0001558370-22-015808 | 10-Q | 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 blood disorders. The Company’s approach is to leverage its novel research engine to systematically and reproducibly identify drivers of diseases in genomically defined patient populations, and to craft highly selective and potent drug candidates that are intended to provide significant and durable clinical responses to patients.

The Company has two approved precision therapies and is globally advancing multiple programs for systemic mastocytosis (SM), lung cancer and other genomically defined cancers, 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.

As of September 30, 2022, the Company had cash, cash equivalents and marketable securities of $1,192.6 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

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies and Recent Accounting Pronouncements

2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements

Basis of Presentation

The unaudited interim condensed consolidated financial statements of the Company included herein have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) as found in the Accounting Standards Codification (ASC), Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB) and the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these financial statements should be read in conjunction with the financial statements as of and for the year ended December 31, 2021 and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 17, 2022 (2021 Annual Report on Form 10-K).

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements, and updated, as necessary, in this report. In the opinion of the Company’s management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments that are necessary to present fairly the Company’s financial position as of September 30, 2022, the results of its operations for the three and nine months ended September 30, 2022 and 2021, stockholder’s equity for the three and nine months ended September 30, 2022 and 2021 and cash flows for nine months ended September 30, 2022 and 2021. Such adjustments are of a normal and recurring nature. The results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results for the year ending December 31, 2022 or for any future period.

The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Blueprint Medicines Security Corporation, which is a Massachusetts subsidiary created to buy, sell and hold securities, Blueprint Medicines (Switzerland) GmbH, Blueprint Medicines (Netherlands) B.V., Blueprint Medicines (UK) Ltd, Blueprint Medicines (Germany) GmbH, Blueprint Medicines (Spain) S.L., Blueprint Medicines (France) SAS, and Blueprint Medicines (Italy) S.r.L. Lengo Therapeutics, Inc. (Lengo), which was acquired on December 30, 2021, was dissolved in June 2022. All intercompany transactions and balances have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and in developing the estimates and assumptions that are used in the preparation of the financial statements. Management must apply significant judgment in this process. Management’s estimation process often may yield a range of potentially reasonable estimates and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: revenue recognition, inventory, operating lease right-of-use assets, operating lease liabilities, stock-based compensation expense, accrued expenses, liabilities related to the sale of future royalties and future revenues, equity investment, and income taxes. The length of time and full extent to which the ongoing 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 and supply, 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, including the identification and spread of new variants, 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 making 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. The Russian invasion of Ukraine has not had a material impact on the Company’s business, results of operations and financial condition.

Significant Accounting Policies

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three and nine months ended September 30, 2022 are consistent with those discussed in Note 2 to the consolidated financial statements in the 2021 Annual Report on Form 10-K, with the exception of the below new policies.

Equity Investment

Investments in non-marketable equity securities of privately-held companies that do not have readily determinable fair values are carried at cost, less any impairments, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Each period the Company assesses relevant transactions to identify observable price changes, and the Company regularly monitors these investments to evaluate whether there is an indication of impairment. The Company evaluates whether an investment’s fair value is less than its carrying value using an estimate of fair value, if such an estimate is available. For periods in which there is no estimate of fair value, the Company evaluates whether an event or change in circumstances has occurred that may have a significant adverse effect on the value of the investment.

Liabilities related to the sale of future royalties and revenues

The Company accounts for net proceeds from sales of the Company’s rights to receive future royalty payments and from sales of future revenues as liabilities if the Company has significant continuing involvement in the generation of the related future cash flows. Interest on the liabilities related to the sale of future royalties and revenues will be recognized using the effective interest rate method over the life of the related royalty or revenue stream. The liabilities related to the sale of future royalties and revenues and the related interest expenses are based on the Company’s current estimates of future royalties or revenues as well as commercial milestones expected to be achieved and received over the life of the arrangement, which the Company determines by using forecasts of the underlying drug products of the underlying regions. The Company will periodically assess the expected payments and to the extent the amount or timing of the future estimated payments is materially different than previous estimates, the Company will account for any such change by adjusting the carrying value of the liabilities related to the sale of future royalties and revenues, and prospectively recognizing the related interest expenses.

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. The Company does not believe that the adoption of recently issued standards have or may have a material impact on its condensed consolidated financial statements and disclosures.

Fair value measurements

In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820) – Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. This standard clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. This standard will be effective for the Company on January 1, 2024, and is not expected to have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

Financing Arrangements

9 Months Ended

Sep. 30, 2022

Financing Arrangements

3. Financing Arrangements

Royalty Pharma Purchase and Sale Agreement

On June 30, 2022, the Company entered into a purchase and sale agreement (Royalty Purchase Agreement) with Royalty Pharma. Pursuant to the Royalty Purchase Agreement, the Company received an upfront payment of $175.0 million in consideration for the Company’s rights to receive royalty payments on the net sales of GAVRETO worldwide excluding the CStone territory and U.S. territory under the terms of the Roche pralsetinib collaboration agreement.

Although the Company sold all of the rights to receive royalties on the net sales of GAVRETO worldwide excluding the CStone territory and U.S. territory to Royalty Pharma, the Company continues to co-develop pralsetinib with Roche globally and is therefore involved in the generation of these future royalties. Due to the Company’s significant continuing involvement, the Company continues to account for any royalties and development and commercialization milestones earned related to the underlying territory under the Roche pralsetinib collaboration agreement as collaboration revenue on its consolidated statements of operations and comprehensive loss. Net proceeds from the transaction were recorded as a liability related to sale of future royalties and revenues on the consolidated balance sheet. The Company will accrete the $175.0 million, net of transaction costs of $3.8 million, to the total of these royalties as interest expense using the effective interest method over the estimated life of the arrangement. As of September 30, 2022, the Company’s estimate of this total interest expense resulted in an effective annual interest rate of 6.3%. These estimates contain assumptions that impact the amount recorded and the interest expense that will be recognized in future periods.

As payments are made to Royalty Pharma, the balance of the liability will be effectively repaid over the life of the Royalty Purchase Agreement. In order to determine the amortization of the liability, the Company estimates the total amount of future royalty payments to be paid to Royalty Pharma over the life of the arrangement. The exact amount of repayment is likely to change each reporting period. A significant increase or decrease in GAVRETO’s net revenue of the underlying territory will materially impact the liability related to this arrangement, interest expense and the time period for repayment. The Company will periodically assess the expected payments to Royalty Pharma and will prospectively adjust the amortization of the liability related to this arrangement for material changes in such payments.

As of September 30, 2022, the carrying value of the liability related to this arrangement was $173.6 million. The following table shows the activity within the liability account (in thousands):


Carrying value as of January 1, 2022	$	—
Sale of future royalties		175,000
Interest expense recognized		2,709
Capitalized closing costs		(3,777)
Interest payments		(330)
Carrying value as of September 30, 2022	$	173,602

Pursuant to the Royalty Purchase Agreement, the Company is eligible to receive certain milestone payments totaling up to $165.0 million, subject to the achievement of specified net sales milestones by Roche. The potential milestone payments will be added to the carrying value of the liability related to this arrangement when the milestones are achieved and received.

Financing Arrangements with Sixth Street Partners

In July 2022, the Company closed two transactions pursuant to a purchase and sale agreement (Future Revenue Purchase Agreement) and a financing transaction for up to $660.0 million (Financing Agreement) with Sixth Street Partners (Sixth Street). Because two transactions were entered into with the same parties and in contemplation of one another, the Company recorded these transactions based on the relative fair values of each freestanding financial instrument and allocated the proceeds in proportion to those fair value amounts.

Sixth Street Partners Purchase and Sale Agreement

Pursuant to the Future Revenue Purchase Agreement, the Company received gross proceeds of $250.0 million in exchange for future royalty payments at a rate of 9.75% on up to $900 million each year of (i) aggregate worldwide annual net product sales of AYVAKIT/ AYVAKYT (avapritinib) and (ii), if it is approved, aggregate worldwide annual net product sales of BLU-263, but excluding sales in Greater China, subject to a cumulative cap of 1.45 times the upfront invested capital or a total of $362.5 million. In the event that certain revenue targets are not achieved by specified dates, the royalty rate and cumulative cap shall be increased to 15% and 1.85 times the invested capital (or $462.5 million), respectively.

The Company continues to own the research, development, manufacturing and commercialization of AYVAKIT/ AYVAKYT and if it is approved, BLU-263, and has significant continuing involvement in the generation of the cash flows under the Future Revenue Purchase Agreement. Therefore, the Company continues to account for any revenue earned from worldwide product sales of AYVAKIT/ AYVAKYT and, if it is approved, BLU-263, on its consolidated statements of operations and comprehensive loss. Net proceeds from the transaction were recorded as a liability related to sale of future liabilities and revenues on the consolidated balance sheet. The Company will accrete the $250.0 million, net of transaction costs of $5.4 million, to the total of these future payments as interest expense using the effective interest method over the estimated life of the arrangement.

As payments are made to Sixth Street, the balance of the liability will be effectively repaid over the life of the Future Revenue Purchase Agreement. In order to determine the amortization of the liability, the Company estimates the total amount of future revenue payments to be paid to Sixth Street over the life of the arrangement. The exact amount of repayment is likely to change each reporting period. A significant increase or decrease in worldwide product sales of AYVAKIT/ AYVAKYT and, if it is approved, BLU-263, will materially impact the liability related to this arrangement, interest expense and the time period for repayment. The Company will periodically assess the expected payments to Sixth Street and will prospectively adjust the amortization of the liability related to this arrangement for material changes in such payments. As of September 30, 2022, the Company’s estimate of this total interest expense resulted in an effective annual interest rate of 11.5%. These estimates contain assumptions that impact the amount recorded and the interest expense that will be recognized in future periods.

As of September 30, 2022, the carrying value of the liability related to this arrangement was $250.1 million. The following table shows the activity within the liability account (in thousands):


Carrying value as of January 1, 2022	$	—
Sale of future revenue		250,000
Interest expense recognized		5,446
Capitalized closing costs		(5,395)
Interest payments		—
Carrying value as of September 30, 2022	$	250,051

Sixth Street Partners Term Loan

The Financing Agreement entered into by the parties in connection with the transaction provides for (i) a senior secured term loan facility of up to $150.0 million and (ii) a senior secured delayed draw term loan facility of up to $250.0 million to be funded in two tranches at the Company’s choice. The term loans will mature on June 30, 2028 and bear interest at a variable rate equal to either the Secured Overnight Financing Rate (SOFR) plus six and one half percent (6.50%) or the base rate plus five and one half percent (5.50%), subject to a floor of one percent (1%) and two percent (2%) with respect to the SOFR and base rate, respectively.

As part of the Financing Agreement with Sixth Street Partners, the Company received gross proceeds of $150.0 million as a term loan in July 2022 and incurred an aggregate of $12.2 million of debt discounts and transaction costs, which have been recorded as a reduction to the carrying amount of the debt on the Company’s consolidated balance sheet and will be amortized as additional interest expenses using the effective interest rate method over the period from issuance through maturity. As of September 30, 2022, the Company’s estimate of the total interest expense resulted in an effective annual interest rate of 12.0%. The carrying amount of the debt as of September 30, 2022 is subject to variable interest rates, which are based on current market rates, and as such, approximates fair value.

The following table shows the activity within the liability account (in thousands):


Carrying value as of January 1, 2022	$	—
Term Loan		150,000
Interest expense recognized		3,190
Debt discounts and capitalized closing costs		(12,214)
Interest payments		(2,626)
Carrying value as of September 30, 2022	$	138,350

The Company’s obligations under the Financing Agreement will be secured, subject to certain exceptions, by security interests in the substantially all of the Company’s assets and the Company’s certain subsidiaries. The Financing Agreement contains customary negative covenants that, among other things and subject to certain exceptions, could restrict the Company’s ability to incur additional liens, incur additional indebtedness, make investments, including acquisitions, engage in fundamental changes, sell or dispose of assets that constitute collateral, including certain intellectual property, pay dividends or make any distribution or payment on or redeem, retire or purchase any equity interests, amend, modify or waive certain material agreements or organizational documents and make payments of certain subordinated indebtedness. The Financing Agreement also requires the Company to maintain a consolidated liquidity of at least (i) $50.0 million during the period commencing from the date on which the term loans are funded to the date which is the day before the next term loans are funded and (ii) $80.0 million for each day thereafter.

Marketable Securities

9 Months Ended

Sep. 30, 2022

Marketable Securities

4. Marketable Securities

Marketable securities consisted of the following at September 30, 2022 and December 31, 2021 (in thousands):


	Amortized		Unrealized		Unrealized		Fair
September 30, 2022	Cost		Gain		Losses		Value
Marketable securities, available-for-sale:
U.S. government agency securities	$	429,423	$	—		(7,007)	$	422,416
U.S. treasury obligations		485,647		—		(6,853)		478,794
Total	$	915,070	$	—	$	(13,860)	$	901,210


	Amortized		Unrealized		Unrealized		Fair
December 31, 2021	Cost		Gain		Losses		Value
Marketable securities, available-for-sale:
U.S. government agency securities	$	498,582	$	21	$	(1,460)	$	497,143
U.S. treasury obligations		328,801		—		(1,249)		327,552
Total	$	827,383	$	21	$	(2,709)	$	824,695

As of September 30, 2022, the Company held 103 debt securities that were in an unrealized loss position with an aggregate fair value of $901.2 million. Of the 103 debt securities, 33 were in an unrealized loss position for more than twelve months with an aggregate fair value of $346.4 million. As of December 31, 2021, the Company held 74 debt securities that were in an unrealized loss position with an aggregate fair value of $750.5 million. As of December 31, 2021, 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 three and nine months ended September 30, 2022 and 2021.

As of September 30, 2022, 10 securities with an aggregate fair value of $55.7 million had remaining maturities between one year and five years. As of December 31, 2021, 56 securities with an aggregate fair value of $557.5 million had remaining maturities between one year and five years.

The Company received proceeds of $90.5 million and $170.1 million from maturities of debt securities for the three and nine months ended September 30, 2022, respectively, and $237.3 million and $637.8 million for the three and nine months ended September 30, 2021, respectively. The Company did not realize any gains or losses from maturities of debt securities for the three and nine months ended September 30, 2022 and 2021.

Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2022

Fair Value of Financial Instruments

5. Fair Value of Financial Instruments

The following table summarizes cash equivalents and marketable securities measured at fair value on a recurring basis as of September 30, 2022 (in thousands):


			Active		Observable		Unobservable
	September 30,		Markets		Inputs		Inputs
Description	2022		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	274,622	$	274,622	$	—	$	—
Marketable securities, available-for-sale:
U.S. government agency securities		422,416		—		422,416		—
U.S. treasury obligations		478,794		478,794		—		—
Total	$	1,175,832	$	753,416	$	422,416	$	—

The following table summarizes cash equivalents and marketable securities measured at fair value on a recurring basis as of December 31, 2021 (in thousands):


			Active		Observable		Unobservable
	December 31,		Markets		Inputs		Inputs
Description	2021		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	118,880	$	118,880	$	—	$	—
Marketable securities, available-for-sale:
U.S. government agency securities		497,143		—		497,143		—
U.S. treasury obligations		327,552		327,552		—		—
Total	$	943,575	$	446,432	$	497,143	$	—

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

9 Months Ended

Sep. 30, 2022

Product Revenue Reserves and Allowances

6. 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 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. In June 2021, the FDA granted a subsequent approval for AYVAKIT, expanding the labeled indications to include adult patients with advanced systemic mastocytosis (Advanced SM), including aggressive SM (ASM), SM with an associated hematological neoplasm (SM-AHN) and mast cell leukemia (MCL). In March 2022, the European Commission expanded the marketing authorization for AYVAKYT to include the treatment of adult patients with ASM, SM-AHN, or MCL, after at least one systemic therapy.

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. In December 2020, the FDA granted a subsequent accelerated approval for GAVRETO, expanding the labeled indications to include adult and pediatric patients 12 years of age and older with advanced or metastatic RET-mutant medullary thyroid cancer (MTC) who require systemic therapy, or with advanced or metastatic RET fusion-positive thyroid cancer who require systemic therapy and who are radioactive iodine-refractory (if radioactive iodine is appropriate).

The Company recorded net product revenue from the U.S. product sales of GAVRETO in 2021 until it transferred, on July 1, 2021, certain responsibilities associated with product sales to customers, pricing and distribution matters related to U.S. product sales of GAVRETO to its collaboration partner. The Company did not record any net product revenue from product sales of GAVRETO subsequent to this transition date. For additional information, see Note 10, Collaboration and License Agreements, to our unaudited condensed consolidated financial statements.

The following table summarizes revenue recognized from product sales for the three and nine months ended September 30, 2022 and 2021 (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
AYVAKIT/AYVAKYT	$	28,634	$	17,270	$	80,929	$	32,952
GAVRETO		—		—		—		4,706
Total product revenue	$	28,634	$	17,270	$	80,929	$	37,658

The following table summarizes activity in each of the product revenue allowance and reserve categories for the nine months ended September 30, 2022 and 2021 (in thousands):


	Nine Months Ended September 30,
	2022		2021
Beginning balance at January 1	$	4,345	$	1,192
Provision related to product sales		13,606		5,665
Adjustment related to prior periods sales		(645)		—
Credits and payments made		(9,980)		(3,416)
Ending balance at September 30	$	7,326	$	3,441

The total reserves that are included in the Company’s unaudited condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021, are summarized as follows (in thousands):


	September 30,		December 31,
	2022		2021
Reduction of accounts receivable, net	$	946	$	419
Component of accrued expenses		6,380		3,926
Total revenue-related reserves	$	7,326	$	4,345

Inventory

9 Months Ended

Sep. 30, 2022

Inventory

7. Inventory

Capitalized inventory consists of the following at September 30, 2022 and December 31, 2021 (in thousands):


	September 30,		December 31,
	2022		2021
Raw materials	$	11,927	$	10,788
Work in process		29,773		17,702
Finished goods		2,311		3,916
Total	$	44,011	$	32,406

Balance sheet classification


	September 30,		December 31,
	2022		2021
Inventory	$	35,253	$	21,817
Other assets		8,758		10,589
Total	$	44,011	$	32,406

Inventory amounts written down as a result of excess, obsolescence, unmarketability or other reasons are charged to cost of sales. The Company did not recognize any material write-down for the three and nine months ended September 30, 2022. For the three and nine months ended September 30, 2021, the Company recorded a write-down of $0.4 million and $0.8 million, respectively. Long-term inventory, which primarily consists of work in process and raw materials, is included in other assets in the unaudited condensed consolidated balance sheets.

Restricted Cash

9 Months Ended

Sep. 30, 2022

Restricted Cash

8. Restricted Cash

At September 30, 2022 and December 31, 2021, $5.2 million and $5.2 million, respectively, of the Company’s cash is restricted by a bank primarily related to security deposits for the Company’s building lease agreements.

Accrued Expenses

9 Months Ended

Sep. 30, 2022

Accrued Expenses

9. Accrued Expenses

Accrued expenses consist of the following (in thousands):


	September 30,		December 31,
	2022		2021
Research, development and commercial contract costs	$	62,119	$	68,164
Employee compensation		25,525		29,166
Accrued professional fees		18,345		12,611
Revenue-related reserves		6,380		3,926
Other		8,394		7,962
Total	$	120,763	$	121,829

Collaboration and License Agreements

9 Months Ended

Sep. 30, 2022

Collaboration and License Agreements

10. Collaboration and License Agreements

IDRx

In August 2022, the Company entered into a license agreement with IDRx, Inc. (IDRx), pursuant to which the Company granted IDRx an exclusive, worldwide, royalty-bearing license to exploit the Company’s internally discovered KIT exon 13 inhibitor, IDRX-73 (formerly known as BLU-654) (IDRx License Agreement). IDRx is a clinical-stage biopharmaceutical company and among IDRx’s founders are Alexis Borisy, George Demetri, M.D., and Nicholas Lydon, Ph.D., each of whom currently serve as members of the Company’s board of directors. Due to these relationships, the transaction with IDRx is a related party transaction.

In connection with the IDRx License Agreement, the Company also entered into a stock purchase agreement with IDRx (IDRx Stock Purchase Agreement), pursuant to which the Company received 4,509,105 shares of IDRx’s Series A preferred stock and the Company has the right to receive additional shares of IDRX’s Series A preferred stock through an anti-dilution provision subject to a defined financing cap.

The Company is also eligible to receive up to $217.5 million in contingent cash payments, including specified development, regulatory and sales-based milestone payments. In addition, IDRx is obligated to pay to the Company royalties on aggregate annual worldwide net sales of licensed products at tiered percentage rates up to low-teens, subject to adjustments in specified circumstances under the IDRx License Agreement.

Unless earlier terminated, the IDRx License Agreement will expire on a country-by-country, licensed product-by-licensed product basis upon the latest of: (a) the expiration of the last valid claim within the licensed patents covering such licensed product in a such country, (b) the expiration of the regulatory exclusivity period for such licensed product in such country, or (c) the tenth (10th) anniversary of the first commercial sale of such licensed product in such country. Following the end of the term for any such licensed product and in such region by expiration, the license granted to IDRx will become exclusive, perpetual, irrevocable, fully paid-up and royalty-free. IDRx may terminate the IDRx License Agreement for convenience at any time upon at least twelve months’ prior written notice to the Company. Either party may also terminate the IDRx License Agreement for material breach of the other party or for insolvency, and the Company may terminate the IDRx License Agreement for IDRx’s breach of the anti-dilution provision in the IDRx Stock Purchase Agreement. Upon termination of the license agreement in its entirety, all rights and obligations under the license agreement will terminate and revert back to the Company, and the Company has a license under certain intellectual property of IDRx to continue to exploit the compound and terminated product, subject to a royalty that will be negotiated at the time of termination.

The Company considered the ASC 606 criteria for combining contracts and determined the IDRx License Agreement and the IDRx Stock Purchase Agreement should be combined into a single contract because they were negotiated and entered into in contemplation of one another. Therefore, the Company determined that the 4,509,105

shares of IDRx’s Series A preferred stock and the anti-dilution right to receive additional shares should be attributed to the transaction price of the IDRx License Agreement.

The Company evaluated the IDRx License Agreement under ASC 606. The Company identified the following material promises under the agreement: (1) the exclusive license and (2) the initial know-how transfer. The Company determined that the exclusive license and the initial know-how transfer were not distinct from each other, as the exclusive license has limited value without the corresponding know-how transfer. As such, for the purposes of ASC 606, the Company determined that these two material promises, the exclusive license and the initial know-how transfer, should be combined into one distinct performance obligation. The Company concluded that the license is a functional intellectual property license. The Company determined that IDRx benefited from the license along with the initial know-how transfer at the time of grant, and therefore the related performance obligation is satisfied at a point in time.

For the purposes of ASC 606, the transaction price of the IDRx License Agreement at the contract inception was determined to be $27.5 million and recorded as license revenue-related party on the consolidated statements of operations and comprehensive loss. The fair value was derived from IDRx’s most recent financing transaction with unrelated investors. All potential milestone payments that the Company is eligible to receive under the IDRx License Agreement have been excluded from the transaction price. The Company will reevaluate the transaction price for inclusion of milestone payments and royalties 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. Additionally, the Company is entitled to sales milestones and royalties from the sales of the licensed products, and revenue are recognized when the related sales occur.

The Company concluded the preferred stock investment should be accounted for as an equity investment as it is not mandatorily redeemable nor does the Company have the unilateral right to redeem the preferred stock, and the Company, along with its related parties, did not have a controlling financial interest in IDRx nor have the ability to influence the financial and operating policies through the ownership of preferred stock. IDRx’s preferred stock is not exchange-traded and does not have a readily determinable fair value. Therefore, the Company accounts for the preferred stock investment under the measurement alternative for equity investments that do not have a readily determinable fair value, which is at cost of $27.8 million including transaction costs of $0.3 million. As of September 30, 2022, the cost of the investment in IDRx’s preferred stock was $27.8 million and was recorded as equity investment on the condensed consolidated balance sheets. As of September 30, 2022, no adjustments have been recognized related to the preferred stock investment as a result of the application of the measurement.

Proteovant

In February 2022, the Company entered into an exclusive collaboration agreement (the Proteovant collaboration agreement) with Oncopia Therapeutics, Inc., d/b/a Proteovant Therapeutics, Inc. (Proteovant), pursuant to which the parties will jointly research and advance up to two novel protein degrader therapies into development candidates, as well as up to two additional novel protein degrader target programs as may be mutually agreed to by the Company and Proteovant (each a target program). On a target program-by-target program basis, the Company will have an exclusive option to obtain a worldwide, exclusive license to develop and commercialize any licensed compound and licensed product under each target program. Proteovant will have the right to opt into the global development and U.S. commercialization of certain licensed compounds and licensed products under the second target program that the Company options, and if the parties add additional target programs, Proteovant will have the same opt-in right for the fourth target program that the Company options.

The Company paid Proteovant an upfront payment of $20.0 million in connection with the execution of the agreement and Proteovant will be eligible to receive up to an additional $632.0 million in contingent milestone payments including specified research, development, regulatory and commercialization milestones and tiered percentage royalties on a licensed product-by-licensed product basis ranging from the mid- to high-single digits on net sales on the first two target programs, subject to adjustment in specified circumstances. If Proteovant opts in to the second target program, the parties will split profits and losses of that program equally in the U.S. along with development costs and the milestone payments for the program will be reduced accordingly. Proteovant will be eligible to receive milestone payments and royalties on ex-U.S. sales. In addition, the parties may jointly extend the collaboration, with the same structure and financial terms, to two additional program targets through additional funding by the Company.

The Company concluded that Proteovant is providing the Company with research services throughout the period until the Company can exercise its option to obtain a worldwide, exclusive license to develop and commercialize any licensed compound. Therefore, the Company recorded the $20.0 million upfront payment as an asset on the unaudited condensed consolidated financial statements and will record it as research and development expense over the expected research period. During the three and nine months ended September 30, 2022, the Company recorded research and development expense of $1.4 million and $2.9 million, respectively, under the Proteovant collaboration agreement. The Company will reevaluate the research period at the end of each reporting period and as any changes in circumstances occur, and if necessary, the Company will adjust its estimate of expected research period accordingly. Each research and development milestone payment will be accrued and expensed when probable.

Zai Lab

In November 2021, the Company entered into a collaboration (the Zai Lab agreement) with Zai Lab (Shanghai) Co., Ltd., (Zai Lab), pursuant to which the Company granted Zai Lab exclusive rights to develop and commercialize the Company’s drug candidates BLU-701 and BLU-945, including their respective back-up forms and certain other forms thereof, for the treatment of EGFR-driven non-small cell lung cancer in Greater China, including Mainland China, Hong Kong, Macau and Taiwan (collectively, the Zai Lab territory), either as a monotherapy or as part of a combination therapy. The Company retains exclusive rights to the licensed products outside the Zai Lab territory.

Under the Zai Lab agreement, the Company received an upfront cash payment of $25.0 million and, in addition to the upfront payment received, the Company is eligible to receive up to $590.0 million in contingent payments, including specified development, regulatory and sales-based milestones and tiered percentage royalties on a licensed product-by-licensed product basis ranging from the low-teens to mid-teens on annual net sales of each licensed product in the Zai Lab territory, subject to adjustment in specified circumstances. Zai Lab will be responsible for costs related to clinical trials in the Zai Lab territory, other than the specified shared services costs as defined in the Zai Lab agreement which will be shared by the Company and Zai Lab.

Pursuant to the terms of the Zai Lab agreement, Zai Lab is responsible for conducting all development and commercialization activities in the Zai Lab territory related to the licensed drug candidates. In addition, under the Zai Lab 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 Zai Lab agreement, including license grants to enable each party to conduct research, development and commercialization activities pursuant to the terms of the Zai Lab agreement.

The Zai Lab agreement will continue on a licensed product-by-product and region-by-region basis until the later of (i) the 12^th anniversary of the date of the first commercial sale of a licensed product in the Zai Lab territory, (ii) the date of expiration of the last valid patent claim related to the Company’s patent rights of the product in the Zai Lab territory, and (iii) the expiration of the last regulatory exclusivity for that product in a region in the Zai Lab territory. Zai Lab may terminate the agreement for convenience by giving a written notice after the second anniversary of the effective date (a) at least 12 months after the date of notice, in the event such notice is given after the first commercial sale of a licensed product in the Zai Lab territory or (b) at least nine months after the date of such notice, in the event such notice is given prior to the first commercial sale of the first licensed product in the Zai Lab territory. Either party may terminate the Zai Lab agreement for the other party’s uncured material breach or insolvency. Upon termination, all licenses and all other rights granted by the Company to Zai Lab will terminate. Each party will retain its joint ownership interests in any joint collaboration technology.

The Company evaluated the Zai Lab agreement to determine whether it is a collaborative arrangement in the scope of ASC 808. The Company concluded that the Zai Lab agreement is a collaborative agreement under ASC 808 as both parties are active participants in the clinical trials and are exposed to significant risks and rewards of those activities under the Zai Lab agreement. The Company determined that the Zai Lab agreement contained two material components: (i) licenses granted to Zai Lab to exploit and develop each licensed product in the Zai Lab territory and related activities in the Zai Lab territory, including manufacturing, and (ii) the parties’ participation in the global development of the licensed products. The Company used the criteria specified in ASC 606 to determine which of the components of the Zai Lab agreement are performance obligations with a customer and concluded that Zai Lab is the Company’s customer for the licenses and related activities in the Zai Lab territory under ASC 606. The global development activities under the agreement does not present a transaction with a customer and the payments received by the Company for global development activities, including manufacturing, are accounted for as a reduction of related expenses. During the three

and nine months ended September 30, 2022, the Company recorded $0.2 million and $0.5 million, respectively, in reduction of expenses under the Zai Lab agreement.

The Company evaluated the Zai Lab territory specific licenses and related activities under ASC 606 as these transactions are considered transactions with a customer and identified three material promises at the outset of the Zai Lab agreement, which consists of the following for each licensed product: (1) the exclusive license, (2) the initial know-how transfer and (3) manufacturing activities related to development and commercial supply of the licensed product in the Zai Lab territory. The Company determined that the exclusive license and the initial know-how transfer were not distinct from each other, as the exclusive license has limited value without the corresponding know-how transfer. As such, for the purposes of ASC 606, the Company determined that these two material promises, the exclusive license and the initial know-how, should be combined into one distinct performance obligation. The Company further evaluated the material promise associated with manufacturing activities related to development and commercial supply of the licensed products in the Zai Lab territory, given Zai Lab 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 the licensed product in Zai Lab territory was an option but not a performance obligation of the Company at the inception of the Zai Lab 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 the licensed product, as the expected pricing was not issued at a significant and incremental discount. Therefore, the manufacturing activities were excluded as performance obligation at the outset of the arrangement.

The Company evaluated the license under ASC 606 and concluded that the license is a functional intellectual property license. The Company determined that Zai Lab benefited from the license along with the initial know-how transfer at the time of grant, and therefore the related performance obligation is satisfied at a point in time. Additionally, the Company is entitled to sales milestones and royalties from Zai Lab upon future sales of the licensed products in the Zai Lab territory, and revenue will be recognized when the related sales occur. Costs that are incurred associated with Zai Lab territory specific activities are reimbursable from Zai Lab and are recognized as revenue. During the three and nine months ended September 30, 2022, the Company recorded $0.2 million and $0.8 million, respectively, in revenue related to Zai Lab territory specific activities in the unaudited condensed consolidated financial statements.

For the purposes of ASC 606, the transaction price of the Zai Lab agreement as of the outset of the arrangement was determined to be $25.0 million, which consisted of the upfront cash payment. 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 Company satisfied the performance obligation upon delivery of the licenses and initial know-how transfer, and recognized the upfront payment of $25.0 million as revenue during the year ended December 31, 2021.

The Company will reevaluate the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur, and if necessary, the Company will adjust its estimate of the transaction price, and any addition to the transaction price would be recognized as revenue when it becomes probable that inclusion would not lead to a significant revenue reversal.

Roche – Pralsetinib Collaboration

In July 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, and through September 30, 2022, the Company has received an aggregate of $105.0 million in specified regulatory and commercialization milestones. In addition to the upfront and milestone payments received through September 30, 2022, the Company is eligible to receive up to $822.0 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 agreed to work together to co-commercialize pralsetinib and 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 shares of common stock to Roche Holdings at a purchase price of $96.57 per share and received an aggregate of $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 are recognized when the related sales occur. Costs that are incurred associated with the Roche territory activities are reimbursable from Roche and are recognized as revenue.

For the purposes of ASC 606, the transaction price of the Roche collaboration agreement at 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. Through September 30, 2022, the Company has achieved an aggregate of $105.0 million in specified regulatory and commercialization milestones and added the $105.0 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 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.

The following table summarizes revenue recognized under the Roche pralsetinib collaboration during the three and nine months ended September 30, 2022 and 2021 (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Manufacturing and research and development services related to ex-US territory-specific activities	$	3,971	$	856	$	4,663	$	4,539
Royalty revenue		311		—		910		—
Total Roche pralsetinib collaboration revenue	$	4,282	$	856	$	5,573	$	4,539

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 are accounted for as an increase to or reduction of research and development expenses. Prior to July 1, 2021, the Company was the principal for product sales to customers in the U.S. and recognized revenues on sales to third parties in product revenue, net in its consolidated statements of operations and comprehensive loss. On July 1, 2021, Roche took over certain responsibilities associated with product sales to customers, pricing and distribution matters for GAVRETO in the U.S. and became the principal for recording product sales to customers in the U.S., and the Company recognized its portion of the commercial losses sharing as collaboration loss sharing in its consolidated statements of operations and comprehensive loss.

The following table summarizes the amount recognized from collaboration loss sharing after Roche became the principal for product sales of GAVRETO to customers in the U.S. (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
The Company's share of loss in the U.S. for pralsetinib	$	1,665	$	3,269	$	7,076	$	3,269

The following table summarizes the amounts recognized as reductions to selling, general and administrative expenses related to the commercialization of GAVRETO in the U.S. and reductions to or increases in research and development expenses related to global development activities for pralsetinib under the Roche pralsetinib collaboration during the three and nine months ended September 30, 2022 and 2021 (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Reductions to selling, general and administrative expenses	$	3,560	$	6,903	$	12,808	$	12,058
Reductions to (increases in) research and development expenses	$	(6,111)	$	1,459	$	(9,815)	$	7,613

The following table summarizes the contract assets and liability associated with the Roche pralsetinib collaboration as of September 30, 2022 and December 31, 2021 (in thousands):


	September 30,		December 31,
	2022		2021
Accounts receivable, net	$	—	$	2,679
Unbilled accounts receivable		—		6,802
Accrued expenses	$	577	$	—

Although the Company sold its right to receive royalty payments from Roche’s sales of GAVRETO in Roche territory to Royalty Pharma in June 2022, given the Company’s significant continuing involvement in the generation of future royalties, the Company continues to account for any royalties and development and commercialization milestones earned related to the Roche territory activities under the Roche pralsetinib collaboration agreement as collaboration revenue on its consolidated statements of operations and comprehensive loss. For additional information, see Note 3 – Financing Arrangements, to our unaudited condensed consolidated financial statements.

Clementia

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

Under the Clementia agreement, the Company received an upfront cash payment of $25.0 million and through September 30, 2022, the Company has received an aggregate of $50.0 million in cash milestone payments. Subject to the terms of the Clementia agreement, in addition to the upfront and milestone payments received through September 30, 2022, the Company is eligible to receive up to $460.0 million in contingent payments, including specified development, regulatory and sales-based milestones for licensed products. In addition, Clementia is obligated to pay to the Company royalties on aggregate annual worldwide net sales of licensed products at tiered percentage rates ranging from the low- to mid-teens, subject to adjustment in specified circumstances under the Clementia agreement, and to purchase specified manufacturing inventory from the Company for a total of $1.5 million.

Unless earlier terminated in accordance with the terms of the Clementia agreement, the agreement will expire on a country-by-country, licensed product-by-licensed product basis on the date when no royalty payments are or will become due. Clementia may terminate the agreement at any time on or after the second anniversary of the effective date of the agreement upon at least 12 months’ prior written notice to the Company, which cannot be delivered before the first anniversary of the effective date. Either party may terminate the agreement for the other party’s uncured material breach or insolvency and in certain other circumstances agreed to by the parties. In certain termination circumstances, the Company is entitled to retain specified licenses to be able to continue to exploit the Clementia licensed products.

The Company evaluated the Clementia agreement under ASC 606, as the agreement represented a transaction with a customer. The Company identified the following material promises under the agreement: (1) the exclusive license

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

The Company determined that the transaction price as of the outset of the arrangement was $46.5 million, which was allocated to the three performance obligations on a relative stand-alone selling price basis. The Company recognized revenue in a total of $46.2 million related to the license and the technology transfer and inventory transfer in 2019 and $0.3 million related to remaining inventory transfer in 2020.

During the three months ended September 30, 2022, no revenue was recognized from the Clementia collaboration. During the nine months ended September 30, 2022, cash consideration associated with an achieved development milestone of $30.0 million was added to the estimated transaction price for the Clementia agreement and recognized as revenue. The other potential milestone payments that the Company is eligible to receive were excluded from the transaction price, as the 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, the Company will adjust its estimate of the transaction price, and any addition to the transaction price would be recognized as revenue when it becomes probable that inclusion would not lead to a significant revenue reversal.

During the three and nine months ended September 30, 2021, no material revenue was recognized from the Clementia collaboration. There was no revenue deferred as a contract liability associated with the Clementia agreement as of September 30, 2022 and December 31, 2021.

CStone Pharmaceuticals

In June 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 received an upfront cash payment of $40.0 million, and through September 30, 2022, the Company has achieved an aggregate of $27.0 million in milestones under this collaboration. Subject to the terms of the CStone agreement, in addition to the upfront payments received and milestones achieved through September 30, 2022, the Company will be eligible to receive up to $319.0 million in contingent payments, including specified development, regulatory and sales-based milestones for licensed products. 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, 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, are 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 expenses payable to CStone during the three and nine months ended September 30, 2022 and 2021 is as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Manufacturing and research and development services related to global development activities, net of expenses payable to CStone	$	493	$	769	$	1,642	$	1,777

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 in 2018.

The Company did not achieve any milestones under the CStone agreement during the three months ended September 30, 2022 and 2021. During the nine months ended September 30, 2022 and 2021, cash considerations associated with achieved regulatory and development milestones of $4.0 million and $9.0 million, respectively, were added to the estimated transaction price for the CStone agreement and recognized as revenue in such periods. The Company will reevaluate the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur, and if necessary, the Company will adjust its estimate of the transaction price, and any addition to the transaction price would be recognized as revenue when it becomes probable that inclusion would not lead to a significant revenue reversal.

In 2021, the Company entered into commercial supply agreements and an avapritinib manufacturing technology transfer agreement with CStone related to supply of drug substance of avapritinib and drug product of avapritinib and pralsetinib to assist CStone’s commercialization activities conducted specifically for the CStone territory. In the first quarter of 2022, the Company entered into a pralsetinib manufacturing technology transfer agreement with CStone related to supply of drug substance of pralsetinib. The manufacturing activities in these agreements were considered as distinct performance obligations from the CStone collaboration agreement and collaboration revenue is recognized upon delivery of the drug substance and drug product to CStone.

A summary of revenue recognized under the CStone agreement during the three and nine months ended September 30, 2022 and 2021 is as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
License milestone revenue	$	—	$	—	$	4,000	$	9,000
Manufacturing services and royalty revenue related to CStone territory-specific activities		2,915		4,655		14,209		17,228
Total CStone collaboration revenue	$	2,915	$	4,655	$	18,209	$	26,228

The following table presents the contract assets associated with the CStone collaboration as of September 30, 2022 and December 31, 2021 (in thousands):


	September 30,		December 31,
	2022		2021
Accounts receivable, net	$	2,045	$	8,164
Unbilled accounts receivable	$	2,206	$	5,034

As of September 30, 2022, the Company did not have material contract liability associated with the CStone collaboration. The contract liability associated with the CStone collaboration was $4.8 million at December 31, 2021, which resulted primarily from advance payments made by CStone in connection with commercial supply of pralsetinib for the CStone territory.

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 BLU-852, a development candidate for 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 prior reporting periods, 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 has the lead responsibility for drug discovery and preclinical development of all collaboration programs. In addition, the Company has 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 has the right to lead the conduct of such Phase 1 clinical trials. Pursuant to the Roche immunotherapy agreement, the parties 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, and through September 30, 2022, the Company has achieved an aggregate of $25.0 million in milestone payments under this collaboration. Subject to the terms of the Roche immunotherapy agreement, as amended, in addition to the upfront and milestone payments received through September 30, 2022, the Company is eligible to receive up to approximately $317.8 million in contingent option fees and milestone payments related to specified research, preclinical, 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 September 30, 2022, the Company has achieved an aggregate of $25.0 million in research milestones 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. During the three and nine months ended September 30, 2022, cash consideration associated with an achieved research milestone of $1.5 million was added to the estimated transaction price. During the three and nine months ended September 30, 2021, no research milestones were achieved under the Roche immunotherapy agreement. In the first quarter of 2022, it was determined that Roche will initiate a Phase 1 clinical development plan for BLU-852, one of the ongoing programs, in combination with atezolizumab, an approved drug product commercialized by Roche, and pursuant to the Roche immunotherapy agreement, the Company will share the development cost up to $15.0 million. As a result, during the first quarter of 2022, the Company reduced $15.0 million from the aggregated transaction price of this collaboration and recorded its commitment of $15.0 million as a contract liability on its unaudited condensed consolidated financial statements.

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. In the first quarter of 2022, a reduction in the costs expected to be incurred in the future to satisfy certain performance obligations under the collaboration became probable

as a result of Roche and the Company endorsing the Phase 1 clinical development plan for one of the ongoing programs in combination with Roche’s product.

Because of the revision to the cost expected to be incurred to satisfy the performance obligation and the reduction of the $15.0 million payment commitment to Roche from the aggregated transaction price, the Company recorded a cumulative revenue catch-up of $2.9 million during the nine months ended September 30, 2022. A summary of revenue recognized or revenue reduced under the Roche immunotherapy agreement during the three and nine months ended September 30, 2022 and 2021 is as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Roche collaboration research and development services revenue	$	2,475	$	1,408	$	1,710	$	4,293

During the three and nine months ended September 30, 2022 and 2021, the Company recognized the following revenue due to the changes in the contract liability balances (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Amounts included in the contract liability at the beginning of the period	$	1,424	$	1,062	$	3,829	$	3,364

The following table summarizes the contract liability related to the Roche immunotherapy agreement as of September 30, 2022, and December 31, 2021 (in thousands):


	September 30, 2022								December 31, 2021
	Current			Noncurrent			Total		Current			Noncurrent			Total
Deferred revenue	$	4,594	$		11,995	$		16,589	$	6,339	$		25,066	$		31,405
Accrued expenses	$	8,208			5,730			13,938	$	—			—			—

The research and development services related to the performance obligation are expected to be performed over a remaining period of approximately 3.3 years.

Stock-based Compensation

9 Months Ended

Sep. 30, 2022

Stock-based Compensation

11. Stock-based compensation

2015 Stock Option and Incentive Plan

In 2015, the Company’s board of directors and stockholders approved the 2015 Stock Option and Incentive Plan (the 2015 Plan), which replaced the Company’s 2011 Stock Option and Grant Plan, as amended (the 2011 Plan). The 2015 Plan includes incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, performance share awards and cash-based awards. The Company initially reserved a total of 1,460,084 shares of common stock for the issuance of awards under the 2015 Plan. The 2015 Plan provides that the number of shares reserved and available for issuance under the 2015 Plan will be cumulatively increased on January 1 of each calendar year by 4% of the number of shares of common stock issued and outstanding on the immediately preceding December 31 or such lesser amount as specified by the compensation committee of the board of directors. For the calendar year beginning January 1, 2022, the number of shares reserved for issuance under the 2015 Plan was increased by 2,365,643 shares. In addition, the total number of shares reserved for issuance is subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. As of September 30, 2022, there were 4,137,674 shares available for future grant under the 2015 Plan.

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. In June 2022, the Company’s board of directors approved the reservation of an additional 1,500,000 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 further 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 September 30, 2022, there were 1,535,757 shares available for future grant under the Inducement Plan.

Stock options

The following table summarizes the stock option activity for the nine months ended September 30, 2022:


		Weighted-Average
	Shares		Exercise Price
Outstanding at December 31, 2021	5,682,022	$	69.37
Granted	1,126,919		60.97
Exercised	(206,582)		18.70
Canceled	(286,619)		79.26
Outstanding at September 30, 2022	6,315,740	$	69.07
Exercisable at September 30, 2022	4,028,524	$	66.34

As of September 30, 2022, the total unrecognized compensation expense related to unvested stock option awards was $86.1 million, which is expected to be recognized over a weighted-average period of approximately 2.54 years.

Restricted stock units

The following table summarizes the restricted stock units activity for the nine months ended September 30, 2022:


		Weighted-Average
	Shares	Grant Date Fair Value
Unvested shares at December 31, 2021	1,590,160	$	83.85
Granted	814,891		60.78
Vested	(420,823)		79.80
Forfeited	(146,069)		79.17
Unvested shares at September 30, 2022	1,838,159	$	74.90

As of September 30, 2022, the total unrecognized compensation expense related to unvested restricted stock units was $110.1 million, which is expected to be recognize over a weighted-average period of approximately 2.64 years.

2015 Employee Stock Purchase Plan

In 2015, the Company’s board of directors and stockholders approved the 2015 Employee Stock Purchase Plan (the 2015 ESPP), which became effective upon the closing of the Company’s initial public offering in May 2015. The Company initially reserved a total of 243,347 shares of common stock for issuance under the 2015 ESPP. The 2015 ESPP provides that the number of shares reserved and available for issuance under the 2015 ESPP will be cumulatively increased on January 1 of each calendar year by 1% of the number of shares of common stock issued and outstanding on the immediately preceding December 31 or such lesser amount as specified by the compensation committee of the board of directors. For the calendar year beginning January 1, 2022, the number of shares reserved for issuance under the 2015 ESPP was increased by 591,410 shares.

Stock-based compensation expense

The Company recognized stock-based compensation expense totaling $24.1 million and $72.9 million for the three and nine months ended September 30, 2022, respectively, and $24.0 million and $68.9 million for the three and nine months ended September 30, 2021, respectively. Stock-based compensation expense by award type included within the unaudited condensed consolidated statements of operations and comprehensive loss was as follows (in thousands):


	Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2022		2021		2022		2021
Stock options	$	12,062	$	14,842	$	37,819	$	43,949
Restricted stock units		11,802		9,165		34,583		25,229
Employee stock purchase plan		404		317		1,000		880
Subtotal		24,268		24,324		73,402		70,058
Capitalized stock-based compensation costs		(159)		(366)		(547)		(1,109)
Stock-based compensation expense included in total cost and operating expenses	$	24,109	$	23,958	$	72,855	$	68,949

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


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Research and development	$	10,010	$	10,250	$	30,548	$	29,682
Selling, general and administrative		14,099		13,708		42,307		39,267
Total	$	24,109	$	23,958	$	72,855	$	68,949

Net Loss Per Share

9 Months Ended

Sep. 30, 2022

Net Income (Loss) Per Share

12. Net Loss per Share

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

The following common stock equivalents were excluded from the calculation of diluted net loss per share for the three and nine months ended September 30, 2022 and 2021 because including them would have had an anti-dilutive effect (in thousands):


	September 30,
	2022	2021
Stock options	6,316	5,958
Restricted stock units	1,838	1,537
ESPP shares	46	25
Total	8,200	7,520

Income Taxes

9 Months Ended

Sep. 30, 2022

Income Taxes

13. Income Taxes

The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax basis of assets and liabilities using enacted tax rates in effect for years in which the temporary

differences are expected to reverse. The Company provides a valuation allowance when it is more likely than not that deferred tax assets will not be realized.

The realization of deferred income tax assets is dependent on the generation of sufficient taxable income during future periods in which temporary differences are expected to reverse. Where the realization of such assets does not meet the more likely than not criterion, the Company applies a valuation allowance against the deferred income tax asset under consideration. The valuation allowance is reviewed periodically and if the assessment of the more likely than not criterion changes, the valuation allowance is adjusted accordingly. As of September 30, 2022, the Company has a full valuation allowance applied against its U.S. and foreign deferred tax assets.

On March 11, 2021, President Joe Biden signed into law a relief and stimulus package known as the American Rescue Plan Act of 2021 (ARPA) stimulus package. While this Act provides various tax provisions including for example, extending the employee retention credit through the end of 2021, modifying the paid sick and family leave credits, repealing the worldwide interest allocation rules that were scheduled to take effect in 2021, and expanding the number of employees subject to the limit on the deduction for executive compensation under Section 162(m) beginning in 2027, among other things, based on the Company’s initial review of the various business tax provisions offered in the ARPA along with having a valuation allowance on its U.S. deferred tax assets, it does not believe that there is an impact to the Company and as such the recording of a discrete item was not required during the three and nine months ended September 30, 2022.

Effective January 1, 2022, a provision of the Tax Cuts and Jobs Act (TCJA) has taken effect creating a significant change to the treatment of research and experimental (R&E) expenditures under Section 174 of the IRC (Sec. 174 expenses). Historically, businesses have had the option of deducting Sec. 174 expenses in the year incurred or capitalizing and amortizing the costs over five years. The new TCJA provision, however, eliminates this option and will require Sec. 174 expenses associated with research conducted in the U.S to be capitalized and amortized over a five-year period. For expenses associated with research outside of the United States, Sec. 174 expenses will be capitalized and amortized over a 15-year period. The Company prepared an analysis of the tax impact of capitalizing and amortizing these costs over the required periods and is expected to be in a taxable income position after the estimated addback for calendar year ended December 31, 2022.

On June 30, 2022, the Company entered into a Royalty Purchase Agreement with Royalty Pharma and a Future Revenue Purchase Agreement with Sixth Street Partners. Pursuant to the agreements, the Company received gross proceeds of $175.0 million from Royalty Pharma in June 2022 and $250.0 million from Sixth Street Partners in July 2022 upon the transactions closing. The total cash consideration of $425.0 million, in its entirety, is considered taxable income for calendar year ended December 31, 2022. Therefore, the $425.0 million is included in the estimated taxable income calculation when estimating the Company’s forecasted 2022 annual effective tax rate.

On August 1, 2022, the Company entered into the IDRx License Agreement and IDRx Stock Purchase Agreement. Pursuant to these agreements, the Company licensed its internally discovered KIT exon 13 inhibitor, IDRX-73 (formerly known as BLU-654) to IDRx in exchange for 4,509,105 shares of IDRx’s Series A preferred stock and the eligibility to receive future milestones and tiered royalty payments. For book and tax purposes, the fair value of the equity totaling $27.5 million was recorded as income for the period ended September 30, 2022 and included in the estimated taxable income calculation when estimating the Company’s forecasted 2022 annual effective tax rate.

On August 16, 2022, President Biden signed the Inflation Reduction Act (IRA) of 2022 (H.R. 5376) into law. It includes income tax incentives designed to encourage investment in renewable and alternative energy sources, adoption of electric vehicles, and improvement in the energy efficiency of buildings and communities. To finance these incentives, the law imposes a 15% corporate alternative minimum tax (CAMT) on adjusted financial statement income of corporations with profits over $1 billion. It also introduces a new excise tax on corporate stock buybacks of public US companies. The CAMT is effective for tax years beginning after December 31, 2022 while the excise tax on corporate stock buybacks is effective for repurchases of stock after December 31, 2022. The Company does not anticipate the IRA having a significant impact on the effective tax rate or income tax payable and deferred income tax positions.

As of September 30, 2022, the Company expects to be in a taxable income position for the calendar year ended December 31, 2022, and recorded an income tax expense of $0.9 million and $4.2 million for the three and nine months

ended September 30, 2022, respectively.

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.

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Leases

9 Months Ended

Sep. 30, 2022

Leases

14. Leases

The Company’s building leases are comprised of office and laboratory spaces under non-cancelable operating leases. The lease agreements contain various clauses for renewal at the Company’s option, and the renewal options were not included in the calculation of the operating lease assets and the operating lease liabilities as the renewal options were not reasonably certain of being exercised as of September 30, 2022. The lease agreements do not contain residual value guarantees and the components of lease cost for the three and nine months ended September 30, 2022 and 2021 were as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
Operating leases:	2022		2021		2022		2021
Lease cost	$	5,322	$	4,676	$	16,233	$	13,861
Sublease income		(600)		(838)		(2,132)		(1,434)
Net lease cost	$	4,722	$	3,838	$	14,101	$	12,427

The Company’s sublease agreement for the 38 Sidney Street property expired in September 2022 and the Company continues to use the leased space for its own operations. The Company has not entered into any material short-term leases or financing leases as of September 30, 2022.

Supplemental cash flow information related to leases for the nine months ended September 30, 2022 and 2021 is as follows (in thousands):


	Nine Months Ended
	September 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:	$	11,668	$	11,121
Lease liabilities arising from obtaining right-of-use assets:
Operating leases	$	—	$	141

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					7.1
Weighted average discount rate					7.4%

Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies

15. Commitments and Contingencies

Purchase Commitments Associated with Commercial Supply Agreements

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. During the nine months ended September 30, 2022, there was a $4.0 million decrease in the Company’s contractual obligations described in Note 18 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Legal Proceedings

The Company is not currently a party to any material legal proceedings. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses the costs related to its legal proceedings as they are incurred.

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners, and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and senior management that will require the Company, among other things, to indemnify them against certain liabilities that may arise from their status or service as directors or officers of the Company. The maximum potential amount of future payments that the Company could be required to make, or otherwise be liable for, under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations in its consolidated financial statements as of September 30, 2022 or December 31, 2021.

Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Policies)	9 Months Ended
	Sep. 30, 2022
Policy Text Blocks
Basis of Presentation	Basis of Presentation The unaudited interim condensed consolidated financial statements of the Company included herein have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) as found in the Accounting Standards Codification (ASC), Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB) and the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these financial statements should be read in conjunction with the financial statements as of and for the year ended December 31, 2021 and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 17, 2022 (2021 Annual Report on Form 10-K). The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements, and updated, as necessary, in this report. In the opinion of the Company’s management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments that are necessary to present fairly the Company’s financial position as of September 30, 2022, the results of its operations for the three and nine months ended September 30, 2022 and 2021, stockholder’s equity for the three and nine months ended September 30, 2022 and 2021 and cash flows for nine months ended September 30, 2022 and 2021. Such adjustments are of a normal and recurring nature. The results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results for the year ending December 31, 2022 or for any future period. The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Blueprint Medicines Security Corporation, which is a Massachusetts subsidiary created to buy, sell and hold securities, Blueprint Medicines (Switzerland) GmbH, Blueprint Medicines (Netherlands) B.V., Blueprint Medicines (UK) Ltd, Blueprint Medicines (Germany) GmbH, Blueprint Medicines (Spain) S.L., Blueprint Medicines (France) SAS, and Blueprint Medicines (Italy) S.r.L. Lengo Therapeutics, Inc. (Lengo), which was acquired on December 30, 2021, was dissolved in June 2022. All intercompany transactions and balances have been eliminated.
Use of Estimates	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, liabilities related to the sale of future royalties and future revenues, equity investment, and income taxes. The length of time and full extent to which the ongoing 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 and supply, 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, including the identification and spread of new variants, 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 making 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. The Russian invasion of Ukraine has not had a material impact on the Company’s business, results of operations and financial condition.
Significant Accounting Policies	Significant Accounting Policies The significant accounting policies used in preparation of these condensed consolidated financial statements for the three and nine months ended September 30, 2022 are consistent with those discussed in Note 2 to the consolidated financial statements in the 2021 Annual Report on Form 10-K, with the exception of the below new policies.
Equity Investment	Equity Investment Investments in non-marketable equity securities of privately-held companies that do not have readily determinable fair values are carried at cost, less any impairments, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Each period the Company assesses relevant transactions to identify observable price changes, and the Company regularly monitors these investments to evaluate whether there is an indication of impairment. The Company evaluates whether an investment’s fair value is less than its carrying value using an estimate of fair value, if such an estimate is available. For periods in which there is no estimate of fair value, the Company evaluates whether an event or change in circumstances has occurred that may have a significant adverse effect on the value of the investment.
Liabilities related to the sale of future royalties and revenues	Liabilities related to the sale of future royalties and revenues The Company accounts for net proceeds from sales of the Company’s rights to receive future royalty payments and from sales of future revenues as liabilities if the Company has significant continuing involvement in the generation of the related future cash flows. Interest on the liabilities related to the sale of future royalties and revenues will be recognized using the effective interest rate method over the life of the related royalty or revenue stream. The liabilities related to the sale of future royalties and revenues and the related interest expenses are based on the Company’s current estimates of future royalties or revenues as well as commercial milestones expected to be achieved and received over the life of the arrangement, which the Company determines by using forecasts of the underlying drug products of the underlying regions. The Company will periodically assess the expected payments and to the extent the amount or timing of the future estimated payments is materially different than previous estimates, the Company will account for any such change by adjusting the carrying value of the liabilities related to the sale of future royalties and revenues, and prospectively recognizing the related interest expenses.
New Accounting Pronouncements	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. The Company does not believe that the adoption of recently issued standards have or may have a material impact on its condensed consolidated financial statements and disclosures. Fair value measurements In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820) – Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. This standard clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. This standard will be effective for the Company on January 1, 2024, and is not expected to have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

Financing Arrangements (Tables)

9 Months Ended

Sep. 30, 2022

Royalty Pharma, Royalty Purchase Agreement

Schedule of activity within the liability account


Carrying value as of January 1, 2022	$	—
Sale of future royalties		175,000
Interest expense recognized		2,709
Capitalized closing costs		(3,777)
Interest payments		(330)
Carrying value as of September 30, 2022	$	173,602

Sixth Street Partners, Future Revenue Purchase Agreement

Schedule of activity within the liability account


Carrying value as of January 1, 2022	$	—
Sale of future revenue		250,000
Interest expense recognized		5,446
Capitalized closing costs		(5,395)
Interest payments		—
Carrying value as of September 30, 2022	$	250,051

Sixth Street Partners, Financing Agreement, Senior Secured Term Loan Facility

Schedule of activity within the liability account


Carrying value as of January 1, 2022	$	—
Term Loan		150,000
Interest expense recognized		3,190
Debt discounts and capitalized closing costs		(12,214)
Interest payments		(2,626)
Carrying value as of September 30, 2022	$	138,350

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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Marketable Securities (Tables)

9 Months Ended

Sep. 30, 2022

Schedule of marketable securities


	Amortized		Unrealized		Unrealized		Fair
September 30, 2022	Cost		Gain		Losses		Value
Marketable securities, available-for-sale:
U.S. government agency securities	$	429,423	$	—		(7,007)	$	422,416
U.S. treasury obligations		485,647		—		(6,853)		478,794
Total	$	915,070	$	—	$	(13,860)	$	901,210


	Amortized		Unrealized		Unrealized		Fair
December 31, 2021	Cost		Gain		Losses		Value
Marketable securities, available-for-sale:
U.S. government agency securities	$	498,582	$	21	$	(1,460)	$	497,143
U.S. treasury obligations		328,801		—		(1,249)		327,552
Total	$	827,383	$	21	$	(2,709)	$	824,695

Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2022

Schedule of financial instruments measured at fair value

The following table summarizes cash equivalents and marketable securities measured at fair value on a recurring basis as of September 30, 2022 (in thousands):


			Active		Observable		Unobservable
	September 30,		Markets		Inputs		Inputs
Description	2022		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	274,622	$	274,622	$	—	$	—
Marketable securities, available-for-sale:
U.S. government agency securities		422,416		—		422,416		—
U.S. treasury obligations		478,794		478,794		—		—
Total	$	1,175,832	$	753,416	$	422,416	$	—

The following table summarizes cash equivalents and marketable securities measured at fair value on a recurring basis as of December 31, 2021 (in thousands):


			Active		Observable		Unobservable
	December 31,		Markets		Inputs		Inputs
Description	2021		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	118,880	$	118,880	$	—	$	—
Marketable securities, available-for-sale:
U.S. government agency securities		497,143		—		497,143		—
U.S. treasury obligations		327,552		327,552		—		—
Total	$	943,575	$	446,432	$	497,143	$	—

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) - Product revenue, net

9 Months Ended

Sep. 30, 2022

Schedule of product revenue allowance and reserve categories


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
AYVAKIT/AYVAKYT	$	28,634	$	17,270	$	80,929	$	32,952
GAVRETO		—		—		—		4,706
Total product revenue	$	28,634	$	17,270	$	80,929	$	37,658


	Nine Months Ended September 30,
	2022		2021
Beginning balance at January 1	$	4,345	$	1,192
Provision related to product sales		13,606		5,665
Adjustment related to prior periods sales		(645)		—
Credits and payments made		(9,980)		(3,416)
Ending balance at September 30	$	7,326	$	3,441


	September 30,		December 31,
	2022		2021
Reduction of accounts receivable, net	$	946	$	419
Component of accrued expenses		6,380		3,926
Total revenue-related reserves	$	7,326	$	4,345

Inventory (Tables)

9 Months Ended

Sep. 30, 2022

Schedule of capitalized inventory


	September 30,		December 31,
	2022		2021
Raw materials	$	11,927	$	10,788
Work in process		29,773		17,702
Finished goods		2,311		3,916
Total	$	44,011	$	32,406

Balance sheet classification


	September 30,		December 31,
	2022		2021
Inventory	$	35,253	$	21,817
Other assets		8,758		10,589
Total	$	44,011	$	32,406

Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2022

Schedule of accrued expenses


	September 30,		December 31,
	2022		2021
Research, development and commercial contract costs	$	62,119	$	68,164
Employee compensation		25,525		29,166
Accrued professional fees		18,345		12,611
Revenue-related reserves		6,380		3,926
Other		8,394		7,962
Total	$	120,763	$	121,829

Collaboration and License Agreements (Tables)

9 Months Ended

Sep. 30, 2022

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


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Manufacturing and research and development services related to global development activities, net of expenses payable to CStone	$	493	$	769	$	1,642	$	1,777

Schedule of collaboration loss sharing


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
The Company's share of loss in the U.S. for pralsetinib	$	1,665	$	3,269	$	7,076	$	3,269

Schedule of amounts recognized as reductions to expenses


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Reductions to selling, general and administrative expenses	$	3,560	$	6,903	$	12,808	$	12,058
Reductions to (increases in) research and development expenses	$	(6,111)	$	1,459	$	(9,815)	$	7,613

Roche, Collaboration (Pralsetnib) Agreement

Roche, Collaboration (Pralsetnib) Agreement | Collaboration revenue


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Manufacturing and research and development services related to ex-US territory-specific activities	$	3,971	$	856	$	4,663	$	4,539
Royalty revenue		311		—		910		—
Total Roche pralsetinib collaboration revenue	$	4,282	$	856	$	5,573	$	4,539

Summary of contract assets and/or contract liabilities


	September 30,		December 31,
	2022		2021
Accounts receivable, net	$	—	$	2,679
Unbilled accounts receivable		—		6,802
Accrued expenses	$	577	$	—

Roche, Collaboration and License (Immunotherapy) Agreement

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


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Roche collaboration research and development services revenue	$	2,475	$	1,408	$	1,710	$	4,293

Summary of contract assets and/or contract liabilities


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Amounts included in the contract liability at the beginning of the period	$	1,424	$	1,062	$	3,829	$	3,364


	September 30, 2022								December 31, 2021
	Current			Noncurrent			Total		Current			Noncurrent			Total
Deferred revenue	$	4,594	$		11,995	$		16,589	$	6,339	$		25,066	$		31,405
Accrued expenses	$	8,208			5,730			13,938	$	—			—			—

C Stone

C Stone | Collaboration revenue


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
License milestone revenue	$	—	$	—	$	4,000	$	9,000
Manufacturing services and royalty revenue related to CStone territory-specific activities		2,915		4,655		14,209		17,228
Total CStone collaboration revenue	$	2,915	$	4,655	$	18,209	$	26,228

Summary of contract assets and/or contract liabilities


	September 30,		December 31,
	2022		2021
Accounts receivable, net	$	2,045	$	8,164
Unbilled accounts receivable	$	2,206	$	5,034

Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2022

Summary of stock option activity


		Weighted-Average
	Shares		Exercise Price
Outstanding at December 31, 2021	5,682,022	$	69.37
Granted	1,126,919		60.97
Exercised	(206,582)		18.70
Canceled	(286,619)		79.26
Outstanding at September 30, 2022	6,315,740	$	69.07
Exercisable at September 30, 2022	4,028,524	$	66.34

Summary of restricted stock units activity


		Weighted-Average
	Shares	Grant Date Fair Value
Unvested shares at December 31, 2021	1,590,160	$	83.85
Granted	814,891		60.78
Vested	(420,823)		79.80
Forfeited	(146,069)		79.17
Unvested shares at September 30, 2022	1,838,159	$	74.90

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


	Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2022		2021		2022		2021
Stock options	$	12,062	$	14,842	$	37,819	$	43,949
Restricted stock units		11,802		9,165		34,583		25,229
Employee stock purchase plan		404		317		1,000		880
Subtotal		24,268		24,324		73,402		70,058
Capitalized stock-based compensation costs		(159)		(366)		(547)		(1,109)
Stock-based compensation expense included in total cost and operating expenses	$	24,109	$	23,958	$	72,855	$	68,949


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Research and development	$	10,010	$	10,250	$	30,548	$	29,682
Selling, general and administrative		14,099		13,708		42,307		39,267
Total	$	24,109	$	23,958	$	72,855	$	68,949

Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2022

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


	September 30,
	2022	2021
Stock options	6,316	5,958
Restricted stock units	1,838	1,537
ESPP shares	46	25
Total	8,200	7,520

Leases (Tables)

9 Months Ended

Sep. 30, 2022

Summary of lease expenses and cash flow and weighted average information


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
Operating leases:	2022		2021		2022		2021
Lease cost	$	5,322	$	4,676	$	16,233	$	13,861
Sublease income		(600)		(838)		(2,132)		(1,434)
Net lease cost	$	4,722	$	3,838	$	14,101	$	12,427


	Nine Months Ended
	September 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:	$	11,668	$	11,121
Lease liabilities arising from obtaining right-of-use assets:
Operating leases	$	—	$	141


					Operating leases
Weighted average remaining lease term in years					7.1
Weighted average discount rate					7.4%

Nature of Business (Details) $ in Millions	Sep. 30, 2022 USD ($)
Cash, cash equivalents and marketable securities
Cash, cash equivalents and marketable securities	$ 1,192.6

Financing Arrangements - General Information (Details) $ in Thousands		1 Months Ended	9 Months Ended
	Jun. 30, 2022 USD ($)	Jul. 31, 2022 USD ($) tranche Transaction	Sep. 30, 2022 USD ($)
Sixth Street Partners, Financing Arrangements
Debt Financing
Debt instrument, transactions, number \| Transaction		2
Sale of Future Royalties and Revenues
Gross Proceeds
Gross proceeds			$ 425,000
Sale of Future Royalties and Revenues \| Royalty Pharma, Royalty Purchase Agreement
Debt Financing
Debt instrument, issuance date	Jun. 30, 2022
Debt instrument, face amount	$ 175,000
Transaction costs, gross	3,800
Gross Proceeds
Gross proceeds	$ 175,000		$ 175,000
Effective Interest Rate
Debt instrument, interest rate, effective percentage (as a percent)			6.30%
Sale of Future Royalties and Revenues \| Sixth Street Partners, Future Revenue Purchase Agreement
Debt Financing
Debt instrument, face amount		$ 250,000
Transaction costs, gross		5,400
Gross Proceeds
Gross proceeds		250,000	$ 250,000
Effective Interest Rate
Debt instrument, interest rate, effective percentage (as a percent)			11.50%
Loans Payable \| Sixth Street Partners, Financing Agreement
Debt Financing
Debt instrument, face amount, potential amount		660,000
Debt instrument, covenants, consolidated liquidity, period commencing from date term loan funded to date day before next term loans funded		50,000
Debt instrument, covenants, consolidated liquidity, period commencing from date term loan funded to date day before next term loans funded, each day thereafter		$ 80,000
Secured Debt \| Sixth Street Partners, Financing Agreement, Senior Secured Term Loan Facilities
Debt Financing
Debt instrument, maturity date		Jun. 30, 2028
Secured Debt \| Sixth Street Partners, Financing Agreement, Senior Secured Term Loan Facilities \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Financing
Debt instrument, basis spread on variable rate		6.50%
Debt instrument, variable rate floor		1.00%
Secured Debt \| Sixth Street Partners, Financing Agreement, Senior Secured Term Loan Facilities \| Base Rate
Debt Financing
Debt instrument, basis spread on variable rate		5.50%
Debt instrument, variable rate floor		2.00%
Secured Debt \| Sixth Street Partners, Financing Agreement, Senior Secured Term Loan Facility
Debt Financing
Debt instrument, face amount		$ 150,000
Debt discounts and transaction costs		12,200
Gross Proceeds
Gross proceeds		150,000	$ 150,000
Effective Interest Rate
Debt instrument, interest rate, effective percentage (as a percent)			12.00%
Secured Debt \| Sixth Street Partners, Financing Agreement, Senior Secured Delayed Draw Term Loan Facility
Debt Financing
Debt instrument, face amount, potential amount		$ 250,000
Debt instrument, tranches, number \| tranche		2

Financing Arrangements - Royalty and Sales Information (Details) - Sixth Street Partners $ in Millions	Jul. 31, 2022 USD ($)
Financing Arrangements
Purchase and sale agreement, royalties, future royalty payments, annual worldwide net product sales, percentage rate (as a percent)	9.75%
Purchase and sale agreement, royalties, future royalty payments, annual worldwide net product sales, amount, maximum	$ 900.0
Purchase and sale agreement, royalties, future royalty payments, annual worldwide net product sales, cumulative cap of upfront invested capital, ratio	1.45
Purchase and sale agreement, royalties, future royalty payments, annual worldwide net product sales, cumulative cap of upfront invested capital, amount	$ 362.5
Purchase and sale agreement, royalties, future royalty payments, annual worldwide net product sales, cumulative cap of upfront invested capital, revenue targets not achieved, percentage increase (as a percent)	15.00%
Purchase and sale agreement, royalties, future royalty payments, annual worldwide net product sales, cumulative cap of upfront invested capital, revenue targets not achieved, ratio	1.85
Purchase and sale agreement, royalties, future royalty payments, annual worldwide net product sales, cumulative cap of upfront invested capital, revenue targets not achieved, amount	$ 462.5

Financing Arrangements - Long-term Debt (Details) - Sale of Future Royalties and Revenues - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Royalty Pharma, Royalty Purchase Agreement
Long-term Debt
Long-term debt	$ 173,602	$ 0
Sixth Street Partners, Future Revenue Purchase Agreement
Long-term Debt
Long-term debt	$ 250,051	$ 0

Amount, excluding unamortized premium (discount) and debt issuance cost, of long-term debt. Excludes lease obligation.

Financing Arrangements - Roll Forward (Details) - USD ($) $ in Thousands		1 Months Ended	9 Months Ended
	Jun. 30, 2022	Jul. 31, 2022	Sep. 30, 2022
Sale of Future Royalties and Revenues
Long-term Debt
Sale of future royalties / borrowings			$ 425,000
Sale of Future Royalties and Revenues \| Royalty Pharma, Royalty Purchase Agreement
Long-term Debt
Carrying value, beginning balance			0
Sale of future royalties / borrowings	$ 175,000		175,000
Interest expense recognized			2,709
Debt discounts and capitalized closing costs			(3,777)
Interest payments			(330)
Carrying value, ending balance			173,602
Sale of Future Royalties and Revenues \| Sixth Street Partners, Future Revenue Purchase Agreement
Long-term Debt
Carrying value, beginning balance			0
Sale of future royalties / borrowings		$ 250,000	250,000
Interest expense recognized			5,446
Debt discounts and capitalized closing costs			(5,395)
Carrying value, ending balance			250,051
Secured Debt \| Sixth Street Partners, Financing Agreement, Senior Secured Term Loan Facility
Long-term Debt
Sale of future royalties / borrowings		$ 150,000	150,000
Interest expense recognized			3,190
Debt discounts and capitalized closing costs			(12,214)
Interest payments			(2,626)
Carrying value, ending balance			$ 138,350

Financing Arrangements - Additional Information (Details) $ in Millions	Jun. 30, 2022 USD ($)
Debt Financing
Royalty Purchase Agreement, milestone payments, achievement of specified net sales milestones, maximum	$ 165.0

Marketable Securities - Tabular Disclosure (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Marketable securities, available-for-sale:
Amortized cost	$ 915,070	$ 827,383
Unrealized gain		21
Unrealized losses	(13,860)	(2,709)
Fair value	901,210	824,695
U.S. government agency securities
Marketable securities, available-for-sale:
Amortized cost	429,423	498,582
Unrealized gain		21
Unrealized losses	(7,007)	(1,460)
Fair value	422,416	497,143
U.S. Treasury obligations
Marketable securities, available-for-sale:
Amortized cost	485,647	328,801
Unrealized losses	(6,853)	(1,249)
Fair value	$ 478,794	$ 327,552

Marketable Securities - Unrealized Loss Position (Details) $ in Millions	Sep. 30, 2022 USD ($) security	Dec. 31, 2021 USD ($) security
Unrealized loss position, number of positions
Number of held securities in an unrealized loss position \| security	103	74
Number of held securities in an unrealized loss position for 12 months or longer \| security	33	0
Unrealized loss position, aggregate fair value
Unrealized loss position \| $	$ 901.2	$ 750.5
Unrealized loss position for more than 12 months \| $	$ 346.4

Marketable Securities - Impairment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Marketable Securities
Marketable debt securities, charges for credit-related impairments	$ 0	$ 0	$ 0	$ 0

Marketable Securities - Remaining Maturities (Details) $ in Millions	Sep. 30, 2022 USD ($) security	Dec. 31, 2021 USD ($) security
Investments, available-for-sale
Securities with remaining maturities greater than one year \| security	10	56
Aggregate fair value with remaining maturities greater than one year \| $	$ 55.7	$ 557.5

Marketable Securities - Proceeds from Maturities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Proceeds from the maturities of debt securities
Proceeds from the maturities of debt securities	$ 90,500	$ 237,300	$ 170,123	$ 637,831

Marketable Securities - Realized Gains (Losses) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Realized gains (losses) from maturities of debt securities
Realized gains (losses) from maturities of debt securities	$ 0	$ 0	$ 0	$ 0

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Fair Value of Financial Instruments
Marketable securities, available-for-sale	$ 901,210	$ 824,695
U.S. government agency securities
Fair Value of Financial Instruments
Marketable securities, available-for-sale	422,416	497,143
U.S. Treasury obligations
Fair Value of Financial Instruments
Marketable securities, available-for-sale	478,794	327,552
Recurring
Fair Value of Financial Instruments
Total	1,175,832	943,575
Recurring \| U.S. government agency securities
Fair Value of Financial Instruments
Marketable securities, available-for-sale	422,416	497,143
Recurring \| U.S. Treasury obligations
Fair Value of Financial Instruments
Marketable securities, available-for-sale	478,794	327,552
Recurring \| Money market funds
Fair Value of Financial Instruments
Cash equivalents	274,622	118,880
Recurring \| Active Markets (Level 1)
Fair Value of Financial Instruments
Total	753,416	446,432
Recurring \| Active Markets (Level 1) \| U.S. Treasury obligations
Fair Value of Financial Instruments
Marketable securities, available-for-sale	478,794	327,552
Recurring \| Active Markets (Level 1) \| Money market funds
Fair Value of Financial Instruments
Cash equivalents	274,622	118,880
Recurring \| Observable Inputs (Level 2)
Fair Value of Financial Instruments
Total	422,416	497,143
Recurring \| Observable Inputs (Level 2) \| U.S. government agency securities
Fair Value of Financial Instruments
Marketable securities, available-for-sale	$ 422,416	$ 497,143

Product Revenue Reserves and Allowances - Product Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenues
Revenue	$ 65,977	$ 24,188	$ 165,255	$ 73,059
Product revenue, net
Revenues
Revenue	28,634	17,270	80,929	37,658
AYVAKIT and AYVAKYT
Revenues
Revenue	$ 28,634	$ 17,270	$ 80,929	32,952
GAVRETO
Revenues
Revenue				$ 4,706

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.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Product Revenue Reserves and Allowances - Product Revenue Allowance and Reserve (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Product revenue allowance and reserve
Beginning balance	$ 4,345	$ 1,192
Provision related to sales in the current period	13,606	5,665
Adjustment related to prior periods sales	(645)
Credits and payments made	(9,980)	(3,416)
Ending balance	$ 7,326	$ 3,441

Product Revenue Reserves and Allowances - Revenue-related Reserves (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2021	Dec. 31, 2020
Revenue-related reserves
Revenue-related reserves	$ 7,326	$ 4,345	$ 3,441	$ 1,192
Accounts Receivable, Net
Revenue-related reserves
Revenue-related reserves	946	419
Accrued Expenses
Revenue-related reserves
Revenue-related reserves	$ 6,380	$ 3,926

Inventory - Capitalized (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Inventory, Noncurrent [Abstract]
Raw materials	$ 11,927	$ 10,788
Work in process	29,773	17,702
Finished goods	2,311	3,916
Total	$ 44,011	$ 32,406

Inventory - Balance Sheet Classification (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Inventory
Inventory	$ 35,253	$ 21,817
Other assets	8,758	10,589
Total	$ 44,011	$ 32,406

Inventory - Write-down (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Inventory - Write-down (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Inventory
Inventory write-down	$ 0	$ 400	$ 0	$ 800

Restricted Cash (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Restricted cash
Restricted cash	$ 5.2	$ 5.2

Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Accrued Expenses
External research and development	$ 62,119	$ 68,164
Employee compensation	25,525	29,166
Accrued professional fees	18,345	12,611
Revenue-related reserves	6,380	3,926
Other	8,394	7,962
Total	$ 120,763	$ 121,829

Collaboration and License Agreements - General Information (Details) $ in Thousands				1 Months Ended		2 Months Ended	3 Months Ended				9 Months Ended
	Feb. 26, 2022 USD ($)	Oct. 15, 2019 USD ($)	Jun. 01, 2018 USD ($) item	Oct. 31, 2019 USD ($)	Mar. 31, 2016 USD ($) item	Dec. 31, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Dec. 31, 2019 item	Sep. 30, 2022 USD ($) item	Sep. 30, 2021 USD ($)	Mar. 31, 2022 USD ($)	Nov. 08, 2021 USD ($)	Jul. 13, 2020 USD ($)
Collaboration Agreements
Prepaid expenses and other current assets						$ 18,064	$ 33,532				$ 33,532
Research and development expense							127,981	$ 84,419			359,579	$ 244,157
Collaborative Arrangement \| IDRx, Inc. \| Director
Collaboration Agreements
Collaborative arrangement, milestones, potential contingent payments							217,500				$ 217,500
Collaborative arrangement, termination, counterparty written notice period											12 months
Collaborative Arrangement \| Proteovant
Collaboration Agreements
Collaborative arrangement, upfront payment	$ 20,000
Collaborative arrangement, milestones, potential contingent payments	632,000
Prepaid expenses and other current assets	$ 20,000
Research and development expense							1,400				$ 2,900
Collaborative Arrangement \| Zai Lab (Shanghai) Co., Ltd.
Collaboration Agreements
Collaborative arrangement, upfront payment, cash payment received						$ 25,000
Collaborative arrangement, milestones, contingent payments eligible to receive														$ 590,000
Collaborative arrangement, termination, counterparty written notice period, period from effective date											2 years
Collaborative arrangement, termination, counterparty written notice period, period from effective date, given after first commercial sale of licensed product in counterparty territory											12 months
Collaborative arrangement, termination, counterparty written notice period, period from effective date, given prior to first commercial sale of licensed product in counterparty territory											9 months
Collaborative Arrangement \| Roche, Collaboration (Pralsetnib) Agreement
Collaboration Agreements
Collaborative arrangement, upfront payment, cash payment received									$ 675,000
Collaborative arrangement, milestones, contingent payments eligible to receive															$ 822,000
Collaborative arrangement, milestones, specified regulatory and commercialization milestones, achieved											$ 105,000
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%
Collaborative Arrangement \| Roche, Collaboration and License (Immunotherapy) Agreement
Collaboration Agreements
Collaborative arrangement, upfront payment, cash payment received					$ 45,000
Collaborative arrangement, milestones, cash payments received, aggregate							25,000				25,000
Collaborative arrangement, option fees and milestones, contingent payments eligible to receive					$ 317,800
Collaborative arrangement, milestones, research milestones, achieved							25,000	$ 0			$ 25,000	$ 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					2
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
Collaborative arrangement, clinical trials, shared development cost													$ 15,000
Collaborative Arrangement \| Clementia
Collaboration Agreements
Collaborative arrangement, upfront payment, cash payment received		$ 25,000
Collaborative arrangement, milestones, cash payments received				$ 50,000
Collaborative arrangement, milestones, contingent payments eligible to receive		460,000
Collaborative arrangement, inventory purchased by counterparty		$ 1,500
Collaborative arrangement, termination, counterparty written notice period		12 months
Collaborative Arrangement \| C Stone
Collaboration Agreements
Collaborative arrangement, upfront payment, cash payment received			$ 40,000
Collaborative arrangement, milestones, contingent payments eligible to receive			$ 319,000
Collaborative arrangement, milestones, achieved							$ 27,000				$ 27,000
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				1 Months Ended	2 Months Ended	3 Months Ended		9 Months Ended
	Jul. 13, 2020	Oct. 15, 2019	Jun. 01, 2018	Mar. 31, 2016	Dec. 31, 2021	Sep. 30, 2022	Mar. 31, 2022	Sep. 30, 2022
Zai Lab (Shanghai) Co., Ltd.
Collaboration Agreements
Collaborative arrangement, transaction price					$ 25.0
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								$ 105.0
Roche, Collaboration and License (Immunotherapy) Agreement
Collaboration Agreements
Collaborative arrangement, transaction price				$ 45.0
Collaborative arrangement, transaction price, research milestone achieved, cash consideration						$ 1.5		$ 1.5
Collaborative arrangement, transaction price, payment commitment reduction							$ 15.0
Collaborative arrangement, transaction price, reduction							$ 15.0
Clementia
Collaboration Agreements
Collaborative arrangement, transaction price		$ 46.5
C Stone
Collaboration Agreements
Collaborative arrangement, transaction price			$ 40.0

Collaboration and License Agreements - Equity Investment (Details) - USD ($) $ in Thousands	Aug. 01, 2022	Sep. 30, 2022
Equity Investment
Equity investment		$ 27,789
Collaborative Arrangement \| IDRx, Inc. \| Director
Equity Investment
Equity investment, license agreement, shares received (in shares)	4,509,105
Equity investment	$ 27,800	$ 27,800
Equity investment, transaction costs	$ 300

Collaboration and License Agreements - Sale of Stock (Details) - Private Placement $ / shares in Units, $ in Millions	Jul. 13, 2020 USD ($) $ / shares shares
Sale of Stock
Stock issued (in shares) \| shares	1,035,519
Share price (in dollars per share) \| $ / shares	$ 96.57
Purchase consideration	$ 100.0
Issuance of common stock	79.3
Share purchase consideration, premium	$ 20.7

Collaboration and License Agreements - Manufacturing and Research and Development Services (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Collaborative Arrangement \| C Stone
Collaboration Agreements
Manufacturing and research and development services related to global development activities, net of expenses payable	$ 493	$ 769	$ 1,642	$ 1,777

Collaboration and License Agreements - Revenue Recognized (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended		12 Months Ended
	Aug. 01, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenues
Revenue		$ 65,977	$ 24,188	$ 165,255	$ 73,059
License revenue \| IDRx, Inc. \| Director
Revenues
Revenue	$ 27,500
Collaborative Arrangement \| Zai Lab (Shanghai) Co., Ltd.
Revenues
Revenue						$ 25,000
Collaborative Arrangement \| Clementia
Revenues
Revenue				30,000
Collaborative Arrangement \| Collaboration revenue \| Roche, Collaboration (Pralsetnib) Agreement
Revenues
Revenue		4,282	856	5,573	4,539
Collaborative Arrangement \| Collaboration revenue \| Roche, Collaboration and License (Immunotherapy) Agreement
Revenues
Revenue		2,475	1,408	1,710	4,293
Collaborative Arrangement \| Collaboration revenue \| Clementia
Revenues
Revenue							$ 300	$ 46,200
Collaborative Arrangement \| Collaboration revenue \| C Stone
Revenues
Revenue		2,915	4,655	18,209	26,228				$ 40,000
Collaborative Arrangement \| License milestone revenue \| C Stone
Revenues
Revenue		0	0	4,000	9,000
Collaborative Arrangement \| Territory-specific activities \| Zai Lab (Shanghai) Co., Ltd.
Revenues
Revenue		200		800
Collaborative Arrangement \| Territory-specific activities, manufacturing services and royalty \| C Stone
Revenues
Revenue		2,915	4,655	14,209	17,228
Collaborative Arrangement \| Territory-specific activities, manufacturing and research and development services \| Roche, Collaboration (Pralsetnib) Agreement
Revenues
Revenue		3,971	$ 856	4,663	$ 4,539
Collaborative Arrangement \| Territory-specific activities, manufacturing and research and development services \| Roche, Collaboration and License (Immunotherapy) Agreement
Revenues
Cumulative revenue catch-up				(2,900)
Collaborative Arrangement \| Royalty \| Roche, Collaboration (Pralsetnib) Agreement
Revenues
Revenue		311		910
Collaborative Arrangement \| License revenue \| IDRx, Inc. \| Director
Revenues
Revenue		$ 27,500		$ 27,500

Collaboration and License Agreements - Collaboration Loss Sharing (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Collaboration Agreements
Collaboration loss sharing	$ 1,665	$ 3,269	$ 7,076	$ 3,269
Collaborative Arrangement \| Roche, Collaboration (Pralsetnib) Agreement
Collaboration Agreements
Collaboration loss sharing	$ 1,665	$ 3,269	$ 7,076	$ 3,269

Collaboration and License Agreements - Reduction in Expenses (Details) - Collaborative Arrangement - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Zai Lab (Shanghai) Co., Ltd.
Collaboration Agreements
Collaborative arrangement, global development activities, reduction in research and development expenses	$ 200		$ 500
Roche, Collaboration (Pralsetnib) Agreement
Collaboration Agreements
Collaborative arrangement, commercialization, reduction in selling, general and administrative expenses	3,560	$ 6,903	12,808	$ 12,058
Collaborative arrangement, global development activities, reduction in research and development expenses	$ (6,111)	$ 1,459	$ (9,815)	$ 7,613

Collaboration and License Agreements - Change in Contract with Customer, Liability (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
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	$ 1,424	$ 1,062	$ 3,829	$ 3,364

Collaboration and License Agreements - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Mar. 31, 2022	Dec. 31, 2021
Contract Assets
Accounts receivable, net	$ 19,320		$ 25,155
Unbilled accounts receivable	2,595		11,875
Contract Liabilities
Contract liabilities, current	4,629		11,510
Contract liabilities, noncurrent	11,995		25,066
Accrued expenses, current	62,119		68,164
Collaborative Arrangement \| Roche, Collaboration (Pralsetnib) Agreement
Contract Assets
Accounts receivable, net			2,679
Unbilled accounts receivable			6,802
Contract Liabilities
Accrued expenses	577
Collaborative Arrangement \| Roche, Collaboration and License (Immunotherapy) Agreement
Contract Liabilities
Contract liabilities	16,589		31,405
Contract liabilities, current	4,594		6,339
Contract liabilities, noncurrent	11,995		25,066
Accrued expenses	13,938
Accrued expenses, current	8,208
Accrued expenses, noncurrent	5,730
Collaborative Arrangement \| Roche, Collaboration and License (Immunotherapy) Agreement, Phase I Clinical Trials
Contract Liabilities
Accrued expenses		$ 15,000
Collaborative Arrangement \| Clementia
Contract Liabilities
Contract liabilities	0		0
Collaborative Arrangement \| C Stone
Contract Assets
Accounts receivable, net	2,045		8,164
Unbilled accounts receivable	2,206		5,034
Contract Liabilities
Contract liabilities	$ 0		$ 4,800

Collaboration and License Agreements - Performance Obligations (Details) - Collaborative Arrangement	9 Months Ended
	Sep. 30, 2022 item component
IDRx, Inc. \| Director
Performance Obligations
Collaborative arrangement, material promises, number	2
Collaborative arrangement, material promises, combined into distinct performance obligation, number	1
Zai Lab (Shanghai) Co., Ltd.
Performance Obligations
Collaborative arrangement, material promises, number	3
Collaborative arrangement, material promises, combined into distinct performance obligation, number	2
Collaborative arrangement, material components, number \| component	2
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 \| component	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]: 2022-10-01
Performance Obligations
Revenue, remaining performance obligation, expected timing of satisfaction, period	3 years 3 months 18 days
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 \| component	2
Revenue, performance obligation, performance obligations, number	3

Stock-based Compensation - 2015 Stock Option and Incentive Plan (Details) - 2015 Stock Option and Incentive Plan - shares		9 Months Ended
	Jan. 01, 2022	Sep. 30, 2022	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 (in shares)	2,365,643
Number of shares available for grant (in shares)		4,137,674

Stock-based Compensation - 2020 Inducement Plan (Details) - 2020 Inducement Plan - shares	1 Months Ended
	Jun. 30, 2022	Sep. 30, 2022	Mar. 31, 2020
Stock-based compensation
Initial shares of common stock authorized for issuance of stock awards (in shares)			1,000,000
Increase in number of shares available for grant (in shares)	1,500,000
Number of shares available for grant (in shares)		1,535,757

Stock-based Compensation - Stock Options - Activity (Details)	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Shares
Outstanding at beginning of period (in shares) \| shares	5,682,022
Granted (in shares) \| shares	1,126,919
Exercised (in shares) \| shares	(206,582)
Cancelled (in shares) \| shares	(286,619)
Outstanding at end of period (in shares) \| shares	6,315,740
Weighted-Average Exercise Price
Outstanding at beginning of period (in dollars per share) \| $ / shares	$ 69.37
Granted (in dollars per share) \| $ / shares	60.97
Exercised (in dollars per share) \| $ / shares	18.70
Cancelled (in dollars per share) \| $ / shares	79.26
Outstanding at end of period (in dollars per share) \| $ / shares	$ 69.07
Additional disclosures
Shares - Exercisable (in shares) \| shares	4,028,524
Weighted-Average Exercise Price - Exercisable (in dollars per share) \| $ / shares	$ 66.34

Stock-based Compensation - Unrecognized Compensation Costs (Details) $ in Millions	Sep. 30, 2022 USD ($)
Stock-based compensation
Total unrecognized compensation cost related to non-vested stock option awards	$ 86.1
Weighted-average period over which unrecognized compensation cost will be recognized	2 years 6 months 14 days
Restricted Stock Units
Stock-based compensation
Total unrecognized compensation cost related to non-vested stock awards	$ 110.1
Weighted-average period over which unrecognized compensation cost will be recognized	2 years 7 months 20 days

Stock-based Compensation - Restricted Stock Units - Activity (Details) - Restricted Stock Units	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Shares
Unvested at beginning of period (in shares) \| shares	1,590,160
Granted (in shares) \| shares	814,891
Vested (in shares) \| shares	(420,823)
Forfeited (in shares) \| shares	(146,069)
Unvested at end of period (in shares) \| shares	1,838,159
Weighted-Average Grant Date Fair Value
Unvested at beginning or period (in dollars per share) \| $ / shares	$ 83.85
Granted (in dollars per share) \| $ / shares	60.78
Vested (in dollars per share) \| $ / shares	79.80
Forfeited (in dollars per share) \| $ / shares	79.17
Unvested at end of period (in dollars per share) \| $ / shares	$ 74.90

Stock-based Compensation - Employee Stock Purchase Plan (Details) - Employee Stock - shares	1 Months Ended
	May 31, 2015	Jan. 01, 2022
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)		591,410

Stock-based Compensation - Stock-based Compensation Expense - General Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Total stock based compensation expense
Stock-based compensation expense	$ 24,109	$ 23,958	$ 72,855	$ 68,949

Stock-based Compensation - Stock-based Compensation Expense - By Type (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Total stock based compensation expense
Subtotal	$ 24,268	$ 24,324	$ 73,402	$ 70,058
Capitalized stock-based compensation costs	(159)	(366)	(547)	(1,109)
Stock-based compensation expense included in total cost and operating expenses	24,109	23,958	72,855	68,949
Stock Options
Total stock based compensation expense
Subtotal	12,062	14,842	37,819	43,949
Restricted Stock Units
Total stock based compensation expense
Subtotal	11,802	9,165	34,583	25,229
Employee Stock
Total stock based compensation expense
Subtotal	$ 404	$ 317	$ 1,000	$ 880

Stock-based Compensation - Stock-based Compensation Expense - By Classification (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Total stock based compensation expense
Stock-based compensation expense	$ 24,109	$ 23,958	$ 72,855	$ 68,949
Research and Development
Total stock based compensation expense
Stock-based compensation expense	10,010	10,250	30,548	29,682
General and Administrative Expense
Total stock based compensation expense
Stock-based compensation expense	$ 14,099	$ 13,708	$ 42,307	$ 39,267

Net Loss Per Share (Details) - shares shares in Thousands	3 Months Ended
Net Loss Per Share (Details) - shares shares in Thousands	Sep. 30, 2022	Sep. 30, 2021
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	8,200	7,520
Stock Options
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	6,316	5,958
Restricted Stock Units
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	1,838	1,537
Employee Stock
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	46	25

Income Taxes - Financing Arrangements (Details) - Sale of Future Royalties and Revenues - USD ($) $ in Thousands		1 Months Ended	9 Months Ended
	Jun. 30, 2022	Jul. 31, 2022	Sep. 30, 2022
Gross Proceeds
Gross proceeds			$ 425,000
Royalty Pharma, Royalty Purchase Agreement
Debt Financing
Debt instrument, issuance date	Jun. 30, 2022
Gross Proceeds
Gross proceeds	$ 175,000		175,000
Sixth Street Partners, Future Revenue Purchase Agreement
Gross Proceeds
Gross proceeds		$ 250,000	$ 250,000

Income Taxes - Equity Investment (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Aug. 01, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenues
Revenue		$ 65,977	$ 24,188	$ 165,255	$ 73,059
License revenue \| IDRx, Inc. \| Director
Revenues
Revenue	$ 27,500
Collaborative Arrangement \| IDRx, Inc. \| Director
Equity Investment
Equity investment, license agreement, shares received (in shares)	4,509,105
Collaborative Arrangement \| License revenue \| IDRx, Inc. \| Director
Revenues
Revenue		$ 27,500		$ 27,500

Income Taxes - Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Taxes
Income tax expense (benefit)	$ 886	$ 175	$ 4,200	$ 368

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.