View Filing Data

Three Months Ended

March 31,

Manufacturing and research and development services related to global development activities

Document and Entity Information - $ / shares	3 Months Ended
Document and Entity Information - $ / shares	Mar. 31, 2020	Apr. 30, 2020
Cover [Abstract]
Entity Central Index Key	0001597264
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
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 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 Common Stock, Shares Outstanding		54,189,964
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 375,168	$ 113,938
Investments, available-for-sale	291,596	369,616
Accounts receivable	4,510	663
Unbilled accounts receivable	20,597	22,749
Inventory	2,665
Prepaid expenses and other current assets	10,147	9,820
Total current assets	704,683	516,786
Investments, available-for-sale	83,666	64,406
Property and equipment, net	37,822	38,361
Operating lease right-of-use assets, net	71,903	72,753
Restricted cash	5,168	5,166
Other assets	10,381	10,222
Total assets	913,623	707,694
Current liabilities:
Accounts payable	8,468	4,793
Accrued expenses	73,961	88,706
Current portion of operating lease liabilities	7,169	6,823
Current portion of deferred revenue	8,690	6,160
Total current liabilities	98,288	106,482
Operating lease liabilities, net of current portion	87,667	89,126
Deferred revenue, net of current portion	36,809	39,913
Other long-term liabilities	7,928	7,814
Total liabilities	230,692	243,335
Commitments (Note 15)
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; 54,168,533 and 49,272,223 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively	54	49
Additional paid-in capital	1,739,140	1,412,083
Accumulated other comprehensive loss	(69)	(2,535)
Accumulated deficit	(1,056,194)	(945,238)
Total stockholders' equity	682,931	464,359
Total liabilities and stockholders' equity	$ 913,623	$ 707,694

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
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)	54,168,533	49,272,223
Common Stock, shares outstanding (in shares)	54,168,533	49,272,223

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues:
Total revenues	$ 6,167	$ 730
Cost and operating expenses
Cost of sales	24
Research and development	84,146	74,250
Selling, general and administrative	35,655	16,553
Total cost and operating expenses	119,825	90,803
Other income (expense):
Interest income (expense), net	2,904	2,710
Other income (expense), net	(201)	(44)
Total other income	2,703	2,666
Net loss	(110,955)	(87,407)
Other comprehensive loss:
Unrealized gain (losses) on available-for-sale investments	2,492	270
Currency translation adjustments	(27)	(15)
Comprehensive loss	$ (108,490)	$ (87,152)
Net loss per share - basic and diluted	$ (2.11)	$ (1.98)
Weighted-average number of common shares used in net loss per share - basic and diluted	52,655	44,097
Product revenue, net
Revenues:
Total revenues	$ 3,458
Collaboration revenue
Revenues:
Total revenues	$ 2,709	$ 730

Condensed 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, 2018	$ 44	$ 1,016,690	$ (180)	$ (597,545)	$ 419,009
Beginning Balance (in shares) at Dec. 31, 2018	44,037,026
Increase (Decrease) in Stockholders' Equity
Issuance of common stock under stock plan		2,061			2,061
Issuance of common stock under stock plan (in shares)	134,439
Stock-based compensation expense		10,295			10,295
Unrealized gain (loss) on available-for-sale securities			270		270
Cumulative translation adjustment			(15)		(15)
Net loss				(87,407)	(87,407)
Ending Balance at Mar. 31, 2019	$ 44	1,029,046	75	(684,952)	344,213
Ending Balance (in shares) at Mar. 31, 2019	44,171,465
Beginning Balance at Dec. 31, 2019	$ 49	1,412,083	(2,534)	(945,239)	$ 464,359
Beginning Balance (in shares) at Dec. 31, 2019	49,272,223				49,272,223
Increase (Decrease) in Stockholders' Equity
Issuance of common stock under stock plan	$ 1	1,612			$ 1,613
Issuance of common stock under stock plan (in shares)	186,166
Stock-based compensation expense		17,026			17,026
Initial public offering / Follow on offering, net of issuance costs	$ 4	308,419			308,423
Initial public offering / Follow on offering, net of issuance costs (in shares)	4,710,144
Unrealized gain (loss) on available-for-sale securities			2,492		2,492
Cumulative translation adjustment			(27)		(27)
Net loss				(110,955)	(110,955)
Ending Balance at Mar. 31, 2020	$ 54	$ 1,739,140	$ (69)	$ (1,056,194)	$ 682,931
Ending Balance (in shares) at Mar. 31, 2020	54,168,533				54,168,533

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash flows from operating activities
Net loss	$ (110,955)	$ (87,407)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,571	1,178
Noncash lease expense	1,391	1,041
Stock-based compensation	16,859	10,295
Accretion of premiums and discounts on investments	(134)	(1,332)
Changes in assets and liabilities:
Accounts receivable	(3,847)	(323)
Unbilled accounts receivable	2,152	(219)
Inventory	(382)
Prepaid expenses and other current assets	(1,408)	(1,381)
Other assets	(66)	(114)
Accounts payable	3,715	982
Accrued expenses	(16,576)	(1,208)
Deferred revenue	(575)	(731)
Operating lease liabilities	(1,073)	(969)
Net cash used in operating activities	(109,328)	(80,188)
Cash flows from investing activities
Purchases of property and equipment	(1,525)	(1,770)
Purchases of investments	(139,250)	(112,916)
Maturities of investments	200,635	204,000
Net cash provided by investing activities	59,860	89,314
Cash flows from financing activities
Proceeds from public offerings of common stock, net of commissions, underwriting discounts and offering costs	308,541
Proceeds from issuance of common stock	1,609	2,039
Other financing activities		(28)
Net cash provided by financing activities	310,150	2,011
Net increase in cash, cash equivalents, and restricted cash	260,682	11,137
Cash, cash equivalents and restricted cash at beginning of period	119,604	73,429
Effect of exchange rate changes on cash, cash equivalents and restricted cash	50	(16)
Cash, cash equivalents and restricted cash at end of period	380,336	84,550
Supplemental cash flow information
Public offering costs incurred but unpaid at period end	118
Property and equipment purchases unpaid at period end	465	1,478
Cash paid for taxes, net	$ 32	$ 53

Summary of Significant Accounting Policies and Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2020

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 unaudited interim condensed consolidated financial statements of the Company included herein have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) as found in the Accounting Standards Codification (ASC), Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB) and the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these financial statements should be read in conjunction with the financial statements as of and for the year ended December 31, 2019 and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on February 13, 2020 (the 2019 Annual Report on Form 10-K).

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements, and updated, as necessary, in this report. In the opinion of the Company’s management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments that are necessary to present fairly the Company’s financial position as of March 31, 2020, the results of its operations for the three months ended March 31, 2020 and 2019, stockholder’s equity for the three months ended March 31, 2020 and 2019 and cash

flows for the three months ended March 31, 2020 and 2019. Such adjustments are of a normal and recurring nature. The results for the three months ended March 31, 2020 are not necessarily indicative of the results for the year ending December 31, 2020 or for any future period.

The accompanying condensed 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, Blueprint Medicines (Switzerland) GmbH, Blueprint Medicines (Netherlands) B.V., Blueprint Medicines (UK) Ltd, and 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.

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. The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition, including sales, expenses, reserves and allowances, manufacturing, clinical trials, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat COVID-19, as well as the economic impact thereof on local, regional, national and international customers and markets. The Company had made estimates of the impact of COVID-19 within its financial statements and there may be changes to those estimates in future periods. Actual results may differ from these estimates.

Significant Accounting Policies

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three months ended March 31, 2020 are consistent with those discussed in Note 2 to the consolidated financial statements in the 2019 Annual Report on Form 10-K, except as noted below with respect to the Company’s accounting policies for product revenue, accounts receivable, and inventory.

Product Revenue

The Company generated product revenue from sales of AYVAKIT to specialty pharmacy providers in the U.S. These customers subsequently dispense the product directly to patients. In addition, the Company entered into arrangements with payors that provide for government mandated rebates and discounts and allowances with respect to the utilization of AYVAKIT.

Product revenue is recognized when the customer takes control of the product, typically upon delivery to the customer. Product revenue is recorded at the net sales price, or transaction price, which includes estimated reserves for variable consideration resulting from chargebacks, government rebates, trade discounts and allowances, product returns and other incentives that are offered within the contract with customers, healthcare providers, payors and other indirect customers relating to the sales of the Company’s product. Reserves are established based on the amounts earned or to be claimed on the related sales. Where appropriate, the Company utilizes the expected value method to determine the appropriate amount for estimates of variable consideration based on factors such as the Company’s current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The amount of variable consideration that is included in the transaction price may be constrained and is included in net product revenues only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results vary from the Company’s estimates, the Company adjusts these estimates, which would affect net product revenue and earnings in the period such variances become known.

Chargebacks: Chargebacks for fees and discounts represent the estimated obligations resulting from contractual commitments to sell product to qualified healthcare providers and government agencies at prices lower than the list prices charged to the customers who directly purchase the product from the Company. The customers charge the Company for the difference between what they pay for the product and the ultimate contractually committed or government required lower selling price to the qualified healthcare providers. These reserves are estimated using the expected value method based upon a range of possible outcomes and are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue.

Government rebates: Government rebates consist of Medicare, Tricare and Medicaid rebates, which were estimated using the expected value method, based upon a range of possible outcomes for the estimated payor mix. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue. For Medicare, the Company also estimates the number of patients in the prescription drug coverage gap for whom it will owe a rebate under the Medicare Part D program.

Trade discounts and allowances: The Company provides the customers with discounts that are explicitly stated in the contracts and recorded as a reduction of revenue in the period the related product revenue is recognized. In addition, the Company also receives sales order management, inventory management and data services from the customers in exchange for certain fees.

Product returns: The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The Company currently estimates product return liabilities using expected value method based on available industry data and its visibility into the inventory remaining in the distribution channel.

Other deductions: Co-pay assistance relates to financial assistance provided to qualified patients, whereby the Company may assist them with prescription drug co-payments required by the patient’s insurance provider. Reserves for co-pay assistance are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue.

Accounts Receivable

Accounts receivable arise from product sales and amounts due from the Company’s collaboration partners. The amount from product sales represents amounts due from specialty pharmacy providers in the U.S. The Company monitors economic conditions to identify facts or circumstances that may indicate that its receivables are at risk of collection. The Company provides reserves against accounts receivable for estimated losses that may result from a customer’s inability to pay based on the composition of its accounts receivable, current economic conditions and historical credit loss activity. Amounts determined to be uncollectible are charged or written-off against the reserve. For the three months ended March 31, 2020, the Company did not record any expected credit losses related to outstanding accounts receivable.

Inventory

Inventories are stated at the lower of cost or estimated net realizable value with cost based on the first-in first-out method. Inventory that can be used in either the production of clinical or commercial products is expensed as research and development costs when identified for use in clinical trials.

Prior to the regulatory approval of its drug candidates, the Company incurs expenses for the manufacture of drug product supplies to support clinical development that could potentially be available to support the commercial launch of those drugs. Until the date at which regulatory approval has been received or is otherwise considered probable, the Company records all such costs as research and development expenses.

The Company performs an assessment of the recoverability of capitalized inventories during each reporting period and writes down any excess and obsolete inventory to its net realizable value in the period in which the impairment is first identified. Such impairment charges, should they occur, are recorded as a component of cost of product sales in the condensed consolidated statements of operations and comprehensive loss. The determination of

whether inventory costs will be realizable requires the use of estimates by management. If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required.

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 condensed consolidated financial statements and disclosures.

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. The FASB subsequently issued amendments to ASU 2016-13, which had 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. This standard limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases.

The Company adopted the new standard on a prospective basis on January 1, 2020 and has completed the assessment of the standard based on the composition of its accounts receivable, investment portfolio of financial instruments, current and forecasted economic conditions and historical credit loss activity as of January 1, 2020. The adoption of this standard did not have a significant impact on the Company’s condensed consolidated financial statements and related disclosures.

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. The Company adopted the new standard on January 1, 2020 and the adoption of this standard did not have a material impact on related disclosures.

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, Revenue from Contracts with Customers, 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, Collaborative Arrangements, 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 Company adopted the new standard on January 1, 2020. 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 adoption of this standard did not have a material impact on its condensed 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. The adoption of this standard did not have a significant impact on the Company’s condensed 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.

Income Taxes

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity in the accounting standards. The amendments in ASU 2019-12 eliminate certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and simplifies other aspects of the accounting for income taxes. The amendments in ASU 2019-12 are effective for the fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in any interim period. The Company has early adopted this amendment as of January 1, 2020. The adoption of the standard did not have a material impact to the Company’s condensed consolidated financial position and results of operations as well as related income tax disclosures.

Reclassification

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

Cash Equivalents and Investments

3 Months Ended

Mar. 31, 2020

Disclosure Text Block

Cash Equivalents and Investments

3. Cash Equivalents and Investments

Cash equivalents and investments, available-for-sale, consisted of the following at March 31, 2020 and December 31, 2019 (in thousands):


	Amortized		Unrealized		Unrealized		Fair
March 31, 2020	Cost		Gain		Losses		Value
Cash equivalents:
Money market funds	$	341,711	$	—	$	—	$	341,711
U.S. treasury obligations		29,999		—		—		29,999
Investments, available-for-sale:
U.S. government agency securities		100,113		883		—		100,996
U.S. treasury obligations		272,174		2,092		—		274,266
Total	$	743,997	$	2,975	$	—	$	746,972


	Amortized		Unrealized		Unrealized		Fair
December 31, 2019	Cost		Gain		Losses		Value
Cash equivalents:
Money market funds	$	98,946	$	—	$	—	$	98,946
U.S. treasury obligations		14,992		—		—		14,992
Investments, available-for-sale:
U.S. government agency securities		128,156		160		(4)		128,312
U.S. treasury obligations		305,360		358		(8)		305,710
Total	$	547,454	$	518	$	(12)	$	547,960

As of March 31, 2020, the Company has no investment in an unrealized loss position. As of December 31, 2019, the Company held 11 debt securities in an unrealized loss position with an aggregate fair value $82.1 million.

As of March 31, 2020, 12 securities with an aggregate fair value of $83.7 million have remaining maturities greater than one year. As of December 31, 2019, nine securities with an aggregate fair value of $64.4 million had remaining maturities greater than one year.

Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2020

Disclosure Text Block

Fair Value of Financial Instruments

4. Fair Value of Financial Instruments

The following table summarizes cash equivalents and marketable securities measured at fair value on a recurring basis as of March 31, 2020 (in thousands):


			Active		Observable		Unobservable
	March 31,		Markets		Inputs		Inputs
Description	2020		(Level 1)		(Level 2)		(Level 3)
Financial Assets
Cash equivalents:
Money market funds	$	341,711	$	341,711	$	—	$	—
U.S. treasury obligations		29,999		29,999		—		—
Investments, available-for-sale:
U.S. government agency securities		100,996		—		100,996		—
U.S. treasury obligations		274,266		274,266		—		—
Total	$	746,972	$	645,976	$	100,996	$	—

The following table summarizes 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	$	98,946	$	98,946	$	—	$	—
U.S. treasury obligations		14,992		14,992		—		—
Investments, available-for-sale:
U.S. government agency securities		128,312		—		128,312		—
U.S. treasury obligations		305,710		305,710		—		—
Total	$	547,960	$	419,648	$	128,312	$	—

- 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

3 Months Ended

Mar. 31, 2020

Disclosure Text Block

Property and Equipment, Net

8. Property and Equipment, Net

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


	Estimated
	Useful Life	March 31,			December 31,
	(Years)	2020		2019
Lab equipment	5	$	10,475	$	8,975
Furniture and fixtures	4		3,580		3,512
Computer equipment	3		1,558		1,558
Leasehold improvements	Term of lease		35,975		36,627
Software	3		408		417
Construction-in-progress			1,081		956
			53,077		52,045
Less: accumulated depreciation and amortization			(15,255)		(13,684)
Total		$	37,822	$	38,361

Property, plant and equipment are recorded at historical cost, net of accumulated depreciation. For the three months ended March 31, 2020, depreciation expense totaled $1.6 million, compared to $1.2 million for the three months ended March 31, 2019.

Collaboration and License Agreements

3 Months Ended

Mar. 31, 2020

Disclosure Text Block

Collaboration and License Agreements

10. Collaboration and License Agreements

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 progressiva (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 the 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.

During 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.

No revenue was recognized during the three months ended March 31, 2020 and 2019. There was no revenue deferred as a contract liability associated with the Clementia agreement as of March 31, 2020 and December 31, 2019.

CStone Pharmaceuticals

On June 1, 2018, the Company entered into a collaboration and license agreement (the CStone agreement) with 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 plan to conduct a proof-of-concept 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 and research and development services related to the global development activities during the three months ended March 31, 2020 and 2019 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 three months ended March 31, 2020, one development and regulatory milestone was achieved and the associated aggregate cash consideration of $2.0 million for such milestone was added to the estimated transaction price for the CStone agreement.

A summary of revenue recognized under the CStone agreement during the three months ended March 31, 2020 and 2019 is as follows (in thousands):


	Three Months Ended
	March 31,
	2020		2019
License milestone revenue	$	2,000	$	—
Manufacturing services related to territory-specific activities		134		—
Total CStone collaboration revenue	$	2,134	$	—

The following table presents the contract assets associated with the CStone agreement as of March 31, 2020 and December 31, 2019 (in thousands):


	March 31,			December 31,
	2020		2019
Accounts receivables	$	2,374	$	663
Unbilled accounts receivables	$	597	$	2,749

There was no revenue deferred as a contract liability associated with the CStone agreement as of March 31, 2020 and December 31, 2019.

Roche

In March 2016, the Company entered into a collaboration and license agreement (as amended, Roche agreement) with Roche for the discovery, development and commercialization of up to five small molecule therapeutics

targeting kinases believed to be important in cancer immunotherapy (including the kinase target MAP4K1, which is believed to play a role in T cell regulation), as single products or possibly in combination with other therapeutics.

Under the Roche agreement, Roche was 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. 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. 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 and received a $10.0 million research milestone payment and an $8.0 million research milestone payment related to 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.

A summary of revenue recognized under the Roche agreement during the three months ended March 31, 2020 and 2019 is as follows (in thousands):

During the three months ended March 31, 2020 and 2019, the Company recognized the following revenue due to the changes in the contract liability balances (in thousands):

As of March 31, 2020, the Company had revenue deferred as a contract liability related to the Roche agreement of $45.5 million, of which $8.7 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 years.

Stock-based Compensation

3 Months Ended

Mar. 31, 2020

Disclosure Text Block

Stock-based Compensation

11. 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 year beginning January 1, 2020, the number of shares reserved for issuance under the 2015 Plan was increased by 1,970,888 shares. 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 March 31, 2020, there were 1,623,278 shares available for future grant under the 2015 Plan.

Stock options

The following table summarizes the stock option activity for the three months ended March 31, 2020:


		Weighted-Average
	Shares		Exercise Price
Outstanding at December 31, 2019	5,795,710	$	58.82
Granted	1,087,783		57.21
Exercised	(127,220)		12.67
Canceled	(112,822)		78.82
Outstanding at March 31, 2020	6,643,451	$	59.10
Exercisable at March 31, 2020	2,863,027	$	43.21

At March 31, 2020, the total unrecognized compensation expense related to unvested stock option awards was $149.5 million, which is expected to be recognized over a weighted-average period of approximately 2.97 years.

Restricted stock units

The following table summarizes the restricted stock units activity for the three months ended March 31, 2020:


		Weighted-Average
		Grant Date
	Shares	Fair Value
Unvested shares at December 31, 2019	419,755	$	82.50
Granted	751,946		55.33
Vested	(58,946)		85.29
Forfeited	(14,919)		82.07
Unvested shares at March 31, 2020	1,097,836	$	63.75

At March 31, 2020, the total unrecognized compensation expense related to unvested restricted stock units was $65.8 million, which is expected to be recognize over a weighted-average period of approximately 3.62 years.

2020 Inducement Plan

In March 2020, the Company’s board of directors adopted the 2020 Inducement Plan (the Inducement Plan), pursuant to which the Company may grant, subject to the terms of the Inducement Plan and Nasdaq rules, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units, and other stock-based awards. The Company initially reserved a total of 1,000,000 shares of common stock for the issuance of awards under the Inducement Plan. The number of shares reserved and available for issuance under the Inducement Plan can be increased at any time with the approval of the Company’s board of directors. The Inducement Plan permits the board of directors or a committee thereof to use the stock-based awards available under the Inducement Plan to attract key employees for the growth of the Company. As of March 31, 2020, no awards were issued under the Inducement Plan.

2015 Employee Stock Purchase Plan

In 2015, the Company’s board of directors and stockholders approved the 2015 Employee Stock Purchase Plan (the 2015 ESPP), which became effective upon the closing of the Company’s initial public offering 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 year 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 year beginning January 1, 2020, the number of shares reserved for issuance under the 2015 ESPP was increased by 492,722 shares.

Stock-based compensation expense

The Company recognized stock-based compensation expense totaling $16.9 million and $10.3 million for the three months ended March 31, 2020 and 2019, respectively. Stock-based compensation expense by award type included within the unaudited condensed consolidated statements of operations and comprehensive loss was as follows (in thousands):


	Three Months Ended
		March 31,
		2020		2019
Stock options	$	13,716	$	9,579
Restricted stock units		3,153		624
Employee stock purchase plan		157		92
Subtotal		17,026		10,295
Capitalized stock-based compensation costs		(167)		—
Stock-based compensation expense included in total cost and operating expenses	$	16,859	$	10,295

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


	Three Months Ended
	March 31,
	2020		2019
Research and development	$	7,798	$	5,790
Selling, general and administrative		9,061		4,505
Total		16,859		10,295

Leases

3 Months Ended

Mar. 31, 2020

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. The associated security deposit of $0.9 million is recorded in restricted cash on the Company’s condensed consolidated balance sheet as of March 31, 2020.

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 March 31, 2020, the remaining minimum sublease rental commitment by the sublessee was $1.9 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. The associated security deposit of $3.0 million is recorded in restricted cash on the Company’s condensed consolidated balance sheet as of March 31, 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 condensed consolidated balance sheet as of March 31, 2020.

The lease agreements do not contain residual value guarantees and the components of lease cost for the three months ended March 31, 2020 and 2019 were as follows (in thousands):


	Three Months Ended
	March 31,
Operating leases:	2020		2019
Lease cost	$	4,381	$	3,564
Sublease income		(722)		(701)
Net lease cost	$	3,659	$	2,863

The Company has not entered into any material short-term leases or financing leases as of March 31, 2020.

Supplemental cash flow information related to leases for the three months ended March 31, 2020 was as follows (in thousands):


	Three Months Ended
	March 31,
	2020		2019

Cash paid for amounts included in the measurement of lease liabilities:	$	3,581	$	2,621

Lease liabilities arising from obtaining right-of-use assets:
Operating leases	$	523	$	23,300

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


					Operating leases
Weighted average remaining lease term in years					9.10
Weighted average discount rate					8.2%

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

3 Months Ended

Mar. 31, 2020

Policy Text Blocks

Basis of Presentation

Use of Estimates

Significant Accounting Policies

Product Revenue Recognition

Product Revenue

Accounts Receivable

Accounts Receivable

Inventory

Inventory

New Accounting Pronouncements

Credit Losses

Fair Value Measurements

Collaborative Arrangements

●

cumulative adjustment to opening retained earnings. The adoption of this standard did not have a material impact on its condensed consolidated financial position and results of operations.

Internal-Use Software

Income Taxes

Reclassification

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

Cash Equivalents and Investments (Tables)

3 Months Ended

Mar. 31, 2020

Table Text Blocks

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

Cash equivalents and investments, available-for-sale, consisted of the following at March 31, 2020 and December 31, 2019 (in thousands):


	Amortized		Unrealized		Unrealized		Fair
March 31, 2020	Cost		Gain		Losses		Value
Cash equivalents:
Money market funds	$	341,711	$	—	$	—	$	341,711
U.S. treasury obligations		29,999		—		—		29,999
Investments, available-for-sale:
U.S. government agency securities		100,113		883		—		100,996
U.S. treasury obligations		272,174		2,092		—		274,266
Total	$	743,997	$	2,975	$	—	$	746,972


	Amortized		Unrealized		Unrealized		Fair
December 31, 2019	Cost		Gain		Losses		Value
Cash equivalents:
Money market funds	$	98,946	$	—	$	—	$	98,946
U.S. treasury obligations		14,992		—		—		14,992
Investments, available-for-sale:
U.S. government agency securities		128,156		160		(4)		128,312
U.S. treasury obligations		305,360		358		(8)		305,710
Total	$	547,454	$	518	$	(12)	$	547,960

Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2020

Table Text Blocks

Schedule of financial instruments measured at fair value

The following table summarizes cash equivalents and marketable securities measured at fair value on a recurring basis as of March 31, 2020 (in thousands):


			Active		Observable		Unobservable
	March 31,		Markets		Inputs		Inputs
Description	2020		(Level 1)		(Level 2)		(Level 3)
Financial Assets
Cash equivalents:
Money market funds	$	341,711	$	341,711	$	—	$	—
U.S. treasury obligations		29,999		29,999		—		—
Investments, available-for-sale:
U.S. government agency securities		100,996		—		100,996		—
U.S. treasury obligations		274,266		274,266		—		—
Total	$	746,972	$	645,976	$	100,996	$	—

The following table summarizes 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	$	98,946	$	98,946	$	—	$	—
U.S. treasury obligations		14,992		14,992		—		—
Investments, available-for-sale:
U.S. government agency securities		128,312		—		128,312		—
U.S. treasury obligations		305,710		305,710		—		—
Total	$	547,960	$	419,648	$	128,312	$	—

- 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)

3 Months Ended

Mar. 31, 2020

Table Text Blocks

Schedule of property and equipment

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


	Estimated
	Useful Life	March 31,			December 31,
	(Years)	2020		2019
Lab equipment	5	$	10,475	$	8,975
Furniture and fixtures	4		3,580		3,512
Computer equipment	3		1,558		1,558
Leasehold improvements	Term of lease		35,975		36,627
Software	3		408		417
Construction-in-progress			1,081		956
			53,077		52,045
Less: accumulated depreciation and amortization			(15,255)		(13,684)
Total		$	37,822	$	38,361

Collaboration and License Agreements (Tables)

3 Months Ended

Mar. 31, 2020

Table Text Blocks

Summary of manufacturing and research and development services related to the global development activities

Summary of revenue recognized


	Three Months Ended
	March 31,
	2020		2019
License milestone revenue	$	2,000	$	—
Manufacturing services related to territory-specific activities		134		—
Total CStone collaboration revenue	$	2,134	$	—

Summary of receivables


	March 31,			December 31,
	2020		2019
Accounts receivables	$	2,374	$	663
Unbilled accounts receivables	$	597	$	2,749

Stock-based Compensation (Tables)

3 Months Ended

Mar. 31, 2020

Table Text Blocks

Summary of stock option activity


		Weighted-Average
	Shares		Exercise Price
Outstanding at December 31, 2019	5,795,710	$	58.82
Granted	1,087,783		57.21
Exercised	(127,220)		12.67
Canceled	(112,822)		78.82
Outstanding at March 31, 2020	6,643,451	$	59.10
Exercisable at March 31, 2020	2,863,027	$	43.21

Summary of restricted stock units activity


		Weighted-Average
		Grant Date
	Shares	Fair Value
Unvested shares at December 31, 2019	419,755	$	82.50
Granted	751,946		55.33
Vested	(58,946)		85.29
Forfeited	(14,919)		82.07
Unvested shares at March 31, 2020	1,097,836	$	63.75

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


	Three Months Ended
		March 31,
		2020		2019
Stock options	$	13,716	$	9,579
Restricted stock units		3,153		624
Employee stock purchase plan		157		92
Subtotal		17,026		10,295
Capitalized stock-based compensation costs		(167)		—
Stock-based compensation expense included in total cost and operating expenses	$	16,859	$	10,295

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


	Three Months Ended
	March 31,
	2020		2019
Research and development	$	7,798	$	5,790
Selling, general and administrative		9,061		4,505
Total		16,859		10,295

Collaboration and License 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, 2018 USD ($)	Mar. 31, 2016 USD ($) item	Mar. 31, 2020 USD ($) item	Dec. 31, 2019 USD ($) item	Mar. 31, 2019 USD ($)	Mar. 31, 2016 USD ($) item	Dec. 31, 2019 USD ($)
Collaboration Agreements
Collaboration revenue							$ 6,167		$ 730
Current portion of deferred revenue							$ 8,690	$ 6,160			$ 6,160
Roche \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01
Collaboration Agreements
Research and development services, performance period							5 years
Collaboration \| Clementia
Collaboration Agreements
Non-refundable upfront payment received	$ 25,000
Eligible milestone payments	510,000
Cash milestone payment	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 material promises \| item	4
Initial cash payment	$ 46,500
Collaboration revenue							$ 0		0		46,200
Deferred revenue							0		0
Collaboration \| C Stone
Collaboration Agreements
Non-refundable upfront payment received		$ 40,000
Eligible milestone payments		$ 346,000
Number of performance obligations \| item		3
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							2,134
Deferred revenue							$ 0	$ 0			$ 0
Revenue recognized, change in contract liability									40,000
Collaboration \| C Stone \| Development and regulatory milestones
Collaboration Agreements
Eligible milestone payments		118,500
Number of potential collaboration programs \| item							1
Collaboration revenue							$ 2,000
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 small molecule therapeutics targeting kinases \| item						5				5
Number of option rights to obtain exclusive license \| item						5				5
Number of potential collaboration programs \| item						4		4
Initial cash payment					$ 45,000	$ 45,000
Collaboration revenue							575		730
Deferred revenue							45,500
Total eligible contingent option fees and milestone payments						940,000				$ 940,000
Eligible option fees and milestones prior to licensing for all potential collaboration programs						$ 190,000
Current portion of deferred revenue							8,700
Achieved research milestone payment received which will be recognized over period of performance			$ 8,000	$ 10,000
Revenue recognized, change in contract liability							$ 989		$ 987
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

Stock-based Compensation - Stock Options (Details)	3 Months Ended
Stock-based Compensation - Stock Options (Details)	Mar. 31, 2020 $ / shares shares
Shares
Outstanding at beginning of period (in shares) \| shares	5,795,710
Granted (in shares) \| shares	1,087,783
Exercised (in shares) \| shares	(127,220)
Cancelled (in shares) \| shares	(112,822)
Outstanding at end of period (in shares) \| shares	6,643,451
Weighted-Average Exercise Price
Outstanding at beginning of period (in dollars per share) \| $ / shares	$ 58.82
Granted (in dollars per share) \| $ / shares	57.21
Exercised (in dollars per share) \| $ / shares	12.67
Cancelled (in dollars per share) \| $ / shares	78.82
Outstanding at end of period (in dollars per share) \| $ / shares	$ 59.10
Additional disclosures
Shares - Exercisable (in shares) \| shares	2,863,027
Weighted-Average Exercise Price - Exercisable (in dollars per share) \| $ / shares	$ 43.21

Stock-based Compensation - Restricted Stock Units (Details) - Restricted stock units	3 Months Ended
	Mar. 31, 2020 $ / shares shares
Shares
Unvested at beginning of period (in shares) \| shares	419,755
Granted (in shares) \| shares	751,946
Vested (in shares) \| shares	(58,946)
Forfeited (in shares) \| shares	(14,919)
Unvested at end of period (in shares) \| shares	1,097,836
Weighted-Average Grant Date Fair Value
Unvested at beginning or period (in dollars per share) \| $ / shares	$ 82.50
Granted (in dollars per share) \| $ / shares	55.33
Vested (in dollars per share) \| $ / shares	85.29
Forfeited (in dollars per share) \| $ / shares	82.07
Unvested at end of period (in dollars per share) \| $ / shares	$ 63.75

Leases - General Information (Details) $ in Millions	Sep. 19, 2018 USD ($) ft²	Apr. 28, 2017 USD ($) ft²	Feb. 12, 2015 USD ($) ft²	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 18, 2018 ft²	Mar. 31, 2018 USD ($)
Leases
Restricted cash				$ 5.2	$ 5.7
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			$ 17.8
Initial lease term			7 years
Base annual rent, initial			$ 2.3
Base annual rent, maximum			2.8
Allowance for leasehold improvements			$ 4.3
Security deposit				0.9
Total commitment in sublease				1.9			$ 8.2
Sublease payable							6.9
Additional sublease payments on share of profits							$ 0.7
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		$ 7.7
Base annual rent, maximum		10.6
Allowance for leasehold improvements		$ 14.2
Security deposit				3.0
Office and Laboratory Space in Cambridge, Massachusetts, 45 Sidney Street, Expansion Premises
Leases
Base annual rent, initial	$ 3.2
Base annual rent, maximum	4.2
Allowance for leasehold improvements	$ 3.2
Security deposit				$ 0.8

Nature of Business - Sale of Stock (Details) - Follow-on public offering $ / shares in Units, $ in Millions	Jan. 27, 2020 USD ($) $ / shares shares
Nature of Business
Stock sold (in shares) \| shares	4,710,144
Share price (in dollars per share) \| $ / shares	$ 69.00
Proceeds from issuance of common stock, net of underwriting discounts and commissions and estimated offering expenses \| $	$ 308.4

Nature of Business - Cash, Cash Equivalents and Investments (Details) $ in Millions	Mar. 31, 2020 USD ($)
Cash, cash equivalents and investments
Cash, cash equivalents and investments	$ 750.4

Summary of Significant Accounting Policies and Recent Accounting Pronouncements - New Accounting Pronouncements (Details)	Mar. 31, 2020
Accounting Standards Update 2016-13
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, 2020
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	true
Change in Accounting Principle, Accounting Standards Update, Adoption Date	Jan. 01, 2020
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	true
Change in Accounting Principle, Accounting Standards Update, Adoption Date	Jan. 01, 2020
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	true
Change in Accounting Principle, Accounting Standards Update, Adoption Date	Jan. 01, 2020
Change in Accounting Principle, Accounting Standards Update, Early Adoption	false
Accounting Standards Update 2019-12
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, 2020
Change in Accounting Principle, Accounting Standards Update, Early Adoption	true

Cash Equivalents and Investments - Unrealized Loss Position (Details) $ in Millions	Mar. 31, 2020 security	Dec. 31, 2019 USD ($) security
Unrealized loss position, number of positions
Number of held securities in an unrealized loss position \| security	0	11
Unrealized loss position, aggregate fair value
Unrealized loss position \| $		$ 82.1

Cash Equivalents and Investments - Remaining Maturities (Details) $ in Millions	Mar. 31, 2020 USD ($) security	Dec. 31, 2019 USD ($) security
Investments, available-for-sale
Securities with remaining maturities greater than one year \| security	12	9
Aggregate fair value with remaining maturities greater than one year \| $	$ 83.7	$ 64.4

Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Reconciliation of cash, cash equivalents, and restricted cash
Cash and cash equivalents	$ 375,168	$ 113,938	$ 79,391
Restricted cash	5,168	5,166	5,159
Total cash, cash equivalents, and restricted cash shown in condensed consolidated statements of cash flows	$ 380,336	$ 119,604	$ 84,550	$ 73,429

Cash Equivalents and Investments - Tabular Disclosure - Cash Equivalents (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Money market funds
Cash equivalents:
Cash equivalents, Amortized Cost	$ 341,711	$ 98,946
Cash equivalents	341,711	98,946
U.S. Treasury obligations
Cash equivalents:
Cash equivalents, Amortized Cost	29,999	14,992
Cash equivalents	$ 29,999	$ 14,992

Cash Equivalents and Investments - Tabular Disclosure - Investments, Available-for-sale (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
U.S. government agency securities
Investments, available-for-sale:
Available-for-sale, Amortized Cost	$ 100,113	$ 128,156
Available-for-sale, Unrealized Gain	883	160
Available-for-sale, Unrealized Losses		(4)
Investments, available-for-sale	100,996	128,312
U.S. Treasury obligations
Investments, available-for-sale:
Available-for-sale, Amortized Cost	272,174	305,360
Available-for-sale, Unrealized Gain	2,092	358
Available-for-sale, Unrealized Losses		(8)
Investments, available-for-sale	$ 274,266	$ 305,710

Cash Equivalents and Investments - Tabular Disclosure - Total (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Cash Equivalents and Investments
Total, Amortized Cost	$ 743,997	$ 547,454
Total, Unrealized Gain	2,975	518
Total, Unrealized Losses		(12)
Total, Fair Value	$ 746,972	$ 547,960

Product Revenue Reserves and Allowances - Product Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues
Total revenues	$ 6,167	$ 730
Product revenue, net
Revenues
Total revenues	$ 3,458

Product Revenue Reserves and Allowances - Product Revenue Allowance - Roll Forward (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($)
Product revenue allowance
Beginning balance	$ 0
Provision related to sales in the current period	607
Credits and payments made	(119)
Ending balance	$ 488

Product Revenue Reserves and Allowances - Product Revenue Allowance - Location (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Product revenue allowance
Product revenue allowance	$ 488	$ 0
Accounts Receivable
Product revenue allowance
Product revenue allowance	161
Accrued Expenses
Product revenue allowance
Product revenue allowance	$ 327

Inventory - Capitalized (Details) $ in Thousands	Mar. 31, 2020 USD ($)
Inventory
Work in process	$ 2,580
Finished goods	85
Total	$ 2,665

Inventory - Write-down (Details)	3 Months Ended
Inventory - Write-down (Details)	Mar. 31, 2020 USD ($)
Inventory
Inventory write-down	$ 0

Property and Equipment, Net - Property and Equipment and Related Accumulated Depreciation (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Property and Equipment, Net
Gross property and equipment	$ 53,077	$ 52,045
Less: accumulated depreciation and amortization	(15,255)	(13,684)
Total	37,822	38,361
Lab equipment
Property and Equipment, Net
Gross property and equipment	10,475	8,975
Furniture and fixtures
Property and Equipment, Net
Gross property and equipment	3,580	3,512
Computer equipment
Property and Equipment, Net
Gross property and equipment	1,558	1,558
Leasehold improvements
Property and Equipment, Net
Gross property and equipment	35,975	36,627
Software
Property and Equipment, Net
Gross property and equipment	408	417
Construction-in-progress
Property and Equipment, Net
Gross property and equipment	$ 1,081	$ 956

Property and Equipment, Net - Depreciation Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Depreciation expense
Depreciation expense	$ 1.6	$ 1.2

Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Accrued Expenses
Research, development and commercial contract costs	$ 51,823	$ 59,420
Employee compensation	9,460	13,519
Accrued professional fees	9,658	12,042
Property and equipment costs	465	906
Revenue-related reserves	327
Other	2,228	2,819
Total	$ 73,961	$ 88,706

Collaboration and License Agreements - Manufacturing Services (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Global development of the licensed product \| C Stone
Collaboration Agreements
Manufacturing and research and development services related to global development activities	$ 1,530	$ 758

Collaboration and License Agreements - Contract Assets - CStone (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Collaboration Agreements
Accounts receivable	$ 4,510	$ 663
Unbilled accounts receivable	20,597	22,749
Collaboration \| C Stone
Collaboration Agreements
Accounts receivable	2,374	663
Unbilled accounts receivable	$ 597	$ 2,749

Stock-based Compensation - 2015 Stock Option and Incentive Plan (Details) - 2015 Stock Option and Incentive Plan - shares		3 Months Ended
	Jan. 01, 2020	Mar. 31, 2020	Apr. 08, 2015
Stock-based compensation
Initial shares of common stock authorized for issuance of stock awards (in shares)			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
Number of shares available for grant		1,623,278

Stock-based Compensation - Unrecognized Compensation Costs (Details) $ in Millions	Mar. 31, 2020 USD ($)
Stock-based compensation
Total unrecognized compensation cost related to non-vested stock option awards	$ 149.5
Weighted-average period over which unrecognized compensation cost will be recognized	2 years 11 months 19 days
Restricted stock units
Stock-based compensation
Total unrecognized compensation cost related to non-vested stock awards	$ 65.8
Weighted-average period over which unrecognized compensation cost will be recognized	3 years 7 months 13 days

Stock-based Compensation - 2020 Inducement Plan (Details)	3 Months Ended
	Mar. 31, 2020 shares
Stock-based compensation
Shares granted, options (in shares)	1,087,783
2020 Inducement Plan
Stock-based compensation
Initial shares of common stock authorized for issuance of stock awards (in shares)	1,000,000
Shares granted, options (in shares)	0
Shares granted, other than options (in shares)	0

Stock-based Compensation - Employee Stock Purchase Plan (Details) - Employee Stock - shares	1 Months Ended
	May 31, 2015	Jan. 01, 2020
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

Stock-based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Total stock based compensation expense
Subtotal	$ 17,026	$ 10,295
Capitalized stock-based compensation costs	(167)
Total	16,859	10,295
Research and development
Total stock based compensation expense
Total	7,798	5,790
General and administrative
Total stock based compensation expense
Total	9,061	4,505
Stock Options
Total stock based compensation expense
Subtotal	13,716	9,579
Restricted stock units
Total stock based compensation expense
Subtotal	3,153	624
Employee Stock
Total stock based compensation expense
Subtotal	$ 157	$ 92

Net Loss per Share (Details) - shares	3 Months Ended
Net Loss per Share (Details) - shares	Mar. 31, 2020	Mar. 31, 2019
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	7,754,908	5,763,149
Stock Options
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	6,643,451	5,460,882
Restricted stock units
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	1,097,836	291,992
Employee Stock
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	13,621	10,275

Income Taxes (Details)	3 Months Ended
Income Taxes (Details)	Mar. 31, 2020
Income Taxes
CARES eliminated taxable income limitation percentage	80.00%
CARES qualified improvement property recovery period	15 years
CARES bonus depreciation percentage	100.00%
Maximum
Income Taxes
CARES net operating losses carryback period	5 years
Deductible interest percentage limitation	50.00%
Tax Cuts and Jobs Act of 2017 deductible interest percentage limitation	30.00%
CARES charitable deduction limit percentage	25.00%

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Operating leases cost:
Lease cost	$ 4,381	$ 3,564
Sublease income	(722)	(701)
Net lease cost	$ 3,659	$ 2,863

Leases - Weighted Average Remaining Lease-term and Weighted Average Discount Rate (Details)	Mar. 31, 2020
Leases
Weighted average remaining lease term in years	9 years 1 month 6 days
Weighted average discount rate	8.20%