0001558370-21-001141 | 10-K | XBRL Viewer

Nature of Business

1. Nature of Business

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

The Company has two approved precision therapies and is globally advancing multiple programs for genomically defined cancers, systemic mastocytosis, and cancer immunotherapy. The Company is devoting substantially all of its efforts to research and development for current and future drug candidates and commercialization of AYVAKIT/AYVAKYT, GAVRETO and any current or future drug candidates that obtain marketing approval.

The Company is subject to a number of risks similar to those of other companies transitioning to a commercial stage, including but not limited to: successful commercialization of its current and future drugs, either by itself or through collaboration with third parties; establishing safety and efficacy in clinical trials and obtaining regulatory approvals for its drug candidates; competition from other companies; compliance with comprehensive and ongoing regulatory requirements and legislative changes; and the need to obtain adequate additional financing to fund the development of its drug candidates. If the Company is unable to raise capital when needed or on attractive terms, it may be forced to delay, reduce, eliminate or out-license certain of its research and development programs or future commercialization efforts.

On January 27, 2020, the Company closed a follow-on public offering of 4,710,144 shares of its common stock at a price to the public of $69.00 per share and received net proceeds of $308.4 million, after deducting underwriting discounts and commissions and offering expenses paid by the Company.

On July 30, 2020, the Company entered into a sales agreement with Cowen and Company, LLC (Cowen), pursuant to which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock having an aggregate offering price of up to $250.0 million through Cowen as sales agent (the ATM Facility). Cowen may sell the shares under such sales agreement by any method that is deemed to be an “at the market offering” as defined in Rule 415 of the Securities Act of 1933, as amended, including sales made directly on the Nasdaq Global Select Market or any other trading market for our common stock. During the year ended December 31, 2020, the Company issued and sold 1,784,926 shares of its common stock under the ATM Facility and received gross proceeds and net proceeds of $200.0 million and $194.7 million, respectively.

As of December 31, 2020, the Company had cash, cash equivalents and marketable securities of $1,549.7 million. Based on the Company’s current operating plans, the Company anticipates that its existing cash, cash equivalents and marketable securities will be sufficient to enable it to fund its current operations for at least the next twelve months from the issuance of the financial statements.

Summary of Significant Accounting Policies and Recent Accounting Pronouncements

12 Months Ended

Dec. 31, 2020

Summary of Significant Accounting Policies and Recent Accounting Pronouncements

2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements

Basis of Presentation

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

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

Due to the shares issued and sold in the follow-on public offerings completed in April 2019 and in January 2020 and the shares issued and sold under the ATM Facility in the year ended December 31, 2020, there were significant increases in shares outstanding in the years ended December 31, 2020 and 2019, which impacts the year-over-year comparability of the Company’s net income (loss) per share calculations.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and in developing the estimates and assumptions that are used in the preparation of the financial statements. Management must apply significant judgment in this process. Management’s estimation process often may yield a range of potentially reasonable estimates and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: revenue recognition, inventory, operating lease right-of-use assets, operating lease liabilities, stock-based compensation expense, accrued expenses, and income taxes. The length of time and full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition, including revenues, expenses, reserves and allowances, manufacturing, clinical trials, research and development costs and employee-related amounts, will depend on future developments that are highly uncertain, subject to change and difficult to predict, 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 considers the impact of COVID-19 while establishing the estimates within its consolidated financial statements and there may be changes to those estimates in future periods. Actual results may differ from these estimates.

Significant Accounting Policies

Revenue Recognition

The Company accounts for contracts with customers in accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC 606). The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Product revenue

The Company generated product revenue from sales of AYVAKIT and GAVRETO in the U.S and sales of AYVAKYT in the European Union to a limited number of specialty distributors and specialty pharmacy providers. These customers subsequently resell the products or dispense the products directly to patients. In addition, the Company entered into arrangements with payors that provide for government mandated rebates, discounts and allowances with respect to the utilization of its products.

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.

Collaboration revenue

At contract inception, the Company analyzes its collaboration arrangements to assess whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities and therefore within the scope of ASC Topic 808, Collaborative Arrangements (ASC 808). This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and which elements of the collaboration are more reflective of a vendor-customer relationship and therefore within the scope of ASC 606.

For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, either by analogy to authoritative accounting literature or by applying a reasonable and rational policy election. The Company evaluates the income statement classification for presentation of amounts due from or owed to other participants associated with multiple activities in a collaboration arrangement based on the nature of each separate activity. For the co-commercialization and marketing activities of certain of the Company’s products and product candidates in a collaboration arrangement, where the Company is the principal on sales transactions with third parties, the Company recognizes revenues, cost of sales and operating expenses on a gross basis in their respective lines in its consolidated statements of operations and comprehensive income (loss).

Where the Company is not the principal on sales transactions with third parties, the Company records its share of the revenues, cost of sales and operating expenses on a net basis as revenue (expenses) from the collaboration arrangement in its consolidated statements of operations and comprehensive income (loss).

For elements accounted within scope of ASC 606, to determine the appropriate amount of revenue to be recognized for the arrangements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. As part of the accounting for these arrangements, the Company must use significant judgment to determine: (a) the performance obligations based on the determination under step (ii) above; (b) the transaction price under step (iii) above; and (c) the stand-alone selling price for each performance obligation identified in the contract for the allocation of transaction price in step (iv) above. The Company uses judgment to determine whether milestones or other variable consideration, except for royalties and sales-based milestones, should be included in the transaction price as described further below. The transaction price is allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied.

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

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

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

Milestone Payments. At the inception of each arrangement that includes research or development milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone

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

Royalties. For arrangements that include sales-based royalties, including milestone payments upon first commercial sales and milestone payments based on a level of sales, which are the result of a customer-vendor relationship and for which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied. To date, the Company has not recognized any royalty revenue resulting from any of its licensing arrangements.

Consideration received prior to revenue recognition is recorded as deferred revenue in the consolidated balance sheets. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue in the accompanying consolidated balance sheets. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion. If the Company transfer goods or services to a customer before the customer pays consideration or before payment is due, the Company records a contract asset as unbilled accounts receivable on the consolidated balance sheets.

For a complete discussion of accounting for collaboration revenues, see Note 10, Collaboration and License Agreements.

Accounts Receivable, net

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 distributors and specialty pharmacy providers in the U.S. and in the European Union. The Company monitors economic conditions and the financial performance and credit worthiness of its counterparties 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, considering past events, current economic conditions, and reasonable and supportable forecasts about the future economic conditions. The contractual life of our accounts receivable is generally short-term. Amounts determined to be uncollectible are charged or written-off against the reserve. For the year ended December 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. The Company classifies its inventory costs as long-term when it expects to utilize the inventory beyond its normal operating cycle and includes these costs in other assets in the consolidated balance sheets.

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 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.

Fair Value Measurements

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

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

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

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

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

There have been no changes to the valuation methods during the years ended December 31, 2020 and 2019.

Cash and cash equivalents

The Company considers all highly liquid investments purchased with original maturities of 90 days or less from the date of purchase to be cash equivalents. As of December 31, 2020, cash equivalents were comprised of money market funds with less than 90 days from the date of purchase. As of December 31, 2019, cash equivalents were comprised of money market funds and U.S. treasury obligations with maturities less than 90 days from the date of purchase. Cash equivalents are reported at fair value.

Available-for-Sale Investments

The Company classifies marketable debt securities with a remaining maturity when purchased of greater than three months available-for-sale, and marketable debt securities with a remaining maturity date greater than one year as non-current assets. Available-for-sale marketable debt securities are maintained by an investment manager and mainly consist of U.S. treasury securities and U.S. government agency securities. Available-for-sale marketable debt securities are carried at fair value with the unrealized gains and losses included in other comprehensive income (loss) as a component of stockholders’ equity until realized. Any premium or discount arising at purchase is amortized and/or accreted to interest income and/or expense over the life of the instrument. Realized gains and losses are determined using the specific identification method and are included in other income (expense). The Company reviews its portfolio of available-for-sale debt securities, using both quantitative and qualitative factors, to determine if declines in fair value below cost have resulted from a credit-related loss or other factors. If the decline in fair value is due to credit-related factors, a loss is recognized in net income, whereas if the decline in fair value is not due to credit-related factors, the loss is recorded in other comprehensive income (loss).

Comprehensive Income (Loss)

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

Research and Development Expenses

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

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

Selling, General and Administrative Expenses

Selling, general and administrative expenses are primarily comprised of compensation and benefits associated with sales and marketing, finance, human resources, legal, information technology and other administrative personnel, business development, advertising and legal expenses and other general and administrative costs. Advertising costs are expensed as incurred. For years ended December 31, 2020 and 2019, advertising costs totaled $9.4 million and $3.3 million, respectively. The advertising cost for the year ended December 31, 2018 was minimal.

Property and Equipment, Net

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

Impairment of Long-Lived Assets

The Company continually evaluates whether events or circumstances have occurred that indicate that the estimated remaining useful life of its long-lived assets may warrant revision or that the carrying value of these assets may be impaired. The Company has not recognized any impairment charges through December 31, 2020.

Leases

Beginning January 1, 2019, leases are accounted for in accordance with ASC Topic 842, Leases (ASC 842). At the inception of a contract, the Company assesses whether the contract is, or contains, a lease. The assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether the Company has the right to direct the use of the asset. At inception of a lease, the Company allocates the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments.

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

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

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

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

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

The Company has made an accounting policy election to not recognize leases with an initial term of 12 months or less within our consolidated balance sheets and to recognize those lease payments on a straight-line basis in our consolidated statements of income over the lease term.

Stock-Based Compensation Expense

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

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

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

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

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

Stock-based awards issued to non-employees, including directors for non-board-related services, are accounted for based on the fair value of such services received or the fair value of the awards granted on the grant date, whichever

is more reliably measured. Stock-based awards subject to service-based vesting conditions are expensed on a straight-line basis over the vesting period.

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

Income Taxes

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

Foreign currency translation

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

Reclassifications

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

Concentrations of Credit Risk and Off-Balance-Sheet Risk

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

The Company maintains its cash, cash equivalents and marketable securities in custodian accounts at high quality financial institutions, and as of December 31, 2020 and 2019, substantially all the Company’s cash, cash equivalents and marketable securities were invested in money market funds and U.S. government agency securities and treasury obligations, and consequently, the Company believes that such funds are subject to minimal credit risk. The Company has adopted an investment policy that limits the amounts the Company may invest in any one type of investment. The Company has not experienced any credit losses and does not believe it is exposed to any significant credit risk on these funds.

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

Segment and Geographic Information

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the chief executive officer. The Company and the chief operating decision maker view the Company’s operations and manage its business as one operating segment. The Company operates in the U.S. and Europe. All material long-lived assets of the Company reside in the U.S.

New Accounting Pronouncements

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

Credit Losses

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13). The FASB subsequently issued amendments to ASU 2016-13, which had the same effective date and transition date of January 1, 2020. These standards require an entity to measure and recognize expected credit losses for certain financial instruments, including trade receivables, as an allowance that reflects the entity's current estimate of credit losses expected to be incurred. For available-for-sale debt securities with unrealized credit losses, the standard requires allowances to be recorded through net income instead of directly reducing the amortized cost of the investment under the previous other-than-temporary impairment model. The Company adopted the new standard on a prospective basis on January 1, 2020. The adoption of this standard did not have a material impact on the Company’s consolidated financial position and results of operations or a significant impact on its internal controls.

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 did not have a material impact on the 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 update clarifies that transactions between collaborative arrangement participants should be accounted for as revenue under ASC 606 when the collaborative arrangement participant is a customer in the context of a unit of account, consistent with the unit of account guidance in ASC 606. The update also 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. The adoption of this standard did not have a material impact on the Company’s consolidated financial position and results of operations or a significant impact on its internal controls.

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 material impact on the Company’s consolidated financial position and results of operations or a significant impact on its internal controls. However, the adoption of this standard

resulted 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 early adopted this amendment prospectively as of January 1, 2020. The adoption of the standard did not have a material impact to the Company’s consolidated financial position and results of operations or a significant impact on its internal controls.

Defined Benefit Plans

In August 2018, the FASB issued No. ASU 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans, which amends ASC 715 to add, remove, and clarify disclosure requirements related defined benefit pension and other postretirement plans. The amendments in ASU 2018-14 are effective for the fiscal years ending after December 15, 2020. The Company adopted this amendment as of January 1, 2020 and the adoption did not have a material impact on the related disclosures.

Marketable Securities

12 Months Ended

Dec. 31, 2020

Marketable Securities

3. Marketable Securities

Marketable securities consisted of the following at December 31, 2020 and 2019 (in thousands):


	Amortized		Unrealized		Unrealized		Fair
December 31, 2020	Cost		Gain		Losses		Value
Marketable securities, available-for-sale:
U.S. government agency securities	$	746,770	$	513	$	(14)	$	747,269
U.S. treasury obligations		117,368		449		—		117,817
Total	$	864,138	$	962	$	(14)	$	865,086


	Amortized		Unrealized		Unrealized		Fair
December 31, 2019	Cost		Gain		Losses		Value
Marketable securities, 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	$	433,516	$	518	$	(12)	$	434,022

As of December 31, 2020 and 2019, the Company held 8 and 11 securities, respectively, that were in an unrealized loss position. The aggregate fair value of securities held by the Company in an unrealized loss position for less than twelve months as of December 31, 2020 and 2019 were $125.7 million and $82.1 million, respectively, and there were no securities held by the Company in an unrealized loss position for more than twelve months. The Company has the intent and ability to hold such securities until recovery. As a result, the Company did not record any charges for credit-related impairments for its marketable debt securities for the years ended December 31, 2020 and 2019.

As of December 31, 2020, 65 securities with an aggregate fair value of $677.9 million had remaining maturities between one year and five years. As of December 31, 2019, 9 securities with an aggregate fair value of $64.4 million had remaining maturities greater than one year.

Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2020

Fair Value of Financial Instruments

4. Fair Value of Financial Instruments

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


			Active		Observable		Unobservable
	December 31,		Markets		Inputs		Inputs
Description	2020		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	420,567	$	420,567	$	—	$	—
Marketable securities, available-for-sale:
U.S. government agency securities		747,269		—		747,269		—
U.S. treasury obligations		117,817		117,817		—		—
Total	$	1,285,653	$	538,384	$	747,269	$	—

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


			Active		Observable		Unobservable
	December 31,		Markets		Inputs		Inputs
Description	2019		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	98,946	$	98,946	$	—	$	—
U.S. treasury obligations		14,992		14,992		—		—
Marketable securities, 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	$	—

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.

Product Revenue Reserves and Allowances

12 Months Ended

Dec. 31, 2020

Product Revenue Reserves and Allowances

5. Product Revenue Reserves and Allowances

In January 2020, the U.S. Food and Drug Administration (FDA) approved AYVAKIT for the treatment of adults with unresectable or metastatic gastrointestinal stromal tumor (GIST) harboring a PDGFRA exon 18 mutation, including PDGFRA D842V mutations. In September 2020, the FDA granted accelerated approval of GAVRETO for the treatment of adult patients with metastatic RET fusion-positive non-small cell lung cancer (NSCLC) as detected by an FDA approved test, and the European Commission granted conditional marketing authorization to AYVAKYT as a monotherapy for the treatment of adult patients with unresectable or metastatic GIST harboring the PDGFRA D842V mutation.

For the year ended December 31, 2020, the Company generated aggregate net product revenue of $22.1 million from sales of AYVAKIT/AYVAKYT and GAVRETO. The following table summarizes activity in each of the product revenue allowance and reserve categories for the year ended December 31, 2020 (in thousands):


	Total
Beginning balance at January 1, 2020	$	—
Provision related to sales in the current period		2,515
Adjustment related to prior periods sales		—
Credits and payments made		(1,323)
Ending balance at December 31, 2020	$	1,192

The total reserves above, which are included in the Company’s consolidated balance sheets, are summarized as follows (in thousands):


	As of December 31,
	2020		2019
Reduction of accounts receivable, net	$	227	$	—
Component of accrued expenses		966		—
Total revenue-related reserves	$	1,192	$	—

Inventory

12 Months Ended

Dec. 31, 2020

Inventory

6. Inventory

Capitalized inventory consists of the following at December 31, 2020 and 2019 (in thousands):


	As of December 31,
	2020		2019
Work in process	$	9,488	$	—
Finished goods		914		—
Total	$	10,402	$	—

Balance sheet classification


	As of December 31,
	2020		2019
Inventory	$	8,581	$	—
Other assets		1,821		—
Total	$	10,402	$	—

Inventory amounts written down as a result of excess, obsolescence, unmarketability or other reasons are charged to cost of sales and was zero for the year ended December 31, 2020. Long-term inventory, which primarily consists of work in process, is included in other assets in the consolidated balance sheets.

Restricted Cash

12 Months Ended

Dec. 31, 2020

Restricted Cash

7. Restricted Cash

At December 31, 2020 and 2019, respectively, $5.2 million and $5.7 million, of the Company’s cash is restricted by a bank primarily related to security deposits for the lease agreements for the Company’s current and former corporate headquarters.

Property and Equipment, Net

12 Months Ended

Dec. 31, 2020

Property and Equipment, Net

8. Property and Equipment, Net

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


	Estimated
	Useful Life	As of December 31,
	(Years)	2020		2019
Lab equipment	5	$	11,418	$	8,975
Furniture and fixtures	4		3,420		3,512
Computer equipment	3		1,513		1,558
Leasehold improvements	Term of lease		36,946		36,627
Software	3		412		417
Construction-in-progress			151		956
Total cost			53,860		52,045
Less: accumulated depreciation and amortization			(19,731)		(13,684)
Total		$	34,129	$	38,361

Property, plant and equipment are recorded at historical cost, net of accumulated depreciation. Depreciation expense for the years ended December 31, 2020, 2019 and 2018 was $6.6 million, $5.3 million and $4.2 million, respectively.

Accrued Expenses

12 Months Ended

Dec. 31, 2020

Accrued Expenses

9. Accrued Expenses

Accrued expenses consist of the following (in thousands):


	As of December 31,
	2020		2019
External research and development	$	60,255	$	59,420
Employee compensation		27,622		13,519
Accrued professional fees		10,986		12,042
Revenue-related reserves		966		—
Other		6,109		3,725
Total	$	105,938	$	88,706

Collaboration and License Agreements

12 Months Ended

Dec. 31, 2020

Collaboration and License Agreements

10. Collaboration and License Agreements

Roche – Pralsetinib Collaboration

On July 13, 2020, the Company entered into a collaboration agreement (the Roche pralsetinib collaboration agreement) with F. Hoffmann-La Roche Ltd and Genentech, Inc., a member of the Roche Group (collectively, Roche), pursuant to which the Company granted Roche exclusive rights to develop and commercialize the Company’s drug candidate pralsetinib worldwide, excluding the CStone territory (as defined below), and a co-exclusive license in the U.S. to develop and commercialize pralsetinib. In addition, Roche has the right to opt in to a next-generation RET compound co-developed by the Company and Roche.

Under the Roche pralsetinib collaboration agreement, the Company received an upfront cash payment of $675.0 million in the third quarter of 2020, and through December 31, 2020, the Company has received $55.0 million in specified regulatory and commercialization milestones. In addition to upfront and milestone payments received through December 31, 2020, the Company is eligible to receive up to $872.0 million in contingent payments, including specified development, regulatory and sales-based milestones for pralsetinib and any licensed product containing a next-generation RET compound.

In the U.S., the Company and Roche are working together to co-commercialize pralsetinib and will equally share responsibilities, profits and losses. In addition, the Company is eligible to receive tiered royalties ranging from high-teens to mid-twenties on annual net sales of pralsetinib outside the U.S., excluding Greater China (the Roche territory). The Company and Roche have also agreed to co-develop pralsetinib globally in RET-altered solid tumors, including non-small cell lung cancer, medullary thyroid carcinoma and other thyroid cancers, as well as other solid tumors. The Company and Roche will share global development costs for pralsetinib at a rate of 45 percent for the Company and 55 percent for Roche up to a specified amount of aggregate joint development costs, after which the Company’s share of global development costs for pralsetinib will be reduced by a specified percentage. The Company and Roche will also share specified global development costs for any next-generation RET compound co-developed under the collaboration in a similar manner.

Unless earlier terminated in accordance with its terms, the Roche pralsetinib collaboration agreement will expire on a licensed product-by-licensed product basis (i) in the U.S. upon the expiration of the gross profit sharing term for such licensed product and (ii) outside the U.S. on a country-by-country basis at the end of the applicable royalty term for such licensed product. Roche may terminate the agreement in its entirety or on a licensed product-by-licensed product or country-by-country basis subject to certain notice periods. Either party may terminate the Roche pralsetinib collaboration agreement for the other party’s uncured material breach or insolvency. Subject to the terms of the Roche pralsetinib collaboration agreement, effective upon termination of the agreement, the Company is entitled to retain specified licenses to be able to continue to exploit the licensed products.

In connection with the Roche collaboration agreement, on July 13, 2020, the Company also entered into a stock purchase agreement with Roche Holdings, Inc. (Roche Holdings) pursuant to which the Company issued and sold an aggregate of 1,035,519 of shares of common stock to Roche Holdings at a purchase price of $96.57 per share and received $100.0 million in the third quarter of 2020. The closing for a minority portion of the equity investment occurred following the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions.

The Company considered the ASC 606 criteria for combining contracts and determined that the Roche pralsetinib collaboration agreement and stock purchase agreement should be combined into a single contract because they were negotiated and entered into in contemplation of one another. The Company accounted for the common stock issued to Roche Holdings based on the fair market value of the common stock on the dates of issuance. The fair market value of the common stock issued to Roche Holdings was $79.3 million, based on the closing price of the Company’s common stock on the dates of issuance, resulting in a $20.7 million premium. The Company determined that the premium paid by Roche Holdings for the common stock should be attributed to the transaction price of the Roche pralsetinib collaboration agreement.

The Company determined that the Roche pralsetinib collaboration agreement contained four material components: (i) licenses granted to Roche to develop and commercialize pralsetinib worldwide, excluding the CStone territory (pralsetinib license); (ii) the Roche territory-specific commercialization activities for pralsetinib, including manufacturing (Roche territory activities); (iii) the parties’ joint development activities for pralsetinib worldwide, excluding the CStone territory; and (iv) the parties’ joint commercialization activities for pralsetinib in the U.S. The Company considered the guidance in ASC 606 to determine which of the components of the Roche pralsetinib collaboration agreement are performance obligations with a customer and concluded that the pralsetinib license and the Roche territory activities are within the scope of ASC 606 because Roche is the Company’s customer in those transactions.

The Company evaluated the Roche pralsetinib license under ASC 606 and concluded that the pralsetinib license is a functional intellectual property license and is a distinct performance obligation. The Company determined that Roche benefited from the pralsetinib license at the time of grant, and therefore the related performance obligation is satisfied at a point in time.

The Company evaluated the Roche territory activities under ASC 606 and identified one material promise associated with manufacturing activities related to development and commercial supply of pralsetinib in the Roche territory for up to 24 months. Given that Roche is not obligated to purchase any minimum amount or quantities of the development and commercial supply from the Company, the Company concluded that, for the purpose of ASC 606, the provision of manufacturing activities related to development and commercial supply of pralsetinib in Roche territory was an option but not a performance obligation of the Company at the inception of the Roche collaboration agreement and will be accounted for if and when exercised. The Company also concluded that there is no separate material right in connection with the development and commercial supply of pralsetinib, as the expected pricing was not issued at a significant and incremental discount. Therefore, the manufacturing activities were excluded as performance obligations at the outset of the arrangement. Additionally, the Company is entitled to sales milestones and royalties from Roche upon future sales of pralsetinib in the Roche territory, and revenue will be recognized when the related sales occur. Costs that are incurred associated with the Roche territory activities are reimbursable from Roche and will be recognized as revenue.

For the purposes of ASC 606, the transaction price of the Roche collaboration agreement as of the outset of the arrangement was determined to be $695.7 million, which consisted of the upfront cash payment of $675.0 million and the $20.7 million premium on the sale of common stock to Roche Holdings, which was allocated to the performance obligation related to the pralsetinib licenses. During the year ended December 31, 2020, the Company achieved $55.0 million in specified regulatory and commercialization milestones and added the $55.0 million to the estimated transaction price of the Roche pralsetinib agreement. The other potential milestone payments that the Company is eligible to receive under the Roche pralsetinib agreement have been excluded from the transaction price, as all the remaining milestone amounts were fully constrained based on the probability of achievement. The Company will re-evaluate 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.

The following table summarizes revenue recognized under the Roche pralsetinib collaboration during the years ended December 31, 2020 and 2019 (in thousands):


	Year Ended December 31,
	2020		2019
Upfront license revenue	$	695,694	$	—
License milestone revenue		55,000		—
Services related to Roche territory-specific activities		2,406		—
Total Roche pralsetinib collaboration revenue	$	753,100	$	—

For the parties’ participation in global development for pralsetinib and the U.S. commercialization activities for GAVRETO, the Company concluded that those activities and cost-sharing payments related to such activities are within the scope of ASC 808, as both parties are active participants in the development, manufacturing and commercialization activities and are exposed to significant risks and rewards of those activities under the Roche pralsetinib collaboration agreement. Payments to or reimbursements from Roche related to the global development activities will be accounted for as an increase to or reduction of research and development expenses. Prior to the transition to Roche of specified responsibilities associated with product sales to customers, pricing and distribution matters in the U.S., the Company is the principal for product sales to customers in the U.S. and will recognize revenues on sales to third parties in product revenue, net in its consolidated statements of operations and comprehensive income (loss). After such transition, Roche will take over the responsibilities associated with product sales to customers, pricing and distribution matters for GAVRETO in the U.S. and become the principal for product sales to customers in the U.S., and the Company will recognize its portion of the commercial profits and losses sharing as revenue (expenses) from the collaboration arrangement in its consolidated statements of operations and comprehensive income (loss).

During the year ended December 31, 2020, the Company recorded a $10.6 million reduction in selling, general and administrative expenses in connection with the commercialization of GAVRETO in the U.S. and a $20.5 million reduction in research and development expenses in connection with global development activities for pralsetinib.

The following table summarizes the contract assets associated with the Roche pralsetinib collaboration as of December 31, 2020 and 2019 (in thousands):

Clementia

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

Under the Clementia agreement, the Company received an upfront cash payment of $25.0 million and through December 31, 2020, the Company has received $20.0 million cash milestone payments. Subject to the terms of the Clementia agreement, in addition to the upfront and milestone payments received through December 31, 2020, the Company is eligible to receive up to $490.0 million in 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 Clementia purchased 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 consisted 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 the year ended December 31, 2019, the Company completed the delivery of the license, the technology transfer and the transfer of existing manufacturing inventory and recognized a total of $46.2 million as revenue. During the year ended December 31, 2020, the Company completed the transfer of the in-process manufacturing inventory and recognized revenue of $0.3 million accordingly. There was no revenue deferred as a contract liability associated with the Clementia agreement as of December 31, 2020 and 2019.

CStone Pharmaceuticals

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

The Company received an upfront cash payment of $40.0 million, and through December 31, 2020, the Company has received $14.0 million in milestone payments under this collaboration. Subject to the terms of the CStone agreement, in addition to the upfront and milestone payments received through December 31, 2020, the Company will be eligible to receive up to approximately $332.0 million in additional milestone payments, including $104.5 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 is responsible for conducting all development and commercialization activities in the CStone territory related to the licensed products. Subject to specified exceptions, during the term of the CStone agreement, each party has agreed that neither it nor its affiliates will conduct specified development and commercialization activities in the CStone territory related to selective inhibitors of FGFR4, KIT, PDGFRA and RET. In addition, under the CStone agreement, each party has granted the other party specified intellectual property licenses to enable the other party to perform its obligations and exercise its rights under the CStone

agreement, including license grants to enable each party to conduct research, development and commercialization activities pursuant to the terms of the CStone agreement.

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 net of cost sharing payments during the years ended December 31, 2020, 2019 and 2018 is as follows (in thousands):


	Year Ended December 31,
	2020		2019		2018
Manufacturing and research and development services related to global development activities net of cost sharing payments	$	3,060	$	3,286	$	496

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 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.

During the years ended December 31, 2020 and 2019, cash consideration associated with achieved development milestones of $2.0 million and $12.0 million, respectively, were added to the estimated transaction price for the CStone agreement and recognized as revenue in such periods. The Company will continue to 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.

A summary of revenue recognized under the CStone agreement during the years ended December 31, 2020, 2019 and 2018 is as follows (in thousands):


	Year Ended December 31,
	2020		2019		2018
License milestone revenue	$	2,000	$	12,000	$	40,000
Manufacturing services related to CStone territory-specific activities		1,630		144		—
Total CStone collaboration revenue	$	3,630	$	12,144	$	40,000

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


	As of December 31,
	2020		2019
Accounts receivable, net	$	563	$	663
Unbilled accounts receivable	$	—	$	2,749

As of December 31, 2020, the Company had $6.5 million of deferred revenue as a contract liability associated with the CStone collaboration. This contract liability resulted from advance payments made by CStone in connection with commercial supply of avapritinib and pralsetinib for the CStone territory. There was no revenue deferred as a contract liability at December 31, 2019.

Roche – Immunotherapy Collaboration

In March 2016, the Company entered into a collaboration and license agreement (as amended, the Roche immunotherapy agreement) with F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc. (collectively, Roche) for the discovery, development and commercialization of small molecule therapeutics targeting kinases believed to be important

in cancer immunotherapy (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 immunotherapy agreement, Roche was originally 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 amendments to the Roche immunotherapy agreement in the fourth quarter of 2019 and subsequently in the first quarter of 2021, the Company and Roche are currently conducting activities for up to two programs under the collaboration. For one of the two collaboration programs, if Roche exercises its option, Roche will receive worldwide, exclusive commercialization rights for the licensed product. For the other collaboration program, if Roche exercises its option, the Company will retain commercialization rights in the U.S. for the licensed product, and Roche will receive commercialization rights outside of the U.S. for the licensed product. 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 immunotherapy 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 immunotherapy agreement, and through December 31, 2020, the Company has achieved $19.5 million in milestone payments under this collaboration. Subject to the terms of the Roche immunotherapy agreement, as amended, in addition to upfront and milestone payments received through December 31, 2020, the Company is eligible to receive up to approximately $323.3 million in contingent option fees and milestone payments related to specified research, pre-clinical, clinical, regulatory and sales-based milestones. 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 immunotherapy 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 immunotherapy agreement. Prior to its exercise of its first option, Roche may terminate the Roche immunotherapy 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 immunotherapy 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 immunotherapy 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 immunotherapy 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 immunotherapy 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.

Through December 31, 2020, the Company has achieved $19.5 million in milestone payments under this collaboration, and these amounts were added to the estimated transaction price and allocated to the existing performance obligation as it became probable that a significant reversal of cumulative revenue would not occur for each of the research milestones achieved.

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

During the year ended December 31, 2020, a reduction in the costs expected to be incurred in the future to satisfy the performance obligation under the collaboration became probable. Accordingly, the Company recorded a cumulative revenue catch-up of $7.9 million during the year ended December 31, 2020. For additional information, see Note 18, Subsequent Events.

A summary of revenue recognized under the Roche immunotherapy agreement during the years ended December 31, 2020, 2019 and 2018 is as follows (in thousands):


	Year Ended December 31,
	2020		2019		2018
Roche collaboration research and development services revenue	$	14,580	$	8,165	$	4,521

During the years ended December 31, 2020, 2019 and 2018, the Company recognized the following revenue due to the changes in the contract liability balances (in thousands):


	Year Ended December 31,
	2020		2019		2018
Amounts included in the contract liability at the beginning of the period	$	11,546	$	4,578	$	4,277

As of December 31, 2020, the Company had revenue deferred as a contract liability related to the Roche immunotherapy agreement of $34.7 million, of which $6.1 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 4.25 years. As of December 31, 2019, the Company had revenue deferred as a contract liability related to the Roche immunotherapy agreement of $46.1 million, of which $6.2 million was included in current liabilities.

Stockholders's Equity

12 Months Ended

Dec. 31, 2020

Stockholders's Equity

11. Stockholder’s Equity

On July 30, 2020, the Company entered into the ATM Facility with Cowen, pursuant to which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock having an aggregate offering price of up to $250.0 million through Cowen as sales agent. During the year ended December 31, 2020, the Company issued and sold 1,784,926 shares of its common stock under the ATM Facility and received net proceeds of $194.7 million.

Stock-based Compensation

12 Months Ended

Dec. 31, 2020

Stock-based Compensation

12. 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-based awards and cash-based awards. The Company initially reserved a total of 1,460,084 shares of common stock for the issuance of awards under the 2015 Plan. The 2015 Plan provides that the number of shares reserved and available for issuance under the 2015 Plan will be cumulatively increased on January 1 of each calendar year by 4% of the number of shares of common stock issued and outstanding on the immediately preceding December 31 or such lesser amount as specified by the compensation committee of the board of directors. For the calendar years beginning January 1, 2020 and 2021, the number of shares reserved for issuance under the 2015 Plan was increased by 1,970,888 and 2,311,741 shares, respectively. In addition, the total number of shares reserved for issuance is subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. At December 31, 2020, there were 1,703,849 shares available for future grant under the 2015 Plan.

Stock-based Compensation Expense

The Company recognized stock-based compensation expense totaling $75.5 million, $54.7 million and $30.5 million for the year ended December 31, 2020, 2019 and 2018, respectively.

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


	Year Ended December 31,
	2020		2019			2018
Stock options	$	57,237	$	47,726	$	30,095
Restricted stock units		18,407		6,445		167
Employee stock purchase plan		958		482		272
Subtotal		76,602		54,653		30,534
Capitalized stock-based compensation costs		(1,076)		—		—
Stock-based compensation expense included in total cost and operating expenses	$	75,526	$	54,653	$	30,534

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


	Year Ended December 31,
	2020		2019		2018
Research and development	$	33,642	$	28,596	$	17,019
Selling, general and administrative		41,884		26,057		13,515
Total stock-based compensation expense	$	75,526	$	54,653	$	30,534

At December 31, 2020, there was $173.7 million of total unrecognized compensation cost related to non-vested stock awards, which is expected to be recognized over a weighted-average period of 2.7 years.

Stock Options

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



	Year Ended December 31,
	2020		2019		2018
Risk-free interest rate	1.02	%	2.21	%	2.77	%
Expected dividend yield	—	%	—	%	—	%
Expected term (years)	6.0		6.0		6.0
Expected stock price volatility	60.48	%	63.83	%	69.08	%

The following table summarizes the stock option activity for the year ended December 31, 2020:


		Weighted-		Remaining	Aggregate
		Average		Contractual	Intrinsic
		Exercise		Life	Value(1)
	Shares	Price		(in Years)	(in thousands)
Outstanding at December 31, 2019	5,795,710	$	58.82	7.69	$	134,409
Granted	1,502,403		62.55
Exercised	(842,649)		39.50
Canceled	(424,823)		75.44
Outstanding at December 31, 2020	6,030,641	$	61.28	7.41	$	306,810
Exercisable at December 31, 2020	3,181,167	$	51.60	6.36	$	192,611

(1)	Intrinsic value represents the amount by which the fair market value as of December 31, 2020 of the underlying common stock exceeds the exercise price of the option.

The weighted-average grant date fair value of options granted in the years ended December 31, 2020, 2019 and 2018 was $34.77, $48.96 and $49.40, respectively. The total intrinsic value of options exercised in the years ended December 31, 2020, 2019, and 2018 was $43.3 million, $33.8 million, and $29.4 million, respectively.

At December 31, 2020, the total unrecognized compensation expense related to unvested stock option awards was $112.4 million, which is expected to be recognized over a weighted-average period of approximately 2.5 years.

Restricted stock units

Restricted stock units granted by the Company generally vest ratably over four years. The following table summarizes the restricted stock units activity for the years ended December 31, 2020:


		Weighted-Average
		Grant Date
	Shares	Fair Value
Unvested shares at December 31, 2019	419,755	$	82.50
Granted	961,283		60.01
Vested	(109,556)		83.64
Forfeited	(99,796)		65.72
Unvested shares at December 31, 2020	1,171,686	$	65.37

The Company started to grant restricted stock units to employees in June 2018. The total fair value of restricted stock units vested during the years ended December 31, 2020 and 2019 was $7.4 million and $0.7 million, respectively. There were no restricted stock units vested during the year ended December 31, 2018. At December 31, 2020, the total unrecognized compensation expense related to unvested restricted stock units was $61.3 million, which is expected to be recognized over a weighted-average period of approximately 3.0 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 December 31, 2020, there were 324,485 shares issued under the Inducement Plan.

2015 Employee Stock Purchase Plan

In 2015, the Company’s board of directors and stockholders approved the 2015 ESPP, which became effective upon the closing of the IPO in May 2015. The Company initially reserved a total of 243,347 shares of common stock for issuance under the 2015 ESPP. The 2015 ESPP provides that the number of shares reserved and available for issuance under the 2015 ESPP will be cumulatively increased on January 1 of each calendar years by 1% of the number of shares of common stock issued and outstanding on the immediately preceding December 31 or such lesser amount as specified by the compensation committee of the board of directors. For the calendar years beginning January 1, 2020 and 2021, the number of shares reserved for issuance under the 2015 ESPP was increased by 492,722 and 577,935 shares, respectively. The Company issued 38,516, 20,724, and 13,878 shares under the ESPP during the years ended December 31, 2020, 2019, and 2018 respectively.

Net Income Per Share

12 Months Ended

Dec. 31, 2020

Net Income Per Share

13. Net income per share

Basic net income (loss) per share (earnings per share, EPS) is calculated by dividing net income (loss) by the weighted average shares of common stock outstanding during the period, without consideration for common stock equivalents. Diluted net income (loss) per share is calculated by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period. For purposes of the diluted net income (loss) per share calculation, the effect of stock options, unvested restricted stock units and ESPP shares on weighted average number of shares is calculated using the treasury stock method. In periods with reported net operating losses, all

common stock equivalents are deemed anti-dilutive such that basic net loss per share and diluted net loss per share are equal.

The calculation of net income (loss) and the number of shares used to compute basic and diluted net income (loss) per share for the years ended December 31, 2020, 2019 and 2018 are as follows (in thousands, except per share data):


	Year Ended December 31,
	2020		2019		2018
Net income (loss) - basic and diluted	$	313,882	$	(347,694)	$	(236,642)
Weighted average shares outstanding - basic		54,534		47,829		43,867
Effect of dilutive securities:
Stock options		1,303		—		—
Restricted stock units		331		—		—
Weighted average shares outstanding - diluted		56,168		47,829		43,867
Net income (loss) per share - basic	$	5.76	$	(7.27)	$	(5.39)
Net income (loss) per share - diluted		5.59		(7.27)		(5.39)

For the years ended December 31, 2020, 2019 and 2018, the following dilutive securities were not included in the computation of net income (loss) per share because the effect would be anti-dilutive (in thousands):


	Year Ended December 31,
	2020	2019	2018
Stock options	4,480	5,796	4,558
Restricted stock units	13	420	37
ESPP shares	19	14	10
Total	4,512	6,230	4,605

Income Taxes

12 Months Ended

Dec. 31, 2020

Income Taxes

14. Income Taxes

A reconciliation of the U.S. statutory income tax rate to the Company’s effective tax rate is as follows for the years ended December 31, 2020, 2019 and 2018


	Year Ended December 31,
	2020		2019		2018
Federal income tax (benefit) at statutory rate	21.00	%	21.00	%	21.00	%
Permanent differences	(0.47)		1.11		1.71
Federal research and development credits	(0.96)		0.77		1.79
Federal orphan drug credits	(10.35)		6.90		18.06
State income tax, net of federal benefit	0.08		7.46		7.08
Other	1.50		2.13		0.04
Foreign rate differential	0.37		(0.03)		—
Deferred rate change	2.60		(0.08)		—
Change in valuation allowance	(13.42)		(39.26)		(49.68)
Effective income tax rate	0.35	%	—	%	—	%

The Company’s deferred tax assets and liabilities consist of the following (in thousands):


	Year Ended December 31,
	2020		2019		2018
Deferred tax assets:
Net operating loss carryforwards	$	140,769	$	219,935	$	127,421
Research and development credit carryforwards		23,679		19,240		13,714
Orphan drug credit carryforwards		125,153		92,538		68,536
Accrued expenses and other		32,206		25,842		12,248
Deferred revenue		7,317		10,971		10,320
Deferred lease incentive		—		—		3,993
Deferred rent		19,308		26,196		1,436
Total gross deferred tax asset		348,432		394,722		237,668
Deferred tax liability
Depreciation		(5,451)		(4,474)		(4,162)
Right of use assets		(14,539)		(19,869)		—
Debt discount		—		—		—
Valuation allowance		(328,442)		(370,379)		(233,506)
Net deferred tax asset	$	—	$	—	$	—

Coronavirus Aid, Relief and Economic Security Act

In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) was signed into law in March 2020. The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (2017 Tax Act). Corporate taxpayers may carryback net operating losses (NOLs) originating during 2018 through 2020 for up to five years, which was not previously allowed under the 2017 Tax Act. The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020. Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for tax years beginning in 2019 and 2020.

In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act resulted in $3.7 million of bonus depreciation to the Company’s income tax provision for the year ended December 31, 2020. Additionally, the Company was able to offset 100% of its current year Federal taxable income with NOLs carried forward from previous years.

Management has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets and has determined that it is more likely than not that the Company will not recognize the benefits of its net federal, foreign and state deferred tax assets, and as a result, a valuation allowance of $328.4 million, $370.4 million and $233.5 million has been established at December 31, 2020, 2019 and 2018, respectively. The change in the valuation allowance was ($42.0) million, $136.9 million and $119.0 million for the years ended December 31, 2020, 2019 and 2018, respectively. The decrease in the deferred tax asset between December 31,2020 and 2019 was mostly due to the utilization of federal and state net operating losses to offset current year taxable income.

The Company has incurred net operating losses (NOL) since inception. As of December 31, 2020, the Company had federal and state NOL carryforwards of $435.7 million and $776.0 million, respectively, which begin to expire in 2030, and of which $414 million of the Company’s federal NOL carryforwards have an unlimited carryforward. As of December 31, 2020, the Company had federal and state research and development tax credit carryforwards of $14.2 million and $11.2 million, respectively, which begin to expire in 2030. As of December 31, 2020, the Company had federal orphan drug credits of $125.2 million, which begin to expire in 2035 and state investment tax credits of $0.8 million, which begin to expire in 2021. The Company has analyzed and validated its research and development tax credits as well as its orphan drug credits for 2011-2019. The Company generated research credits in 2020 but has not conducted a formal study to document its qualified activities. This study may result in an adjustment to the Company’s research and development credit carryforwards. No amounts are being presented as an uncertain tax position as of December 31, 2020 until such study is completed and the adjustment is known. A valuation allowance has been provided against the Company’s research and development credits and, if an adjustment is required, this adjustment would be

offset by an adjustment to the deferred tax asset established for the research and development credit carry-forwards and the valuation allowance.

The Internal Revenue Code of 1986, as amended (the Code), provides for a limitation of the annual use of net operating losses and other tax attributes (such as research and development tax credit carryforwards) following certain ownership changes (as defined by the Code) that could limit the Company’s ability to utilize these carryforwards. The Company analyzed shifts in the stock ownership to determine if its net operating losses and tax credit carryforwards may be subject to limitation under Sections 382 and 383. Based on this analysis, it was determined that it is more likely than not that an ownership change occurred on the following dates: March 24, 2011; April 5, 2011; November 10, 2014; and February 7, 2017. As a consequence of these ownership changes, the Company’s net operating loss carryforwards and tax credit carryforwards allocable to the periods preceding each ownership change are subject to limitations under Section 382. Approximately $2 million of the Company’s NOL carryforwards may be available for utilization within their applicable carryforward periods. In addition, U.S. tax laws limit the time during which these carryforwards may be applied against future taxes. Therefore, the Company may not be able to take full advantage of these carryforwards for federal or state income tax purposes.

Interest and penalty charges, if any, related to unrecognized tax benefits would be classified as income tax expense in the accompanying statements of operations and comprehensive loss. As of December 31, 2020 and 2019, the Company has no unrecognized tax benefits or accrued interest related to unrecognized tax benefits. As of December 31, 2020, the Company was open to examination in the U.S. federal and certain state jurisdictions for all of the Company’s tax years since the net operating losses may potentially be utilized in future years to reduce taxable income. Since the Company is in a loss carryforward position, it is generally subject to examination by the U.S. federal, state, and local income tax authorities for all tax years in which a loss carryforward is available.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

Leases

12 Months Ended

Dec. 31, 2020

Leases

15. 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. During the year ended December 31, 2018, prior to the adoption of ASC 842, the Company recorded rent expense on a straight-line basis and the leasehold improvement incentives as a reduction to rent expense ratably over the lease term. The lease agreement required the Company to pay an intital security deposit of $1.3 million, of which a total of $0.4 million was released subsequently, and the remaining $0.9 million is recorded in restricted cash on the Company’s consolidated balance sheet as of December 31, 2020. In the first quarter of 2018, the Company subleased the space to a third party and the term of the sublease will expire on February 28, 2021.

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. During the year ended December 31, 2018, prior to the adoption of ASC 842, the Company recorded rent expense on a straight-line basis and the leasehold improvement incentives as a reduction to rent expense ratably over the lease term. The lease agreement required the Company to pay an initial security deposit of $3.5 million, of which $3.0 million is recorded in restricted cash on the Company’s consolidated balance sheet as of

December 31, 2019, and $0.5 million was recorded in prepaid and other current assets, which was subsequently released in January 2020.

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

The Company has agreed to pay an initial annual base rent of approximately $3.2 million for the expansion premises, which increases annually until it reaches approximately $4.2 million in the last year of the initial term for the expansion premises. Pursuant to the lease amendment, the landlord has also agreed to provide the Company with a tenant improvement allowance of approximately $3.2 million for improvements to be made to the expansion premises. The lease amendment required the Company to pay an additional security deposit of $0.8 million to the landlord for the expansion premises, which is recorded in restricted cash on the Company’s consolidated balance sheet as of December 31, 2020.

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


	Year Ended December 31,
Operating leases:	2020		2019
Lease cost	$	17,600	$	16,162
Sublease income		(2,919)		(2,834)
Net lease cost	$	14,681	$	13,328

For the year ended December 31, 2018, rent expense under ASC 840, net of sublease income, was $7.3 million.

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

Supplemental cash flow information related to leases for the years ended December 31, 2020 and 2019 was as follows (in thousands):


	Year Ended December 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:	$	14,444	$	12,247
Lease liabilities arising from obtaining right-of-use assets:
Operating leases	$	479	$	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					8.4
Weighted average discount rate					8.2%

Future minimum lease payments under non-cancellable leases as of December 31, 2020 were as follows (in thousands):



2021		14,879
2022		14,836
2023		12,864
2024		13,241
2025		13,517
Thereafter		56,842
Total future minimum lease payments		126,179
Less imputed interest		(36,575)
Total	$	89,604

Employee Benefit Plans

12 Months Ended

Dec. 31, 2020

Employee Benefit Plans

16. Employee Benefit Plans

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

401(k) Savings Plan

The Company maintains a 401(k) plan for employees (the 401(k) Plan). The 401(k) Plan is intended to qualify under Section 401(k) of the Code, so that contributions to the 401(k) Plan by employees or by the Company, and the investment earnings on contributions, are not taxable to the employees until withdrawn from the 401(k) Plan, and so that contributions by the Company, if any, will be deductible by the Company when made. Under the 401(k) Plan, employees may elect to reduce their current compensation by up to the statutorily prescribed annual limit and to have the amount of such reduction contributed to the 401(k) Plan. The 401(k) Plan permits the Company to make contributions up to the limits allowed by law on behalf of all eligible employees. The expense related to the 401(k) Plan primarily consists of the Company’s matching contributions. Expense related to the 401(k) Plan for the years ended December 31, 2020, 2019 and 2018 were not material.

Switzerland Defined Benefit Plan

The Company maintains a pension plan covering employees of its Swiss subsidiary, Blueprint Medicines (Switzerland) GmbH (the “Swiss Plan”). The Swiss Plan is a government-mandated retirement fund that provides employees with a minimum benefit. Employer and employee contributions are made to the Swiss Plan based on various percentages of salary and wages that vary according to employee age and other factors. As is customary with Swiss pension plans, the assets of the Swiss Plan are invested in a collective fund with multiple employers. The Company has no investment authority over the assets of the Swiss Plan, which are held and invested by a Swiss insurance company. The investment strategy of the Swiss Plan is managed by an independent asset manager with the objective of achieving a consistent long-term return which will provide sufficient funding for future pension obligations while limiting risk. As of December 31, 2020, the Swiss Plan had an unfunded status of $6.4 million, which resulted from fair value of plan assets of $7.7 million and projected benefit obligation of $14.1 million. The accumulated benefit obligation at December 31, 2020 was $11.8 million. The Company’s net periodic benefit cost as well as contributions to the Swiss Plan for the years ended December 31, 2020 and 2019 were not material.

The entire disclosure for retirement benefits.

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Commitments

12 Months Ended

Dec. 31, 2020

Commitments

17. Commitments

In connection with the commercialization of AYVAKIT/AYVAKYT and GAVRETO, the Company has negotiated manufacturing agreements with certain vendors that require the Company to meet minimum purchase obligations on an annual basis. The aggregate amount of future minimum purchase obligations under these manufacturing agreements over the period of next five years is approximately $30.9 million as of December 31, 2020.

Subsequent Events

12 Months Ended

Dec. 31, 2020

Cash and cash equivalents

Subsequent Events

18. Subsequent Events

On January 8, 2021, the Company entered into a ninth amendment to its collaboration and license agreement, as amended, with Roche related to the discovery, development and commercialization of small molecule therapeutics targeting kinases in cancer immunotherapy. Pursuant to the amendment, the Company and Roche agreed to modify certain time periods related to Roche’s option rights for one of the collaboration programs and agreed to terminate two of the other collaboration programs, including certain mechanics related to the wind-down of activities for such terminated targets.

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

12 Months Ended

Dec. 31, 2020

Policy Text Blocks

Basis of Presentation

Use of Estimates

Revenue Recognition

Revenue Recognition

Product revenue

Collaboration revenue

For a complete discussion of accounting for collaboration revenues, see Note 10, Collaboration and License Agreements.

Accounts Receivable, net

Accounts Receivable, net

Inventory

Inventory

Fair Value Measurements

Fair Value Measurements

●

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

●

There have been no changes to the valuation methods during the years ended December 31, 2020 and 2019.

Cash and cash equivalents

Available-for-sale Investments

Available-for-Sale Investments

Comprehensive Income (Loss)

Comprehensive Income (Loss)

Research and Development Expenses

Research and Development Expenses

Selling, General and Administrative Expenses

Selling, General and Administrative Expenses

Property and Equipment, Net

Property and Equipment, Net

Impairment of Long Lived Assets

Impairment of Long-Lived Assets

Leases

Leases

Stock-Based Compensation Expense

Stock-Based Compensation Expense

●

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

●

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

is more reliably measured. Stock-based awards subject to service-based vesting conditions are expensed on a straight-line basis over the vesting period.

Income Taxes

Income Taxes

Foreign currency translation

Foreign currency translation

Reclassification

Reclassifications

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

Concentrations of Credit Risk and Off-Balance-Sheet Risk

Segment and Geographic Information

New Accounting Pronouncements

Credit Losses

Fair Value Measurements

Collaborative Arrangements

Internal-Use Software

resulted in an increase in capitalized assets related to qualifying cloud computing arrangement implementation costs incurred after the adoption date.

Income Taxes

Defined Benefit Plans

Marketable Securities (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of marketable securities

Marketable securities consisted of the following at December 31, 2020 and 2019 (in thousands):


	Amortized		Unrealized		Unrealized		Fair
December 31, 2020	Cost		Gain		Losses		Value
Marketable securities, available-for-sale:
U.S. government agency securities	$	746,770	$	513	$	(14)	$	747,269
U.S. treasury obligations		117,368		449		—		117,817
Total	$	864,138	$	962	$	(14)	$	865,086


	Amortized		Unrealized		Unrealized		Fair
December 31, 2019	Cost		Gain		Losses		Value
Marketable securities, 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	$	433,516	$	518	$	(12)	$	434,022

Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of financial instruments measured at fair value

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


			Active		Observable		Unobservable
	December 31,		Markets		Inputs		Inputs
Description	2020		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	420,567	$	420,567	$	—	$	—
Marketable securities, available-for-sale:
U.S. government agency securities		747,269		—		747,269		—
U.S. treasury obligations		117,817		117,817		—		—
Total	$	1,285,653	$	538,384	$	747,269	$	—

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


			Active		Observable		Unobservable
	December 31,		Markets		Inputs		Inputs
Description	2019		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	98,946	$	98,946	$	—	$	—
U.S. treasury obligations		14,992		14,992		—		—
Marketable securities, 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	$	—

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.

Product Revenue Reserves and Allowances (Tables)

12 Months Ended

Dec. 31, 2020

Product revenue, net

Schedule of product revenue allowance and reserve categories


	Total
Beginning balance at January 1, 2020	$	—
Provision related to sales in the current period		2,515
Adjustment related to prior periods sales		—
Credits and payments made		(1,323)
Ending balance at December 31, 2020	$	1,192


	As of December 31,
	2020		2019
Reduction of accounts receivable, net	$	227	$	—
Component of accrued expenses		966		—
Total revenue-related reserves	$	1,192	$	—

Inventory (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of capitalized inventory


	As of December 31,
	2020		2019
Work in process	$	9,488	$	—
Finished goods		914		—
Total	$	10,402	$	—

Balance sheet classification


	As of December 31,
	2020		2019
Inventory	$	8,581	$	—
Other assets		1,821		—
Total	$	10,402	$	—

Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of property and equipment

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


	Estimated
	Useful Life	As of December 31,
	(Years)	2020		2019
Lab equipment	5	$	11,418	$	8,975
Furniture and fixtures	4		3,420		3,512
Computer equipment	3		1,513		1,558
Leasehold improvements	Term of lease		36,946		36,627
Software	3		412		417
Construction-in-progress			151		956
Total cost			53,860		52,045
Less: accumulated depreciation and amortization			(19,731)		(13,684)
Total		$	34,129	$	38,361

Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of accrued expenses

Accrued expenses consist of the following (in thousands):


	As of December 31,
	2020		2019
External research and development	$	60,255	$	59,420
Employee compensation		27,622		13,519
Accrued professional fees		10,986		12,042
Revenue-related reserves		966		—
Other		6,109		3,725
Total	$	105,938	$	88,706

Collaboration and License Agreements (Tables)

12 Months Ended

Dec. 31, 2020

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


	Year Ended December 31,
	2020		2019		2018
Manufacturing and research and development services related to global development activities net of cost sharing payments	$	3,060	$	3,286	$	496

Roche, Collaboration (Pralsetnib) Agreement

Summary of revenue recognized


	Year Ended December 31,
	2020		2019
Upfront license revenue	$	695,694	$	—
License milestone revenue		55,000		—
Services related to Roche territory-specific activities		2,406		—
Total Roche pralsetinib collaboration revenue	$	753,100	$	—

Summary of contract assets and/or contract liabilities

Roche, Collaboration and License (Immunotherapy) Agreement

Summary of revenue recognized


	Year Ended December 31,
	2020		2019		2018
Roche collaboration research and development services revenue	$	14,580	$	8,165	$	4,521

Roche, Collaboration and License (Immunotherapy) Agreement | Collaboration revenue

Summary of contract assets and/or contract liabilities


	Year Ended December 31,
	2020		2019		2018
Amounts included in the contract liability at the beginning of the period	$	11,546	$	4,578	$	4,277

C Stone

Summary of revenue recognized


	Year Ended December 31,
	2020		2019		2018
License milestone revenue	$	2,000	$	12,000	$	40,000
Manufacturing services related to CStone territory-specific activities		1,630		144		—
Total CStone collaboration revenue	$	3,630	$	12,144	$	40,000

C Stone | Collaboration revenue

Summary of contract assets and/or contract liabilities


	As of December 31,
	2020		2019
Accounts receivable, net	$	563	$	663
Unbilled accounts receivable	$	—	$	2,749

Stock-based Compensation (Tables)

12 Months Ended

Dec. 31, 2020

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


	Year Ended December 31,
	2020		2019			2018
Stock options	$	57,237	$	47,726	$	30,095
Restricted stock units		18,407		6,445		167
Employee stock purchase plan		958		482		272
Subtotal		76,602		54,653		30,534
Capitalized stock-based compensation costs		(1,076)		—		—
Stock-based compensation expense included in total cost and operating expenses	$	75,526	$	54,653	$	30,534

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


	Year Ended December 31,
	2020		2019		2018
Research and development	$	33,642	$	28,596	$	17,019
Selling, general and administrative		41,884		26,057		13,515
Total stock-based compensation expense	$	75,526	$	54,653	$	30,534

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



	Year Ended December 31,
	2020		2019		2018
Risk-free interest rate	1.02	%	2.21	%	2.77	%
Expected dividend yield	—	%	—	%	—	%
Expected term (years)	6.0		6.0		6.0
Expected stock price volatility	60.48	%	63.83	%	69.08	%

Summary of stock option activity


		Weighted-		Remaining	Aggregate
		Average		Contractual	Intrinsic
		Exercise		Life	Value(1)
	Shares	Price		(in Years)	(in thousands)
Outstanding at December 31, 2019	5,795,710	$	58.82	7.69	$	134,409
Granted	1,502,403		62.55
Exercised	(842,649)		39.50
Canceled	(424,823)		75.44
Outstanding at December 31, 2020	6,030,641	$	61.28	7.41	$	306,810
Exercisable at December 31, 2020	3,181,167	$	51.60	6.36	$	192,611

(1)	Intrinsic value represents the amount by which the fair market value as of December 31, 2020 of the underlying common stock exceeds the exercise price of the option.

Summary of restricted stock units activity


		Weighted-Average
		Grant Date
	Shares	Fair Value
Unvested shares at December 31, 2019	419,755	$	82.50
Granted	961,283		60.01
Vested	(109,556)		83.64
Forfeited	(99,796)		65.72
Unvested shares at December 31, 2020	1,171,686	$	65.37

Net Income Per Share (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of net income (loss) and the number of shares used to compute basic and diluted net income (loss) per share


	Year Ended December 31,
	2020		2019		2018
Net income (loss) - basic and diluted	$	313,882	$	(347,694)	$	(236,642)
Weighted average shares outstanding - basic		54,534		47,829		43,867
Effect of dilutive securities:
Stock options		1,303		—		—
Restricted stock units		331		—		—
Weighted average shares outstanding - diluted		56,168		47,829		43,867
Net income (loss) per share - basic	$	5.76	$	(7.27)	$	(5.39)
Net income (loss) per share - diluted		5.59		(7.27)		(5.39)

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


	Year Ended December 31,
	2020	2019	2018
Stock options	4,480	5,796	4,558
Restricted stock units	13	420	37
ESPP shares	19	14	10
Total	4,512	6,230	4,605

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of the reconciliation of the effective tax rate


	Year Ended December 31,
	2020		2019		2018
Federal income tax (benefit) at statutory rate	21.00	%	21.00	%	21.00	%
Permanent differences	(0.47)		1.11		1.71
Federal research and development credits	(0.96)		0.77		1.79
Federal orphan drug credits	(10.35)		6.90		18.06
State income tax, net of federal benefit	0.08		7.46		7.08
Other	1.50		2.13		0.04
Foreign rate differential	0.37		(0.03)		—
Deferred rate change	2.60		(0.08)		—
Change in valuation allowance	(13.42)		(39.26)		(49.68)
Effective income tax rate	0.35	%	—	%	—	%

Schedule of the deferred tax assets and liabilities


	Year Ended December 31,
	2020		2019		2018
Deferred tax assets:
Net operating loss carryforwards	$	140,769	$	219,935	$	127,421
Research and development credit carryforwards		23,679		19,240		13,714
Orphan drug credit carryforwards		125,153		92,538		68,536
Accrued expenses and other		32,206		25,842		12,248
Deferred revenue		7,317		10,971		10,320
Deferred lease incentive		—		—		3,993
Deferred rent		19,308		26,196		1,436
Total gross deferred tax asset		348,432		394,722		237,668
Deferred tax liability
Depreciation		(5,451)		(4,474)		(4,162)
Right of use assets		(14,539)		(19,869)		—
Debt discount		—		—		—
Valuation allowance		(328,442)		(370,379)		(233,506)
Net deferred tax asset	$	—	$	—	$	—

Leases (Tables)

12 Months Ended

Dec. 31, 2020

Summary of lease expenses and cash flow and weighted average information


	Year Ended December 31,
Operating leases:	2020		2019
Lease cost	$	17,600	$	16,162
Sublease income		(2,919)		(2,834)
Net lease cost	$	14,681	$	13,328


	Year Ended December 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:	$	14,444	$	12,247
Lease liabilities arising from obtaining right-of-use assets:
Operating leases	$	479	$	23,300


					Operating leases
Weighted average remaining lease term in years					8.4
Weighted average discount rate					8.2%

Schedule of future minimum lease payments



2021		14,879
2022		14,836
2023		12,864
2024		13,241
2025		13,517
Thereafter		56,842
Total future minimum lease payments		126,179
Less imputed interest		(36,575)
Total	$	89,604

Nature of Business - Sale of Stock (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Jan. 27, 2020	Dec. 31, 2020	Dec. 31, 2019	Jul. 31, 2020
Sale of Stock
Proceeds from issuance of common stock, net of underwriting discounts and commissions and estimated offering expenses		$ 503,189	$ 327,466
Follow-on Public Offering
Sale of Stock
Stock issued (in shares)	4,710,144
Share price (in dollars per share)	$ 69.00
Proceeds from issuance of common stock, net of underwriting discounts and commissions and estimated offering expenses	$ 308,400
At-the-market Offering
Sale of Stock
Aggregate offering price				$ 250,000
Stock issued (in shares)		1,784,926
Gross proceeds from issuance of common stock		$ 200,000
Proceeds from issuance of common stock, net of underwriting discounts and commissions and estimated offering expenses		$ 194,700

Nature of Business - Cash, Cash Equivalents and Marketable Securities (Details) $ in Millions	Dec. 31, 2020 USD ($)
Cash, cash equivalents and marketable securities
Cash, cash equivalents and marketable securities	$ 1,549.7

Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Selling, General and Administrative Expenses (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Selling, General and Administrative Expenses
Advertising costs	$ 9.4	$ 3.3

Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Impairment of Long-Lived Assets (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Impairment of Long Lived Assets
Long-lived asset impairment	$ 0.0	$ 0.0	$ 0.0

Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Stock-Based Compensation Expense (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Stock Options
Stock-based compensation
Expected dividend yield	0.00%	0.00%	0.00%
Award expiration period	10 years	10 years	10 years
Employee Stock
Stock-based compensation
Purchase price on common stock (as a percent)	85.00%	85.00%	85.00%
Discount on fair value, offering date (as a percent)	15.00%	15.00%	15.00%
Discount on fair value, purchase date (as a percent)	15.00%	15.00%	15.00%
Award expiration period	180 days	180 days	180 days

Summary of Significant Accounting Policies and Recent Accounting Pronouncements - Segment and Geographic Information (Details) - segment	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Segment and Geographic Information
Number of operating segments	1	1	1

Summary of Significant Accounting Policies and Recent Accounting Pronouncements - New Accounting Pronouncements (Details)	12 Months Ended
	Dec. 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
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
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
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
Change in Accounting Principle, Accounting Standards Update, Transition Option Elected	us-gaap:AccountingStandardsUpdate201815ProspectiveMember
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
Accounting Standards Update 2018-14
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

Marketable Securities - Tabular Disclosure (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Marketable securities, available-for-sale:
Amortized cost	$ 864,138	$ 433,516
Unrealized gain	962	518
Unrealized losses	(14)	(12)
Fair value	865,086	434,022
U.S. government agency securities
Marketable securities, available-for-sale:
Amortized cost	746,770	128,156
Unrealized gain	513	160
Unrealized losses	(14)	(4)
Fair value	747,269	128,312
U.S. Treasury obligations
Marketable securities, available-for-sale:
Amortized cost	117,368	305,360
Unrealized gain	449	358
Unrealized losses		(8)
Fair value	$ 117,817	$ 305,710

Marketable Securities - Unrealized Loss Position (Details) $ in Millions	Dec. 31, 2020 USD ($) security	Dec. 31, 2019 USD ($) security
Unrealized loss position, number of positions
Number of held securities in an unrealized loss position for less than 12 months	8	11
Number of held securities in an unrealized loss position for 12 months or longer	0	0
Unrealized loss position, aggregate fair value
Unrealized loss position for less than 12 months \| $	$ 125.7	$ 82.1

Marketable Securities - Other-than-temporary Impairment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Other-than-temporary impairment loss, debt securities, available-for-sale securities
Other-than-temporary impairment loss, debt securities, available-for-sale	$ 0	$ 0

Marketable Securities - Remaining Maturities (Details) $ in Millions	Dec. 31, 2020 USD ($) security	Dec. 31, 2019 USD ($) security
Investments, available-for-sale
Securities with remaining maturities greater than one year \| security	65	9
Aggregate fair value with remaining maturities greater than one year \| $	$ 677.9	$ 64.4

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Fair Value of Financial Instruments
Fair value	$ 865,086	$ 434,022
U.S. government agency securities
Fair Value of Financial Instruments
Fair value	747,269	128,312
U.S. Treasury obligations
Fair Value of Financial Instruments
Fair value	117,817	305,710
Recurring
Fair Value of Financial Instruments
Total	1,285,653	547,960
Recurring \| U.S. government agency securities
Fair Value of Financial Instruments
Fair value	747,269	128,312
Recurring \| U.S. Treasury obligations
Fair Value of Financial Instruments
Fair value	117,817	305,710
Recurring \| Money market funds
Fair Value of Financial Instruments
Cash equivalents	420,567	98,946
Recurring \| U.S. Treasury obligations
Fair Value of Financial Instruments
Cash equivalents		14,992
Recurring \| Active Markets (Level 1)
Fair Value of Financial Instruments
Total	538,384	419,648
Recurring \| Active Markets (Level 1) \| U.S. Treasury obligations
Fair Value of Financial Instruments
Fair value	117,817	305,710
Recurring \| Active Markets (Level 1) \| Money market funds
Fair Value of Financial Instruments
Cash equivalents	420,567	98,946
Recurring \| Active Markets (Level 1) \| U.S. Treasury obligations
Fair Value of Financial Instruments
Cash equivalents		14,992
Recurring \| Observable Inputs (Level 2)
Fair Value of Financial Instruments
Total	747,269	128,312
Recurring \| Observable Inputs (Level 2) \| U.S. government agency securities
Fair Value of Financial Instruments
Fair value	$ 747,269	$ 128,312

Product Revenue Reserves and Allowances - Product Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenues
Revenue	$ 793,735	$ 66,512	$ 44,521
Product revenue, net
Revenues
Revenue	$ 22,134

Amount, including tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value-added and excise.

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Product Revenue Reserves and Allowances - Product Revenue Allowance - Roll Forward (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($)
Product revenue allowance
Beginning balance	$ 0
Provision related to sales in the current period	2,515
Credits and payments made	(1,323)
Ending balance	$ 1,192

Product Revenue Reserves and Allowances - Product Revenue Allowance - Location (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Product revenue allowance
Product revenue allowance	$ 1,192	$ 0
Accounts Receivable, Net
Product revenue allowance
Product revenue allowance	227
Accrued Expenses
Product revenue allowance
Product revenue allowance	$ 966

Inventory - Capitalized (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Inventory, Noncurrent [Abstract]
Work in process	$ 9,488
Finished goods	914
Total	$ 10,402

Inventory - Balance Sheet Classification (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Inventory
Inventory	$ 8,581
Other assets	1,821
Total	$ 10,402

Inventory - Write-down (Details) - USD ($) $ in Thousands	12 Months Ended
Inventory - Write-down (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Inventory
Inventory write-down	$ 0	$ 0

Restricted Cash (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Restricted Cash
Restricted cash	$ 5.2	$ 5.7

Property and Equipment, Net - Estimated Useful Lives (Details)	12 Months Ended
	Dec. 31, 2020
Lab equipment
Property and Equipment, Net
Estimated Useful Life (Years)	5 years
Furniture and fixtures
Property and Equipment, Net
Estimated Useful Life (Years)	4 years
Computer equipment
Property and Equipment, Net
Estimated Useful Life (Years)	3 years
Leasehold improvements
Property and Equipment, Net
Estimated Useful Life	Term of lease
Software
Property and Equipment, Net
Estimated Useful Life (Years)	3 years

Property and Equipment, Net - Property and Equipment and Related Accumulated Depreciation (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Property and Equipment, Net
Total cost	$ 53,860	$ 52,045
Less: accumulated depreciation and amortization	(19,731)	(13,684)
Total	34,129	38,361
Lab equipment
Property and Equipment, Net
Total cost	11,418	8,975
Furniture and fixtures
Property and Equipment, Net
Total cost	3,420	3,512
Computer equipment
Property and Equipment, Net
Total cost	1,513	1,558
Leasehold improvements
Property and Equipment, Net
Total cost	36,946	36,627
Software
Property and Equipment, Net
Total cost	412	417
Construction-in-progress
Property and Equipment, Net
Total cost	$ 151	$ 956

Property and Equipment, Net - Depreciation Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Depreciation expense
Depreciation expense	$ 6.6	$ 5.3	$ 4.2

Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Accrued Expenses
External research and development	$ 60,255	$ 59,420
Employee compensation	27,622	13,519
Accrued professional fees	10,986	12,042
Revenue-related reserves	966
Other	6,109	3,725
Total	$ 105,938	$ 88,706

Collaboration and License Agreements - General Information (Details) - Collaborative Arrangement $ in Millions			1 Months Ended		3 Months Ended	12 Months Ended
	Oct. 15, 2019 USD ($)	Jun. 01, 2018 USD ($) item	Jul. 31, 2020 USD ($)	Mar. 31, 2016 USD ($) item	Sep. 30, 2020 USD ($)	Dec. 31, 2020 USD ($) item	Jul. 13, 2020 USD ($)
Roche, Collaboration (Pralsetnib) Agreement
Collaboration Agreements
Collaborative arrangement, upfront payment, cash payment received					$ 675.0
Collaborative arrangement, milestones, cash payments received						$ 55.0
Collaborative arrangement, milestones, contingent payments eligible to receive							$ 872.0
Collaborative arrangement, milestones, specified regulatory and commercialization milestones, achieved						55.0
Collaborative arrangement, percentage of global development costs shared, entity (as a percent)							45.00%
Collaborative arrangement, percentage of global development costs shared, counterparty (as a percent)							55.00%
Roche, Collaboration and License (Immunotherapy) Agreement
Collaboration Agreements
Collaborative arrangement, upfront payment, cash payment received				$ 45.0
Collaborative arrangement, option fees and milestones, pre-clinical and clinical development events prior to licensing, contingent payments eligible to receive						323.3
Collaborative arrangement, milestones, research milestones, achieved						$ 10.0
Collaborative arrangement, license option rights, number \| item				5
Collaborative arrangement, collaboration programs, number \| item						2
Collaborative arrangement, collaboration programs, licensed products, commercialization rights, counterparty exercises option, counterparty receives worldwide exclusivity, number \| item				1
Collaborative arrangement, collaboration programs, licensed products, commercialization rights, counterparty exercises option, entity retains domestic and counterparty receives international, number \| item						1
Collaborative arrangement, termination, counterparty written notice period				120 days
Collaborative arrangement, termination, counterparty written notice period, after option exercise, if licensed products have not been commercially sold				120 days
Collaborative arrangement, termination, counterparty written notice period, after option exercise, if licensed products have been commercially sold				180 days
Clementia
Collaboration Agreements
Collaborative arrangement, upfront payment, cash payment received	$ 25.0
Collaborative arrangement, milestones, cash payments received			$ 20.0		$ 20.0
Collaborative arrangement, milestones, contingent payments eligible to receive	490.0
Collaborative arrangement, inventory purchased by counterparty	$ 1.5
Collaborative arrangement, termination, counterparty written notice period	12 months
C Stone
Collaboration Agreements
Collaborative arrangement, upfront payment, cash payment received		$ 40.0
Collaborative arrangement, milestones, cash payments received						$ 14.0
Collaborative arrangement, milestones, contingent payments eligible to receive		332.0
Collaborative arrangement, milestones, development and regulatory milestones, contingent payments eligible to receive		104.5
Collaborative arrangement, milestones, sales-based milestones, contingent payments eligible to receive		$ 227.5
Collaborative arrangement, licensed product term from first commercial sale		12 years
Collaborative arrangement, license option rights, number \| item		3
Collaborative arrangement, collaboration programs with exclusive commercialization rights, number \| item		3

Collaboration and License Agreements - Transaction Price (Details) - Collaborative Arrangement - USD ($) $ in Millions				12 Months Ended
	Jul. 13, 2020	Oct. 15, 2019	Jun. 01, 2018	Dec. 31, 2020	Dec. 31, 2019
Roche, Collaboration (Pralsetnib) Agreement
Collaboration Agreements
Collaborative arrangement, transaction price	$ 695.7
Collaborative arrangement, transaction price, upfront payment	675.0
Collaborative arrangement, transaction price, stock issued, premium on sale of stock to counterparty	$ 20.7
Collaborative arrangement, transaction price, milestone payments receivable				$ 55.0
Roche, Collaboration and License (Immunotherapy) Agreement
Collaboration Agreements
Collaborative arrangement, transaction price, milestone payments received and receivable				19.5
Clementia
Collaboration Agreements
Collaborative arrangement, transaction price		$ 46.5
Collaborative arrangement, transaction price, upfront payment		25.0
Collaborative arrangement, transaction price, milestone payments receivable		20.0
Collaborative arrangement, transaction price, inventory purchased by counterparty, existing manufacturing inventory		1.2
Collaborative arrangement, transaction price, inventory purchased by counterparty, in-process manufacturing inventory		$ 0.3
C Stone
Collaboration Agreements
Collaborative arrangement, transaction price			$ 40.0
Collaborative arrangement, transaction price, cash consideration received				$ 2.0	$ 12.0

Collaboration and License Agreements - Sale of Stock (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Jul. 13, 2020	Dec. 31, 2020	Dec. 31, 2019
Sale of Stock
Issuance of common stock			$ 327,466
Private Placement
Sale of Stock
Stock issued (in shares)	1,035,519
Share price (in dollars per share)	$ 96.57
Purchase consideration	$ 100,000
Issuance of common stock	79,300	$ 79,306
Share purchase consideration, premium	$ 20,700

Collaboration and License Agreements - Manufacturing and Research and Development Services (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Collaborative Arrangement \| C Stone
Collaboration Agreements
Manufacturing and research and development services related to global development activities net of cost sharing payments	$ 3,060.0	$ 3,286.0	$ 496.0

Collaboration and License Agreements - Revenue Recognized (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenues
Revenue		$ 793,735	$ 66,512	$ 44,521
Collaboration revenue
Revenues
Revenue		771,601	66,512	44,521
Collaborative Arrangement \| Collaboration revenue \| Roche, Collaboration (Pralsetnib) Agreement
Revenues
Revenue		753,100
Collaborative Arrangement \| Collaboration revenue \| Roche, Collaboration and License (Immunotherapy) Agreement
Revenues
Revenue		14,580	8,165	4,521
Cumulative revenue catch-up		7,900
Collaborative Arrangement \| Collaboration revenue \| Clementia
Revenues
Revenue		300	46,200
Collaborative Arrangement \| Collaboration revenue \| C Stone
Revenues
Revenue	$ 40,000	3,630	12,144	40,000
Collaborative Arrangement \| Upfront license revenue \| Roche, Collaboration (Pralsetnib) Agreement
Revenues
Revenue		695,694
Collaborative Arrangement \| License milestone revenue \| Roche, Collaboration (Pralsetnib) Agreement
Revenues
Revenue		55,000
Collaborative Arrangement \| License milestone revenue \| C Stone
Revenues
Revenue		2,000	12,000	$ 40,000
Collaborative Arrangement \| Territory-specific activities, services \| Roche, Collaboration (Pralsetnib) Agreement
Revenues
Revenue		2,406
Collaborative Arrangement \| Territory-specific activities, manufacturing services \| C Stone
Revenues
Revenue		$ 1,630	$ 144

Collaboration and License Agreements - Reduction in Expenses (Details) - Collaborative Arrangement - Roche, Collaboration (Pralsetnib) Agreement $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($)
Selling, General and Administrative Expenses
Collaboration Agreements
Collaborative arrangement, commercialization, reduction in expenses	$ 10.6
Research and Development Expense
Collaboration Agreements
Collaborative arrangement, commercialization, reduction in expenses	$ 20.5

Collaboration and License Agreements - Change in Contract with Customer, Liability (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Collaborative Arrangement \| Roche, Collaboration and License (Immunotherapy) Agreement
Change in Contract with Customer, Liability
Amounts included in the contact liability at the beginning of the period	$ 11,546	$ 4,578	$ 4,277

Collaboration and License Agreements - Contract Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Collaboration Agreements
Accounts receivable, net	$ 7,096	$ 663
Unbilled accounts receivable	18,213	22,749
Collaborative Arrangement \| Roche, Collaboration (Pralsetnib) Agreement
Collaboration Agreements
Unbilled accounts receivable	17,600
Collaborative Arrangement \| C Stone
Collaboration Agreements
Accounts receivable, net	$ 563	663
Unbilled accounts receivable		$ 2,749

Collaboration and License Agreements - Contract Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Contract Liability
Deferred revenue, current	$ 12,559	$ 6,160
Deferred revenue, net of current portion	28,599	39,913
Collaborative Arrangement \| Clementia
Contract Liability
Deferred revenue	0	0
Collaborative Arrangement \| C Stone
Contract Liability
Deferred revenue	6,500	0
Collaborative Arrangement \| Roche, Collaboration and License (Immunotherapy) Agreement
Contract Liability
Deferred revenue	34,700	46,100
Deferred revenue, current	6,100	6,200
Deferred revenue, net of current portion	$ 28,600	$ 39,900

Collaboration and License Agreements - Performance Obligations (Details) - Collaborative Arrangement	12 Months Ended
	Dec. 31, 2020 item
Roche, Collaboration (Pralsetnib) Agreement
Performance Obligations
Collaborative arrangement, material promises, number	1
Collaborative arrangement, material promises, manufacturing activities, term	24 months
Collaborative arrangement, material components, number	4
Roche, Collaboration and License (Immunotherapy) Agreement
Performance Obligations
Revenue, performance obligation, performance obligations, number	1
Roche, Collaboration and License (Immunotherapy) Agreement \| Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Performance Obligations
Revenue, remaining performance obligation, expected timing of satisfaction, period	4 years 3 months
Clementia
Performance Obligations
Collaborative arrangement, material promises, number	4
Revenue, performance obligation, performance obligations, number	3
C Stone
Performance Obligations
Collaborative arrangement, material promises, number	6
Collaborative arrangement, material components, number	2
Revenue, performance obligation, performance obligations, number	3

Stockholders's Equity (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Jan. 27, 2020	Dec. 31, 2020	Dec. 31, 2019	Jul. 31, 2020
Sale of Stock
Proceeds from issuance of common stock, net of underwriting discounts and commissions and estimated offering expenses		$ 503,189	$ 327,466
Follow-on Public Offering
Sale of Stock
Stock issued (in shares)	4,710,144
Share price (in dollars per share)	$ 69.00
Proceeds from issuance of common stock, net of underwriting discounts and commissions and estimated offering expenses	$ 308,400
At-the-market Offering
Sale of Stock
Aggregate offering price				$ 250,000
Stock issued (in shares)		1,784,926
Proceeds from issuance of common stock, net of underwriting discounts and commissions and estimated offering expenses		$ 194,700

Stock-based Compensation - 2015 Stock Option and Incentive Plan (Details) - 2015 Stock Option and Incentive Plan - shares			12 Months Ended
	Jan. 01, 2020	Jan. 01, 2019	Dec. 31, 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	2,311,741	1,970,888
Number of shares available for grant			1,703,849

Stock-based Compensation - Stock-based Compensation Expense - By Type (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Total stock based compensation expense
Subtotal	$ 76,602	$ 54,653	$ 30,534
Capitalized stock-based compensation costs	(1,076)
Stock-based compensation expense included in total cost and operating expenses	75,526	54,653	30,534
Stock Options
Total stock based compensation expense
Subtotal	57,237	47,726	30,095
Restricted Stock Units
Total stock based compensation expense
Subtotal	18,407	6,445	167
Employee Stock
Total stock based compensation expense
Subtotal	$ 958	$ 482	$ 272

Stock-based Compensation - Stock-based Compensation Expense - By Classification (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Total stock based compensation expense
Stock-based compensation expense	$ 75,526	$ 54,653	$ 30,534
Research and Development Expense
Total stock based compensation expense
Stock-based compensation expense	33,642	28,596	17,019
Selling, General and Administrative Expenses
Total stock based compensation expense
Stock-based compensation expense	$ 41,884	$ 26,057	$ 13,515

Stock-based Compensation - Unrecognized Compensation Costs (Details) $ in Millions	Dec. 31, 2020 USD ($)
Stock-based compensation
Total unrecognized compensation cost related to non-vested stock awards	$ 173.7
Total unrecognized compensation cost related to non-vested stock option awards	$ 112.4
Weighted-average period over which unrecognized compensation cost will be recognized	2 years 8 months 12 days
Stock Options
Stock-based compensation
Weighted-average period over which unrecognized compensation cost will be recognized	2 years 6 months
Restricted Stock Units
Stock-based compensation
Total unrecognized compensation cost related to non-vested non-option awards	$ 61.3
Weighted-average period over which unrecognized compensation cost will be recognized	3 years

Stock-based Compensation - Awards - General Information (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Stock Options
Stock-based compensation
Award expiration period	10 years	10 years	10 years
2015 Stock Option and Incentive Plan \| Stock Options
Stock-based compensation
Award vesting period	4 years	4 years	4 years
Cliff vesting period for new employees	1 year	1 year	1 year
Award expiration period	10 years	10 years	10 years
2015 Stock Option and Incentive Plan \| Restricted Stock Units
Stock-based compensation
Award vesting period	4 years	4 years	4 years

Stock-based Compensation - Stock Options - Weighted Average Assumptions (Details) - Stock Options	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Assumptions used in estimating the fair value of stock options granted
Risk-free interest rate	1.02%	2.21%	2.77%
Expected dividend yield	0.00%	0.00%	0.00%
Expected term (in years)	6 years	6 years	6 years
Expected stock price volatility	60.48%	63.83%	69.08%

Stock-based Compensation - Stock Options - Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Shares
Outstanding at beginning of period (in shares)	5,795,710
Granted (in shares)	1,502,403
Exercised (in shares)	(842,649)
Cancelled (in shares)	(424,823)
Outstanding at end of period (in shares)	6,030,641	5,795,710
Weighted-Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 58.82
Granted (in dollars per share)	62.55
Exercised (in dollars per share)	39.50
Cancelled (in dollars per share)	75.44
Outstanding at end of period (in dollars per share)	$ 61.28	$ 58.82
Additional disclosures
Shares - Exercisable (in shares)	3,181,167
Weighted-Average Exercise Price - Exercisable (in dollars per share)	$ 51.60
Remaining Contractual Life - Outstanding	7 years 4 months 28 days	7 years 8 months 8 days
Remaining Contractual Life - Exercisable	6 years 4 months 9 days
Aggregate Intrinsic Value - Outstanding	$ 306,810	$ 134,409
Aggregate Intrinsic Value - Exercisable	$ 192,611

Stock-based Compensation - Stock Options - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Additional disclosures
Weighted-average grant date fair value of options granted	$ 34.77	$ 48.96	$ 49.40
Total intrinsic value of options exercised	$ 43.3	$ 33.8	$ 29.4

Stock-based Compensation - Restricted Stock Units - Activity (Details) - Restricted Stock Units - $ / shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2018
Shares
Unvested at beginning of period (in shares)	419,755
Granted (in shares)	961,283
Vested (in shares)	(109,556)	0
Forfeited (in shares)	(99,796)
Unvested at end of period (in shares)	1,171,686
Weighted-Average Grant Date Fair Value
Unvested at beginning or period (in dollars per share)	$ 82.50
Granted (in dollars per share)	60.01
Vested (in dollars per share)	83.64
Forfeited (in dollars per share)	65.72
Unvested at end of period (in dollars per share)	$ 65.37

Stock-based Compensation - Restricted Stock Units - Additional Information (Details) - Restricted Stock Units - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Stock-based Compensation
Total fair value of restricted stock units that vested	$ 7.4	$ 0.7
Vested (in shares)	109,556		0

Stock-based Compensation - 2020 Inducement Plan (Details) - 2020 Inducement Plan - shares	12 Months Ended
	Dec. 31, 2020	Mar. 31, 2020
Stock-based compensation
Initial shares of common stock authorized for issuance of stock awards (in shares)		1,000,000
Shares issued (in shares)	324,485

Stock-based Compensation - Employee Stock Purchase Plan (Details) - shares	1 Months Ended	12 Months Ended
	May 31, 2015	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Jan. 01, 2021	Jan. 01, 2020
Stock-based compensation
ESPP shares issued during period (in shares)		38,516	20,724	13,878
Employee Stock
Stock-based compensation
Number of common shares reserved for future issuance (in shares)	243,347
Annual increase for common stock for issuance (as a percent)	1.00%
Increase of common shares reserved for future issuance (in shares)					577,935	492,722

Net Income Per Share - Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net income (loss) - basic and diluted
Net income (loss)	$ 313,882	$ (347,694)	$ (236,642)
Net income (loss) - basic	313,882	(347,694)	(236,642)
Net income (loss) - diluted	$ 313,882	$ (347,694)	$ (236,642)
Weighted average shares outstanding
Weighted average shares outstanding - basic (in shares)	54,534	47,829	43,867
Effect of dilutive securities:
Weighted average shares outstanding - diluted (in shares)	56,168	47,829	43,867
Net income (loss) per share - basic
Net income (loss) per share - basic (in dollars per share)	$ 5.76	$ (7.27)	$ (5.39)
Net income (loss) per share - diluted
Net income (loss) per share - diluted (in dollars per share)	$ 5.59	$ (7.27)	$ (5.39)
Stock Options
Effect of dilutive securities:
Effect of dilutive securities (in shares)	1,303
Restricted Stock Units
Effect of dilutive securities:
Effect of dilutive securities (in shares)	331

Net Income Per Share - Anti-dilutive Securities (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	4,512	6,230	4,605
Stock Options
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	4,480	5,796	4,558
Restricted Stock Units
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	13	420	37
Employee Stock
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	19	14	10

Income Taxes - Reconciliation (Details)	12 Months Ended
Income Taxes - Reconciliation (Details)	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
A reconciliation of the U.S. statutory income tax rate to the Company's effective tax rate
Federal income tax (benefit) at statutory rate	21.00%	21.00%	21.00%
Permanent differences	(0.47%)	1.11%	1.71%
Federal research and development credits	(0.96%)	0.77%	1.79%
Federal orphan drug credits	(10.35%)	6.90%	18.06%
State income tax, net of federal benefit	0.08%	7.46%	7.08%
Other	1.50%	2.13%	0.04%
Foreign rate differential	0.37%	(0.03%)
Deferred rate change	2.60%	(0.08%)
Change in valuation allowance	(13.42%)	(39.26%)	(49.68%)
Effective income tax rate	0.35%	0.00%	0.00%

Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Deferred tax assets:
Net operating loss carryforwards	$ 140,769	$ 219,935	$ 127,421
Research and development credit carryforwards	23,679	19,240	13,714
Orphan drug credit carryforwards	125,153	92,538	68,536
Accrued expenses and other	32,206	25,842	12,248
Deferred revenue	7,317	10,971	10,320
Deferred lease incentive			3,993
Deferred rent	19,308	26,196	1,436
Total gross deferred tax asset	348,432	394,722	237,668
Deferred tax liability
Depreciation	(5,451)	(4,474)	(4,162)
Right of use assets	(14,539)	(19,869)	0
Valuation allowance	(328,442)	(370,379)	(233,506)
Net deferred tax asset	$ 0	$ 0	$ 0

Income Taxes - Coronavirus Aid, Relief and Economic Security Act (Details) $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($)
Coronavirus Aid, Relief and Economic Security Act
Bonus depreciation, CARES Act	$ 3.7
Taxable income offset in current year carried forward from previous years, percentage, CARES Act (as a percent)	100.00%

Income Taxes - Valuation Allowance (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Valuation allowance
Valuation allowance	$ 328,442	$ 370,379	$ 233,506
Change in valuation allowance	$ (42,000)	$ 136,900	$ 119,000

Income Taxes - Net Operating Loss Carryforwards (Details) $ in Millions	Dec. 31, 2020 USD ($)
Net Operating Loss Carryforwards
Net operating loss carryforwards, limitations on use, available for utilization	$ 2.0
Federal
Net Operating Loss Carryforwards
Net operating loss carryforwards	435.7
Net operating loss carryforwards, unlimited	414.0
State
Net Operating Loss Carryforwards
Net operating loss carryforwards	$ 776.0

Income Taxes - Tax Credit Carryforwards (Details) $ in Millions	Dec. 31, 2020 USD ($)
Research and Development Tax Credit \| Federal
Tax Credit Carryforwards
Tax credit carryforwards	$ 14.2
Research and Development Tax Credit \| State
Tax Credit Carryforwards
Tax credit carryforwards	11.2
Orphan Drug Tax Credit \| Federal
Tax Credit Carryforwards
Tax credit carryforwards	125.2
Investment Tax Credit \| State
Tax Credit Carryforwards
Tax credit carryforwards	$ 0.8

Income Taxes - Uncertain Tax Positions (Details) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Uncertain tax positions
Accrued interest related to uncertain tax positions	$ 0.0	$ 0.0

Leases - General Information (Details) $ in Thousands				1 Months Ended
Leases - General Information (Details) $ in Thousands	Sep. 19, 2018 USD ($) ft²	Apr. 28, 2017 USD ($) ft²	Feb. 12, 2015 USD ($) ft²	Feb. 28, 2019 USD ($)	Feb. 28, 2018 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 18, 2018 ft²
Leases
Initial lease commitments						$ 126,179
Restricted cash						5,200	$ 5,700
Corporate Headquarters Lease
Leases
Area leased (in square feet) \| ft²			38,500
Extension period of lease term			5 years
Lessee, Operating Lease, Existence of Option to Extend			true
Initial lease commitments			$ 17,800
Initial lease term			7 years
Base annual rent, initial			$ 2,300
Base annual rent, maximum			2,800
Allowance for leasehold improvements			4,300
Security deposit			$ 1,300			900
Security deposit released				$ 400	$ 400
Office and Laboratory Space in Cambridge Massachusetts, 45 Sidney Street
Leases
Area leased (in square feet) \| ft²	139,216	99,833						99,833
Extension period of lease term		5 years
Lessee, Operating Lease, Existence of Option to Extend		true
Base annual rent, initial		$ 7,700
Base annual rent, maximum		10,600
Allowance for leasehold improvements		$ 14,200
Security deposit						3,500
Restricted cash						3,000
Security deposit to be released						$ 500
Office and Laboratory Space in Cambridge, Massachusetts, 45 Sidney Street, Expansion Premises
Leases
Base annual rent, initial	$ 3,200
Base annual rent, maximum	4,200
Allowance for leasehold improvements	3,200
Security deposit	$ 800

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Operating leases cost:
Lease cost	$ 17,600	$ 16,162
Sublease income	(2,919)	(2,834)
Net lease cost	$ 14,681	$ 13,328
Rent expense			$ 7,300

Leases - Cash Flow Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Leases
Cash paid for amounts included in the measurement of lease liabilities, operating cash flows from operating leases	$ 14,444	$ 12,247
Lease liabilities arising from obtaining right-of-use assets, operating leases	$ 479	$ 23,300

Leases - Weighted Average Remaining Lease-term and Weighted Average Discount Rate (Details)	Dec. 31, 2020
Leases
Weighted average remaining lease term in years	8 years 4 months 24 days
Weighted average discount rate	8.20%

Leases - Future Minimum Lease Payments (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Future minimum lease payments
2021	$ 14,879
2022	14,836
2023	12,864
2024	13,241
2025	13,517
Thereafter	56,842
Total future minimum lease payments	$ 126,179

Leases - Total Lease Liability (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Leases
Total future minimum lease payments	$ 126,179
Less imputed interest	(36,575)
Total	$ 89,604

Employee Benefit Plans (Details) $ in Millions	Dec. 31, 2020 USD ($)
Net pension obligation
Unfunded net pension obligation	$ 6.4
Plan assets	7.7
Projected benefit obligation	14.1
Additional information
Accumulated benefit obligation	$ 11.8
Defined Benefit Plan, Type	us-gaap:PensionPlansDefinedBenefitMember
Defined Benefit Plan, Sponsor Location	country:CH

Amount of asset segregated and restricted to provide benefit under defined benefit plan. Asset includes, but is not limited to, stock, bond, other investment, earning from investment, and contribution by employer and employee.

Indicates location of employer sponsoring defined benefit plan designed to provide retirement benefits.

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Indicates type of defined benefit plan. Includes, but is not limited to, pension plan, other postretirement plan and special and contractual termination benefits payable upon retirement.

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