Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2019	Feb. 10, 2020	Jun. 28, 2019
Cover [Abstract]
Entity Central Index Key	0001597264
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2019
Document Transition Report	false
Entity File Number	001-37359
Entity Registrant Name	BLUEPRINT MEDICINES CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	26-3632015
Entity Address, Address Line One	45 Sidney Street
Entity Address, City or Town	Cambridge
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02139
City Area Code	617
Local Phone Number	374-7580
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	BPMC
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Listing, Par Value Per Share	$ 0.001
Entity Public Float			$ 4,627,796,219
Entity Common Stock, Shares Outstanding		54,027,009
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Amendment Flag	false

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 113,938	$ 68,064
Investments, available-for-sale	369,616	425,948
Accounts receivable	663	64
Unbilled accounts receivable	22,749	151
Prepaid expenses and other current assets	9,820	5,560
Total current assets	516,786	499,787
Investments, available-for-sale	64,406
Property and equipment, net	38,361	29,627
Operating lease right-of-use assets, net	72,753
Restricted cash	5,166	5,154
Other assets	10,222	5,556
Total assets	707,694	540,124
Current liabilities:
Accounts payable	4,793	3,298
Accrued expenses	88,706	51,711
Current portion of operating lease liabilities	6,823
Current portion of deferred revenue	6,160	3,600
Current portion of lease incentive obligation		1,714
Total current liabilities	106,482	60,323
Deferred rent, net of current portion		5,130
Operating lease liabilities, net of current portion	89,126
Deferred revenue, net of current portion	39,913	42,567
Lease incentive obligation, net of current portion		12,903
Other long-term liabilities	7,814	192
Total liabilities	243,335	121,115
Commitments (Note 16)
Stockholders' equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding
Common stock, $0.001 par value; 120,000,000 shares authorized; 49,272,223 and 44,037,026 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively	49	44
Additional paid-in capital	1,412,083	1,016,690
Accumulated other comprehensive loss	(2,535)	(180)
Accumulated deficit	(945,238)	(597,545)
Total stockholders' equity	464,359	419,009
Total liabilities and stockholders' equity	$ 707,694	$ 540,124

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2019	Dec. 31, 2018
Preferred Stock Disclosures
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common Stock Disclosures
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	120,000,000	120,000,000
Common stock, shares issued (in shares)	49,272,223	44,037,026
Common Stock, shares outstanding (in shares)	49,272,223	44,037,026

Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Condensed Consolidated Statements of Operations and Comprehensive Loss
Collaboration revenue	$ 66,512	$ 44,521	$ 21,426
Operating expenses:
Research and development	331,450	243,621	144,687
General and administrative	96,388	47,928	27,986
Total operating expenses	427,838	291,549	172,673
Other income (expense):
Interest income (expense), net	13,732	10,566	3,204
Other income (expense), net	(100)	(180)	(76)
Total other income (expense)	13,632	10,386	3,128
Net loss	(347,694)	(236,642)	(148,119)
Other comprehensive loss:
Unrealized gain (losses) on pension benefit obligations	(2,985)
Unrealized gain (losses) on available-for-sale investments	671	105	(251)
Currency translation adjustments	(40)	(16)
Comprehensive loss	$ (350,048)	$ (236,553)	$ (148,370)
Net loss per share - basic and diluted	$ (7.27)	$ (5.39)	$ (3.92)
Weighted-average number of common shares used in net loss per share - basic and diluted	47,829	43,867	37,793

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total
Beginning Balance at Dec. 31, 2016	$ 33	$ 420,533	$ (18)	$ (207,470)	$ 213,078
Beginning Balance (in shares) at Dec. 31, 2016	33,123,354
Increase (Decrease) in Stockholders' Equity
Initial public offering / Follow on offering, net of issuance costs	$ 10	541,366			541,376
Initial public offering / Follow on offering, net of issuance costs (in shares)	10,009,259
Issuance of common stock under stock plan		4,887			4,887
Issuance of common stock under stock plan (in shares)	428,210
Purchase of common stock under ESPP		476			$ 476
Purchase of common stock under ESPP (in shares)	16,703				16,703
Stock-based compensation expense		12,523			$ 12,523
Unrealized gain (loss) on available-for-sale securities			(251)		(251)
Net loss				(148,119)	(148,119)
Ending Balance at Dec. 31, 2017	$ 43	979,785	(269)	(355,589)	623,970
Ending Balance (in shares) at Dec. 31, 2017	43,577,526
Increase (Decrease) in Stockholders' Equity
Issuance of common stock under stock plan	$ 1	5,586			5,587
Issuance of common stock under stock plan (in shares)	445,622
Purchase of common stock under ESPP		750			$ 750
Purchase of common stock under ESPP (in shares)	13,878				13,878
Stock-based compensation expense		30,534			$ 30,534
Adoption of new accounting standard				(5,314)	(5,314)
Unrealized gain (loss) on available-for-sale securities			105		105
Cumulative translation adjustment			(16)		(16)
Other		35			35
Net loss				(236,642)	(236,642)
Ending Balance at Dec. 31, 2018	$ 44	1,016,690	(180)	(597,545)	$ 419,009
Ending Balance (in shares) at Dec. 31, 2018	44,037,026				44,037,026
Increase (Decrease) in Stockholders' Equity
Initial public offering / Follow on offering, net of issuance costs	$ 4	327,462			$ 327,466
Initial public offering / Follow on offering, net of issuance costs (in shares)	4,662,162
Issuance of common stock under stock plan	$ 1	12,130			12,131
Issuance of common stock under stock plan (in shares)	552,311
Purchase of common stock under ESPP		1,148			$ 1,148
Purchase of common stock under ESPP (in shares)	20,724				20,724
Stock-based compensation expense		54,653			$ 54,653
Unrealized loss on pension benefit obligation			(2,985)		(2,985)
Unrealized gain (loss) on available-for-sale securities			671		671
Cumulative translation adjustment			(40)		(40)
Net loss				(347,694)	(347,694)
Ending Balance at Dec. 31, 2019	$ 49	$ 1,412,083	$ (2,534)	$ (945,239)	$ 464,359
Ending Balance (in shares) at Dec. 31, 2019	49,272,223				49,272,223

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities
Net loss	$ (347,694)	$ (236,642)	$ (148,119)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	5,259	4,246	1,578
Noncash lease expense	4,991
Stock-based compensation	54,653	30,534	12,523
Accretion of premiums and discounts on investments	(4,949)	(4,381)	(320)
Other		(6)	32
Changes in assets and liabilities:
Accounts receivable	(599)	349	(413)
Unbilled accounts receivable	(22,597)	(151)	3,577
Prepaid expenses and other current assets	(3,338)	6,086	(6,853)
Other assets	20	(4,242)	(458)
Accounts payable	1,448	(445)	1,532
Accrued expenses	36,980	24,804	14,597
Deferred revenue	(94)	5,479	(11,861)
Deferred rent		(640)	14,320
Operating lease liabilities	(2,095)
Net cash used in operating activities	(278,015)	(175,009)	(119,865)
Cash flows from investing activities
Purchases of property and equipment	(14,013)	(12,677)	(15,512)
Purchases of investments	(738,387)	(801,236)	(360,835)
Maturities of investments	735,934	652,825	304,000
Net cash used in investing activities	(16,466)	(161,088)	(72,347)
Cash flows from financing activities
Principal payments on loan payable		(1,528)	(2,583)
Payment of offering costs	(284)	(281)	(965)
Proceeds from public offerings of common stock, net of commissions and underwriting discounts	327,750		542,225
Proceeds from issuance of common stock	13,288	6,425	5,271
Other financing activities	(116)	(162)
Net cash provided by financing activities	340,638	4,454	543,948
Net increase (decrease) in cash, cash equivalents, and restricted cash	46,157	(331,643)	351,736
Cash, cash equivalents and restricted cash at beginning of period	73,429	405,072	53,336
Effect of exchange rate changes on cash, cash equivalents and restricted cash	18
Cash, cash equivalents and restricted cash at end of period	119,604	73,429	405,072
Supplemental cash flow information
Public offering costs incurred but unpaid at period end			317
Property and equipment purchases unpaid at period end	958	912	3,947
Cash paid for interest	5	267	151
Cash paid for taxes, net	$ 185	$ 123	$ 37

Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Reconciliation of cash, cash equivalents, and restricted cash
Cash and cash equivalents	$ 113,938	$ 68,064	$ 400,304
Restricted cash included in prepaid expenses and other current assets	500	211	213
Restricted cash	5,166	5,154	4,555
Total cash, cash equivalents, and restricted cash shown in condensed consolidated statements of cash flows	$ 119,604	$ 73,429	$ 405,072

Nature of Business

12 Months Ended

Dec. 31, 2019

Disclosure Text Block

Nature of Business

1. Nature of Business

Blueprint Medicines Corporation (the Company), a Delaware corporation incorporated on October 14, 2008, is a precision therapy company focused on genomically defined cancers, rare diseases and cancer immunotherapy. The Company’s approach is to leverage its novel target discovery engine to systematically and reproducibly identify kinases that are drivers of diseases and to craft highly selective and potent drug candidates that may provide significant and durable clinical responses for patients without adequate treatment options.

The Company is devoting substantially all of its efforts to research and development, initial market development and raising capital. The Company is subject to a number of risks similar to those of other early stage companies, including dependence on key individuals; establishing safety and efficacy in clinical trials for its drug candidates; the need to develop commercially viable drug candidates; competition from other companies, many of which are larger and better capitalized; and the need to obtain adequate additional financing to fund the development of its drug candidates. If the Company is unable to raise capital when needed or on attractive terms, it would be forced to delay, reduce, eliminate or out-license certain of its research and development programs or future commercialization efforts.

On April 2, 2019, the Company closed a follow-on public offering of 4,662,162 shares of its common stock at a price to the public of $74.00 per share, including 608,108 shares of common stock sold by the Company pursuant to the exercise in full by the underwriters of their option to purchase additional shares in connection with the offering. The Company received net proceeds of $327.5 million, after deducting underwriting discounts and commissions and offering expenses.

On January 27, 2020, the Company closed a follow-on public offering of 4,710,144 shares of its common stock at a price to the public of $69.00 per share and received estimated net proceeds of $308.2 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. The Company has also granted the underwriters a 30-day option to purchase up to an additional 706,521 shares of its common stock at the public offering price, less underwriting discounts and commissions.

As of December 31, 2019, the Company had cash, cash equivalents and investments of $548.0 million. Based on the Company’s current operating plans, the Company believes that its existing cash, cash equivalents and investments including the $308.2 million in estimated net proceeds from its January 2020 follow-on public offering, together with anticipated product revenues but excluding any additional potential option fees, milestone payments or other payments under its collaboration or license agreements, will be sufficient to enable it to fund its current operations for at least the next twelve months from the issuance of the financial statements.

Summary of Significant Accounting Policies and Recent Accounting Pronouncements

12 Months Ended

Dec. 31, 2019

Disclosure Text Block

Summary of Significant Accounting Policies and Recent Accounting Pronouncements

2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements

Basis of Presentation

The audited consolidated financial statements of the Company included herein have been prepared in accordance with accounting principles generally accepted in the U.S. (GAAP) as found in the Accounting Standards Codification (ASC) and Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB) and the rules and regulations of the Securities and Exchange Commission (SEC).

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Blueprint Medicines Security Corporation, which is a Massachusetts subsidiary created to buy, sell and hold securities, and Blueprint Medicines (Switzerland) GmbH, Blueprint Medicines (Netherlands) B.V., Blueprint Medicines (UK) Ltd, Blueprint Medicines (Germany) GmbH, Blueprint Medicines (Spain) S.L., Blueprint Medicines (France) SAS and Blueprint Medicines (Italy) S.r.L. All intercompany transactions and balances have been eliminated.

Due to the follow-on public offering completed in April 2019, there was a significant increase in shares outstanding in the year ended December 31, 2019, which impacts the year-over-year comparability of the Company’s net loss per share calculations.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and in developing the estimates and assumptions that are used in the preparation of the financial statements. Management must apply significant judgment in this process. Management’s estimation process often may yield a range of potentially reasonable estimates and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: revenue recognition, operating lease right-of-use assets, operating lease liabilities, stock-based compensation expense, accrued expenses, and income taxes.

Revenue Recognition

Effective January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers (ASC 606), using the modified retrospective transition method. Under this method, results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with ASC Topic 605, Revenue Recognition (ASC 605). The Company only applied the modified retrospective transition method to contracts that were not completed as of January 1, 2018, the effective date of adoption for ASC 606. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

The Company enters into licensing agreements that are within the scope of ASC 606, under which it may exclusively license rights to research, develop, manufacture and commercialize its drug candidates to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, upfront license fees; reimbursement of certain costs; customer option exercise fees; development, regulatory and commercial milestone payments; and royalties on net sales of licensed products.

In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. As part of the accounting for these arrangements, the Company must use significant judgment to determine: (a) the performance obligations based on the determination under step (ii) above; (b) the transaction price under step (iii) above; and (c) the stand-alone selling price for each performance obligation identified in the contract for the allocation of transaction price in step (iv) above. The Company uses judgment to determine whether milestones or other variable consideration, except for royalties and sales-based milestones, should be included in the transaction price as described further below. The transaction price is allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied.

Amounts received prior to revenue recognition are recorded as deferred revenue. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue in the accompanying consolidated balance sheets. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion. If the Company

performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, the Company records a contract asset, excluding any amounts presented as accounts receivable. The Company includes contract assets as unbilled accounts receivable on the consolidated balance sheets. The Company records accounts receivables for amounts billed to the customer for which the Company has an unconditional right to consideration. The Company assesses contract assets and accounts receivable for impairment and, to date, no impairment losses have been recorded.

Exclusive Licenses. If the license to the Company’s intellectual property is determined to be distinct from the other promises or performance obligations identified in the arrangement, the Company recognizes revenue from non-refundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. In assessing whether a promise or performance obligation is distinct from the other promises, the Company considers factors such as the research, development, manufacturing and commercialization capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. In addition, the Company considers whether the collaboration partner can benefit from a promise for its intended purpose without the receipt of the remaining promise, whether the value of the promise is dependent on the unsatisfied promise, whether there are other vendors that could provide the remaining promise, and whether it is separately identifiable from the remaining promise. For licenses that are combined with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The measure of progress, and thereby periods over which revenue should be recognized, are subject to estimates by management and may change over the course of the research and development and licensing agreement. Such a change could have a material impact on the amount of revenue the Company records in future periods.

Research and Development Services. The promises under the Company’s collaboration agreements may include research and development services to be performed by the Company on behalf of the partner. Payments or reimbursements resulting from the Company’s research and development efforts are recognized as the services are performed and presented on a gross basis because the Company is the principal for such efforts. Reimbursements from and payments to the partner that are the result of a collaborative relationship with the partner, instead of a customer relationship, such as co-development activities, are recorded as a reduction to research and development expense.

Customer Options. If an arrangement is determined to contain customer options that allow the customer to acquire additional goods or services, the goods and services underlying the customer options that are not determined to be material rights are not considered to be performance obligations at the outset of the arrangement, as they are contingent upon option exercise. The Company evaluates the customer options for material rights, or options to acquire additional goods or services for free or at a discount. If the customer options are determined to represent a material right, the material right is recognized as a separate performance obligation at the outset of the arrangement. The Company allocates the transaction price to material rights based on the relative standalone selling price, which is determined based on the identified discount and the probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until, at the earliest, the option is exercised.

Milestone Payments. At the inception of each arrangement that includes research or development milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The Company evaluates factors such as the scientific, clinical, regulatory, commercial, and other risks that must be overcome to achieve the particular milestone in making this assessment. There is considerable judgment involved in determining whether it is probable that a significant revenue reversal would not occur. At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of all milestones subject to constraint and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.

Royalties. For arrangements that include sales-based royalties, including milestone payments upon first commercial sales and milestone payments based on a level of sales, which are the result of a customer-vendor

relationship and for which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied. To date, the Company has not recognized any royalty revenue resulting from any of its licensing arrangements.

For a complete discussion of accounting for collaboration revenues, see Note 8, Collaboration and License Agreement.

Prior to January 1, 2018, the Company recognized revenue from license and collaboration agreements in accordance with ASC Topic 605, Revenue Recognition (ASC 605). Accordingly, revenue was recognized when all of the following criteria were met:

(1)

persuasive evidence of an arrangement exists;

(2)

delivery has occurred or services have been rendered;

(3)

the seller’s price to the buyer is fixed or determinable; and

(4)

collectability is reasonably assured.

Amounts received prior to satisfying the revenue recognition criteria were recognized as deferred revenue in the Company’s balance sheets. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date were classified as deferred revenue, current portion. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date were classified as deferred revenue, net of current portion.

When evaluating multiple element arrangements, the Company considered whether the deliverables under the arrangement represented separate units of accounting. This evaluation required subjective determinations and required management to make judgments about the individual deliverables and whether such deliverables were separable from the other aspects of the contractual relationship. In determining the units of accounting, management evaluated certain criteria, including whether the deliverables have standalone value, based on the consideration of the relevant facts and circumstances for each arrangement. The consideration received was allocated among the separate units of accounting using the relative selling price method, and the applicable revenue recognition criteria were applied to each of the separate units. Deliverables were considered separate units of accounting provided that: (i) the delivered item(s) has value to the customer on a stand-alone basis and (ii) if the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. In assessing whether an item had stand-alone value, the Company considered factors such as the research, manufacturing and commercialization capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. In addition, the Company considered whether the collaboration partner could use the deliverable(s) for their intended purpose without the receipt of the remaining element(s), whether the value of the deliverable is dependent on the undelivered item(s) and whether there were other vendors that can provide the undelivered element(s). The Company’s collaboration agreements with Alexion and Roche do not contain a general right of return relative to the delivered item(s).

Arrangement consideration that is fixed or determinable was allocated among the separate units of accounting using the relative selling price method. Then, the applicable revenue recognition criteria in ASC 605-25 were applied to each of the separate units of accounting in determining the appropriate period and pattern of recognition. The Company determined the selling price of a unit of accounting following the hierarchy of evidence prescribed by ASC 605-25. Accordingly, the Company determined the estimated selling price for units of accounting within each arrangement using vendor-specific objective evidence (VSOE) of selling price, if available, third-party evidence (TPE) of selling price if VSOE is not available, or best estimate of selling price (BESP) if neither VSOE nor TPE is available. The Company typically used BESP to estimate the selling price, since it generally did not have VSOE or TPE of selling price for its units of accounting. Determining the BESP for a unit of accounting required significant judgment. In developing the BESP for a unit of accounting, the Company considered applicable market conditions and relevant entity-specific factors, including factors that were contemplated in negotiating the agreement with the customer and estimated costs. The Company validated the BESP for units of accounting by evaluating whether changes in the key assumptions used to determine the BESP would have a significant effect on the allocation of arrangement consideration between multiple units of accounting.

In the event that an element of a multiple element arrangement did not represent a separate unit of accounting, the Company recognized revenue from the combined element over the period over which it expected to fulfill its performance obligations or as undelivered items were delivered, as appropriate, if all of the other revenue recognition criteria in ASC 605-25 were met. If the pattern of performance in which the service was provided to the customer could be determined and objectively measurable performance measures existed, then the Company recognized revenue under the arrangement using the proportional performance method. If there was no discernible pattern of performance and/or objectively measurable performance measures did not exist, then the Company recognized revenue under the arrangement on a straight-line basis over the period the Company was expected to complete its performance obligations. Revenue recognized was limited to the lesser of the cumulative amount of payments received or the cumulative amount of revenue earned, as determined using the straight-line method or proportional performance method, as applicable, as of the period ending date.

The Company’s multiple-element revenue arrangements may include the following:

Exclusive Licenses

The deliverables under the Company’s collaboration agreements may include exclusive licenses to research, develop, manufacture and commercialize licensed products. To account for this element of an arrangement, management evaluated whether an exclusive license had stand-alone value from the undelivered elements based on the consideration of the relevant facts and circumstances of the arrangement, including the research and development capabilities of the collaboration partner. The Company recognized the arrangement consideration allocated to licenses upon delivery of the license if facts and circumstances indicated that the license had stand-alone value from the undelivered elements, which generally included research and development services. The Company deferred arrangement consideration allocated to licenses if facts and circumstances indicated that the delivered license did not have stand-alone value from the undelivered elements.

When management believed a license did not have stand-alone value from the other deliverables to be provided in the arrangement, the Company recognized revenue attributed to the license on a proportional basis over the Company’s contractual or estimated performance period, which was typically the term of the Company’s research and development obligations. If management could not reasonably estimate when the Company’s performance obligation ends, then revenue was deferred until management could reasonably estimate when the performance obligation ended. The periods over which revenue should be recognized were subject to estimates by management and could change over the course of the research and development and licensing agreement.

Research and Development Services

The deliverables under the Company’s collaboration agreements may include research and development services to be performed by the Company on behalf of the partner. Payments or reimbursements resulting from the Company’s research and development efforts were recognized as the services were performed and presented on a gross basis because the Company was the principal for such efforts, so long as there was persuasive evidence of an arrangement, the fee was fixed or determinable, and collection of the related amount was reasonably assured.

Milestone Revenue

The Company’s collaboration agreements may include contingent milestone payments related to specified pre-clinical milestones, development milestones and sales-based commercial milestones.

At the inception of an arrangement that includes milestone payments, the Company evaluated whether each milestone was substantive and at risk to both parties on the basis of the contingent nature of the milestone. This evaluation included an assessment of whether:

●

the consideration was commensurate with either the Company’s performance to achieve the milestone or the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the Company’s performance to achieve the milestone;

●

the consideration related solely to past performance; and

●

the consideration was reasonable relative to all of the deliverables and payment terms within the arrangement.

The Company evaluated factors such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the respective milestone and the level of effort and investment required to achieve the respective milestone in making this assessment. There was considerable judgment involved in determining whether a milestone satisfied all of the criteria required to conclude that a milestone was substantive. Milestones that were not considered substantive were accounted for as license payments and recognized over the remaining period of performance from the date of achievement of the milestone. Milestones that were considered substantive were recognized in their entirety upon successful accomplishment of the milestone with a cumulative catch up adjustments, assuming all other revenue recognition criteria were met.

Collaborative Arrangements

The Company analyzes its collaboration arrangements to assess whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities and therefore within the scope of ASC Topic 808, Collaborative Arrangements (ASC 808). This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and which elements of the collaboration are more reflective of a vendor-customer relationship and therefore within the scope of ASC 606. For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, generally by analogy to ASC 606. Amounts that are owed to collaboration partners are recognized as an offset to collaboration revenues as such amounts are incurred by the collaboration partner. Where amounts owed to a collaboration partner exceed the Company’s collaboration revenues in each quarterly period, such amounts are classified as research and development expense. For those elements of the arrangement that are accounted for pursuant to ASC 606, the Company applies the five-step model described above under ASC 606.

For a complete discussion of accounting for collaboration revenues, see Note 8, Collaboration and License Agreement.

Fair Value Measurements

The Company has certain financial assets and liabilities recorded at fair value which have been classified as Level 1, 2 or 3 within the fair value hierarchy as described in the accounting standards for fair value measurements.

●

Level 1 — Fair values are determined utilizing quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access;

●

Level 2 — Fair values are determined by utilizing quoted prices for identical or similar assets and liabilities in active markets or other market observable inputs such as interest rates, yield curves and foreign currency spot rates; and

●

Level 3 — inputs are unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The Company’s financial assets, which include cash equivalents and marketable securities, have been initially valued at the transaction price, and subsequently revalued at the end of each reporting period, utilizing third-party pricing services. The pricing services utilize industry standard valuation models, including both income and market based approaches, to determine value.

There have been no changes to the valuation methods during the years ended December 31, 2019 and 2018.

Cash and cash equivalents

The Company considers all highly liquid investments purchased with original maturities of 90 days or less from the date of purchase to be cash equivalents. As of December 31, 2019 and 2018, cash equivalents were comprised of money market funds and other debt securities with maturities less than 90 days from the date of purchase. Cash equivalents are reported at fair value.

Available-for-Sale Investments

The Company classifies marketable securities with a remaining maturity when purchased of greater than three months as available-for-sale. Marketable securities with a remaining maturity date greater than one year are classified as non-current. Available-for-sale securities are maintained by an investment manager and may consist of U.S. Treasury securities and U.S. government agency securities. Available-for-sale securities are carried at fair value with the unrealized gains and losses included in other comprehensive income (loss) as a component of stockholders’ equity until realized. Any premium or discount arising at purchase is amortized and/or accreted to interest income and/or expense over the life of the instrument. Realized gains and losses are determined using the specific identification method and are included in other income (expense). If any adjustment to fair value reflects a decline in value of the investment, the Company considers all available evidence to evaluate the extent to which the decline is “other-than-temporary” and, if so, will mark the investment to market through a charge to the Company’s statement of operations and comprehensive loss.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Other comprehensive income (loss) consisted of foreign currency translation adjustments, unrealized gains and losses on available-for-sale investments and unrealized gains and losses on pension benefit obligations.

Research and Development Costs

Expenditures relating to research and development are expensed in the period incurred. Research and development expenses consist of both internal and external costs associated with the development of the Company’s selective cancer therapies and building of its discovery platform. As part of the process of preparing the consolidated financial statements, the Company accrues costs for clinical trial activities based upon estimates of the services received and related expenses incurred that have yet to be invoiced by the contract research organizations or other clinical trial vendors that perform the activities.

In certain circumstances, the Company is required to make nonrefundable advance payments to vendors for goods or services that will be received in the future for use in research and development activities. In such circumstances, the nonrefundable advance payments are deferred and capitalized, even when there is no alternative future use for the research and development, until related goods or services are provided. In circumstances where amounts have been paid in excess of costs incurred, the Company records a prepaid expense.

Property and Equipment, Net

Property and equipment consists of lab equipment, furniture and fixtures, computer equipment, software, and leasehold improvements, all of which is stated at cost. Expenditures for maintenance and repairs are recorded to expense as incurred, whereas major betterments are capitalized as additions to property and equipment. Depreciation is recognized over the estimated useful lives of the assets using the straight-line method.

Impairment of Long-Lived Assets

The Company continually evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long-lived assets may warrant revision or that the carrying value of these assets may be impaired. The Company has not recognized any impairment charges through December 31, 2019.

Stock-Based Compensation Expense

Stock-based compensation awards are accounted for in accordance with ASC Topic 718, Compensation –Stock Compensation (ASC 718). The Company expenses the fair value of stock awards granted to employees and members of the board of directors over the requisite service period, which is typically the vesting period. Compensation cost for stock-based awards issued to employees is measured using the estimated fair value at the grant date and is adjusted to reflect actual forfeitures. Fair value of options granted to employees at the date of grant are estimated using the Black-Scholes option-pricing model that requires management to apply judgment and make estimates, including:

●

expected volatility, which is calculated based on reported volatility data for a representative group of publicly traded companies for which historical information is available. For these analyses, the Company selects companies with comparable characteristics to itself including enterprise value, risk profiles, position within the industry, and with historical share price information sufficient to meet the expected life of the stock-based awards. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of its stock-based awards. The Company intends to consistently apply this process using representative companies until a sufficient amount of historical information regarding the volatility of its own share price becomes available;

●

risk-free interest rate, which is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected term assumption;

●

expected term, which is calculated using the simplified method, as prescribed by the Securities and Exchange Commission Staff Accounting Bulletin No. 107, Share-Based Payment, as the Company has insufficient historical information regarding its stock options to provide a basis for an estimate. Under this approach, the weighted-average expected life is presumed to be the average of the contractual term of ten years and the weighted-average vesting term of the stock options, taking into consideration multiple vesting tranches;

●

dividend yield, which is zero based on the fact that the Company never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

Stock-based awards issued to non-employees, including directors for non-board-related services, are accounted for based on the fair value of such services received or of the intrinsic value of equity instruments issued, whichever is more reliably measured. The measurement date for non-employee awards is the date of grant. Stock-based awards subject to service-based vesting conditions are expensed on a straight-line basis over the vesting period.

The purchase price of common stock under the Company’s 2015 employee stock purchase plan (as amended, the 2015 ESPP) is equal to 85% of the lesser of (i) the fair market value per share of the common stock on the first business day of an offering period and (ii) the fair market value per share of the common stock on the purchase date. The fair value of the discounted purchases made under 2015 ESPP is calculated using the Black-Scholes valuation model. The fair value of the look-back provision plus the 15% discount is recognized as compensation expense over the 180-day purchase period.

Income Taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on differences between the financial statement carrying amounts and the tax bases of the assets and liabilities using the enacted tax rates in effect in the years in which the differences are expected to reverse. A valuation allowance against deferred tax assets is recorded if, based on the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company accounts for uncertain tax positions using a more-likely-than-not threshold for recognizing and resolving uncertain tax positions. The evaluation of uncertain tax positions is based on factors including, but not limited to, changes in the law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity, and changes in facts or circumstances related to a tax position.

Foreign currency translation

The financial statements of each of the Company’s subsidiaries with a functional currency other than the U.S. dollar are translated into U.S. dollars using period-end exchange rates for assets and liabilities, historical exchange rates for stockholders’ equity and weighted average exchange rates for operating results. Translation gains and losses are included in accumulated other comprehensive income (loss) in stockholders’ equity. Foreign currency transaction gains and losses are included in other (expense) income, net in the results of operations.

Reclassifications

Certain items in the prior year’s consolidated financial statements have been reclassified to conform to the current presentation.

Concentrations of Credit Risk and Off-Balance-Sheet Risk

The Company has no significant off-balance-sheet risk such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk primarily consist of cash and cash equivalents, investments, accounts receivable and unbilled account receivables.

The Company maintains its cash, cash equivalents and investments in a custodian account at high quality financial institutions, and as of December 31, 2019 and 2018, substantially all the Company’s cash, cash equivalents and investments were invested in money market funds and U.S. government agency and treasury obligations, and consequently, the Company believes that such funds are subject to minimal credit risk. The Company has adopted an investment policy that limits the amounts the Company may invest in any one type of investment. The Company has not experienced any credit losses and does not believe it is exposed to any significant credit risk on these funds.

Accounts receivables and unbilled accounts receivables represent amounts due from the Company’s collaboration partners. The Company monitors economic conditions to identify facts or circumstances that may indicate that its receivables is at risk of collection.

Segment and Geographic Information

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, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the chief executive officer. The Company and the chief operating decision maker view the Company’s operations and manage its business as one operating segment. The Company operates in the U.S. and Europe. All material long-lived assets of the Company reside in the U.S.

New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed below, the Company does not believe that the adoption of recently issued standards have or may have a material impact on its consolidated financial statements and disclosures.

Leases

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02), a new standard issued to increase transparency and comparability among organizations related to their leasing activities. This standard established a right-of-use model that requires all lessees to recognize right-of-use assets and lease liabilities on their balance sheet that arise from leases as well as provide disclosures with respect to certain qualitative and quantitative

information related to a company's leasing arrangements to meet the objective of allowing users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases.

The FASB subsequently issued the following amendments to ASU 2016-02 that have the same effective date and transition date: ASU No. 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842, ASU No. 2018-10, Codification Improvements to Topic 842, Leases, ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, ASU No. 2018-20, Narrow-Scope Improvement for Lessors, and ASU No. 2019-01, Leases (Topic 842): Codification Improvements. The Company adopted these amendments with ASU 2016-02 (collectively, the new leasing standards, or ASC 842) effective January 1, 2019.

As permitted by the new leasing standards, the Company elected to adopt ASC 842 using the modified retrospective transition approach, with no restatement of prior periods or cumulative adjustment to retained earnings, and therefore, the consolidated balance sheet prior to January 1, 2019 continues to be reported under ASC Topic 840, Leases, (ASC 840), which did not require the recognition of operating lease liabilities on the balance sheet, and is not comparative.

Upon adoption of the new leasing standards under ASC 842, the Company elected the package of transition practical expedients, which allowed it to carry forward prior conclusions related to whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases and initial direct costs for existing leases. The leases that were classified as operating leases under ASC 840 were classified as operating leases under ASC 842, and the accounting for finance leases (capital leases) was substantially unchanged. The Company elected to apply the practical expedient not to separate lease and non-lease components for new and modified leases commencing after adoption. The Company also made an accounting policy election to not recognize leases with an initial term of 12 months or less within the consolidated balance sheets and to recognize those lease payments on a straight-line basis in the consolidated statements of operations over the lease term.

Impact of Adoption of ASC 842

Upon adoption of the new leasing standards under ASC 842, the Company recognized an adjustment of $54.2 million and $74.1 million to operating lease right-of-use assets and the related lease liabilities, respectively. The operating lease liabilities are based on the present value of the remaining minimum lease payments discounted using the Company’s secured incremental borrowing rate at the effective date of January 1, 2019. The adoption of the new leasing standards did not have an impact on the Company’s consolidated statements of operations.

The impact of the adoption of ASC 842 on the consolidated balance sheet was as follows:


	Impact of ASC 842 Adoption on Consolidated Balance Sheet as of January 1, 2019
(in thousands)	Balances without adoption of ASC 842		ASC 842 Adjustment		Balances with adoption of ASC 842
Operating lease right-of-use assets, net	$	—	$	54,245	$	54,245
Total assets		540,124		54,245		594,369
Accrued expenses		51,711		(125)		51,586
Current portion of operating lease liabilities		—		4,730		4,730
Current portion of lease incentive obligation		1,714		(1,714)		—
Total current liabilities		60,323		2,891		63,214
Deferred rent, net of current portion		5,130		(5,130)		—
Operating lease liabilities, net of current portion		—		69,387		69,387
Lease incentive obligation, net of current portion		12,903		(12,903)		—
Total liabilities		121,115		54,245		175,360

Leases Accounting Policy

For contracts entered into on or after the effective date, at the inception of a contract, the Company assesses whether the contract is, or contains, a lease. The assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether the Company has the right to direct the use of the asset. At inception of a lease, the Company allocates the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments.

Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, the lease term is for a major part of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any of these criteria.

For all leases at the lease commencement date, a right-of-use asset and a lease liability are recognized. The right-of-use asset represents the right to use the leased asset for the lease term. The lease liability represents the present value of the lease payments under the lease.

The right-of-use asset is initially measured at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred if any, less any lease incentives received. All right-of-use assets are reviewed for impairment. The lease liability is initially measured at the present value of the lease payments, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the secured incremental borrowing rate for the same term as the underlying lease.

Lease payments included in the measurement of the lease liability comprise the following: the fixed noncancelable lease payments, payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and payments for early termination options unless it is reasonably certain the lease will not be terminated early.

Lease cost for operating leases consists of the lease payments plus any initial direct costs, primarily brokerage commissions, and is recognized on a straight-line basis over the lease term. Included in lease cost are any variable lease payments incurred in the period that are not included in the initial lease liability and lease payments incurred in the period for any leases with an initial term of 12 months or less. Lease cost for finance leases consists of the amortization of the right-of-use asset on a straight-line basis over the lease term and interest expense determined on an amortized cost basis. The lease payments are allocated between a reduction of the lease liability and interest expense.

Credit Losses

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13). The FASB has subsequently issued amendments to ASU 2016-13, which have the same effective date and transition date of January 1, 2020. These standards require that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used, and establish additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, these standards now require allowances to be recorded instead of reducing the amortized cost of the investment.

The Company adopted the new standard on January 1, 2020 and has substantially completed the assessment of the standard based on the composition of its portfolio of financial instruments and current and forecasted economic conditions as of January 1, 2020. The Company has substantially completed its calculations for credit losses and established processes and internal controls that are required to comply with the new credit loss standard and related disclosure requirements. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial position and results of operations.

Debt Securities

In March 2017, the FASB issued ASU No. 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. This standard amends the amortization period for certain purchased callable debt securities held at a premium by shortening the amortization period to the earliest call date. This standard became effective for the Company on January 1, 2019, and was adopted using a modified retrospective transition approach. The adoption of this standard did not result in a significant adjustment to the Company’s marketable debt securities.

Fair Value Measurements

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement. This standard modifies certain disclosure requirements on fair value measurements. This standard was effective for the Company on January 1, 2020. The Company does not expect that the adoption of this standard to have a material impact on the disclosures of its consolidated financial statements.

Collaborative Arrangements

In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606. This standard makes targeted improvements for collaborative arrangements as follows:

●

Clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under ASC 606, when the collaborative arrangement participant is a customer in the context of a unit of account. In those situations, all the guidance in ASC 606 should be applied, including recognition, measurement, presentation and disclosure requirements;

●

Adds unit-of-account guidance to ASC 808, to align with the guidance in ASC 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of ASC 606; and

●

Requires that in a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, presenting that transaction together with revenue recognized under ASC 606 is precluded if the collaborative arrangement participant is not a customer.

The standard is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. A retrospective transition approach is required for either all contracts or only for contracts that are not completed at the date of initial application of ASC 606, with a cumulative adjustment to opening retained earnings. The Company adopted the new standard on January 1, 2020 and does not expect the adoption of this standard to have a significant impact on its consolidated financial position and results of operations.

Internal-Use Software

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, which clarifies the accounting for implementation costs in cloud computing arrangements. The standard is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted, and can be adopted prospectively or retrospectively.

The Company adopted the new standard on January 1, 2020 on a prospective basis and is continuing to establish new processes and internal controls that may be required to comply with the new cloud computing standard. The Company does not expect the adoption of this standard to have a significant impact on its consolidated financial position and results of operations; however, the adoption of this standard will result in an increase in capitalized assets related to qualifying cloud computing arrangement implementation costs incurred after the adoption date.

Cash Equivalents and Investments

12 Months Ended

Dec. 31, 2019

Disclosure Text Block

Cash Equivalents and Investments

3. Cash Equivalents and Investments

Cash equivalents and investments, available-for-sale, consisted of the following at December 31, 2019 and December 31, 2018 (in thousands):


	Amortized		Unrealized		Unrealized		Fair
December 31, 2019	Cost		Gain		Losses		Value
Cash equivalents:
Money market funds	$	113,938	$	—	$	—	$	113,938
Investments, available-for-sale:
U.S. government agency securities		128,156		160		(4)		128,312
U.S. treasury bills		305,360		358		(8)		305,710
Total	$	547,454	$	518	$	(12)	$	547,960


	Amortized		Unrealized		Unrealized		Fair
December 31, 2018	Cost		Gain		Losses		Value
Cash equivalents:
Money market funds	$	68,064	$	—	$	—	$	68,064
Investments, available-for-sale:
U.S. government agency securities		99,940		—		(80)		99,860
U.S. treasury bills		326,172		—		(84)		326,088
Total	$	494,176	$	—	$	(164)	$	494,012

At December 31, 2019 and 2018, the Company held 11 and 54 securities, respectively, that were in an unrealized loss position. The aggregate fair value of securities held by the Company in an unrealized loss position for less than twelve months as of December 31, 2019 and 2018 were $82.1 million and $397.5 million, respectively, and there were no securities held by the Company in an unrealized loss position for more than twelve months. The Company has the intent and ability to hold such securities until recovery. The Company determined that there was no material change in the credit risk of the above investments. As a result, the Company determined it did not hold any investments with an other-than-temporary impairment as of December 31, 2019 and 2018.

As of December 31, 2019, 9 securities with an aggregate fair value of $64.4 million had remaining maturities greater than one year. No available-for-sale securities held as of December 31, 2018 had remaining maturities greater than one year.

Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2019

Disclosure Text Block

Fair Value of Financial Instruments

4. Fair Value of Financial Instruments

The following table summarizes the Company’s cash equivalents and marketable securities measured at fair value on a recurring basis as of December 31, 2019 (in thousands):


			Active		Observable		Unobservable
	December 31,		Markets		Inputs		Inputs
Description	2019		(Level 1)		(Level 2)		(Level 3)
Financial Assets
Cash equivalents:
Money market funds	$	113,938	$	113,938	$	—	$	—
Investments, available-for-sale:
U.S. government agency securities		128,312		—		128,312		—
U.S. treasury bills		305,710		305,710		—		—
Total	$	547,960	$	419,648	$	128,312	$	—

The following table summarizes the Company’s cash equivalents and marketable securities measured at fair value on a recurring basis as of December 31, 2018 (in thousands):


			Active		Observable		Unobservable
	December 31,		Markets		Inputs		Inputs
Description	2018		(Level 1)		(Level 2)		(Level 3)
Financial Assets
Cash equivalents:
Money market funds	$	68,064	$	68,064	$	—	$	—
Investments, available-for-sale:
U.S. government agency securities		99,860		99,860		—		—
U.S. treasury bills		326,088		326,088		—		—
Total	$	494,012	$	494,012	$	—	$	—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Property and Equipment, Net

12 Months Ended

Dec. 31, 2019

Disclosure Text Block

Property and Equipment, Net

6. Property and Equipment, Net

Property and equipment and related accumulated depreciation are as follows (in thousands):


	Estimated
	Useful Life	As of December 31,
	(Years)	2019		2018
Lab equipment	5	$	8,975	$	6,232
Furniture and fixtures	4		3,512		2,369
Computer equipment	3		1,558		1,805
Leasehold improvements	Term of lease		36,627		26,640
Software	3		417		280
Construction-in-progress			956		956
			52,045		38,282
Less: accumulated depreciation and amortization			(13,684)		(8,655)
Total property and equipment, net		$	38,361	$	29,627

Property, plant and equipment are recorded at historical cost, net of accumulated depreciation. Depreciation expense for the years ended December 31, 2019, 2018 and 2017 was $5.3 million, $4.2 million and $1.6 million, respectively.

Accrued Expenses

12 Months Ended

Dec. 31, 2019

Disclosure Text Block

Accrued Expenses

7. Accrued Expenses

Accrued expenses consist of the following (in thousands):


	As of December 31,
	2019		2018
External research and development	$	59,420	$	36,213
Employee compensation		13,519		8,071
Accrued professional fees		12,042		4,423
Property and equipment costs		906		912
Other		2,819		2,092
	$	88,706	$	51,711

Collaboration Agreements

12 Months Ended

Dec. 31, 2019

Disclosure Text Block

Collaboration Agreements

8. Collaboration and License Agreement

Clementia

On October 15, 2019, the Company entered into a license agreement (the Clementia agreement) with Clementia Pharmaceuticals, Inc. (Clementia), a wholly-owned subsidiary of Ipsen S.A. Under the Clementia agreement, the Company granted an exclusive, worldwide, royalty-bearing license to Clementia to develop and commercialize BLU-782, the Company’s oral, highly selective investigational ALK2 inhibitor in Phase 1 clinical development for the treatment of fibrodysplasia ossificans progressive (FOP), as well as specified other compounds related to the BLU-782 program.

The Company received an upfront cash payment of $25.0 million, and subject to the terms of the Clementia agreement, the Company will be eligible to receive up to $510.0 million in milestone and other payments, including a $20.0 million cash milestone payment due in the third quarter of 2020 and up to $490.0 million in other payments and potential development, regulatory and sales-based milestone payments for licensed products. In addition, Clementia is obligated to pay to the Company royalties on aggregate annual worldwide net sales of licensed products at tiered percentage rates ranging from the low- to mid-teens, subject to adjustment in specified circumstances under the Clementia agreement, and to purchase specified manufacturing inventory from the Company for a total of $1.5 million.

Unless earlier terminated in accordance with the terms of the Clementia agreement, the agreement will expire on a country-by-country, licensed product-by-licensed product basis on the date when no royalty payments are or will become due. Clementia may terminate the agreement at any time on or after the second anniversary of the effective date

of the agreement upon at least 12 months’ prior written notice to the Company, which cannot be delivered before the first anniversary of the effective date. Either party may terminate the agreement for the other party’s uncured material breach or insolvency and in certain other circumstances agreed to by the parties. In certain termination circumstances, the Company is entitled to retain specified licenses to be able to continue to exploit the Clementia licensed products.

The Company evaluated the Clementia agreement under ASC 606 as the agreement represented a transaction with a customer. The Company identified the following material promises under the agreement: (1) the exclusive license to develop, manufacture and commercialize BLU-782; (2) the technology transfer of BLU-782 program; (3) the transfer of existing manufacturing inventory; and (4) the transfer of in-process manufacturing inventory. In addition, the Company determined that the exclusive license and technology transfer were not distinct from each other, as exclusive license has limited value without the corresponding technology transfer. As such, for the purposes of ASC 606, the Company determined that these four material promises, described above, should be combined into three performance obligations: (1) the exclusive license and the technology transfer; (2) the transfer of existing manufacturing inventory; and (3) the transfer of in-process manufacturing inventory.

The Company determined that the transaction price as of the outset of the arrangement was $46.5 million, which consists of the upfront amount of $25.0 million, the $20.0 million cash milestone payment due in the third quarter of 2020, the purchase of existing manufacturing inventory of $1.2 million and the purchase of in-process manufacturing inventory of $0.3 million. The other potential milestone payments that the Company is eligible to receive were excluded from the transaction price, as all milestone amounts were fully constrained based on the probability of achievement. The transaction price was allocated to the three performance obligation on a relative stand-alone selling price basis. The Company satisfies the performance obligations upon delivery of the license and completion of the technology transfer and inventory transfers.

As of December 31, 2019, the Company completed the delivery of the license, the technology transfer and the transfer of existing manufacturing inventory and recognized a total of $46.2 million as revenue, of which $20.0 million cash milestone payment due in the third quarter of 2020 was recorded as unbilled accounts receivable. There was no revenue deferred as a contract liability associated with the Clementia agreement as of December 31, 2019 and 2018.

CStone Pharmaceuticals

On June 1, 2018, the Company entered into a collaboration and license agreement (the CStone agreement) with CStone Pharmaceuticals (CStone) pursuant to which the Company granted CStone exclusive rights to develop and commercialize the Company’s drug candidates avapritinib, pralsetinib and fisogatinib, including back-up forms and certain other forms thereof, in Mainland China, Hong Kong, Macau and Taiwan (each, a CStone region and collectively, the CStone territory), either as a monotherapy or as part of a combination therapy. The Company retains exclusive rights to the licensed products outside the CStone territory.

The Company received an upfront cash payment of $40.0 million, and subject to the terms of the CStone agreement, will be eligible to receive up to approximately $346.0 million in milestone payments, including $118.5 million related to development and regulatory milestones and $227.5 million related to sales-based milestones. In addition, CStone will be obligated to pay the Company tiered percentage royalties on a licensed product-by-licensed product basis ranging from the mid-teens to low twenties on annual net sales of each licensed product in the CStone territory, subject to adjustment in specified circumstances. CStone will be responsible for costs related to the development of the licensed products in the CStone territory, other than specified costs related to the development of fisogatinib as a combination therapy in the CStone territory that will be shared by the Company and CStone.

Pursuant to the terms of the CStone agreement, CStone will be responsible for conducting all development and commercialization activities in the CStone territory related to the licensed products, and the Company and CStone have initiated a clinical trial in China evaluating fisogatinib in combination with CS1001, a clinical-stage anti-programmed death ligand-1 immunotherapy being developed by CStone, as a first-line therapy for the treatment of patients with hepatocellular carcinoma.

The CStone agreement will continue on a licensed product-by-licensed product and CStone region-by-CStone region basis until the later of (i) 12 years after the first commercial sale of a licensed product in a CStone region in the CStone territory and (ii) the date of expiration of the last valid patent claim related to the Company’s patent rights or any joint collaboration patent rights for the licensed product that covers the composition of matter, method of use or method

of manufacturing such licensed product in such region. Subject to the terms of the CStone agreement, CStone may terminate the CStone agreement in its entirety or with respect to one or more licensed products for convenience by providing written notice to the Company after June 1, 2019, and CStone may terminate the CStone agreement with respect to a licensed product for convenience at any time by providing written notice to the Company following the occurrence of specified events. In addition, the Company may terminate the CStone agreement under specified circumstances if CStone or certain other parties challenges the Company’s patent rights or any joint collaboration patent rights or if CStone or its affiliates do not conduct any material development or commercialization activities with respect to one or more licensed products for a specified period of time, subject to specified exceptions. Either party may terminate the CStone agreement for the other party’s uncured material breach or insolvency. In certain termination circumstances, the parties are entitled to retain specified licenses to be able to continue to exploit the licensed products, and in the event of termination by CStone for the Company’s uncured material breach, the Company will be obligated to pay CStone a low single digit percentage royalty on a licensed product-by-licensed product basis on annual net sales of such licensed product in the CStone territory, subject to a cap and other specified exceptions.

The Company evaluated the CStone agreement to determine whether it is a collaborative arrangement for purposes of ASC 808. The Company determined that there were two material components of the CStone agreement: (i) the CStone territory-specific license and related activities in the CStone territory, and (ii) the parties’ participation in global development of the licensed products. The Company concluded that the CStone territory-specific license and related activities in the CStone territory are not within the scope of ASC 808 because the Company is not exposed to significant risks and rewards. The Company concluded that CStone is a customer with regard to the component that includes the CStone territory-specific license and related activities in CStone territory, which include manufacturing. For the parties’ participation in global development of the licensed products, the Company concluded that the research and development activities and cost-sharing payments related to such activities are within the scope of ASC 808 as both parties are active participants exposed to the risk of the activities under the CStone agreement. The Company concluded that CStone is not a customer with regard to the global development component in the context of the CStone agreement. Therefore, payments received by the Company for global development activities under the CStone agreement, including manufacturing, will be accounted for as a reduction of related expenses.

A summary of manufacturing services related to the global development activities during the years ended December 31, 2019 and 2018 is as follows (in thousands):

The Company evaluated the CStone territory-specific license and related activities in the CStone territory under ASC 606 as these transactions are considered transactions with a customer. The Company identified the following material promises under the arrangement: (1) the three exclusive licenses granted in the CStone territory to develop, manufacture and commercialize the three licensed products; (2) the initial know-how transfer for each licensed product; (3) manufacturing activities related to development and commercial supply of the licensed products; (4) participation in the joint steering committee (JSC) and joint project teams (JPT); (5) regulatory responsibilities; and (6) manufacturing technology and continuing know-how transfers. The Company determined that each licensed product is distinct from the other licensed products. In addition, the Company determined that the exclusive licenses and initial know-how transfers for each licensed product were not distinct from each other, as each exclusive license has limited value without the corresponding initial know-how transfer. For purposes of ASC 606, the Company determined that that participation on the JSC and JPTs, the regulatory responsibilities and the manufacturing technology and continuing know-how transfers are qualitatively and quantitatively immaterial in the context of the CStone agreement and therefore are excluded from performance obligations. As such, the Company determined that these six material promises, described above, should be combined into one performance obligation for each of the three candidates.

The Company evaluated the provision of manufacturing activities related to development and commercial supply of the licensed products as an option for purposes of ASC 606 to determine whether these manufacturing activities provide CStone with any material rights. The Company concluded that the manufacturing activities were not issued at a significant and incremental discount, and therefore do not provide CStone with any material rights. As such, the manufacturing activities are excluded as performance obligations at the outset of the arrangement.

Based on these assessments, the Company identified three distinct performance obligations at the outset of the CStone agreement, which consists of the following for each licensed product: (1) the exclusive license and (2) the initial know-how transfer.

Under the CStone agreement, in order to evaluate the transaction price for purposes of ASC 606, the Company determined that the upfront amount of $40.0 million constituted the entirety of the consideration to be included in the transaction price as of the outset of the arrangement, which was allocated to the three performance obligations. The potential milestone payments that the Company is eligible to receive were excluded from the transaction price, as all milestone amounts were fully constrained based on the probability of achievement. The Company satisfied the performance obligations upon delivery of the licenses, initial know-how transfers and product trademark and recognized the upfront payment of $40.0 million as revenue during the second quarter of 2018.

The Company will reevaluate the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur, and if necessary, the Company will adjust its estimate of the transaction price, and any addition to the transaction price would be recognized as revenue when it becomes probable that inclusion would not lead to a significant revenue reversal. During the year ended December 31, 2019, several development and regulatory milestones were achieved and the associated aggregate cash consideration of $12.0 million for such milestones was added to the estimated transaction price for the CStone agreement.

A summary of revenue recognized under the CStone agreement during the years ended December 31, 2019 and 2018 is as follows (in thousands):


	Year Ended
	December 31,
	2019		2018
License milestone revenue	$	12,000	$	40,000
Manufacturing services related to territory-specific activities		144		—
Total CStone collaboration revenue	$	12,144	$	40,000

The following table presents the receivables including the contract assets associated with the CStone agreement as of December 31, 2019 and 2018 (in thousands):


	As of December 31,
	2019		2018
Accounts receivables	$	663	$	—
Unbilled accounts receivables	$	2,749	$	151

There was no revenue deferred as a contract liability associated with the CStone agreement as of December 31, 2019 and 2018.

Roche

In March 2016, the Company entered into a collaboration and license agreement (as amended, Roche agreement) with F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc. (collectively, Roche) for the discovery, development and commercialization of small molecule therapeutics targeting kinases believed to be important in cancer immunotherapy, as single products or possibly in combination with other therapeutics. As a result of an amendment to the Roche agreement in the fourth quarter of 2019, the parties are currently conducting activities for up to four programs under the collaboration.

Under the Roche agreement, Roche was initially granted up to five option rights to obtain an exclusive license to exploit products derived from the collaboration programs in the field of cancer immunotherapy. Such option rights are triggered upon the achievement of Phase 1 proof-of-concept. For up to two collaboration programs, if Roche exercises its option, Roche will receive worldwide, exclusive commercialization rights for the licensed products. For up to two collaboration programs, if Roche exercises its option, the Company will retain commercialization rights in the U.S. for

the licensed products, and Roche will receive commercialization rights outside of the U.S. for the licensed products. The Company will also retain worldwide rights to any products for which Roche elects not to exercise its applicable option.

Prior to Roche’s exercise of an option, the Company will have the lead responsibility for drug discovery and pre-clinical development of all collaboration programs. In addition, the Company will have the lead responsibility for the conduct of all Phase 1 clinical trials other than those Phase 1 clinical trials for any product in combination with Roche’s portfolio of therapeutics, for which Roche will have the right to lead the conduct of such Phase 1 clinical trials. Pursuant to the Roche agreement, the parties will share the costs of Phase 1 development for each collaboration program. In addition, Roche will be responsible for post-Phase 1 development costs for each licensed product for which it retains global commercialization rights, and the Company and Roche will share post-Phase 1 development costs for each licensed product for which the Company retains commercialization rights in the U.S.

The Company received an upfront cash payment of $45.0 million in March 2016 upon execution of the Roche agreement, and subject to the terms of the Roche agreement, the Company will be eligible to receive up to approximately $940.0 million in contingent option fees and milestone payments related to specified research, pre-clinical, clinical, regulatory and sales-based milestones. Of the total contingent payments, up to approximately $190.0 million are for option fees and milestone payments for research, pre-clinical and clinical development events prior to licensing across all four potential collaboration programs.

In addition, for any licensed product for which Roche retains worldwide commercialization rights, the Company will be eligible to receive tiered royalties ranging from low double-digits to high-teens on future net sales of the licensed product. For any licensed product for which the Company retains commercialization rights in the U.S., the Company and Roche will be eligible to receive tiered royalties ranging from mid-single-digits to low double-digits on future net sales in the other party’s respective territories in which it commercializes the licensed product. The upfront cash payment and any payments for milestones, option fees and royalties are non-refundable, non-creditable and not subject to set-off.

The Roche agreement will continue until the date when no royalty or other payment obligations are or will become due, unless earlier terminated in accordance with the terms of the Roche agreement. Prior to its exercise of its first option, Roche may terminate the Roche agreement at will, in whole or on a collaboration target-by-collaboration target basis, upon 120 days’ prior written notice to the Company. Following its exercise of an option, Roche may terminate the Roche agreement at will, in whole, on a collaboration target-by-collaboration target basis, on a collaboration program-by-collaboration program basis or, if a licensed product has been commercially sold, on a country-by-country basis, (i) upon 120 days’ prior written notice if a licensed product has not been commercially sold or (ii) upon 180 days’ prior written notice if a licensed product has been commercially sold. Either party may terminate the Roche agreement for the other party’s uncured material breach or insolvency and in certain other circumstances agreed to by the parties. In certain termination circumstances, the Company is entitled to retain specified licenses to be able to continue to exploit the licensed products.

The Company assessed this arrangement in accordance with ASC 606 upon the adoption of the new standard on January 1, 2018, and concluded that the contract counterparty, Roche, is a customer prior to the exercise, if any, of an option by Roche. The Company identified the following material promises under the arrangement: (1) a non-transferable, sub-licensable and non-exclusive license to use the Company’s intellectual property and collaboration compounds to conduct research activities; (2) research and development activities through Phase 1 clinical trials under the research plan; (3) five option rights for licenses to develop, manufacture, and commercialize the collaboration targets; (4) participation on a joint research committee (JRC) and joint development committee (JDC); and (5) regulatory responsibilities under Phase 1 clinical trials. The Company determined that the license and research and development activities were not distinct from another, as the license has limited value without the performance of the research and development activities. Participation on the JRC and JDC to oversee the research and development activities was determined to be quantitatively and qualitatively immaterial and therefore is excluded from performance obligations. The regulatory responsibilities related to filings and obtaining approvals related to the drugs that may result from each program do not represent separate performance obligations based on their dependence on the research and development efforts. As such, the Company determined that these promises should be combined into a single performance obligation.

The Company evaluated the option rights for licenses to develop, manufacture, and commercialize the collaboration targets to determine whether it provides Roche with any material rights. The Company concluded that the

options were not issued at a significant and incremental discount, and therefore do not provide material rights. As such, they are excluded as performance obligations at the outset of the arrangement.

Based on these assessments, the Company identified one performance obligation at the outset of the Roche agreement, which consists of: (1) the non-exclusive license; (2) the research and development activities through Phase 1; and (3) regulatory responsibilities under Phase 1 clinical trials.

Under the Roche agreement, in order to evaluate the appropriate transaction price, the Company determined that as of January 1, 2018, the upfront amount of $45.0 million constituted the entirety of the consideration to be included in the transaction price as of the outset of the arrangement, which was allocated to the single performance obligation. The option exercise payments that may be received are excluded from the transaction price until each customer option is exercised as it was determined that the options are not material rights. The potential milestone payments that the Company is eligible to receive prior to the exercise of the options were initially excluded from the transaction price, as all milestone amounts were fully constrained based on the probability of achievement. The Company will reevaluate the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur, and, if necessary, adjust its estimate of the transaction price.

In June 2018 and October 2019, the Company achieved a $10.0 million research and milestone payment and an $8.0 million research milestone payment under the Roche agreement. These amounts were added to the estimated transaction price and allocated to the existing performance obligation as it became probable that a significant reversal of cumulative revenue would not occur for each of the research milestones achieved.

The Company recognizes revenue associated with the performance obligation as the research and development services are provided using an input method, according to the costs incurred as related to the research and development activities on each program and the costs expected to be incurred in the future to satisfy the performance obligation. The transfer of control occurs over this time period and, in management’s judgment, is the best measure of progress towards satisfying the performance obligation. The amounts received that have not yet been recognized as revenue are deferred as a contract liability on the Company’s consolidated balance sheet and will be recognized over the remaining research and development period until the performance obligation is satisfied.

During the year ended December 31, 2019, as a result of an amendment to the Roche agreement, a reduction in the costs expected to be incurred in the future to satisfy certain performance obligations under the collaboration became probable, and accordingly, the Company recorded a cumulative catch-up of $1.6 million to revenue; In addition, due to the achievement of the $8.0 million research milestone in October 2019, the Company recognized another cumulative catch-up of $1.6 million to revenue.

A summary of revenue recognized under the Roche agreement during the years ended December 31, 2019 and 2018 is as follows (in thousands):


	Year Ended
	December 31,
	2019		2018
Roche collaboration research and development services revenue	$	8,165	$	4,521

During the years ended December 31, 2019 and 2018, the Company recognized the following revenue due to the changes in the contract liability balances (in thousands):


	Year Ended
	December 31,
	2019		2018
Amounts included in the contract liability at the beginning of the period	$	4,578	$	4,277

As of December 31, 2019, the Company had revenue deferred as a contract liability related to the Roche agreement of $46.1 million, of which $6.2 million was included in current liabilities, and the research and development services related to the performance obligation are expected to be performed over a remaining period of approximately 5.3 years. As of December 31, 2018, the Company had revenue deferred as a contract liability related to the Roche agreement of $46.2 million, of which $3.6 million was included in current liabilities.

Alexion

In March 2015, the Company entered into a research, development and commercialization agreement (Alexion agreement) with Alexion to research, develop and commercialize one or more drug candidates targeting the ALK2 kinase for the treatment of FOP. Since the Alexion agreement was terminated in October 2017, the Company recognized revenue from the agreement in accordance with ASC 605.

Prior to the termination, the Company had received an aggregate amount of $18.8 million in upfront and milestone payments, which consisted of a $15.0 million non-refundable upfront payment upon execution of the Alexion agreement and an aggregate amount of $3.8 million in pre-clinical milestone payments. The Company was not entitled to receive payment from Alexion for any research and development expenses incurred after October 24, 2017 and as a result, the Company did not recognize any revenue under the Alexion agreement for the year ended December 31, 2018.

During the year ended December 31, 2017, the Company recognized $16.2 million revenue under the Alexion agreement, of which $9.5 million related to reimbursable research and development costs and $6.7 million related to the remaining portion of the upfront and milestone payments previously received.

Stock-based Compensation

12 Months Ended

Dec. 31, 2019

Disclosure Text Block

Stock-based Compensation

10. Stock-based Compensation

2015 Stock Option and Incentive Plan

In 2015, the Company’s board of directors and stockholders approved the 2015 Stock Option and Incentive Plan (the 2015 Plan), which replaced the Company’s 2011 Stock Option and Grant Plan, as amended (the 2011 Plan). The 2015 Plan includes incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, performance share awards and cash-based awards. The Company initially reserved a total of 1,460,084 shares of common stock for the issuance of awards under the 2015 Plan. The 2015 Plan provides that the number of shares reserved and available for issuance under the 2015 Plan will be cumulatively increased on January 1 of each calendar year by 4% of the number of shares of common stock issued and outstanding on the immediately preceding December 31 or such lesser amount as specified by the compensation committee of the board of directors. For the calendar years beginning January 1, 2019 and 2020, the number of shares reserved for issuance under the 2015 Plan was increased by 1,761,481 and 1,970,888 shares, respectively. In addition, the total number of shares reserved for issuance is subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. At December 31, 2019, there were 1,364,378 shares available for future grant under the 2015 Plan.

Stock-based Compensation Expense

The Company recognized stock-based compensation expense totaling $54.7 million, $30.5 million and $12.5 million for the year ended December 31, 2019, 2018 and 2017, respectively.

Stock-based compensation expense by award type included within the consolidated statements of operations and comprehensive loss was as follows (in thousands):


		Year Ended

		December 31,
		2019		2018		2017
Stock options	$	47,726	$	30,095	$	12,317
Restricted stock units		6,445		167		—
Restricted stock awards		—		—		2
Employee stock purchase plan		482		272		204
Total stock-based compensation expense	$	54,653	$	30,534	$	12,523

Stock-based compensation expense by classification within the consolidated statements of operations and comprehensive loss is as follows (in thousands):


	Year Ended
	December 31,
	2019		2018		2017
Research and development	$	28,596	$	17,019	$	6,296
General and administrative		26,057		13,515		6,227
Total stock-based compensation expense	$	54,653	$	30,534	$	12,523

At December 31, 2019, there was $160.6 million of total unrecognized compensation cost related to non-vested stock awards, which is expected to be recognized over a weighted-average period of 2.9 years. Due to an operating loss, the Company does not record tax benefits associated with stock-based compensation or option exercises. Tax benefit will be recorded when realized.

Stock Options

Stock options granted by the Company generally vest ratably over four years, with a one-year cliff for new employee awards and are exercisable from the date of grant for a period of ten years. The fair value of each option issued to employees was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:



	Year Ended December 31,
	2019		2018		2017
Risk-free interest rate	2.21	%	2.77	%	2.07	%
Expected dividend yield	—	%	—	%	—	%
Expected term (years)	6.0		6.0		6.0
Expected stock price volatility	63.83	%	69.08	%	74.58	%

The following table summarizes the stock option activity for the year ended December 31, 2019:


		Weighted-		Remaining	Aggregate
		Average		Contractual	Intrinsic
		Exercise		Life	Value(1)
	Shares	Price		(in Years)	(in thousands)
Outstanding at December 31, 2018	4,557,800	$	44.64	7.96	$	86,675
Granted	2,063,081		82.20
Exercised	(544,065)		22.30
Canceled	(281,106)		71.24
Outstanding at December 31, 2019	5,795,710	$	58.82	7.69	$	134,409
Exercisable at December 31, 2019	2,755,865	$	40.20	6.56	$	111,895

(1)	Intrinsic value represents the amount by which the fair market value as of December 31, 2019 of the underlying common stock exceeds the exercise price of the option.

The weighted-average grant date fair value of options granted in the years ended December 31, 2019, 2018 and 2017 was $48.96, $49.40 and $28.04, respectively. The total intrinsic value of options exercised in the years ended December 31, 2019, 2018, and 2017 was $33.8 million, $29.4 million, and $17.8 million, respectively.

At December 31, 2019, the total unrecognized compensation expense related to unvested stock option awards was $132.0 million, which is expected to be recognized over a weighted-average period of approximately 2.8 years.

Restricted stock units

Restricted stock units granted by the Company generally vest ratably over four years. The following table summarizes the restricted stock units activity for the year ended December 31, 2019:


		Weighted-Average
		Grant Date
	Shares	Fair Value
Unvested shares at December 31, 2018	36,868	$	66.28
Granted	413,499		83.58
Vested	(8,246)		66.55
Forfeited	(22,366)		81.57
Unvested shares at December 31, 2019	419,755	$	82.50

The Company started to grant restricted stock units to employees in June 2018. The total fair value of restricted stock units vested during the year ended December 31, 2019 was $0.7 million and there were no restricted stock units vested during the year ended December 31, 2018. At December 31, 2019, the total unrecognized compensation expense related to unvested restricted stock units was $28.6 million, which is expected to be recognized over a weighted-average period of approximately 3.2 years.

Restricted Stock Awards

Restricted stock awards granted by the Company generally vest ratably over four years. The Company did not grant restricted stock awards to any employees or directors during the years ended December 31, 2019 or 2018. Outstanding restricted stock awards previously granted to employees and directors were fully vested as of December 31,

2017. The total fair value of restricted stock awards that vested during the years ended December 31, 2017 was $0.1 million.

2015 Employee Stock Purchase Plan

In 2015, the Company’s board of directors and stockholders approved the 2015 ESPP, which became effective upon the closing of the IPO in May 2015. The Company initially reserved a total of 243,347 shares of common stock for issuance under the 2015 ESPP. The 2015 ESPP provides that the number of shares reserved and available for issuance under the 2015 ESPP will be cumulatively increased on January 1 of each calendar years by 1% of the number of shares of common stock issued and outstanding on the immediately preceding December 31 or such lesser amount as specified by the compensation committee of the board of directors. For the calendar years beginning January 1, 2019 and 2020, the number of shares reserved for issuance under the 2015 ESPP was increased by 440,370 and 492,722 shares, respectively. The Company issued 20,724, 13,878, and 16,703 shares under the ESPP during the years ended December 31, 2019, 2018 and 2017, respectively.

Net Loss per Share

12 Months Ended

Dec. 31, 2019

Disclosure Text Block

Net Loss per Share

11. Net Loss per Share

Basic net loss per share is calculated by dividing net loss by the weighted average shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period. For purposes of the dilutive net loss per share calculation, stock options, unvested restricted stock units and ESPP shares are considered to be common stock equivalents but are excluded from the calculation of diluted net loss per share, as their effect would be anti-dilutive; therefore, basic and diluted net loss per share were the same for all periods presented as a result of the Company’s net loss.

The following common stock equivalents were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect.


	Year Ended
	December 31,
	2019	2018	2017
Stock options	5,795,710	4,557,800	3,304,166
Restricted stock units	419,755	36,868	—
ESPP shares	13,621	10,275	5,663
Total	6,229,086	4,604,943	3,309,829

Income Taxes

12 Months Ended

Dec. 31, 2019

Disclosure Text Block

Income Taxes

13. Income Taxes

A reconciliation of the U.S. statutory income tax rate to the Company’s effective tax rate is as follows for the years ended December 31, 2019, 2018 and 2017.


	Year Ended
	December 31,
	2019		2018		2017
Federal income tax (benefit) at statutory rate	21.00	%	21.00	%	34.00	%
Permanent differences	1.11		1.71		0.49

Federal research and development credits	0.77		1.79		0.97
Federal orphan drug credits	6.90		18.06		6.40
State income tax, net of federal benefit	7.46		7.08		5.40
Other	2.13		0.04		0.83
Foreign rate differential	(0.03)		—		—
Deferred rate change	(0.08)		—		(27.58)
Change in valuation allowance	(39.26)		(49.68)		(20.54)
Effective income tax rate	—	%	—	%	(0.03)	%

The Company had net losses in all periods presented and therefore has not recognized any federal or state income tax expense.

During 2018, the Company completed a detailed study of its research and development credits and orphan drug credit carryforwards. As a result, the Company adjusted its deferred tax asset balances and the impacts are included on the Federal research and developmental credit and Federal orphan drug credit lines in the effective rate reconciliation above. The impacts of the increases in the deferred tax asset balances have been completely offset by an increase in the Company's valuation allowance which is included in the change in valuation allowance line on the reconciliation above.

The Company’s deferred tax assets and liabilities consist of the following:


	Year Ended
	December 31,
	2019		2018		2017
Deferred tax assets:
Net operating loss carryforwards	$	219,935	$	127,421	$	78,829
Research and development credit carryforwards		19,240		13,714		5,950
Orphan drug credit carryforwards		92,538		68,536		14,574
Accrued expenses and other		25,842		12,248		4,660
Deferred revenue		10,971		10,320		9,664
Deferred lease incentive		—		3,993		4,462
Deferred rent		26,196		1,436		1,142
Total gross deferred tax asset		394,722		237,668		119,281
Deferred tax liability
Depreciation		(4,474)		(4,162)		(4,801)
Right of use assets		(19,869)		—		—
Debt discount		—		—		(2)
Valuation allowance		(370,379)		(233,506)		(114,478)
Net deferred tax asset	$	—	$	—	$	—

Management has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets and has determined that it is more likely than not that the Company will not recognize the benefits of its federal and state deferred tax assets, and as a result, a valuation allowance of $370.4 million, $233.5 million and $114.5 million has been established at December 31, 2019, 2018 and 2017, respectively. The change in the valuation allowance was $136.9 million, $119.0 million and $30.4 million for the years ended December 31, 2019, 2018 and 2017, respectively. The Company has incurred net operating losses (NOL) since inception. At December 31, 2019, the Company had federal and state NOL carryforwards of $802.1 million and $817.4 million, respectively, which expire beginning in 2030. As of December 31, 2019, the Company had federal and state research and development tax credit carryforwards of $11.2 million and $9.4 million, respectively, which expire beginning in 2027. As of December 31, 2019, the Company had federal orphan drug credits of $92.5 million, which expire beginning in 2035 and state investment tax credits of $0.8 million, which expire beginning in 2021.

The Internal Revenue Code of 1986, as amended (the Code), provides for a limitation of the annual use of net operating losses and other tax attributes (such as research and development tax credit carryforwards) following certain

ownership changes (as defined by the Code) that could limit the Company’s ability to utilize these carryforwards. At this time, the Company has not completed a study to assess whether an ownership change under Section 382 of the Code has occurred, or whether there have been multiple ownership changes since the Company’s formation. The Company may have experienced ownership changes, as defined by the Code, as a result of past financing transactions. Accordingly, the Company’s ability to utilize the aforementioned carryforwards may be limited. In addition, U.S. tax laws limit the time during which these carryforwards may be applied against future taxes. Therefore, the Company may not be able to take full advantage of these carryforwards for federal or state income tax purposes.

Interest and penalty charges, if any, related to unrecognized tax benefits would be classified as income tax expense in the accompanying statements of operations and comprehensive loss. As of December 31, 2019 and 2018, the Company has no accrued interest related to uncertain tax positions. As of December 31, 2018, the Company was open to examination in the U.S. federal and certain state jurisdictions for all of the Company’s tax years since the net operating losses may potentially be utilized in future years to reduce taxable income. Since the Company is in a loss carryforward position, it is generally subject to examination by the U.S. federal, state, and local income tax authorities for all tax years in which a loss carryforward is available.

On December 22, 2017, H.R.1, known as the Tax Cuts and Jobs Act, was enacted. This new law did not have a significant impact on the Company’s consolidated financial statements for the year ended December 31, 2017 because it maintains a valuation allowance on the majority of its net operating losses and other deferred tax assets. However, the reduction of the U.S. federal corporate tax rate from 35% to 21% resulted in increases to the amounts reflected in “Deferred rate change” in the Company’s tax reconciliation table above for the year ended December 31, 2017 compared to the year ended December 31, 2016. The change in the U.S. federal corporate tax rate, which was effective January 1, 2018, was also reflected in the Company’s deferred tax table above.

As permitted by SEC Staff Accounting Bulletin 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act, the Company recorded provisional estimates during the year ended December 31, 2018, and has subsequently finalized its accounting analysis based on the guidance, interpretations, and data available as of December 31, 2019. Adjustments made in the fourth quarter of 2018 upon finalization of its accounting analysis were not material to the Company’s consolidated financial statements.

Leases

12 Months Ended

Dec. 31, 2019

Disclosure Text Block

Leases

14. Leases

38 Sidney Street

On February 12, 2015, the Company entered into a lease for approximately 38,500 rentable square feet of office and laboratory space at 38 Sidney Street in Cambridge, Massachusetts, which the Company gained control over on June 15, 2015, and occupancy commenced in October 2015. The initial term of the lease agreement will expire on October 31, 2022, unless terminated sooner. The Company has an option to extend the lease for five additional years. The lease has a total commitment of $17.8 million over the initial seven-year term. The Company has agreed to pay an initial annual base rent of approximately $2.3 million, which rises periodically until it reaches approximately $2.8 million. The lease provided the Company with an allowance for leasehold improvements of $4.3 million. Prior to adoption of ASC 842, the Company recorded rent expense on a straight-line basis through the end of the lease term and the associated deferred rent on the consolidated balance sheet. The Company also recorded the leasehold improvement incentives as a reduction to rent expense ratably over the lease term, and the balance from the leasehold improvement incentives was included in lease incentive obligations on the consolidated balance sheet as of December 31, 2018. The lease agreement required the Company to pay a security deposit of $1.3 million, of which $0.2 million was released in February 2018 and February 2019, respectively. The remaining $0.9 million is recorded in restricted cash on the Company’s consolidated balance sheet as of December 31, 2019.

In the first quarter of 2018, the Company subleased its former corporate headquarters at 38 Sidney Street, Cambridge, Massachusetts through October 31, 2020. Subject to the terms of the sublease agreement and the master lease agreement, including a right of recapture by the Company, the sublessee has the option to extend the sublease through October 31, 2022. The sublease includes a total commitment by the sublessee of $8.2 million over the 32 month term of the sublease agreement. During the 32 month term, the Company will be responsible for total rental payments of $6.9 million and an additional $0.7 million in total payments related to the Company’s profit on the sublease income which are payable by the Company to the landlord. As of December 31, 2019, the remaining minimum sublease rental commitment by the sublessee was $2.6 million.

45 Sidney Street

On April 28, 2017, the Company entered into a lease agreement for approximately 99,833 rentable square feet of office and laboratory space located at 45 Sidney Street in Cambridge, Massachusetts. The initial term of the lease agreement commenced on October 1, 2017 and will expire on November 30, 2029, unless terminated sooner. The lease agreement also provides the Company with an option to extend the lease agreement for two consecutive five-year periods at the then fair market annual rent, as defined in the lease agreement.

During the initial term of the lease agreement, the Company has agreed to pay an initial annual base rent of approximately $7.7 million, which increases annually until it reaches approximately $10.6 million in the last year of the initial term. The lease provided the Company with a tenant improvement allowance of approximately $14.2 million for improvements to be made to the premises. Prior to adoption of ASC 842, the Company recorded rent expense on a straight-line basis through the end of the lease term and the associated deferred rent on the consolidated balance sheet. The Company also recorded the leasehold improvement incentives as a reduction to rent expense ratably over the lease term, and the balance from the leasehold improvement incentives was included in lease incentive obligations on the consolidated balance sheet as of December 31, 2018. The lease agreement required the Company to pay a security deposit of $3.5 million, of which $3.0 million is recorded in restricted cash on the Company’s consolidated balance sheet as of December 31, 2019, and $0.5 million was recorded in prepaid and other current assets, which was subsequently released in January 2020.

On September 19, 2018, the Company entered into an amendment to the lease agreement for its office and laboratory space located at 45 Sidney Street in Cambridge, Massachusetts to expand the rentable square footage from approximately 99,833 square feet to approximately 139,216 square feet. The initial term of the lease with respect to the expansion premises commenced on March 1, 2019 and will expire on November 30, 2029, unless terminated sooner. Pursuant to the lease amendment, the rent commencement date for the expansion premises was July 1, 2019.

The Company has agreed to pay an initial annual base rent of approximately $3.2 million for the expansion premises, which increases annually until it reaches approximately $4.2 million in the last year of the initial term for the expansion premises. Pursuant to the lease amendment, the landlord has also agreed to provide the Company with a tenant improvement allowance of approximately $3.2 million for improvements to be made to the expansion premises. The lease amendment required the Company to pay an additional security deposit of $0.8 million to the landlord for the expansion premises, which is recorded in restricted cash on the Company’s consolidated balance sheet as of December 31, 2019.

The lease agreements do not contain residual value guarantees and the components of lease cost for the year ended December 31, 2019 were as follows (in thousands):


Operating leases:	Year Ended December 31, 2019
Lease cost	$	16,162
Sublease income		(2,834)
Net lease cost	$	13,328

For the years ended December 31, 2018 and 2017 rent expenses under ASC 840, net of sublease income, was $7.3 million and $6.3 million, respectively.

The Company has not entered into any material short-term leases or financing leases as of December 31, 2019.

Supplemental cash flow information related to leases for the year ended December 31, 2019 was as follows (in thousands):


	Year Ended December 31, 2019

Cash paid for amounts included in the measurement of lease liabilities:	$	12,247

Lease liabilities arising from obtaining right-of-use assets:

Operating leases

23,300

The weighted average remaining lease term and weighted average discount rate of the operating leases are as follows:



Weighted average remaining lease term in years		9.30
Weighted average discount rate		8.2%

Future minimum lease payments under non-cancellable leases as of December 31, 2019 were as follows (in thousands):



2020		14,341
2021		14,764
2022		14,719
2023		12,746
2024		13,121
Thereafter		70,350
Total future minimum lease payments (1)		140,041
Less imputed interest		(44,093)
Total	$	95,948

(1)

Minimum lease payments have not been reduced by minimum sublease rentals of $2.4 million due in the future under the Company’s non-cancelable sublease for the office and laboratory space located at 38 Sidney Street, Cambridge, Massachusetts. The minimum lease payments above do not include any related common area maintenance charges or real estate taxes.

Employee Benefit Plans

12 Months Ended

Dec. 31, 2019

Disclosure Text Block

Employee Benefit Plans

15. Employee Benefit Plans

The Company sponsors various retirement and pension plans. The estimates of liabilities and expenses for these plans incorporate a number of assumptions, including expected rates of return on plan assets and interest rates used to discount future benefits.

401(k) Savings Plan

The Company maintains a 401(k) plan for employees (the 401(k) Plan). The 401(k) Plan is intended to qualify under Section 401(k) of the Code, so that contributions to the 401(k) Plan by employees or by the Company, and the investment earnings on contributions, are not taxable to the employees until withdrawn from the 401(k) Plan, and so that contributions by the Company, if any, will be deductible by the Company when made. Under the 401(k) Plan, employees may elect to reduce their current compensation by up to the statutorily prescribed annual limit and to have the amount of such reduction contributed to the 401(k) Plan. The 401(k) Plan permits the Company to make contributions up to the limits allowed by law on behalf of all eligible employees. Effective September 1, 2015, the Company instituted an employer match of 50% of eligible contributions up to 6% of employee contributions. For the years ended December 31, 2019, 2018 and 2017, the Company contributed $1.3 million, $0.8 million and $0.5 million, respectively, to the 401(k) Plan.

Switzerland Defined Benefit Plan

The Company maintains a pension plan covering employees of its Swiss subsidiary, Blueprint Medicines (Switzerland) GmbH (the “Swiss Plan”). The Swiss Plan is a government-mandated retirement fund that provides employees with a minimum benefit. Employer and employee contributions are made to the Swiss Plan based on various percentages of salary and wages that vary according to employee age and other factors. The Company’s contributions to the Swiss Plan for the year ended December 31, 2019 were $0.2 million. The Company’s expected contributions for the year ended December 31, 2020 are $0.4 million.

As is customary with Swiss pension plans, the assets of the Swiss Plan are invested in a collective fund with multiple employers. The Company has no investment authority over the assets of the Swiss Plan, which are held and invested by a Swiss insurance company. The investment strategy of the Swiss Plan is managed by an independent asset manager with the objective of achieving a consistent long-term return which will provide sufficient funding for future pension obligations while limiting risk. As of December 31, 2019, the Swiss Plan had an unfunded net pension obligation of $3.0 million, plan assets of $4.7 million and accumulated benefit obligation of $6.5 million. The expected rate of return on plan assets is 2.6%. During the year ended December 31, 2019, the Company recorded $0.2 million expenses related to the Swiss Plan.

Selected Quarterly Financial Data (unaudited)

12 Months Ended

Dec. 31, 2019

Disclosure Text Block

Selected Quarterly Financial Data (unaudited)

17. Selected Quarterly Financial Data (unaudited)

The following table contains selected quarterly financial information for 2019 and 2018. The Company believes that the following information reflects all normal recurring adjustments necessary for a fair statement of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period.


		Three Months Ended
		March 31, 2019		June 30, 2019		September 30, 2019		December 31, 2019
		(in thousands, except per share data)
Total revenue	$	730	$	5,110	$	9,139	$	51,533
Total operating expenses		90,803		109,024		107,100		120,911
Total other income		2,666		4,233		3,686		3,047
Net loss	$	(87,407)	$	(99,681)	$	(94,275)	$	(66,331)
Net loss per share — basic and diluted	$	(1.98)	$	(2.04)	$	(1.92)	$	(1.35)


		Three Months Ended
		March 31, 2018		June 30, 2018		September 30, 2018		December 31, 2018
		(in thousands, except per share data)
Total revenue	$	954	$	41,439	$	1,095	$	1,033
Total operating expenses		59,865		70,906		76,603		84,175
Total other income		2,362		2,419		2,785		2,820
Net loss	$	(56,549)	$	(27,048)	$	(72,723)	$	(80,322)
Net loss per share — basic and diluted	$	(1.29)	$	(0.62)	$	(1.66)	$	(1.83)

Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Policies)

12 Months Ended

Dec. 31, 2019

Policy Text Blocks

Basis of Presentation

Use of Estimates

Revenue recognition

Revenue Recognition

For a complete discussion of accounting for collaboration revenues, see Note 8, Collaboration and License Agreement.

(1)

persuasive evidence of an arrangement exists;

(2)

delivery has occurred or services have been rendered;

(3)

the seller’s price to the buyer is fixed or determinable; and

(4)

collectability is reasonably assured.

The Company’s multiple-element revenue arrangements may include the following:

Exclusive Licenses

Research and Development Services

Milestone Revenue

The Company’s collaboration agreements may include contingent milestone payments related to specified pre-clinical milestones, development milestones and sales-based commercial milestones.

●

the consideration related solely to past performance; and

●

the consideration was reasonable relative to all of the deliverables and payment terms within the arrangement.

Collaborative Arrangements

For a complete discussion of accounting for collaboration revenues, see Note 8, Collaboration and License Agreement.

Fair Value Measurements

●

Level 1 — Fair values are determined utilizing quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access;

●

There have been no changes to the valuation methods during the years ended December 31, 2019 and 2018.

Cash and cash equivalents

Available-for-sale Investments

Available-for-Sale Investments

Comprehensive Income (Loss)

Research and Development Costs

Property and Equipment, Net

Impairment of Long Lived Assets

Impairment of Long-Lived Assets

Stock-Based Compensation Expense

●

risk-free interest rate, which is based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected term assumption;

●

dividend yield, which is zero based on the fact that the Company never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

Income Taxes

Foreign currency translation

Reclassifications

Certain items in the prior year’s consolidated financial statements have been reclassified to conform to the current presentation.

Concentrations of Credit Risk and Off-Balance-Sheet Risk

Segment and Geographic Information

New Accounting Pronouncements

Leases

information related to a company's leasing arrangements to meet the objective of allowing users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases.

Impact of Adoption of ASC 842

The impact of the adoption of ASC 842 on the consolidated balance sheet was as follows:


	Impact of ASC 842 Adoption on Consolidated Balance Sheet as of January 1, 2019
(in thousands)	Balances without adoption of ASC 842		ASC 842 Adjustment		Balances with adoption of ASC 842
Operating lease right-of-use assets, net	$	—	$	54,245	$	54,245
Total assets		540,124		54,245		594,369
Accrued expenses		51,711		(125)		51,586
Current portion of operating lease liabilities		—		4,730		4,730
Current portion of lease incentive obligation		1,714		(1,714)		—
Total current liabilities		60,323		2,891		63,214
Deferred rent, net of current portion		5,130		(5,130)		—
Operating lease liabilities, net of current portion		—		69,387		69,387
Lease incentive obligation, net of current portion		12,903		(12,903)		—
Total liabilities		121,115		54,245		175,360

Leases Accounting Policy

Credit Losses

Debt Securities

Fair Value Measurements

Collaborative Arrangements

●

Internal-Use Software

Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Tables)

12 Months Ended

Dec. 31, 2019

Table Text Blocks

Schedule of financial statement impact of the cumulative adjustment


	Impact of ASC 842 Adoption on Consolidated Balance Sheet as of January 1, 2019
(in thousands)	Balances without adoption of ASC 842		ASC 842 Adjustment		Balances with adoption of ASC 842
Operating lease right-of-use assets, net	$	—	$	54,245	$	54,245
Total assets		540,124		54,245		594,369
Accrued expenses		51,711		(125)		51,586
Current portion of operating lease liabilities		—		4,730		4,730
Current portion of lease incentive obligation		1,714		(1,714)		—
Total current liabilities		60,323		2,891		63,214
Deferred rent, net of current portion		5,130		(5,130)		—
Operating lease liabilities, net of current portion		—		69,387		69,387
Lease incentive obligation, net of current portion		12,903		(12,903)		—
Total liabilities		121,115		54,245		175,360

Cash Equivalents and Investments (Tables)

12 Months Ended

Dec. 31, 2019

Table Text Blocks

Schedule of cash equivalents and investments, available-for-sale

Cash equivalents and investments, available-for-sale, consisted of the following at December 31, 2019 and December 31, 2018 (in thousands):


	Amortized		Unrealized		Unrealized		Fair
December 31, 2019	Cost		Gain		Losses		Value
Cash equivalents:
Money market funds	$	113,938	$	—	$	—	$	113,938
Investments, available-for-sale:
U.S. government agency securities		128,156		160		(4)		128,312
U.S. treasury bills		305,360		358		(8)		305,710
Total	$	547,454	$	518	$	(12)	$	547,960


	Amortized		Unrealized		Unrealized		Fair
December 31, 2018	Cost		Gain		Losses		Value
Cash equivalents:
Money market funds	$	68,064	$	—	$	—	$	68,064
Investments, available-for-sale:
U.S. government agency securities		99,940		—		(80)		99,860
U.S. treasury bills		326,172		—		(84)		326,088
Total	$	494,176	$	—	$	(164)	$	494,012

Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2019

Table Text Blocks

Schedule of financial instruments measured at fair value

The following table summarizes the Company’s cash equivalents and marketable securities measured at fair value on a recurring basis as of December 31, 2019 (in thousands):


			Active		Observable		Unobservable
	December 31,		Markets		Inputs		Inputs
Description	2019		(Level 1)		(Level 2)		(Level 3)
Financial Assets
Cash equivalents:
Money market funds	$	113,938	$	113,938	$	—	$	—
Investments, available-for-sale:
U.S. government agency securities		128,312		—		128,312		—
U.S. treasury bills		305,710		305,710		—		—
Total	$	547,960	$	419,648	$	128,312	$	—

The following table summarizes the Company’s cash equivalents and marketable securities measured at fair value on a recurring basis as of December 31, 2018 (in thousands):


			Active		Observable		Unobservable
	December 31,		Markets		Inputs		Inputs
Description	2018		(Level 1)		(Level 2)		(Level 3)
Financial Assets
Cash equivalents:
Money market funds	$	68,064	$	68,064	$	—	$	—
Investments, available-for-sale:
U.S. government agency securities		99,860		99,860		—		—
U.S. treasury bills		326,088		326,088		—		—
Total	$	494,012	$	494,012	$	—	$	—

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2019

Table Text Blocks

Schedule of property and equipment

Property and equipment and related accumulated depreciation are as follows (in thousands):


	Estimated
	Useful Life	As of December 31,
	(Years)	2019		2018
Lab equipment	5	$	8,975	$	6,232
Furniture and fixtures	4		3,512		2,369
Computer equipment	3		1,558		1,805
Leasehold improvements	Term of lease		36,627		26,640
Software	3		417		280
Construction-in-progress			956		956
			52,045		38,282
Less: accumulated depreciation and amortization			(13,684)		(8,655)
Total property and equipment, net		$	38,361	$	29,627

Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2019

Table Text Blocks

Schedule of accrued expenses

Accrued expenses consist of the following (in thousands):


	As of December 31,
	2019		2018
External research and development	$	59,420	$	36,213
Employee compensation		13,519		8,071
Accrued professional fees		12,042		4,423
Property and equipment costs		906		912
Other		2,819		2,092
	$	88,706	$	51,711

Collaboration Agreements (Tables)

12 Months Ended

Dec. 31, 2019

Table Text Blocks

Summary of manufacturing services related to the global development activities

Summary of revenue recognized


	Year Ended
	December 31,
	2019		2018
License milestone revenue	$	12,000	$	40,000
Manufacturing services related to territory-specific activities		144		—
Total CStone collaboration revenue	$	12,144	$	40,000


	Year Ended
	December 31,
	2019		2018
Roche collaboration research and development services revenue	$	8,165	$	4,521


	Year Ended
	December 31,
	2019		2018
Amounts included in the contract liability at the beginning of the period	$	4,578	$	4,277

Summary of receivables


	As of December 31,
	2019		2018
Accounts receivables	$	663	$	—
Unbilled accounts receivables	$	2,749	$	151

Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2019

Table Text Blocks

Summary of stock-based compensation expense, allocation by type of awards and recognition in statements of operations


		Year Ended

		December 31,
		2019		2018		2017
Stock options	$	47,726	$	30,095	$	12,317
Restricted stock units		6,445		167		—
Restricted stock awards		—		—		2
Employee stock purchase plan		482		272		204
Total stock-based compensation expense	$	54,653	$	30,534	$	12,523

Stock-based compensation expense by classification within the consolidated statements of operations and comprehensive loss is as follows (in thousands):


	Year Ended
	December 31,
	2019		2018		2017
Research and development	$	28,596	$	17,019	$	6,296
General and administrative		26,057		13,515		6,227
Total stock-based compensation expense	$	54,653	$	30,534	$	12,523

Assumptions used in estimating fair value of stock options on grant date



	Year Ended December 31,
	2019		2018		2017
Risk-free interest rate	2.21	%	2.77	%	2.07	%
Expected dividend yield	—	%	—	%	—	%
Expected term (years)	6.0		6.0		6.0
Expected stock price volatility	63.83	%	69.08	%	74.58	%

Summary of stock option activity


		Weighted-		Remaining	Aggregate
		Average		Contractual	Intrinsic
		Exercise		Life	Value(1)
	Shares	Price		(in Years)	(in thousands)
Outstanding at December 31, 2018	4,557,800	$	44.64	7.96	$	86,675
Granted	2,063,081		82.20
Exercised	(544,065)		22.30
Canceled	(281,106)		71.24
Outstanding at December 31, 2019	5,795,710	$	58.82	7.69	$	134,409
Exercisable at December 31, 2019	2,755,865	$	40.20	6.56	$	111,895

(1)	Intrinsic value represents the amount by which the fair market value as of December 31, 2019 of the underlying common stock exceeds the exercise price of the option.

Summary of restricted stock units activity


		Weighted-Average
		Grant Date
	Shares	Fair Value
Unvested shares at December 31, 2018	36,868	$	66.28
Granted	413,499		83.58
Vested	(8,246)		66.55
Forfeited	(22,366)		81.57
Unvested shares at December 31, 2019	419,755	$	82.50

Net Loss per Share (Tables)

12 Months Ended

Dec. 31, 2019

Table Text Blocks

Schedule of common stock equivalents excluded from calculation of diluted net loss per share applicable to common stockholders


	Year Ended
	December 31,
	2019	2018	2017
Stock options	5,795,710	4,557,800	3,304,166
Restricted stock units	419,755	36,868	—
ESPP shares	13,621	10,275	5,663
Total	6,229,086	4,604,943	3,309,829

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Table Text Blocks

Schedule of the reconciliation of the effective tax rate


	Year Ended
	December 31,
	2019		2018		2017
Federal income tax (benefit) at statutory rate	21.00	%	21.00	%	34.00	%
Permanent differences	1.11		1.71		0.49

Federal research and development credits	0.77		1.79		0.97
Federal orphan drug credits	6.90		18.06		6.40
State income tax, net of federal benefit	7.46		7.08		5.40
Other	2.13		0.04		0.83
Foreign rate differential	(0.03)		—		—
Deferred rate change	(0.08)		—		(27.58)
Change in valuation allowance	(39.26)		(49.68)		(20.54)
Effective income tax rate	—	%	—	%	(0.03)	%

Schedule of the deferred tax assets and liabilities


	Year Ended
	December 31,
	2019		2018		2017
Deferred tax assets:
Net operating loss carryforwards	$	219,935	$	127,421	$	78,829
Research and development credit carryforwards		19,240		13,714		5,950
Orphan drug credit carryforwards		92,538		68,536		14,574
Accrued expenses and other		25,842		12,248		4,660
Deferred revenue		10,971		10,320		9,664
Deferred lease incentive		—		3,993		4,462
Deferred rent		26,196		1,436		1,142
Total gross deferred tax asset		394,722		237,668		119,281
Deferred tax liability
Depreciation		(4,474)		(4,162)		(4,801)
Right of use assets		(19,869)		—		—
Debt discount		—		—		(2)
Valuation allowance		(370,379)		(233,506)		(114,478)
Net deferred tax asset	$	—	$	—	$	—

Leases (Tables)

12 Months Ended

Dec. 31, 2019

Table Text Blocks

Summary of lease expenses and cash flow and weighted average information


Operating leases:	Year Ended December 31, 2019
Lease cost	$	16,162
Sublease income		(2,834)
Net lease cost	$	13,328


	Year Ended December 31, 2019

Cash paid for amounts included in the measurement of lease liabilities:	$	12,247

Lease liabilities arising from obtaining right-of-use assets:

Operating leases

23,300



Weighted average remaining lease term in years		9.30
Weighted average discount rate		8.2%

Schedule of future minimum lease payments - ASC 842



2020		14,341
2021		14,764
2022		14,719
2023		12,746
2024		13,121
Thereafter		70,350
Total future minimum lease payments (1)		140,041
Less imputed interest		(44,093)
Total	$	95,948

Selected Quarterly Financial Data (unaudited) (Tables)

12 Months Ended

Dec. 31, 2019

Table Text Blocks

Schedule of quarterly financial information


		Three Months Ended
		March 31, 2019		June 30, 2019		September 30, 2019		December 31, 2019
		(in thousands, except per share data)
Total revenue	$	730	$	5,110	$	9,139	$	51,533
Total operating expenses		90,803		109,024		107,100		120,911
Total other income		2,666		4,233		3,686		3,047
Net loss	$	(87,407)	$	(99,681)	$	(94,275)	$	(66,331)
Net loss per share — basic and diluted	$	(1.98)	$	(2.04)	$	(1.92)	$	(1.35)


		Three Months Ended
		March 31, 2018		June 30, 2018		September 30, 2018		December 31, 2018
		(in thousands, except per share data)
Total revenue	$	954	$	41,439	$	1,095	$	1,033
Total operating expenses		59,865		70,906		76,603		84,175
Total other income		2,362		2,419		2,785		2,820
Net loss	$	(56,549)	$	(27,048)	$	(72,723)	$	(80,322)
Net loss per share — basic and diluted	$	(1.29)	$	(0.62)	$	(1.66)	$	(1.83)

Nature of Business - Sale of Stock (Details) - USD ($) $ / shares in Units, $ in Millions	Jan. 27, 2020	Apr. 02, 2019
Follow-on public offering
Nature of Business
Stock sold (in shares)		4,662,162
Share price (in dollars per share)		$ 74.00
Proceeds from issuance of common stock, net of underwriting discounts and commissions and estimated offering expenses		$ 327.5
Follow-on public offering \| Subsequent Event
Nature of Business
Stock sold (in shares)	4,710,144
Share price (in dollars per share)	$ 69.00
Proceeds from issuance of common stock, net of underwriting discounts and commissions and estimated offering expenses	$ 308.2
Underwriters' Option
Nature of Business
Stock sold (in shares)		608,108
Underwriters' Option \| Subsequent Event
Nature of Business
Stock sold (in shares)	706,521
Period of underwriters option to purchase	30 days

Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Stock-Based Compensation Expense (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Stock Options
Stock-based compensation
Expected dividend yield	0.00%	0.00%	0.00%
Award expiration period	10 years	10 years	10 years
Employee Stock
Stock-based compensation
Purchase price on common stock (as a percent)	85.00%	85.00%	85.00%
Discount on fair value, offering date (as a percent)	15.00%	15.00%	15.00%
Discount on fair value, purchase date (as a percent)	15.00%	15.00%	15.00%
Award expiration period	180 days	180 days	180 days

Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Impact of Adoption of ASC 842 - Consolidated Balance Sheet (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Leases
Operating lease right-of-use assets, net	$ 72,753	$ 54,245
Total assets	707,694	594,369	$ 540,124
Accrued expenses	88,706	51,586	51,711
Current portion of operating lease liabilities	6,823	4,730
Current portion of lease incentive obligation			1,714
Total current liabilities	106,482	63,214	60,323
Deferred rent, net of current portion			5,130
Operating lease liabilities, net of current portion	89,126	69,387
Lease incentive obligation, net of current portion			12,903
Total liabilities	$ 243,335	175,360	$ 121,115
Previously Reported
Leases
Total assets		540,124
Accrued expenses		51,711
Current portion of lease incentive obligation		1,714
Total current liabilities		60,323
Deferred rent, net of current portion		5,130
Lease incentive obligation, net of current portion		12,903
Total liabilities		121,115
Accounting Standards Update 2016-02 \| Restatement Adjustment
Leases
Operating lease right-of-use assets, net		54,245
Total assets		54,245
Accrued expenses		(125)
Current portion of operating lease liabilities		4,730
Current portion of lease incentive obligation		(1,714)
Total current liabilities		2,891
Deferred rent, net of current portion		(5,130)
Operating lease liabilities, net of current portion		69,387
Lease incentive obligation, net of current portion		(12,903)
Total liabilities		$ 54,245

Summary of Significant Accounting Policies and Recent Accounting Pronouncements - New Accounting Pronouncements (Details)	12 Months Ended
	Dec. 31, 2019
Accounting Standards Update 2016-02
Summary of Significant Accounting Policies and Recent Accounting Pronouncements
Change in Accounting Principle, Accounting Standards Update, Adopted	true
Change in Accounting Principle, Accounting Standards Update, Adoption Date	Jan. 01, 2019
Change in Accounting Principle, Accounting Standards Update, Early Adoption	false
New Accounting Pronouncement or Change in Accounting Principle, Prior Period Not Restated	true
Accounting Standards Update 2016-13
Summary of Significant Accounting Policies and Recent Accounting Pronouncements
Change in Accounting Principle, Accounting Standards Update, Adopted	false
Change in Accounting Principle, Accounting Standards Update, Early Adoption	false
Accounting Standards Update 2017-08
Summary of Significant Accounting Policies and Recent Accounting Pronouncements
Change in Accounting Principle, Accounting Standards Update, Adopted	true
Change in Accounting Principle, Accounting Standards Update, Adoption Date	Jan. 01, 2019
Change in Accounting Principle, Accounting Standards Update, Early Adoption	false
Accounting Standards Update 2018-13
Summary of Significant Accounting Policies and Recent Accounting Pronouncements
Change in Accounting Principle, Accounting Standards Update, Adopted	false
Change in Accounting Principle, Accounting Standards Update, Early Adoption	false
Accounting Standards Update 2018-18
Summary of Significant Accounting Policies and Recent Accounting Pronouncements
Change in Accounting Principle, Accounting Standards Update, Adopted	false
Change in Accounting Principle, Accounting Standards Update, Early Adoption	false
Accounting Standards Update 2018-15
Summary of Significant Accounting Policies and Recent Accounting Pronouncements
Change in Accounting Principle, Accounting Standards Update, Adopted	false
Change in Accounting Principle, Accounting Standards Update, Early Adoption	false

Cash Equivalents and Investments - Tabular Disclosure - Investments, Available-for-sale (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
U.S. government agency securities
Investments, available-for-sale:
Available-for-sale, Amortized Cost	$ 128,156	$ 99,940
Available-for-sale, Unrealized Gain	160
Available-for-sale, Unrealized Losses	(4)	(80)
Investments, available-for-sale	128,312	99,860
U.S. Treasury bills
Investments, available-for-sale:
Available-for-sale, Amortized Cost	305,360	326,172
Available-for-sale, Unrealized Gain	358
Available-for-sale, Unrealized Losses	(8)	(84)
Investments, available-for-sale	$ 305,710	$ 326,088

Cash Equivalents and Investments - Unrealized Loss Position (Details) $ in Millions	Dec. 31, 2019 USD ($) security	Dec. 31, 2018 USD ($) security
Unrealized loss position, number of positions
Number of held securities in an unrealized loss position for less than 12 months \| security	11	54
Number of held securities in an unrealized loss position for 12 months or longer \| security	0	0
Unrealized loss position, aggregate fair value
Unrealized loss position for less than 12 months \| $	$ 82.1	$ 397.5
Unrealized loss position for more than 12 months \| $	$ 0.0	$ 0.0

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
U.S. government agency securities
Fair Value of Financial Instruments
Investments, available-for-sale	$ 128,312	$ 99,860
U.S. Treasury bills
Fair Value of Financial Instruments
Investments, available-for-sale	305,710	326,088
Money market funds
Fair Value of Financial Instruments
Cash equivalents	113,938	68,064
Recurring
Fair Value of Financial Instruments
Total	547,960	494,012
Recurring \| U.S. government agency securities
Fair Value of Financial Instruments
Investments, available-for-sale	128,312	99,860
Recurring \| U.S. Treasury bills
Fair Value of Financial Instruments
Investments, available-for-sale	305,710	326,088
Recurring \| Money market funds
Fair Value of Financial Instruments
Cash equivalents	113,938	68,064
Recurring \| Active Markets (Level 1)
Fair Value of Financial Instruments
Total	419,648	494,012
Recurring \| Active Markets (Level 1) \| U.S. government agency securities
Fair Value of Financial Instruments
Investments, available-for-sale		99,860
Recurring \| Active Markets (Level 1) \| U.S. Treasury bills
Fair Value of Financial Instruments
Investments, available-for-sale	305,710	326,088
Recurring \| Active Markets (Level 1) \| Money market funds
Fair Value of Financial Instruments
Cash equivalents	113,938	$ 68,064
Recurring \| Observable Inputs (Level 2)
Fair Value of Financial Instruments
Total	128,312
Recurring \| Observable Inputs (Level 2) \| U.S. government agency securities
Fair Value of Financial Instruments
Investments, available-for-sale	$ 128,312

Property and Equipment, Net - Property and Equipment and Related Accumulated Depreciation (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Property and Equipment, Net
Gross property and equipment	$ 52,045	$ 38,282
Less: accumulated depreciation and amortization	(13,684)	(8,655)
Total	38,361	29,627
Lab equipment
Property and Equipment, Net
Gross property and equipment	8,975	6,232
Furniture and fixtures
Property and Equipment, Net
Gross property and equipment	3,512	2,369
Computer equipment
Property and Equipment, Net
Gross property and equipment	1,558	1,805
Leasehold improvements
Property and Equipment, Net
Gross property and equipment	36,627	26,640
Software
Property and Equipment, Net
Gross property and equipment	417	280
Construction-in-progress
Property and Equipment, Net
Gross property and equipment	$ 956	$ 956

Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Accrued Expenses
External research and development	$ 59,420		$ 36,213
Employee compensation	13,519		8,071
Accrued professional fees	12,042		4,423
Property and equipment costs	906		912
Other	2,819		2,092
Total	$ 88,706	$ 51,586	$ 51,711

Collaboration Agreements - General Information (Details) $ in Thousands			1 Months Ended				3 Months Ended								12 Months Ended
	Oct. 15, 2019 USD ($) item	Jun. 01, 2018 USD ($) item	Oct. 31, 2019 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2016 USD ($) item	Mar. 31, 2015 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Collaboration Agreements
Collaboration revenue							$ 51,533	$ 9,139	$ 5,110	$ 730	$ 1,033	$ 1,095	$ 41,439	$ 954	$ 66,512	$ 44,521	$ 21,426
Current portion of deferred revenue							$ 6,160				3,600				$ 6,160	3,600
Roche \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Collaboration Agreements
Research and development services, performance period							5 years 3 months 18 days								5 years 3 months 18 days
Collaboration \| Clementia
Collaboration Agreements
Non-refundable upfront payment received	$ 25,000
Eligible milestone payments	510,000
Cash milestone payment	20,000						$ 20,000								$ 20,000
Milestone other payment	490,000
Purchase specified manufacturing inventory	$ 1,500
Number of performance obligations \| item	3
Purchase of existing manufacturing inventory	$ 1,200
Purchase of in-process manufacturing inventory	$ 300
Number of potential collaboration programs \| item	3
Number of material promises \| item	4
Initial cash payment	$ 46,500
Collaboration revenue															46,200
Deferred revenue							0				0				0	0
Collaboration \| C Stone
Collaboration Agreements
Non-refundable upfront payment received		$ 40,000
Eligible milestone payments		$ 346,000
Licensed product term from first commercial sale		12 years
Number of materials components \| item		2
Number of option rights to obtain exclusive license \| item		3
Number of potential collaboration programs \| item		3
Number of material promises \| item		6
Number of collaboration programs with exclusive commercialization rights for licensed products \| item		3
Initial cash payment		$ 40,000
Collaboration revenue															12,144	40,000
Deferred revenue							0				0				0	0
Collaboration \| C Stone \| Development and regulatory milestones
Collaboration Agreements
Eligible milestone payments		118,500
Collaboration revenue															12,000
Collaboration \| C Stone \| Sales-based milestones
Collaboration Agreements
Eligible milestone payments		$ 227,500
Collaboration \| Roche
Collaboration Agreements
Non-refundable upfront payment received					$ 45,000
Number of option rights to obtain exclusive license \| item					5
Initial cash payment					$ 45,000
Collaboration revenue															8,165	4,521
Deferred revenue							46,100				46,200				46,100	46,200
Total eligible contingent option fees and milestone payments					940,000
Eligible option fees and milestones prior to licensing for all potential collaboration programs					$ 190,000
Current portion of deferred revenue							$ 6,200				$ 3,600				6,200	3,600
Achieved research milestone payment received which will be recognized over period of performance			$ 8,000	$ 10,000
Revenue recognized, change in contract liability															4,578	4,277
Cumulative revenue catch-up			1,600												$ 1,600
Research milestone achieved			$ 8,000
Collaboration \| Roche \| Prior To Exercise License Right Option
Collaboration Agreements
Written termination notice period					120 days
Collaboration \| Roche \| Exercise Of License Right Option
Collaboration Agreements
Number of collaboration programs with exclusive commercialization rights for licensed products \| item					2
Number of collaboration programs with specified commercial rights for each party \| item					2
Collaboration \| Roche \| Exercise Of License Option Product Not Commercially Sold
Collaboration Agreements
Written termination notice period					120 days
Collaboration \| Roche \| Exercise Of License Option Product Commercially Sold
Collaboration Agreements
Written termination notice period					180 days
Collaboration \| Alexion
Collaboration Agreements
Non-refundable upfront payment received						$ 15,000											6,700
Collaboration revenue																$ 0	16,200
Non-refundable upfront and milestone payment received						18,800
Non-refundable milestone payment received						$ 3,800
Reimbursable research and development costs recognized																	$ 9,500

Term Loan (Details) - Secured Debt $ in Millions	1 Months Ended
Term Loan (Details) - Secured Debt $ in Millions	Nov. 30, 2014 USD ($)	May 31, 2013 USD ($) tranche	Dec. 31, 2019 USD ($)
Term Loan
Percentage fee payable on total loan advances at end of loan (as a percent)			4.00%
outstanding principal			$ 0.0
outstanding interest			$ 0.0
2013 Term Loan
Term Loan
Face amount		$ 5.0
Number of tranches \| tranche		3
2013 Term Loan \| Prime Rate
Term Loan
Fixed rate based on percentage points added to base rate (as a percent)		2.00%
2014 Term Loan
Term Loan
Face amount	$ 5.0
Proceeds from term loan	$ 5.0

Stock-based Compensation - 2015 Stock Option and Incentive Plan (Details) - 2015 Stock Option and Incentive Plan - shares			12 Months Ended
	Jan. 01, 2020	Jan. 01, 2019	Dec. 31, 2019	Apr. 08, 2015
Stock-based compensation
Initial shares of common stock authorized for issuance of stock awards				1,460,084
Increase in number of shares available for grant (as a percent)			4.00%
Increase in number of shares available for grant	1,970,888	1,761,481
Number of shares available for grant			1,364,378

Stock-based Compensation - Unrecognized Compensation Costs (Details) $ in Millions	Dec. 31, 2019 USD ($)
Stock-based compensation
Total unrecognized compensation cost related to non-vested stock awards	$ 160.6
Total unrecognized compensation cost related to non-vested stock option awards	$ 132.0
Weighted-average period over which unrecognized compensation cost will be recognized	2 years 10 months 24 days
Stock Options
Stock-based compensation
Weighted-average period over which unrecognized compensation cost will be recognized	2 years 9 months 18 days
Restricted stock units
Stock-based compensation
Total unrecognized compensation cost related to non-vested non-option awards	$ 28.6
Weighted-average period over which unrecognized compensation cost will be recognized	3 years 2 months 12 days

Stock-based Compensation - Awards - General Information (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Stock Options
Stock-based compensation
Award expiration period	10 years	10 years	10 years
2015 Stock Option and Incentive Plan \| Stock Options
Stock-based compensation
Award vesting period	4 years	4 years	4 years
Cliff vesting period for new employees	1 year	1 year	1 year
Award expiration period	10 years	10 years	10 years
2015 Stock Option and Incentive Plan \| Restricted stock units
Stock-based compensation
Award vesting period	4 years	4 years	4 years
2015 Stock Option and Incentive Plan \| Restricted stock awards
Stock-based compensation
Award vesting period	4 years	4 years	4 years

Stock-based Compensation - Stock Options - Weighted Average Assumptions (Details) - Stock Options	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Assumptions used in estimating the fair value of stock options granted
Risk-free interest rate	2.21%	2.77%	2.07%
Expected dividend yield	0.00%	0.00%	0.00%
Expected term (in years)	6 years	6 years	6 years
Expected stock price volatility	63.83%	69.08%	74.58%

Stock-based Compensation - Stock Options - Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Shares
Outstanding at beginning of period (in shares)	4,557,800
Granted (in shares)	2,063,081
Exercised (in shares)	(544,065)
Cancelled (in shares)	(281,106)
Outstanding at end of period (in shares)	5,795,710	4,557,800
Weighted-Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 44.64
Granted (in dollars per share)	82.20
Exercised (in dollars per share)	22.30
Cancelled (in dollars per share)	71.24
Outstanding at end of period (in dollars per share)	$ 58.82	$ 44.64
Additional disclosures
Shares - Exercisable (in shares)	2,755,865
Weighted-Average Exercise Price - Exercisable (in dollars per share)	$ 40.20
Remaining Contractual Life - Outstanding	7 years 8 months 8 days	7 years 11 months 15 days
Remaining Contractual Life - Exercisable	6 years 6 months 21 days
Aggregate Intrinsic Value - Outstanding	$ 134,409	$ 86,675
Aggregate Intrinsic Value - Exercisable	$ 111,895

Stock-based Compensation - Restricted Stock Units (Details) - Restricted stock units	12 Months Ended
	Dec. 31, 2019 $ / shares shares
Shares
Unvested at beginning of period (in shares) \| shares	36,868
Granted (in shares) \| shares	413,499
Vested (in shares) \| shares	(8,246)
Forfeited (in shares) \| shares	(22,366)
Unvested at end of period (in shares) \| shares	419,755
Weighted-Average Grant Date Fair Value
Unvested at beginning or period (in dollars per share) \| $ / shares	$ 66.28
Granted (in dollars per share) \| $ / shares	83.58
Vested (in dollars per share) \| $ / shares	66.55
Forfeited (in dollars per share) \| $ / shares	81.57
Unvested at end of period (in dollars per share) \| $ / shares	$ 82.50

Stock-based Compensation - Employee Stock Purchase Plan (Details) - shares	1 Months Ended	12 Months Ended
	May 31, 2015	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Jan. 01, 2020	Jan. 01, 2019
Stock-based compensation
ESPP shares issued during period (in shares)		20,724	13,878	16,703
Employee Stock
Stock-based compensation
Number of common shares reserved for future issuance (in shares)	243,347
Annual increase for common stock for issuance (as a percent)	1.00%
Increase of common shares reserved for future issuance (in shares)					492,722	440,370

Income Taxes - Reconciliation (Details)		12 Months Ended
Income Taxes - Reconciliation (Details)	Dec. 22, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
A reconciliation of the U.S. statutory income tax rate to the Company's effective tax rate
Federal income tax (benefit) at statutory rate	35.00%	21.00%	21.00%	34.00%
Permanent differences		1.11%	1.71%	0.49%
Federal research and development credits		0.77%	1.79%	0.97%
Federal orphan drug credits		6.90%	18.06%	6.40%
State income tax, net of federal benefit		7.46%	7.08%	5.40%
Other		2.13%	0.04%	0.83%
Foreign rate differential		(0.03%)
Deferred rate change		(0.08%)		(27.58%)
Change in valuation allowance		(39.26%)	(49.68%)	(20.54%)
Effective income tax rate		0.00%	0.00%	(0.03%)

Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Deferred tax assets:
Net operating loss carryforwards	$ 219,935	$ 127,421	$ 78,829
Research and development credit carryforwards	19,240	13,714	5,950
Orphan drug credit carryforwards	92,538	68,536	14,574
Accrued expenses and other	25,842	12,248	4,660
Deferred revenue	10,971	10,320	9,664
Deferred lease incentive		3,993	4,462
Deferred rent	26,196	1,436	1,142
Total gross deferred tax asset	394,722	237,668	119,281
Deferred tax liability
Depreciation	(4,474)	(4,162)	(4,801)
Right of use assets	(19,869)	0	0
Debt discount			(2)
Valuation allowance	(370,379)	(233,506)	(114,478)
Net deferred tax asset	$ 0	$ 0	$ 0

Leases - General Information (Details) $ in Thousands				1 Months Ended		3 Months Ended
Leases - General Information (Details) $ in Thousands	Sep. 19, 2018 USD ($) ft²	Apr. 28, 2017 USD ($) ft²	Feb. 12, 2015 USD ($) ft²	Feb. 28, 2019 USD ($)	Feb. 28, 2018 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Sep. 18, 2018 ft²
Leases
Initial lease commitments							$ 140,041
Restricted cash							5,700	$ 5,400
Total commitment in sublease							2,400
Corporate Headquarters Lease
Leases
Area leased (in square feet) \| ft²			38,500
Extension period of lease term			5 years
Lessee, Operating Lease, Existence of Option to Extend			true
Initial lease commitments			$ 17,800
Initial lease term			7 years
Base annual rent, initial			$ 2,300
Base annual rent, maximum			2,800
Allowance for leasehold improvements			4,300
Security deposit			$ 1,300				900
Security deposit released				$ 200	$ 200
Total commitment in sublease						$ 8,200	2,600
Sublease term						32 months
Sublease payable						$ 6,900
Additional sublease payments on share of profits						$ 700
Office and Laboratory Space in Cambridge Massachusetts, 45 Sidney Street
Leases
Area leased (in square feet) \| ft²	139,216	99,833							99,833
Extension period of lease term		5 years
Lessee, Operating Lease, Existence of Option to Extend		true
Base annual rent, initial		$ 7,700
Base annual rent, maximum		10,600
Allowance for leasehold improvements		$ 14,200
Security deposit							3,500
Restricted cash							3,000
Security deposit to be released							$ 500
Office and Laboratory Space in Cambridge, Massachusetts, 45 Sidney Street, Expansion Premises
Leases
Base annual rent, initial	$ 3,200
Base annual rent, maximum	4,200
Allowance for leasehold improvements	3,200
Security deposit	$ 800

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Operating leases cost:
Lease cost	$ 16,162
Sublease income	(2,834)
Net lease cost	$ 13,328
Rent expense		$ 7,300	$ 6,300

Leases - Future Minimum Lease Payments - ASC 842 (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Future minimum lease payments
2020	$ 14,341
2021	14,764
2022	14,719
2023	12,746
2024	13,121
Thereafter	70,350
Total future minimum lease payments	$ 140,041

Employee Benefit Plans - Switzerland Defined Benefit Plan (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Expected future employer contributions
Employer contributions, current fiscal year	$ 0.2
Employer contributions, next fiscal year	0.4
Net pension obligation
Unfunded net pension obligation	3.0
Plan assets	4.7
Additional information
Accumulated benefit obligation	$ 6.5
Expected return on plan assets (as a percent)	2.60%
Plan expenses	$ 0.2
Defined Benefit Plan, Type	us-gaap:PensionPlansDefinedBenefitMember
Defined Benefit Plan, Sponsor Location	country:CH

Selected Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Selected Quarterly Financial Data
Total revenue	$ 51,533	$ 9,139	$ 5,110	$ 730	$ 1,033	$ 1,095	$ 41,439	$ 954	$ 66,512	$ 44,521	$ 21,426
Total operating expenses	120,911	107,100	109,024	90,803	84,175	76,603	70,906	59,865	427,838	291,549	172,673
Total other income	3,047	3,686	4,233	2,666	2,820	2,785	2,419	2,362	13,632	10,386	3,128
Net loss	$ (66,331)	$ (94,275)	$ (99,681)	$ (87,407)	$ (80,322)	$ (72,723)	$ (27,048)	$ (56,549)	$ (347,694)	$ (236,642)	$ (148,119)
Net loss per share - basic and diluted	$ (1.35)	$ (1.92)	$ (2.04)	$ (1.98)	$ (1.83)	$ (1.66)	$ (0.62)	$ (1.29)	$ (7.27)	$ (5.39)	$ (3.92)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions	Jan. 27, 2020	Apr. 02, 2019
Follow-on public offering
Subsequent Events
Stock sold (in shares)		4,662,162
Share price (in dollars per share)		$ 74.00
Proceeds from issuance of common stock, net of underwriting discounts and commissions and estimated offering expenses		$ 327.5
Underwriters' Option
Subsequent Events
Stock sold (in shares)		608,108
Subsequent Event \| Follow-on public offering
Subsequent Events
Stock sold (in shares)	4,710,144
Share price (in dollars per share)	$ 69.00
Proceeds from issuance of common stock, net of underwriting discounts and commissions and estimated offering expenses	$ 308.2
Subsequent Event \| Underwriters' Option
Subsequent Events
Stock sold (in shares)	706,521
Period of underwriters option to purchase	30 days

Nature of Business - Cash, Cash Equivalents and Investments (Details) $ in Millions	Dec. 31, 2019 USD ($)
Cash, cash equivalents and investments
Cash, cash equivalents and investments	$ 548.0

Cash Equivalents and Investments - Remaining Maturities (Details) $ in Millions	Dec. 31, 2019 USD ($) security	Dec. 31, 2018 USD ($)
Investments, available-for-sale
Securities with remaining maturities greater than one year \| security	9
Aggregate fair value with remaining maturities greater than one year \| $	$ 64.4	$ 0.0

Restricted Cash (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Restricted Cash
Restricted cash	$ 5.7	$ 5.4

Stock-based Compensation - Stock Options - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Additional disclosures
Weighted-average grant date fair value of options granted	$ 48.96	$ 49.40	$ 28.04
Total intrinsic value of options exercised	$ 33.8	$ 29.4	$ 17.8

Stock-based Compensation - Restricted Stock Awards (Details) - Restricted stock awards - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Stock Awards
Total fair value of restricted stock that vested	$ 0.7	$ 0.0	$ 0.1
Employees or directors
Stock Awards
Granted (in shares)	0	0

Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Impairment of Long-Lived Assets (Details) $ in Millions	12 Months Ended
	Dec. 31, 2019 USD ($)
Impairment of Long Lived Assets
Long-lived asset impairment	$ 0.0

Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Leases (Details)	12 Months Ended
	Dec. 31, 2019
Leases
Lease, Practical Expedients, Package	true
Lease, Practical Expedient, Lessor Single Lease Component	true

Cash Equivalents and Investments - Tabular Disclosure - Cash Equivalents (Details) - Money market funds - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Cash equivalents:
Cash equivalents, Amortized Cost	$ 113,938	$ 68,064
Cash equivalents	$ 113,938	$ 68,064

Cash Equivalents and Investments - Tabular Disclosure - Total (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Cash Equivalents and Investments
Total, Amortized Cost	$ 547,454	$ 494,176
Total, Unrealized Gain	518
Total, Unrealized Losses	(12)	(164)
Total, Fair Value	$ 547,960	$ 494,012

Collaboration Agreements - Manufacturing Services (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Global development of the licensed product \| C Stone
Collaboration Agreements
Manufacturing services related to global development activities	$ 3,286	$ 496

Collaboration Agreements - Contract Assets - CStone (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Collaboration Agreements
Accounts receivable	$ 663	$ 64
Unbilled accounts receivable	22,749	151
C Stone
Collaboration Agreements
Accounts receivable	663
Unbilled accounts receivable	$ 2,749	$ 151

Net Loss per Share (Details) - shares	12 Months Ended
Net Loss per Share (Details) - shares	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	6,229,086	4,604,943	3,309,829
Stock Options
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	5,795,710	4,557,800	3,304,166
Restricted stock units
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	419,755	36,868
Employee Stock
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	13,621	10,275	5,663

Income Taxes - Net Operating Loss Carryforwards (Details) $ in Millions	Dec. 31, 2019 USD ($)
Federal
Net Operating Loss Carryforwards
Net operating loss carryforwards	$ 802.1
State
Net Operating Loss Carryforwards
Net operating loss carryforwards	$ 817.4

Income Taxes - Tax Credit Carryforwards (Details) $ in Millions	Dec. 31, 2019 USD ($)
Research and Development Tax Credit \| Federal
Tax Credit Carryforwards
Tax credit carryforwards	$ 11.2
Research and Development Tax Credit \| State
Tax Credit Carryforwards
Tax credit carryforwards	9.4
Orphan Drug Tax Credit \| Federal
Tax Credit Carryforwards
Tax credit carryforwards	92.5
Investment Tax Credit \| State
Tax Credit Carryforwards
Tax credit carryforwards	$ 0.8

Income Taxes - Uncertain Tax Positions (Details) - USD ($) $ in Millions	Dec. 31, 2019	Dec. 31, 2018
Uncertain tax positions
Accrued interest related to uncertain tax positions	$ 0.0	$ 0.0

Income Taxes - Tax Cuts and Jobs Act (Details)		12 Months Ended
Income Taxes - Tax Cuts and Jobs Act (Details)	Dec. 22, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Taxes
U.S. federal corporate tax rate (as a percent)	35.00%	21.00%	21.00%	34.00%

Leases - Cash Flow Information (Details) $ in Thousands	12 Months Ended
Leases - Cash Flow Information (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Leases
Cash paid for amounts included in the measurement of lease liabilities, operating cash flows from operating leases	$ 12,247
Lease liabilities arising from obtaining right-of-use assets, operating leases	$ 23,300

Leases - Weighted Average Remaining Lease-term and Weighted Average Discount Rate (Details)	Dec. 31, 2019
Leases
Weighted average remaining lease term in years	9 years 3 months 18 days
Weighted average discount rate	8.20%

Employee Benefit Plans - 401(k) Savings Plan (Details) - USD ($) $ in Millions		12 Months Ended
	Sep. 01, 2015	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
401(k) Savings Plan
Employer matching contribution, percent of match (as a percent)	50.00%
Employer matching contribution, percent of employees' gross pay	6.00%
Contribution amount by entity		$ 1.3	$ 0.8	$ 0.5

Year Ended December 31,

Manufacturing services related to global development activities