated Balance Sheets for cash equivalents, accounts payable, and accrued expenses approximate fair value due to their short-term maturities. |
Investment and Variable Interes
Investment and Variable Interest Entity | 6 Months Ended |
Jun. 30, 2020 | |
Investment and Variable Interest Entity | |
Investment and Variable Interest Entity | 4. Investment and Variable Interest Entity MapKure In June 2019, the Company announced the formation of MapKure, an entity jointly owned by the Company and BeiGene Ltd. (“BeiGene”). BeiGene licensed to MapKure exclusive rights to BGB‑3245, an oral, small molecule selective inhibitor of specific BRAF driver mutations and genetic fusions. MapKure is advancing BGB‑3245 through clinical development for solid tumor patients harboring BRAF driver mutations and genetic fusions that were observed to be sensitive to the compound in preclinical studies. In addition to the Company’s equity ownership in MapKure, the Company has appointed a member to each of MapKure’s joint steering committee and board of directors. The Company also contributes to clinical development and other operational activities for BGB‑3245 through a service agreement with MapKure. In conjunction with the formation of MapKure in June 2019, the Company purchased 3,500,000 Series A preferred units of MapKure, or a 25% ownership interest, for $3.5 million, and BeiGene received 10,000,000 Series A preferred units as payment for its contributed intellectual property, or a 71.4% ownership interest. Two individuals each purchased 250,000 Series A preferred units, or 1.8% ownership interest each. In June 2020, the Company purchased an additional 3,500,000 Series A preferred units of MapKure for $3.5 million, as required by the terms of the initial investment in MapKure. As of June 30, 2020, the Company’s ownership interest in MapKure is 38.9%. The Company determined that MapKure is a variable interest entity, but the Company is not the primary beneficiary. The Company does not have the power to direct the activities that most significantly impact the economic performance of MapKure. Accordingly, the Company does not consolidate the financial statements of this entity and accounts for this investment using the equity method of accounting. In accordance with ASC 323-10-35-6, the Company records MapKure’s earnings or losses based on a one quarter lag. The Company recognized an equity loss of $0.2 million and $0.3 million for the three and six months ended June 30, 2020, respectively. The Company’s ownership interest in MapKure is included in “Equity method investments” in the Condensed Consolidated Balance Sheets. The balance of the Company’s investment was $4.1 million at June 30, 2020, representing the maximum exposure to loss as a result of the Company’s involvement with MapKure. |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2020 | |
Accrued Expenses | |
Accrued Expenses | 5. Accrued Expenses Accrued expenses consisted of the following: June 30, December 31, (in thousands) 2020 2019 Accrued professional fees $ 795 $ 793 Accrued compensation and benefits 2,105 3,147 Accrued research and development 5,042 4,447 Accrued other 323 566 $ 8,265 $ 8,953 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 6. Commitments and Contingencies Leases The Company’s future minimum lease obligations as of June 30, 2020 are as follows: Premises Operating (in thousands) Leases 2020 674 2021 1,372 2022 1,297 2023 135 Total Obligations $ 3,478 The Company recorded rent expense of $0.4 million and $0.8 million, for the three and six months ended June 30, 2020. Contingencies From time to time, the Company may be involved in disputes or regulatory inquiries that arise in the ordinary course of business. When the Company determines that a loss is both probable and reasonably estimable, a liability is recorded and disclosed if the amount is material to the financial statements taken as a whole. When a material loss contingency is only reasonably possible, the Company does not record a liability, but instead discloses the nature and the amount of the claim, and an estimate of the loss or range of loss, if such an estimate can reasonably be made. As of June 30, 2020, there was no litigation or contingency with at least a reasonable possibility of a material loss. |
Equity-Based Compensation
Equity-Based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Equity-Based Compensation | |
Equity-Based Compensation | 7. Equity-Based Compensation 2019 Equity Incentive Plan The 2019 Equity Incentive Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock units, restricted stock awards, unrestricted stock awards and dividend equivalent rights to the Company’s officers, employees, directors and other key persons (including consultants). The number of shares reserved for issuance under the 2019 Equity Incentive Plan is cumulatively increased each January 1 by 5% of the number of shares of the Company’s common stock outstanding on the immediately preceding December 31 or such lesser number of shares determined by the Company’s compensation committee. Effective January 1, 2020, the number of shares reserved for issuance under the 2019 Equity Incentive Plan was increased by 2,150,304 shares. The terms of stock options and restricted stock awards, including vesting requirements, are determined by the Board of Directors or its delegates, subject to the provisions of the 2019 Equity Incentive Plan. Stock options and restricted stock awards granted by the Company to employees and directors generally vest over four years. As of June 30, 2020, there were 4,360,801 shares available for issuance under the 2019 Equity Incentive Plan. Share-Based Awards During the six months ended June 30, 2020, the Company granted 1,397,888 stock option awards to its officers, employees and directors under the 2019 Equity Incentive Plan. During the six months ended June 30, 2020, 294,918 restricted stock awards previously issued to employees of the Company vested, and 15,652 stock options were exercised. As of June 30, 2020, there were 943,225 stock options vested and exercisable. In June 2019, the Company’s CEO received an award of 176,411 stock options (the “2019 CEO Performance Award”). During the quarter ended June 30, 2020, 51,452 options of the CEO Performance Award became exercisable upon the satisfaction of the market condition applicable to this award. Share-based compensation expense included in general and administrative expense, and research and development expense, for the three months ended June 30, 2020 was $1.8 million and $0.8 million, respectively, and $0.5 million and $0.2 million, respectively, the three months ended June 30, 2019. Share-based compensation expense included in general and administrative expense, and research and development expense, for the six months ended June 30, 2020 was $2.8 million and $1.2 million, respectively, and $1.1 million and $0.3 million, respectively, the six months ended June 30, 2019. As of June 30, 2020, the unrecognized compensation expense related to unvested stock options and restricted stock awards was $35.6 million and $0.6 million, respectively, which is expected to be recognized over a weighted-average remaining period of approximately 3.22 years and 1.13 years, respectively. As of June 30, 2020, the Company had 4,567,328 stock options outstanding and 989,303 unvested restricted stock awards. |
Net Loss per Share
Net Loss per Share | 6 Months Ended |
Jun. 30, 2020 | |
Net Loss per Share | |
Net Loss per Share | 8. Net Loss per Share Since the Company had a net loss in each of the periods presented, basic and diluted net loss per share are the same. The table below provides potentially dilutive securities not included in the computation of the diluted net loss per share for the periods ended June 30, 2020 and 2019, because to do so would be anti-dilutive: As of June 30, 2020 2019 Common stock options issued and outstanding 4,567,328 2,489,778 Restricted stock subject to future vesting 989,303 2,118,689 Total potentially dilutive securities 5,556,631 4,608,467 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Basis of Presentation | |
Basis of Presentation | Basis of Presentation The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information and Article 10 of Regulation S-X of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the Company's consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 ("2019 Form 10-K") filed with the SEC. The condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q are unaudited; however, in the opinion of management, such financial statements reflect all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, accrued expenses and deferred tax asset valuation allowances. Management bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates as there are changes in circumstances, facts and experience. Actual results may differ from those estimates or assumptions. |
Research and Development Expenses | Research and Development Expenses Research and development expenses consist of expenses incurred in performing development activities, including salaries and benefits, equity-based compensation expenses, materials and supplies, preclinical expenses, clinical trial and related clinical manufacturing expenses, depreciation of equipment, contract services and other outside expenses. Costs for certain development activities, such as manufacturing and clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using either time-based measures or data such as information provided to the Company by its vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the condensed consolidated financial statements as prepaid or accrued development expenses. Nonrefundable advance payments for goods or services to be received in the future for use in development activities are deferred and capitalized. The capitalized amounts are expensed as the related goods are delivered or the services are performed. |
Segment Information | Segment Information Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment functioning exclusively in the United States. |
Emerging Growth Company Status | Emerging Growth Company Status The Company qualifies as an emerging growth company (“EGC”) as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”) enacted in April 2012. As of June 30, 2020, the last business day of the Company’s most recently completed second fiscal quarter, the market value of the Company’s common stock that was held by non-affiliates was greater than $700 million. As a result, as of the close of the current fiscal year on December 31, 2020, the Company will become a large accelerated filer and will no longer qualify as an EGC |
Recently Issued Accounting Pronouncements (not yet adopted) | Recently Issued Accounting Pronouncements (not yet adopted) In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842).” This standard requires entities that lease assets to recognize on the balance sheet the assets and liabilities of the rights and obligations created by those leases. The Company will use the new transition option and is also utilizing the package of practical expedients that allows it to not reassess: (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases, and (3) initial direct costs for any expired or existing leases. The Company additionally expects to use the practical expedient that allows it to treat the lease and non-lease components of its leases as a single component. The Company has is currently assessing the financial impact on the consolidated balance sheet. ASU 2016-02 is effective for the Company for annual reporting periods beginning after December 15, 2020, and early adoption is permitted. In August 2018, the FASB issued ASU No. 2018-15, Intangibles, Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”). The FASB issued ASU 2018-15 to align the requirements for capitalizing implementation costs incurred in a cloud-based hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU 2018-15 is effective for the Company for annual and interim reporting periods beginning after December 15, 2020, and early adoption is permitted. In 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires entities to record expected credit losses for certain financial instruments, including trade receivables, as an allowance that reflects the entity's current estimate of credit losses expected to be incurred. For available-for-sale debt securities in unrealized loss positions, ASU 2016-13 requires allowances to be recorded instead of reducing the amortized cost of the investment. The guidance in ASU No. 2016-13 is effective for the company for annual and interim periods beginning after December 15, 2022, and early adoption is permitted. Effective as the close of the current fiscal year on December 31, 2020, when the Company will cease to qualify as an EGC, the Company will be required to comply with the requirements for adoption of new or revised accounting pronouncements applicable to public companies. Specifically, the Company will be required to accelerate the adoption of certain accounting standards disclosed above, as follows: Accounting Pronouncement Effective Date Accelerated ASU No. 2016‑02, Leases (Topic 842) Fiscal years beginning after December 15, 2020 Fiscal year ending December 31, 2020 ASU No. 2018-15, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Fiscal years beginning after December 15, 2020 Fiscal year ending December 31, 2020 ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments Fiscal years beginning after December 15, 2022 Fiscal year ending December 31, 2020 |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Basis of Presentation | |
Schedule of accelerated effective date of accounting pronouncements | Accounting Pronouncement Effective Date Accelerated ASU No. 2016‑02, Leases (Topic 842) Fiscal years beginning after December 15, 2020 Fiscal year ending December 31, 2020 ASU No. 2018-15, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Fiscal years beginning after December 15, 2020 Fiscal year ending December 31, 2020 ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments Fiscal years beginning after December 15, 2022 Fiscal year ending December 31, 2020 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Measurements | |
Schedule of financial assets subject to fair value measurements | As of June 30, 2020 Fair Value Hierarchy (in thousands) Total Level 1 Level 2 Level 3 Financial instruments carried at fair value (asset position): Cash equivalents: Money market funds $ 205,627 $ 205,627 $ — $ — Short-term investments: U.S. Government securities 13,237 13,237 — — Corporate debt securities 24,911 — 24,911 — Commercial paper 26,419 — 26,419 — Total $ 270,194 $ 218,864 $ 51,330 $ — |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accrued Expenses | |
Schedule of accrued expenses | Accrued expenses consisted of the following: June 30, December 31, (in thousands) 2020 2019 Accrued professional fees $ 795 $ 793 Accrued compensation and benefits 2,105 3,147 Accrued research and development 5,042 4,447 Accrued other 323 566 $ 8,265 $ 8,953 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies | |
Schedule of future minimum lease obligations | The Company’s future minimum lease obligations as of June 30, 2020 are as follows: Premises Operating (in thousands) Leases 2020 674 2021 1,372 2022 1,297 2023 135 Total Obligations $ 3,478 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Net Loss per Share | |
Schedule of potential common shares not included in the calculation of the diluted net loss per share | As of June 30, 2020 2019 Common stock options issued and outstanding 4,567,328 2,489,778 Restricted stock subject to future vesting 989,303 2,118,689 Total potentially dilutive securities 5,556,631 4,608,467 |
Nature of Operations (Details)
Nature of Operations (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Nature of Operations | ||
Accumulated deficit | $ (108,216) | $ (73,029) |
Working Capital | 284,200 | 319,400 |
Cash, cash equivalents and marketable securities | $ 291,200 | $ 327,700 |
Basis of Presentation (Details)
Basis of Presentation (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2020USD ($)segment | |
Number of Operating Segments | segment | 1 |
Minimum | |
Entity Public Float | $ | $ 700 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value Measurements | ||
Cash and cash equivalents | $ 327,700 | |
Recurring | ||
Fair Value Measurements | ||
Total financial assets | $ 270,194 | |
Recurring | Money market funds | ||
Fair Value Measurements | ||
Cash and cash equivalents | 205,627 | |
Recurring | U.S. Government securities | ||
Fair Value Measurements | ||
Short-term investments | 13,237 | |
Recurring | Corporate debt securities | ||
Fair Value Measurements | ||
Short-term investments | 24,911 | |
Recurring | Commercial paper | ||
Fair Value Measurements | ||
Short-term investments | 26,419 | |
Level 1 | Recurring | ||
Fair Value Measurements | ||
Total financial assets | 218,864 | |
Level 1 | Recurring | Money market funds | ||
Fair Value Measurements | ||
Cash and cash equivalents | 205,627 | |
Level 1 | Recurring | U.S. Government securities | ||
Fair Value Measurements | ||
Short-term investments | 13,237 | |
Level 2 | Recurring | ||
Fair Value Measurements | ||
Total financial assets | 51,330 | |
Level 2 | Recurring | Corporate debt securities | ||
Fair Value Measurements | ||
Short-term investments | 24,911 | |
Level 2 | Recurring | Commercial paper | ||
Fair Value Measurements | ||
Short-term investments | $ 26,419 |
Investment and Variable Inter_2
Investment and Variable Interest Entity (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020USD ($)shares | Jun. 30, 2020USD ($)shares | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($)individualshares | |
Number of individuals under the equity method investments | individual | 2 | |||
Investment in Mapkure | $ 4,147 | $ 4,147 | $ 976 | |
Income (Loss) from Equity Method Investments, Total | 229 | 329 | ||
BeiGene | Series A Preferred Units | ||||
Shares purchased | shares | 10,000,000 | |||
Ownership Interest | 71.40% | |||
Individual One | Series A Preferred Units | ||||
Shares purchased | shares | 250,000 | |||
Ownership Interest | 1.80% | |||
Individual Two | Series A Preferred Units | ||||
Shares purchased | shares | 250,000 | |||
Ownership Interest | 1.80% | |||
MapKure | ||||
Investment in Mapkure | $ 4,100 | 4,100 | ||
Income (Loss) from Equity Method Investments, Total | $ 200 | |||
MapKure | Series A Preferred Units | ||||
Shares purchased | shares | 3,500,000 | 3,500,000 | 3,500,000 | |
Investment in Mapkure | $ 3,500 | $ 3,500 | $ 3,500 | |
Ownership Interest | 38.90% | 38.90% | 25.00% |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accrued Expenses | ||
Accrued professional fees | $ 795 | $ 793 |
Accrued compensation and benefits | 2,105 | 3,147 |
Accrued research and development | 5,042 | 4,447 |
Accrued other | 323 | 566 |
Accrued expenses | $ 8,265 | $ 8,953 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($) | |
Operating Leases | ||
Rent expense | $ 400 | $ 800 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2020 | 674 | 674 |
2021 | 1,372 | 1,372 |
2022 | 1,297 | 1,297 |
2023 | 135 | 135 |
Total obligations | $ 3,478 | $ 3,478 |
Equity-Based Compensation - 201
Equity-Based Compensation - 2019 Equity Incentive Plan (Details) - USD ($) $ in Millions | Jan. 01, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
General and administrative | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock compensation expense | $ 1.8 | $ 0.5 | $ 2.8 | $ 1.1 | ||
Research and development | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock compensation expense | $ 0.8 | $ 0.2 | $ 1.2 | $ 0.3 | ||
Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation expense expected to be recognized over a weighted-average remaining period | 3 years 2 months 19 days | |||||
2019 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of annual increase in the shares | 5.00% | |||||
Shares available for future issuance | 4,360,801 | 4,360,801 | ||||
Number of additional shares reserved for issuance | 2,150,304 | |||||
2019 Equity Incentive Plan | Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Exercise of stock options (in shares) | 15,652 | |||||
Stock options vested and exercisable | 943,225 | 943,225 | ||||
Unrecognized compensation expense related to unvested stock options | $ 35.6 | $ 35.6 | ||||
Stock options outstanding | 4,567,328 | 4,567,328 | ||||
2019 Equity Incentive Plan | Stock options | Executive officers and employees | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted | 1,397,888 | |||||
2019 Equity Incentive Plan | Restricted stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation expense related to restricted stock awards | $ 0.6 | $ 0.6 | ||||
Unrecognized compensation expense expected to be recognized over a weighted-average remaining period | 1 year 1 month 17 days | |||||
Unvested restricted stock award outstanding | 989,303 | 989,303 | ||||
CEO Performance Award | Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options vested and exercisable | 51,452 | 51,452 | ||||
CEO Performance Award | Stock options | CEO | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted | 176,411 | |||||
Employees | 2019 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 4 years | |||||
Employees | 2019 Equity Incentive Plan | Restricted stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted stock awards vested | 294,918 |
Net Loss per Share (Details)
Net Loss per Share (Details) - shares | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities | 5,556,631 | 4,608,467 |
Common | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities | 4,567,328 | 2,489,778 |
Restricted stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive securities | 989,303 | 2,118,689 |