0001558370-23-016845 | 10-Q | XBRL Viewer

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Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Unrecognized tax benefits
Unrecognized tax benefits	$ 200	$ 0

Marketable Securities - Proceeds from Maturities (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Proceeds from the maturities of debt securities
Proceeds from the maturities of debt securities	$ 237,600	$ 90,500	$ 855,365	$ 170,123

Product Revenue Reserves and Allowances - Product Revenue Allowance and Reserve (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Product revenue allowance and reserve
Beginning balance	$ 9,788	$ 4,345
Provision related to sales in the current period	25,874	13,606
Adjustment related to prior periods sales	(545)	(645)
Credits and payments made	(17,469)	(9,980)
Ending balance	$ 17,648	$ 7,326

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

- Definition

Equity impact of the value of new stock issued during the period. Includes shares issued in an initial public offering or a secondary public offering.

+ References + Details

Financing Arrangements (Tables)

9 Months Ended

Sep. 30, 2023

Sixth Street Partners, Future Revenue Purchase Agreement

Table Text Blocks

Schedule of activity within the liability account


Carrying value as of January 1, 2023	$	254,328
Interest expense recognized		21,043
Payments		(10,484)
Carrying value as of September 30, 2023	$	264,887

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

Table Text Blocks

Schedule of activity within the liability account


Carrying value as of January 1, 2023	$	139,083
Net proceeds received from the delayed draw term loan		97,968
Interest expense recognized		15,557
Payments		(14,230)
Carrying value as of September 30, 2023	$	238,378

- Definition

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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+ Details

Stock-based Compensation - Performance-based Restricted Stock Units (Details) - Performance-based restricted stock units	9 Months Ended
	Sep. 30, 2023
Stock-based compensation
Award service period	3 years
Award vesting period	3 years
Performance metric, cumulative relative total shareholder return, period	3 years
Minimum
Stock-based compensation
Award grants, percentage of target (as a percent)	0.00%
Maximum
Stock-based compensation
Award grants, percentage of target (as a percent)	200.00%

Collaboration and License Agreements - General Information (Details) $ in Thousands				1 Months Ended	2 Months Ended	3 Months Ended			9 Months Ended		45 Months Ended	86 Months Ended
	Feb. 26, 2022 USD ($) item Program	Oct. 15, 2019 USD ($)	Jun. 01, 2018 USD ($) item	Oct. 31, 2019 USD ($)	Dec. 31, 2021 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Apr. 30, 2023 Program	Dec. 31, 2022 USD ($)	Nov. 08, 2021 USD ($)	Jul. 13, 2020	Mar. 31, 2016 Program Right
Collaboration Agreements
Prepaid expenses and other current assets						$ 37,477			$ 37,477		$ 37,477		$ 35,024
Research and development expense						110,252	$ 127,981		330,184	$ 359,579
Collaborative Arrangement \| IDRx, Inc. \| Director
Collaboration Agreements
Collaborative arrangement, milestones, potential contingent payments						217,500			$ 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						600	$ 1,400		$ 6,200	$ 2,900
Collaborative arrangement, jointly research and advance novel protein degrader therapies into development candidates, number \| item	2
Collaborative arrangement, jointly research and advance additional novel protein degrader target programs, number \| Program	2
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, specified regulatory and commercialization milestones, achieved									$ 105,000		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, option rights, maximum \| Right																5
Collaborative arrangement, development programs, terminated \| Program												4
Collaborative arrangement, development programs \| Program																5
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			$ 307,500
Collaborative arrangement, milestones, achieved						$ 38,500			$ 38,500		$ 38,500
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

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total
Beginning Balance at Dec. 31, 2021	$ 59	$ 2,250,250	$ (4,133)	$ (1,275,441)	$ 970,735
Beginning Balance (in shares) at Dec. 31, 2021	59,141,086
Increase (Decrease) in Stockholders' Equity
Issuance of common stock under stock plan	$ 1	1,297			1,298
Issuance of common stock under stock plan (in shares)	414,888
Stock-based compensation expense		23,609			23,609
Other comprehensive income (loss)			(7,977)		(7,977)
Net loss				(105,999)	(105,999)
Ending Balance at Mar. 31, 2022	$ 60	2,275,156	(12,110)	(1,381,440)	881,666
Ending Balance (in shares) at Mar. 31, 2022	59,555,974
Beginning Balance at Dec. 31, 2021	$ 59	2,250,250	(4,133)	(1,275,441)	970,735
Beginning Balance (in shares) at Dec. 31, 2021	59,141,086
Increase (Decrease) in Stockholders' Equity
Net loss					(398,871)
Ending Balance at Sep. 30, 2022	$ 60	2,329,385	(14,826)	(1,674,312)	640,307
Ending Balance (in shares) at Sep. 30, 2022	59,808,492
Beginning Balance at Mar. 31, 2022	$ 60	2,275,156	(12,110)	(1,381,440)	881,666
Beginning Balance (in shares) at Mar. 31, 2022	59,555,974
Increase (Decrease) in Stockholders' Equity
Issuance of common stock under stock plan and stock purchase plan		2,407			2,407
Issuance of common stock under stock plan and stock purchase plan (in shares)	132,321
Stock-based compensation expense		25,524			25,524
Other comprehensive income (loss)			(2,138)		(2,138)
Net loss				(159,709)	(159,709)
Ending Balance at Jun. 30, 2022	$ 60	2,303,087	(14,248)	(1,541,149)	747,750
Ending Balance (in shares) at Jun. 30, 2022	59,688,295
Increase (Decrease) in Stockholders' Equity
Issuance of common stock under stock plan		2,030			2,030
Issuance of common stock under stock plan (in shares)	120,197
Stock-based compensation expense		24,268			24,268
Other comprehensive income (loss)			(578)		(578)
Net loss				(133,163)	(133,163)
Ending Balance at Sep. 30, 2022	$ 60	2,329,385	(14,826)	(1,674,312)	640,307
Ending Balance (in shares) at Sep. 30, 2022	59,808,492
Beginning Balance at Dec. 31, 2022	$ 60	2,358,018	(10,443)	(1,832,958)	$ 514,677
Beginning Balance (in shares) at Dec. 31, 2022	59,958,919				59,958,919
Increase (Decrease) in Stockholders' Equity
Issuance of common stock under stock plan (in shares)	457,416
Stock-based compensation expense		23,340			$ 23,340
Other comprehensive income (loss)			5,841		5,841
Net loss				(129,560)	(129,560)
Ending Balance at Mar. 31, 2023	$ 60	2,381,358	(4,602)	(1,962,518)	414,298
Ending Balance (in shares) at Mar. 31, 2023	60,416,335
Beginning Balance at Dec. 31, 2022	$ 60	2,358,018	(10,443)	(1,832,958)	$ 514,677
Beginning Balance (in shares) at Dec. 31, 2022	59,958,919				59,958,919
Increase (Decrease) in Stockholders' Equity
Net loss					$ (396,068)
Ending Balance at Sep. 30, 2023	$ 61	2,434,258	(2,683)	(2,229,025)	$ 202,611
Ending Balance (in shares) at Sep. 30, 2023	60,740,744				60,740,744
Beginning Balance at Mar. 31, 2023	$ 60	2,381,358	(4,602)	(1,962,518)	$ 414,298
Beginning Balance (in shares) at Mar. 31, 2023	60,416,335
Increase (Decrease) in Stockholders' Equity
Issuance of common stock under stock plan and stock purchase plan	$ 1	5,298			5,299
Issuance of common stock under stock plan and stock purchase plan (in shares)	221,940
Stock-based compensation expense		23,945			23,945
Other comprehensive income (loss)			381		381
Net loss				(132,794)	(132,794)
Ending Balance at Jun. 30, 2023	$ 61	2,410,601	(4,221)	(2,095,312)	311,129
Ending Balance (in shares) at Jun. 30, 2023	60,638,275
Increase (Decrease) in Stockholders' Equity
Issuance of common stock under stock plan		445			445
Issuance of common stock under stock plan (in shares)	102,469
Stock-based compensation expense		23,212			23,212
Other comprehensive income (loss)			1,538		1,538
Net loss				(133,713)	(133,713)
Ending Balance at Sep. 30, 2023	$ 61	$ 2,434,258	$ (2,683)	$ (2,229,025)	$ 202,611
Ending Balance (in shares) at Sep. 30, 2023	60,740,744				60,740,744

Product Revenue Reserves and Allowances - Product Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenues
Revenue	$ 56,566	$ 65,977	$ 177,423	$ 165,255
Product revenue, net
Revenues
Revenue	54,228	28,634	133,173	80,929
AYVAKIT and AYVAKYT
Revenues
Revenue	49,121	25,054	118,355	70,888
GAVRETO
Revenues
Revenue	$ 5,107	$ 3,580	$ 14,818	$ 10,041

- Definition

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

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+ Details

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

- Definition

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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1D

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1F
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1F

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1F
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1F

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1F
-Subparagraph (b)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1F

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1F
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1F

Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities
Net loss	$ (396,068)	$ (398,871)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	10,134	4,719
Non-cash lease expense	6,759	6,212
Stock-based compensation	70,087	72,855
Non-cash interest expense	11,886	8,389
Non-cash customer consideration		(27,500)
Net (accretion of discount) amortization of premium on marketable securities	(11,527)	844
Other	2,342	(57)
Changes in assets and liabilities:
Accounts receivable	(18,970)	5,553
Unbilled accounts receivable	13,019	9,282
Inventory	(5,195)	(20,653)
Prepaid expenses and other current assets	(2,449)	(15,575)
Other assets	(1,724)	(11,886)
Accounts payable	4,244	(2,031)
Accrued expenses	(15,100)	7,833
Other long-term liabilities	(7,235)	5,730
Deferred revenue	(10,280)	(19,952)
Operating lease liabilities	(7,842)	(5,764)
Net cash used in operating activities	(357,919)	(380,872)
Cash flows from investing activities
Purchases of property and equipment	(11,389)	(7,438)
Purchases of investments	(648,705)	(258,654)
Maturities of investments	855,365	170,123
Other		(289)
Net cash provided by (used in) investing activities	195,271	(96,258)
Cash flows from financing activities
Net proceeds from the sale of future royalties and revenues		415,836
Net proceeds from term loan facility	97,968	137,797
Net proceeds from stock option exercises and employee stock purchase plan	5,729	5,686
Net cash provided by financing activities	103,697	559,319
Net increase (decrease) in cash, cash equivalents, and restricted cash	(58,951)	82,189
Cash, cash equivalents and restricted cash at beginning of period	124,904	215,119
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(285)	(685)
Cash, cash equivalents and restricted cash at end of period	65,668	296,623
Supplemental cash flow information
Cash paid for interest	25,455	2,956
Property and equipment purchases unpaid at period end	1,921	195
Cash paid for taxes, net	$ 762	$ 4,018

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenues:
Revenue	$ 56,566	$ 65,977	$ 177,423	$ 165,255
Cost and operating expenses:
Cost of sales	2,782	3,000	8,280	12,965
Research and development	110,252	127,981	330,184	359,579
Selling, general and administrative	70,741	57,608	215,826	173,354
Collaboration loss sharing	1,771	1,665	4,301	7,076
Total cost and operating expenses	185,546	190,254	558,591	552,974
Other income (expense):
Interest expense, net	(3,808)	(8,396)	(13,624)	(7,527)
Other income (expense), net	(728)	396	(369)	575
Total other expense, net	(4,536)	(8,000)	(13,993)	(6,952)
Loss before income taxes	(133,516)	(132,277)	(395,161)	(394,671)
Income tax expense	197	886	907	4,200
Net loss	(133,713)	(133,163)	(396,068)	(398,871)
Other comprehensive loss:
Unrealized gains (losses) on available-for-sale investments	1,443	(843)	7,624	(11,171)
Currency translation adjustments	95	265	136	478
Comprehensive loss	$ (132,175)	$ (133,741)	$ (388,308)	$ (409,564)
Net loss per share - basic (in dollars per share)	$ (2.20)	$ (2.23)
Net loss per share - diluted (in dollars per share)	$ (2.20)	$ (2.23)	$ (6.55)	$ (6.70)
Weighted-average number of common shares used in net loss per share - basic (in shares)	60,688	59,758
Weighted-average number of common shares used in net loss per share - diluted (in shares)	60,688	59,758	60,445	59,564
Product revenue, net
Revenues:
Revenue	$ 54,228	$ 28,634	$ 133,173	$ 80,929
Product revenue, net \| Nonrelated Party
Revenues:
Revenue	54,228	28,634	133,173	80,929
Collaboration and License \| Nonrelated Party
Revenues:
Revenue	$ 2,338	9,843	$ 44,250	56,826
License \| Related Party
Revenues:
Revenue		$ 27,500		$ 27,500

Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Reconciliation of cash, cash equivalents, and restricted cash
Cash and cash equivalents	$ 55,972	$ 119,709	$ 291,430
Restricted cash	9,696	5,195	5,193
Total cash, cash equivalents, and restricted cash shown in condensed consolidated statements of cash flows	$ 65,668	$ 124,904	$ 296,623	$ 215,119

Collaboration and License Agreements - Performance Obligations (Details) - Collaborative Arrangement	9 Months Ended
	Sep. 30, 2023 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
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

Net Loss Per Share (Details) - shares shares in Thousands	3 Months Ended
Net Loss Per Share (Details) - shares shares in Thousands	Sep. 30, 2023	Sep. 30, 2022
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	9,177	8,200
Employee Stock Option
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	6,984	6,316
Restricted Stock Units
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	2,093	1,838
Performance-based restricted stock units
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	53
Employee Stock
Antidilutive securities excluded from computation of earnings per share
Antidilutive securities excluded from computation of earnings per share	47	46

Collaboration and License Agreements - Revenue Recognized (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended		12 Months Ended		24 Months Ended
	Aug. 01, 2022	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2021	Dec. 31, 2018	Dec. 31, 2020
Revenues
Revenue		$ 56,566	$ 65,977	$ 177,423	$ 165,255
License \| Related Party
Revenues
Revenue			27,500		27,500
License \| IDRx, Inc. \| Director
Revenues
Revenue	$ 27,500
Collaborative Arrangement \| Zai Lab (Shanghai) Co., Ltd.
Revenues
Revenue						$ 25,000
Collaborative Arrangement \| Clementia
Revenues
Revenue		0			30,000			$ 46,500
Collaborative Arrangement \| Collaboration revenue \| Roche, Collaboration (Pralsetnib) Agreement
Revenues
Revenue		513	4,282	1,672	5,573
Collaborative Arrangement \| Collaboration revenue \| Roche, Collaboration and License (Immunotherapy) Agreement
Revenues
Revenue		0	2,500	25,700	1,700
Cumulative revenue catch-up				9,700
Collaborative Arrangement \| Collaboration revenue \| C Stone
Revenues
Revenue		1,820	2,915	16,861	18,209		$ 40,000
Collaborative Arrangement \| License milestone revenue \| C Stone
Revenues
Revenue		0	0	9,000	4,000
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		1,820	2,915	7,861	14,209
Collaborative Arrangement \| Territory-specific activities, manufacturing and research and development services \| Roche, Collaboration (Pralsetnib) Agreement
Revenues
Revenue		213	3,971	570	4,663
Collaborative Arrangement \| Royalty \| Roche, Collaboration (Pralsetnib) Agreement
Revenues
Revenue		$ 300	$ 311	$ 1,102	$ 910

Accrued Expenses

9 Months Ended

Sep. 30, 2023

Disclosure Text Block

Accrued Expenses

9. Accrued Expenses

Accrued expenses consist of the following (in thousands):


	September 30,		December 31,
	2023		2022
Research, development and commercial contract costs	$	38,699	$	66,041
Employee compensation		34,517		30,744
Accrued professional fees		14,592		17,588
Revenue-related reserves		16,101		9,046
Other		6,527		7,704
Total	$	110,436	$	131,123

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Fair Value of Financial Instruments
Marketable securities, available-for-sale	$ 771,254	$ 958,763
U.S. government agency securities
Fair Value of Financial Instruments
Marketable securities, available-for-sale	200,863	372,671
U.S. Treasury obligations
Fair Value of Financial Instruments
Marketable securities, available-for-sale	570,391	586,092
Recurring
Fair Value of Financial Instruments
Total	818,764	1,058,950
Recurring \| U.S. government agency securities
Fair Value of Financial Instruments
Marketable securities, available-for-sale	200,863	372,671
Recurring \| U.S. Treasury obligations
Fair Value of Financial Instruments
Marketable securities, available-for-sale	570,391	586,092
Recurring \| Money market funds
Fair Value of Financial Instruments
Cash equivalents	47,510	95,198
Recurring \| U.S. Treasury obligations
Fair Value of Financial Instruments
Cash equivalents		4,989
Recurring \| Active Markets (Level 1)
Fair Value of Financial Instruments
Total	617,901	686,279
Recurring \| Active Markets (Level 1) \| U.S. Treasury obligations
Fair Value of Financial Instruments
Marketable securities, available-for-sale	570,391	586,092
Recurring \| Active Markets (Level 1) \| Money market funds
Fair Value of Financial Instruments
Cash equivalents	47,510	95,198
Recurring \| Active Markets (Level 1) \| U.S. Treasury obligations
Fair Value of Financial Instruments
Cash equivalents		4,989
Recurring \| Observable Inputs (Level 2)
Fair Value of Financial Instruments
Total	200,863	372,671
Recurring \| Observable Inputs (Level 2) \| U.S. government agency securities
Fair Value of Financial Instruments
Marketable securities, available-for-sale	$ 200,863	$ 372,671

Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2023

Disclosure Text Block

Fair Value of Financial Instruments

5. Fair Value of Financial Instruments

The following table summarizes the Company’s cash equivalents and marketable securities measured at fair value on a recurring basis as of September 30, 2023 (in thousands):


			Active		Observable		Unobservable
	September 30,		Markets		Inputs		Inputs
Description	2023		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	47,510		47,510		—	$	—
Marketable securities, available-for-sale:
U.S. government agency securities		200,863		—		200,863		—
U.S. treasury obligations		570,391		570,391		—		—
Total	$	818,764	$	617,901	$	200,863	$	—

The following table summarizes the Company’s cash equivalents and marketable securities measured at fair value on a recurring basis as of December 31, 2022 (in thousands):


			Active		Observable		Unobservable
	December 31,		Markets		Inputs		Inputs
Description	2022		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	95,198	$	95,198	$	—	$	—
U.S. treasury obligations		4,989		4,989		—		—
Marketable securities, available-for-sale:
U.S. government agency securities		372,671		—		372,671		—
U.S. treasury obligations		586,092		586,092		—		—
Total	$	1,058,950	$	686,279	$	372,671	$	—

- Definition

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

+ References + Details

Collaboration and License Agreements (Tables)

9 Months Ended

Sep. 30, 2023

Table Text Blocks

Schedule of collaboration loss sharing


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
The Company's share of loss in the U.S. for pralsetinib	$	1,771	$	1,665	$	4,301	$	7,076

Schedule of amounts recognized as reductions to expenses


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Reductions to selling, general and administrative expenses	$	3,063	$	3,560	$	8,618	$	12,808
Increases in research and development expenses	$	7,603	$	6,111	$	21,226	$	9,815

Roche, Collaboration (Pralsetnib) Agreement

Table Text Blocks

Summary of revenue recognized


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Manufacturing and research and development services related to ex-US territory-specific activities	$	213	$	3,971	$	570	$	4,663
Royalty revenue		300		311		1,102		910
Total Roche pralsetinib collaboration revenue	$	513	$	4,282	$	1,672	$	5,573

Summary of contract assets and/or contract liabilities


	September 30,		December 31,
	2023		2022
Unbilled accounts receivable	$	304	$	—
Accrued expenses	$	6,221	$	6,519

C Stone

Table Text Blocks

Summary of revenue recognized


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
License milestone revenue	$	—	$	—	$	9,000	$	4,000
Manufacturing services and royalty revenue related to CStone Territory-specific activities		1,820		2,915		7,861		14,209
Total CStone collaboration revenue	$	1,820	$	2,915	$	16,861	$	18,209

C Stone | Collaboration revenue

Table Text Blocks

Summary of contract assets and/or contract liabilities


	September 30,		December 31,
	2023		2022
Accounts receivable, net	$	5,338	$	4,991
Unbilled accounts receivable		83		1,529
Contract liability		3,010		2,265

Stock-based Compensation - Stock-based Compensation Expense - General Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Total stock based compensation expense
Stock-based compensation expense	$ 23,071	$ 24,109	$ 70,087	$ 72,855

Stock-based Compensation - Unvested Awards - Activity (Details)	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Restricted Stock Units
Shares
Unvested at beginning of period (in shares) \| shares	1,893,944
Granted (in shares) \| shares	888,010
Vested (in shares) \| shares	(569,385)
Forfeited (in shares) \| shares	(119,829)
Unvested at end of period (in shares) \| shares	2,092,740
Weighted-Average Grant Date Fair Value
Unvested at beginning or period (in dollars per share) \| $ / shares	$ 73.28
Granted (in dollars per share) \| $ / shares	44.78
Vested (in dollars per share) \| $ / shares	72.64
Forfeited (in dollars per share) \| $ / shares	64.97
Unvested at end of period (in dollars per share) \| $ / shares	$ 61.85
Performance-based restricted stock units
Shares
Unvested at beginning of period (in shares) \| shares	0
Granted (in shares) \| shares	52,500
Unvested at end of period (in shares) \| shares	52,500
Weighted-Average Grant Date Fair Value
Unvested at beginning or period (in dollars per share) \| $ / shares	$ 0
Granted (in dollars per share) \| $ / shares	59.32
Unvested at end of period (in dollars per share) \| $ / shares	$ 59.32

Marketable Securities - Maturities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Amortized cost
Within one year, amortized cost	$ 658,760	$ 834,440
After one through five years, amortized cost	114,818	134,272
Amortized cost	773,578	968,712
Fair value
Within one year, fair value	657,012	825,283
After one through five years, fair value	114,242	133,480
Investments, available-for-sale	$ 771,254	$ 958,763

Document and Entity Information - $ / shares	9 Months Ended
Document and Entity Information - $ / shares	Sep. 30, 2023	Oct. 23, 2023
Cover [Abstract]
Entity Central Index Key	0001597264
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-37359
Entity Registrant Name	BLUEPRINT MEDICINES CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	26-3632015
Entity Address, Address Line One	45 Sidney Street
Entity Address, City or Town	Cambridge
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02139
City Area Code	617
Local Phone Number	374-7580
Title of 12(b) Security	Common stock, par value $0.001 per share
Trading Symbol	BPMC
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Listing, Par Value Per Share	$ 0.001
Entity Common Stock, Shares Outstanding		60,789,712
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false

Stock-based Compensation - 2015 Stock Option and Incentive Plan (Details) - 2015 Stock Option and Incentive Plan - shares		9 Months Ended
	Jan. 01, 2023	Sep. 30, 2023	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)	2,398,356
Number of shares available for grant (in shares)		4,896,334

Stock-based Compensation - Employee Stock Purchase Plan (Details) - Employee Stock - shares	1 Months Ended
	May 31, 2015	Jan. 01, 2023
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)		599,589

Product Revenue Reserves and Allowances - Revenue-related Reserves (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Revenue-related reserves
Revenue-related reserves	$ 17,648	$ 9,788	$ 7,326	$ 4,345
Accounts Receivable, Net
Revenue-related reserves
Revenue-related reserves	1,547	742
Accrued Expenses
Revenue-related reserves
Revenue-related reserves	$ 16,101	$ 9,046

Product Revenue Reserves and Allowances - Concentration Risk (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Revenue from Contract with Customer Benchmark \| Customer Concentration Risk \| Customer One
Concentration Risk
Concentration risk (as a percent)	42.00%	45.00%	42.00%	46.00%
Revenue from Contract with Customer Benchmark \| Customer Concentration Risk \| Customer Two
Concentration Risk
Concentration risk (as a percent)	11.00%	10.00%	11.00%	11.00%
Accounts Receivable, Net \| Credit Concentration Risk \| Customer One
Concentration Risk
Concentration risk (as a percent)			31.00%		33.00%
Accounts Receivable, Net \| Credit Concentration Risk \| Customer Two
Concentration Risk
Concentration risk (as a percent)			13.00%		15.00%
Accounts Receivable, Net \| Credit Concentration Risk \| Customer Three
Concentration Risk
Concentration risk (as a percent)			11.00%
Accounts Receivable, Net \| Credit Concentration Risk \| Customer Three \| Maximum
Concentration Risk
Concentration risk (as a percent)					10.00%
Accounts Receivable, Net \| Credit Concentration Risk \| Customer Four
Concentration Risk
Concentration risk (as a percent)					12.00%
Accounts Receivable, Net \| Credit Concentration Risk \| Customer Four \| Maximum
Concentration Risk
Concentration risk (as a percent)			10.00%

Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2023

Table Text Blocks

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


	September 30,
	2023	2022
Stock options	6,984	6,316
Restricted stock units	2,093	1,838
Performance-based restricted stock units	53	—
ESPP shares	47	46
Total	9,177	8,200

Marketable Securities - Tabular Disclosure (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Marketable securities, available-for-sale:
Amortized cost	$ 773,578	$ 968,712
Unrealized gain	7	22
Unrealized losses	(2,331)	(9,971)
Fair value	771,254	958,763
U.S. government agency securities
Marketable securities, available-for-sale:
Amortized cost	201,990	377,519
Unrealized losses	(1,127)	(4,848)
Fair value	200,863	372,671
U.S. Treasury obligations
Marketable securities, available-for-sale:
Amortized cost	571,588	591,193
Unrealized gain	7	22
Unrealized losses	(1,204)	(5,123)
Fair value	$ 570,391	$ 586,092

Financing Arrangements - Roll Forward (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($)
Sale of Future Royalties and Revenues \| Royalty Pharma, Royalty Purchase Agreement
Long-term Debt
Carrying value, ending balance	$ 175,300
Sale of Future Royalties and Revenues \| Sixth Street Partners, Future Revenue Purchase Agreement
Long-term Debt
Carrying value, beginning balance	254,328
Interest expense recognized	21,043
Payments	(10,484)
Carrying value, ending balance	264,887
Secured Debt \| Sixth Street Partners, Financing Agreement, Senior Secured Term Loan Facilities
Long-term Debt
Carrying value, beginning balance	139,083
Net proceeds received	97,968
Interest expense recognized	15,557
Payments	(14,230)
Carrying value, ending balance	$ 238,378

Stock-based Compensation - Stock-based Compensation Expense - By Type (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Total stock based compensation expense
Subtotal	$ 23,212	$ 24,268	$ 70,497	$ 73,402
Capitalized stock-based compensation costs	(141)	(159)	(410)	(547)
Stock-based compensation expense included in total cost and operating expenses	23,071	24,109	70,087	72,855
Employee Stock Option
Total stock based compensation expense
Subtotal	9,998	12,062	31,195	37,819
Restricted Stock Units
Total stock based compensation expense
Subtotal	12,536	11,802	37,389	34,583
Performance-based restricted stock units
Total stock based compensation expense
Subtotal	261		605
Employee Stock
Total stock based compensation expense
Subtotal	$ 417	$ 404	$ 1,308	$ 1,000

Stock-based Compensation - Stock-based Compensation Expense - By Classification (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Total stock based compensation expense
Stock-based compensation expense	$ 23,071	$ 24,109	$ 70,087	$ 72,855
Research and Development
Total stock based compensation expense
Stock-based compensation expense	11,169	10,010	31,512	30,548
General and Administrative Expense
Total stock based compensation expense
Stock-based compensation expense	$ 11,902	$ 14,099	$ 38,575	$ 42,307

Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Disclosure Text Block

Commitments and Contingencies

15. Commitments and Contingencies

Purchase Commitments Associated with Commercial Supply Agreements

In connection with the commercialization of AYVAKIT/AYVAKYT, 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, 2023, there was a decrease of $7.3 million 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, 2022.

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 by reason of their status or service as directors or officers of the Company. The maximum potential amount of future payments the Company could be required to make 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 condensed consolidated financial statements as of September 30, 2023 or December 31, 2022.

Marketable Securities (Tables)

9 Months Ended

Sep. 30, 2023

Table Text Blocks

Schedule of marketable securities


	Amortized		Unrealized		Unrealized		Fair
September 30, 2023	Cost		Gain		Losses		Value
Marketable securities, available-for-sale:
U.S. government agency securities	$	201,990		—		(1,127)	$	200,863
U.S. treasury obligations		571,588		7		(1,204)		570,391
Total	$	773,578	$	7	$	(2,331)	$	771,254


	Amortized		Unrealized		Unrealized		Fair
December 31, 2022	Cost		Gain		Losses		Value
Marketable securities, available-for-sale:
U.S. government agency securities	$	377,519		—		(4,848)	$	372,671
U.S. treasury obligations		591,193		22		(5,123)		586,092
Total	$	968,712	$	22	$	(9,971)	$	958,763

Summary of fair value and number of available-for-sale securities in loss positions


	September 30, 2023				December 31, 2022
	Fair		Number of		Fair		Number of
	value		securities		value		securities
Debt securities in unrealized loss position for 12 months or less	$	624,319		116	$	371,746		66
Debt securities in unrealized loss position for more than 12 months		56,975		10		550,561		56
Total debt securities in unrealized loss position	$	681,294		126	$	922,307		122

Summary of the fair value and the number of the available-for-sale securities by their maturities


	September 30, 2023				December 31, 2022
	Amortized		Fair		Amortized		Fair
	Cost		value		Cost		value
Within one year	$	658,760	$	657,012	$	834,440	$	825,283
After one through five years		114,818		114,242		134,272		133,480
Total	$	773,578	$	771,254	$	968,712	$	958,763

Summary of proceeds from maturities of debt securities


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Proceeds from maturities of debt securities	$	237,600	$	90,500	$	855,365	$	170,123

- Definition

Tabular disclosure of investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale).

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-9

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (aa)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (aaa)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

+ Details

Collaboration and License Agreements - Reduction in Expenses (Details) - Collaborative Arrangement - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Zai Lab (Shanghai) Co., Ltd.
Collaboration Agreements
Collaborative arrangement, reduction in expenses	$ 0	$ 200	$ 0	$ 500
Roche, Collaboration (Pralsetnib) Agreement
Collaboration Agreements
Collaborative arrangement, commercialization, reduction in selling, general and administrative expenses	3,063	3,560	8,618	12,808
Collaborative arrangement, global development activities, increase (reduction) in research and development expenses	$ 7,603	6,111	$ 21,226	9,815
C Stone
Collaboration Agreements
Collaborative arrangement, reduction in manufacturing and research and development expenses		$ 500		$ 1,600

Income Taxes - Expense (Benefit) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income tax expense (benefit)
Income tax expense	$ 197	$ 886	$ 907	$ 4,200

- Definition

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

+ References + Details

Nature of Business

9 Months Ended

Sep. 30, 2023

Disclosure Text Block

Nature of Business

1. Nature of Business

Blueprint Medicines Corporation (the Company), a Delaware corporation incorporated on October 14, 2008, is a precision therapy company focused on genomically defined cancers 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 brought its approved medicines, AYVAKIT®/AYVAKYT® (avapritinib) and GAVRETO® (pralsetinib), to patients in the U.S. and Europe, and the Company is globally advancing multiple programs for mast cell disorders, including SM and chronic urticaria, breast cancer and other cancers vulnerable to CDK2 inhibition, as well as EGFR-mutant lung cancer. 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, 2023, the Company had cash, cash equivalents and marketable securities of $827.2 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.

Inventory - Capitalized (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Inventory
Raw materials	$ 1,599	$ 4,967
Work in process	29,335	28,427
Finished goods	3,475	2,791
Total	$ 34,409	$ 36,185

Commitments and Contingencies - Purchase Commitments (Details) $ in Millions	9 Months Ended
	Sep. 30, 2023 USD ($)
Manufacturing Agreement, October 2020
Manufacturing Agreements
Unrecorded unconditional purchase obligation, period increase (decrease)	$ (7.3)

Leases (Tables)

9 Months Ended

Sep. 30, 2023

Table Text Blocks

Summary of lease expenses and cash flow and weighted average information


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
Operating leases:	2023		2022		2023		2022
Lease cost	$	5,758	$	5,322	$	17,301	$	16,233
Sublease income		—		(600)		—		(2,132)
Net lease cost	$	5,758	$	4,722	$	17,301	$	14,101


	Nine Months Ended
	September 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:	$	13,249	$	11,668
Lease liabilities arising from obtaining right-of-use assets:
Operating leases	$	109	$	—


					Operating leases
Weighted average remaining lease term in years					6.1
Weighted average discount rate					7.4%

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

Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Table Text Blocks

Summary of stock option activity


		Weighted-Average
	Shares		Exercise Price
Outstanding at December 31, 2022	6,233,451	$	69.14
Granted	1,182,245		45.31
Exercised	(154,433)		22.02
Canceled	(277,649)		70.90
Outstanding at September 30, 2023	6,983,614	$	66.08
Exercisable at September 30, 2023	4,756,302	$	68.88

Summary of restricted stock units activity


		Weighted-Average
	Shares	Grant Date Fair Value
Unvested shares at December 31, 2022	1,893,944	$	73.28
Granted	888,010		44.78
Vested	(569,385)		72.64
Forfeited	(119,829)		64.97
Unvested shares at September 30, 2023	2,092,740	$	61.85

Summary of performance-based restricted stock units activity


		Weighted-Average
		Grant Date
	Shares	Grant Date Fair Value
Unvested shares at December 31, 2022	—	$	—
Granted	52,500		59.32
Vested	—		—
Forfeited	—		—
Unvested shares at September 30, 2023	52,500	$	59.32

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,
	2023		2022		2023		2022
Stock options	$	9,998	$	12,062	$	31,195	$	37,819
Restricted stock units		12,536		11,802		37,389		34,583
Performance-based restricted stock units		261		—		605		—
Employee stock purchase plan		417		404		1,308		1,000
Subtotal		23,212		24,268		70,497		73,402
Capitalized stock-based compensation costs		(141)		(159)		(410)		(547)
Stock-based compensation expense included in total cost and operating expenses	$	23,071	$	24,109	$	70,087	$	72,855


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Research and development	$	11,169	$	10,010	$	31,512	$	30,548
Selling, general and administrative		11,902		14,099		38,575		42,307
Total	$	23,071	$	24,109	$	70,087	$	72,855

Commitments and Contingencies - Indemnification Agreements (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Indemnification Agreement
Indemnification Agreements
Loss contingency accrual	$ 0	$ 0

Inventory - Balance Sheet Classification (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Inventory
Inventory	$ 16,457	$ 29,697
Other assets	17,952	6,488
Total	$ 34,409	$ 36,185

Insider Trading Arrangements

3 Months Ended

9 Months Ended

Sep. 30, 2023

Trading Arrangements, by Individual

Material Terms of Trading Arrangement

Name and Title

Action Taken

Type of Trading Arrangement

Nature of Trading Arrangement

Duration of Trading Arrangement

Aggregate Number of Securities

Ariel Hurley

(Senior Vice President, Finance and Principal Accounting Officer)

Adoption

(9/13/23)

Trading plan intended to satisfy the affirmative defense conditions of Securities Exchange Act Rule 10b5-1(c)

Sale of the Company’s common stock pursuant to the terms of the trading plan

9/13/23 – 9/23/24

16,867

Ariel Hurley

Trading Arrangements, by Individual

Name

Ariel Hurley

Title

Senior Vice President, Finance and Principal Accounting Officer

Rule 10b5-1 Arrangement Adopted

true

Adoption Date

Adoption

Termination Date

9/23/24

Aggregate Available

16,867

Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2023

Table Text Blocks

Schedule of financial instruments measured at fair value

The following table summarizes the Company’s cash equivalents and marketable securities measured at fair value on a recurring basis as of September 30, 2023 (in thousands):


			Active		Observable		Unobservable
	September 30,		Markets		Inputs		Inputs
Description	2023		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	47,510		47,510		—	$	—
Marketable securities, available-for-sale:
U.S. government agency securities		200,863		—		200,863		—
U.S. treasury obligations		570,391		570,391		—		—
Total	$	818,764	$	617,901	$	200,863	$	—

The following table summarizes the Company’s cash equivalents and marketable securities measured at fair value on a recurring basis as of December 31, 2022 (in thousands):


			Active		Observable		Unobservable
	December 31,		Markets		Inputs		Inputs
Description	2022		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market funds	$	95,198	$	95,198	$	—	$	—
U.S. treasury obligations		4,989		4,989		—		—
Marketable securities, available-for-sale:
U.S. government agency securities		372,671		—		372,671		—
U.S. treasury obligations		586,092		586,092		—		—
Total	$	1,058,950	$	686,279	$	372,671	$	—

Leases - Cash Flow Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Leases
Cash paid for amounts included in the measurement of lease liabilities, operating cash flows from operating leases	$ 13,249	$ 11,668
Lease liabilities arising from obtaining right-of-use assets, operating leases	$ 109

Net Loss Per Share

9 Months Ended

Sep. 30, 2023

Disclosure Text Block

Net 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, PSUs 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, 2023 and 2022 because including them would have had an anti-dilutive effect (in thousands):


	September 30,
	2023	2022
Stock options	6,984	6,316
Restricted stock units	2,093	1,838
Performance-based restricted stock units	53	—
ESPP shares	47	46
Total	9,177	8,200

Income Taxes

9 Months Ended

Sep. 30, 2023

Disclosure Text Block

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, 2023, the Company has a full valuation allowance applied against its U.S. and foreign deferred tax assets.

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 has included the tax impact of capitalizing and amortizing these costs

over the required periods for the nine months ended September 30, 2023.

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, was considered taxable income for calendar year ended December 31, 2022. Therefore, the $425.0 million was included in the estimated taxable income calculation when estimating the Company’s forecasted 2022 annual effective tax rate. As of September 30, 2022, the Company expected 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.

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 Company’s effective tax rate or income tax payable and deferred income tax positions.

As of September 30, 2023, the Company expects to be in a taxable loss position for the calendar year ended December 31, 2023, and has recorded an income tax expense of $0.2 million and $0.9 million for the three and nine months ended September 30, 2023. The Company recorded an income tax provision despite forecasting a taxable loss due to the impact of recording unfavorable discrete items in the period, and taxable income from the jurisdictions in which the Company is subject to tax.

As of September 30, 2023, the Company had gross unrecognized tax benefit, excluding interest and penalties of approximately $0.2 million. As of December 31, 2022, the Company did not have any gross unrecognized tax benefit. The company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. As of September 30, 2023, the Company recorded an insignificant amount of interest and penalties related to uncertain tax positions.

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
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-Paragraph 21
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-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Restricted Cash (Details) - USD ($) $ in Millions	Sep. 30, 2023	Dec. 31, 2022
Restricted cash
Restricted cash	$ 9.7	$ 5.2

Summary of Significant Accounting Policies and Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2023

Disclosure Text Block

Summary of Significant Accounting Policies and Recent Accounting Pronouncements

2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements

Basis of Presentation

The unaudited interim condensed consolidated financial statements of the Company included herein have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) as found in the Accounting Standards Codification (ASC), Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB) and the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these financial statements should be read in conjunction with the financial statements as of and for the year ended December 31, 2022 and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 16, 2023 (2022 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, 2023, the results of its operations for the three and nine months ended September 30, 2023 and 2022, stockholder’s equity for the three and nine months ended September 30, 2023 and 2022 and cash flows for nine months ended September 30, 2023 and 2022. Such adjustments are of a normal and recurring nature. The results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results for the year ending December 31, 2023 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. 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. Actual results may differ from these estimates.

Significant Accounting Policies

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three and nine months ended September 30, 2023 are consistent with those discussed in Note 2 to the consolidated financial statements in the 2022 Annual Report on Form 10-K, with the exception of the below new policy.

Performance-Based Restricted Stock Unit Awards

Fair value of performance-based restricted stock unit awards (PSUs) at the grant date are estimated using a lattice model with a Monte Carlo simulation. This valuation methodology utilizes several key assumptions, including defined consecutive trading day average closing stock price on the grant date, valuation date stock price, expected volatilities using historical volatilities, correlation coefficients based on the volatility data, risk-free rates of return and expected dividend yield. The probability of actual shares expected to be earned is considered in the grant date valuation and the expense is not adjusted to reflect the actual units earned. The PSUs cliff vest at the end of the service period and the compensation expense for PSUs is recognized straight-line over the applicable service period.

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.

Collaboration and License Agreements - Collaboration Loss Sharing (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Collaboration Agreements
Collaboration loss sharing	$ 1,771	$ 1,665	$ 4,301	$ 7,076
Collaborative Arrangement \| Roche, Collaboration (Pralsetnib) Agreement
Collaboration Agreements
Collaboration loss sharing	$ 1,771	$ 1,665	$ 4,301	$ 7,076

Restricted Cash

9 Months Ended

Sep. 30, 2023

Disclosure Text Block

Restricted Cash

8. Restricted Cash

At September 30, 2023 and December 31, 2022, $9.7 million and $5.2 million, respectively, of the Company’s cash is restricted by a financial institution primarily related to funds held to satisfy the requirements of certain government agreements and the security deposits for the lease agreements for the Company’s office and laboratory spaces.

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Operating leases:
Lease cost	$ 5,758	$ 5,322	$ 17,301	$ 16,233
Sublease income		(600)		(2,132)
Net lease cost	$ 5,758	$ 4,722	$ 17,301	$ 14,101

Stock-based Compensation - 2020 Inducement Plan (Details) - 2020 Inducement Plan - shares	1 Months Ended
	Jun. 30, 2022	Sep. 30, 2023	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)		1,366,923

Stock-based Compensation

9 Months Ended

Sep. 30, 2023

Disclosure Text Block

Stock-based Compensation

11. Stock-based Compensation

2015 Stock Option and Incentive Plan

In 2015, the Company’s board of directors and stockholders approved the 2015 Stock Option and Incentive Plan (the 2015 Plan), which replaced the Company’s 2011 Stock Option and Grant Plan, as amended (the 2011 Plan). The 2015 Plan includes incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based restricted stock units, unrestricted stock, performance-based awards and cash-based awards. The Company initially reserved a total of 1,460,084 shares of common stock for the issuance of awards under the 2015 Plan. The 2015 Plan provides that the number of shares reserved and available for issuance under the 2015 Plan will be cumulatively increased on January 1 of each calendar year by 4% of the number of shares of common stock issued and outstanding on the immediately preceding December 31 or such lesser amount as specified by the compensation committee of the board of directors. For the calendar year beginning January 1, 2023, the number of shares reserved for issuance under the 2015 Plan was increased by 2,398,356 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, 2023, there were 4,896,334 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 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, 2023, there were 1,366,923 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, 2023:


		Weighted-Average
	Shares		Exercise Price
Outstanding at December 31, 2022	6,233,451	$	69.14
Granted	1,182,245		45.31
Exercised	(154,433)		22.02
Canceled	(277,649)		70.90
Outstanding at September 30, 2023	6,983,614	$	66.08
Exercisable at September 30, 2023	4,756,302	$	68.88

As of September 30, 2023, the total unrecognized compensation expense related to unvested stock option awards was $69.2 million, which is expected to be recognized over a weighted-average period of approximately 2.61 years.

Restricted stock units

The following table summarizes the restricted stock units activity for the nine months ended September 30, 2023:


		Weighted-Average
	Shares	Grant Date Fair Value
Unvested shares at December 31, 2022	1,893,944	$	73.28
Granted	888,010		44.78
Vested	(569,385)		72.64
Forfeited	(119,829)		64.97
Unvested shares at September 30, 2023	2,092,740	$	61.85

As of September 30, 2023, the total unrecognized compensation expense related to unvested restricted stock units was $99.0 million, which is expected to be recognized over a weighted-average period of approximately 2.55 years.

Performance-based restricted stock units

During the first quarter of 2023, the Company began granting performance-based restricted stock units (PSUs) that will settle in stock. PSUs awarded to employees have a three-year performance period and vest on the third anniversary of the grant date. The vesting of these awards is subject to the respective employee’s continued employment. The number of PSUs granted represents the target number of units that are eligible to be earned based on the achievement of cumulative three-year performance measures established at the beginning of the performance period, which ends on December 31 of the third year of the performance period.

Participants may ultimately earn between zero and 200.0% of the target number of PSUs granted based on the degree of achievement of the performance metric based on a three-year cumulative relative total shareholder return metric. Accordingly, additional PSUs may be issued or currently issued PSUs may be cancelled upon final determination of the number of units earned.

The following table summarizes the PSU activity for the nine months ended September 30, 2023:


		Weighted-Average
		Grant Date
	Shares	Grant Date Fair Value
Unvested shares at December 31, 2022	—	$	—
Granted	52,500		59.32
Vested	—		—
Forfeited	—		—
Unvested shares at September 30, 2023	52,500	$	59.32

As of September 30, 2023, the total unrecognized compensation expense related to unvested PSUs was $2.5 million, which is expected to be recognized over a weighted-average period of approximately 2.42 years.

The Company values PSUs on the grant date using a lattice model with a Monte Carlo simulation. This valuation methodology utilizes several key assumptions, including defined consecutive trading day average closing stock price on the grant date, valuation date stock price, expected volatilities using historical volatilities, correlation coefficients based on the volatility data, risk-free rates of return and expected dividend yield. The probability of actual shares expected to be earned is considered in the grant date valuation and the expense is not adjusted to reflect the actual units earned.

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, 2023, the number of shares reserved for issuance under the 2015 ESPP was increased by 599,589 shares.

Stock-based compensation expense

The Company recognized stock-based compensation expense of $23.1 million and $70.1 million for the three and nine months ended September 30, 2023, respectively, and $24.1 million and $72.9 million for the three and nine months ended September 30, 2022, 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,
	2023		2022		2023		2022
Stock options	$	9,998	$	12,062	$	31,195	$	37,819
Restricted stock units		12,536		11,802		37,389		34,583
Performance-based restricted stock units		261		—		605		—
Employee stock purchase plan		417		404		1,308		1,000
Subtotal		23,212		24,268		70,497		73,402
Capitalized stock-based compensation costs		(141)		(159)		(410)		(547)
Stock-based compensation expense included in total cost and operating expenses	$	23,071	$	24,109	$	70,087	$	72,855

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,
	2023		2022		2023		2022
Research and development	$	11,169	$	10,010	$	31,512	$	30,548
Selling, general and administrative		11,902		14,099		38,575		42,307
Total	$	23,071	$	24,109	$	70,087	$	72,855

Inventory (Tables)

9 Months Ended

Sep. 30, 2023

Table Text Blocks

Schedule of capitalized inventory


	September 30,		December 31,
	2023		2022
Raw materials	$	1,599	$	4,967
Work in process		29,335		28,427
Finished goods		3,475		2,791
Total	$	34,409	$	36,185

Balance sheet classification


	September 30,		December 31,
	2023		2022
Inventory	$	16,457	$	29,697
Other assets		17,952		6,488
Total	$	34,409	$	36,185

Inventory - Write-down (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Inventory - Write-down (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Inventory
Inventory write-down	$ 100	$ 0	$ 2,200	$ 0

Product Revenue Reserves and Allowances

9 Months Ended

Sep. 30, 2023

Disclosure Text Block

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 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 May 2023, the FDA approved AYVAKIT for the treatment of adult patients with indolent SM.

The following table summarizes revenue recognized from product sales for the three and nine months ended September 30, 2023 and 2022 (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
United States	$	49,121	$	25,054	$	118,355	$	70,888
Rest of World		5,107		3,580		14,818		10,041
Total product revenue	$	54,228	$	28,634	$	133,173	$	80,929

The Company primarily sells AYVAKIT/AYVAKYT through specialty distributors and specialty pharmacies. The following table summarizes the customers that represent 10% or greater of gross product revenue for the three and nine months ended September 30, 2023, and 2022 (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Customer 1	42	%	45	%	42	%	46	%
Customer 2	11	%	10	%	11	%	11	%

The following table summarizes the customers with amounts due that represent 10% or greater of the accounts receivable associated with the Company’s product sales as of September 30, 2023 and December 31, 2022 (in thousands):


	September 30,		December 31,
	2023		2022
Customer 1	31	%	33	%
Customer 2	13	%	15	%
Customer 3	11	%	*
Customer 4	*		12	%

* Indicates the customer’s share is under 10%.

The following table summarizes activity in each of the product revenue allowance and reserve categories for the nine months ended September 30, 2023 and 2022 (in thousands):


	Nine Months Ended September 30,
	2023		2022
Beginning balance at January 1	$	9,788	$	4,345
Provision related to sales in the current period		25,874		13,606
Adjustment related to prior periods sales		(545)		(645)
Credits and payments made		(17,469)		(9,980)
Ending balance at September 30	$	17,648	$	7,326

The total reserves that are included in the Company’s unaudited condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022, are summarized as follows (in thousands):


	September 30,		December 31,
	2023		2022
Reduction of accounts receivable, net	$	1,547	$	742
Component of accrued expenses		16,101		9,046
Total revenue-related reserves	$	17,648	$	9,788

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 55,972	$ 119,709
Marketable securities	657,012	825,283
Accounts receivable	40,861	23,525
Unbilled accounts receivable	393	13,413
Inventory	16,457	29,697
Prepaid expenses and other current assets	37,477	35,024
Total current assets	808,172	1,046,651
Marketable securities	114,242	133,480
Property and equipment, net	40,619	33,344
Operating lease right-of-use assets, net	75,221	81,854
Restricted cash	9,696	5,195
Equity investment	27,789	27,789
Other assets	29,560	21,589
Total assets	1,105,299	1,349,902
Current liabilities:
Accounts payable	6,963	2,729
Accrued expenses	110,436	131,123
Current portion of operating lease liabilities	11,617	10,579
Current portion of deferred revenue	3,010	4,667
Current portion of liabilities related to the sale of future royalties and revenues	35,137	17,285
Current portion of term loan	30,221	16,851
Total current liabilities	197,384	183,234
Operating lease liabilities, net of current portion	84,036	92,789
Deferred revenue, net of current portion	5,000	13,624
Liabilities related to the sale of future royalties and revenues, net of current portion	405,010	413,045
Term loan, net of current portion	208,157	122,232
Other long-term liabilities	3,101	10,301
Total liabilities	902,688	835,225
Commitments and Contingencies (Note 15)
Stockholders' equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding
Common stock, $0.001 par value; 120,000,000 shares authorized; 60,740,744 and 59,958,919 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively	61	60
Additional paid-in capital	2,434,258	2,358,018
Accumulated other comprehensive loss	(2,683)	(10,443)
Accumulated deficit	(2,229,025)	(1,832,958)
Total stockholders' equity	202,611	514,677
Total liabilities and stockholders' equity	$ 1,105,299	$ 1,349,902

Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Policies)	9 Months Ended
	Sep. 30, 2023
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, 2022 and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 16, 2023 (2022 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, 2023, the results of its operations for the three and nine months ended September 30, 2023 and 2022, stockholder’s equity for the three and nine months ended September 30, 2023 and 2022 and cash flows for nine months ended September 30, 2023 and 2022. Such adjustments are of a normal and recurring nature. The results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results for the year ending December 31, 2023 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. 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. Actual results may differ from these estimates.
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, 2023 are consistent with those discussed in Note 2 to the consolidated financial statements in the 2022 Annual Report on Form 10-K, with the exception of the below new policy.
Performance-Based Restricted Stock Unit Awards	Performance-Based Restricted Stock Unit Awards Fair value of performance-based restricted stock unit awards (PSUs) at the grant date are estimated using a lattice model with a Monte Carlo simulation. This valuation methodology utilizes several key assumptions, including defined consecutive trading day average closing stock price on the grant date, valuation date stock price, expected volatilities using historical volatilities, correlation coefficients based on the volatility data, risk-free rates of return and expected dividend yield. The probability of actual shares expected to be earned is considered in the grant date valuation and the expense is not adjusted to reflect the actual units earned. The PSUs cliff vest at the end of the service period and the compensation expense for PSUs is recognized straight-line over the applicable service period.
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.

- Definition

Disclosure of accounting policy for award under share-based payment arrangement. Includes, but is not limited to, methodology and assumption used in measuring cost.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(v)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 14.C.Q3)
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-URI https://asc.fasb.org//1943274/2147479830/718-10-S99-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 14.D.1.Q5)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479830/718-10-S99-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
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-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 14.D.3.Q2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479830/718-10-S99-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 14.D.2.Q6)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479830/718-10-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//718/tableOfContent

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

+ Details

Financing Arrangements - General Information (Details) $ in Thousands		1 Months Ended		3 Months Ended	12 Months Ended
	Jun. 30, 2022 USD ($)	Aug. 31, 2023 USD ($)	Jul. 31, 2022 USD ($) tranche Transaction	Sep. 30, 2023 USD ($)	Dec. 31, 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
Debt instrument, interest expense accretion				$ 0
Gross Proceeds
Gross proceeds	$ 175,000
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
Effective Interest Rate
Debt instrument, interest rate, effective percentage (as a percent)				10.80%
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
Effective Interest Rate
Debt instrument, interest rate, effective percentage (as a percent)				13.30%
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
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
Transaction costs, gross		$ 2,000
Gross Proceeds
Gross proceeds		$ 100,000
Secured Debt \| Sixth Street Partners, Financing Agreement, Incremental Term Loan
Debt Financing
Debt instrument, face amount, potential amount			$ 260,000

Income Taxes - Financing Arrangements (Details) - Sale of Future Royalties and Revenues - USD ($) $ in Millions		1 Months Ended	12 Months Ended
	Jun. 30, 2022	Jul. 31, 2022	Dec. 31, 2022
Gross Proceeds
Gross proceeds			$ 425.0
Royalty Pharma, Royalty Purchase Agreement
Gross Proceeds
Gross proceeds	$ 175.0
Sixth Street Partners, Future Revenue Purchase Agreement
Gross Proceeds
Gross proceeds		$ 250.0

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ (133,713)	$ (132,794)	$ (129,560)	$ (133,163)	$ (159,709)	$ (105,999)	$ (396,068)	$ (398,871)

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
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-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 3
-Subparagraph (c)
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 28
-Subparagraph (f)
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-URI https://asc.fasb.org//1943274/2147482907/825-10-50-28

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147482765/220-10-50-6

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 7: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
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-URI https://asc.fasb.org//1943274/2147483443/250-10-50-4

Reference 13: http://www.xbrl.org/2003/role/exampleRef
-Topic 946
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-Name Accounting Standards Codification
-Section 55
-Paragraph 10
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-URI https://asc.fasb.org//1943274/2147480167/946-830-55-10

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Section 45
-Paragraph 7
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-URI https://asc.fasb.org//1943274/2147483581/946-220-45-7

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
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Reference 24: http://www.xbrl.org/2003/role/disclosureRef
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Reference 25: http://www.xbrl.org/2003/role/disclosureRef
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Reference 26: http://www.xbrl.org/2003/role/disclosureRef
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Reference 27: http://www.xbrl.org/2003/role/disclosureRef
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Reference 28: http://www.xbrl.org/2003/role/disclosureRef
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Reference 29: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
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Reference 30: http://www.xbrl.org/2003/role/disclosureRef
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Reference 31: http://www.xbrl.org/2003/role/disclosureRef
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Reference 36: http://www.xbrl.org/2003/role/disclosureRef
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Reference 37: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1
-Subparagraph (SX 210.9-04(22))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

+ Details

Financing Arrangements - Long-term Debt (Details) - Sale of Future Royalties and Revenues - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Royalty Pharma, Royalty Purchase Agreement
Long-term Debt
Long-term debt	$ 175,300
Sixth Street Partners, Future Revenue Purchase Agreement
Long-term Debt
Long-term debt	$ 264,887	$ 254,328

- Definition

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

+ References + Details

Leases - Weighted Average Remaining Lease-term and Weighted Average Discount Rate (Details)	Sep. 30, 2023
Leases
Weighted average remaining lease term in years	6 years 1 month 6 days
Weighted average discount rate	7.40%

Marketable Securities - Unrealized Loss Positions (Details) $ in Thousands	Sep. 30, 2023 USD ($) security	Dec. 31, 2022 USD ($) security
Unrealized loss position, aggregate fair value
Unrealized loss position for less than 12 months, aggregate fair value \| $	$ 624,319	$ 371,746
Unrealized loss position for more than 12 months, aggregate fair value \| $	56,975	550,561
Unrealized loss position, aggregate fair value \| $	$ 681,294	$ 922,307
Unrealized loss position, number of positions
Number of held securities in an unrealized loss position for less than 12 months \| security	116	66
Number of held securities in an unrealized loss position for 12 months or longer \| security	10	56
Number of held securities in an unrealized loss position \| security	126	122

Financing Arrangements

9 Months Ended

Sep. 30, 2023

Disclosure Text Block

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 (as defined below) 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 accretes 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. 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 impact interest expense and the liability related to this arrangement. The Company periodically assesses the expected payments to Royalty Pharma and prospectively adjusts the amortization of the liability related to this arrangement for material changes in such payments including the prospective impact around the uncertainty related to GAVRETO’s commercial outlook in the underlying territory during the life of the arrangement.

In February 2023, the Company received written notice from Roche of their election to terminate for convenience the Roche pralsetinib collaboration agreement. The termination will become effective February 2024, at which time the Company will regain commercialization and development rights to GAVRETO from Roche worldwide excluding the CStone Territory. As of September 30, 2023, none of the derecognition conditions under ASC 405 Liabilities were met, and in consideration of the significant uncertainties related to GAVRETO’s commercial outlook in the underlying territory during the life of the arrangement caused by the termination of the Roche pralsetinib collaboration agreement, during the three and nine months ended September 30, 2023, the Company did not accrete any interest expenses related to the liability. As of September 30, 2023, the net carrying value of the liability related to this arrangement was $175.3 million.

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. However, following the termination of the Roche pralsetinib collaboration agreement, if the specified net sales milestone thresholds under the Royalty Purchase Agreement with Royalty Pharma are not otherwise met, the Company may no longer be eligible to receive any of the contingent milestone payments under the Royalty Purchase Agreement. The potential milestone payments will be added to the carrying value of the liability related to this arrangement when and if 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 (as amended, Financing Agreement) with Sixth Street Partners. 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 (elenestinib), 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, elenestinib, 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, elenestinib, on its consolidated statements of operations and comprehensive loss. Net proceeds received from the transaction were recorded as a liability related to sale of future royalties and revenues on the consolidated balance sheet. The Company accretes 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 Partners, the balance of the liability is 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 Partners 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, elenestinib, will materially impact the liability related to this arrangement, interest expense and the time period for repayment. The Company periodically assesses the expected payments to Sixth Street Partners and prospectively adjusts the amortization of the liability related to this arrangement for material changes in such payments. As of September 30, 2023, the Company’s estimate of this total interest expense resulted in an effective annual interest rate of 10.8%. These estimates contain assumptions that impact the amount recorded and the interest expense that will be recognized in future periods.

As of September 30, 2023, the net carrying value of the liability related to this arrangement was $264.9 million. The following table shows the activity within the liability account (in thousands):


Carrying value as of January 1, 2023	$	254,328
Interest expense recognized		21,043
Payments		(10,484)
Carrying value as of September 30, 2023	$	264,887

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 subject to certain terms and conditions. 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 6.50% or the base rate plus 5.50%, subject to a floor of 1% and 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 in July 2022 and incurred an aggregate of $12.2 million of debt discounts and transaction costs. In August 2023, the Company received the first tranche of the senior secured delayed draw term loan facility in the amount of $100.0 million in gross proceeds and incurred $2.0 million of transaction costs. Debt discounts and transaction costs have been recorded as a reduction to the carrying amount of the debt on the Company’s consolidated balance sheet and are amortized as additional interest expenses using the effective interest rate method over the period from issuance through maturity. In addition, the Company may at any time request an incremental term loan in an amount not to exceed $260.0 million on terms to be agreed and subject to the consent of Sixth Street Partners providing such incremental term loan. As of September 30, 2023, the Company’s estimate of the total interest expense resulted in an effective annual interest rate of 13.3%. The carrying amount of the debt as of September 30, 2023 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, 2023	$	139,083
Net proceeds received from the delayed draw term loan		97,968
Interest expense recognized		15,557
Payments		(14,230)
Carrying value as of September 30, 2023	$	238,378

The Company’s obligations under the Financing Agreement are 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. As of

September 30, 2023, the Company was in compliance with the applicable terms and conditions of the covenants under the Financing Arrangement.

Inventory

9 Months Ended

Sep. 30, 2023

Disclosure Text Block

Inventory

7. Inventory

Capitalized inventory consists of the following at September 30, 2023 and December 31, 2022 (in thousands):


	September 30,		December 31,
	2023		2022
Raw materials	$	1,599	$	4,967
Work in process		29,335		28,427
Finished goods		3,475		2,791
Total	$	34,409	$	36,185

Balance sheet classification


	September 30,		December 31,
	2023		2022
Inventory	$	16,457	$	29,697
Other assets		17,952		6,488
Total	$	34,409	$	36,185

Inventory amounts written down as a result of excess, obsolescence, unmarketability or other reasons are charged to cost of sales. The Company recognized a write-down of $0.1 million and $2.2 million for the three and nine months ended September 30, 2023, respectively. The Company did not recognize any write-down for the three and nine months ended September 30, 2022. 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.

Nature of Business (Details) $ in Millions	Sep. 30, 2023 USD ($)
Cash, cash equivalents and marketable securities
Cash, cash equivalents and marketable securities	$ 827.2

Collaboration and License Agreements - Equity Investment (Details) - USD ($) $ in Thousands		1 Months Ended
	Aug. 01, 2022	Jul. 31, 2023	Sep. 30, 2023	Dec. 31, 2022
Equity Investment
Equity investment			$ 27,789	$ 27,789
Collaborative Arrangement \| IDRx, Inc. \| Director
Equity Investment
Equity investment, license agreement, shares received (in shares)	4,509,105	192,282
Equity investment	$ 27,800		$ 27,800
Equity investment, transaction costs	$ 300

Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2023

Table Text Blocks

Schedule of accrued expenses


	September 30,		December 31,
	2023		2022
Research, development and commercial contract costs	$	38,699	$	66,041
Employee compensation		34,517		30,744
Accrued professional fees		14,592		17,588
Revenue-related reserves		16,101		9,046
Other		6,527		7,704
Total	$	110,436	$	131,123

Collaboration and License Agreements - Change in Contract with Customer, Liability (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
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	$ 1.4	$ 16.0	$ 3.8

Product Revenue Reserves and Allowances (Tables)

9 Months Ended

Sep. 30, 2023

Table Text Blocks

Schedules of concentration of risk


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Customer 1	42	%	45	%	42	%	46	%
Customer 2	11	%	10	%	11	%	11	%


	September 30,		December 31,
	2023		2022
Customer 1	31	%	33	%
Customer 2	13	%	15	%
Customer 3	11	%	*
Customer 4	*		12	%

Product revenue, net

Table Text Blocks

Summary of revenue recognized


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
United States	$	49,121	$	25,054	$	118,355	$	70,888
Rest of World		5,107		3,580		14,818		10,041
Total product revenue	$	54,228	$	28,634	$	133,173	$	80,929

Schedule of product revenue allowance and reserve categories


	Nine Months Ended September 30,
	2023		2022
Beginning balance at January 1	$	9,788	$	4,345
Provision related to sales in the current period		25,874		13,606
Adjustment related to prior periods sales		(545)		(645)
Credits and payments made		(17,469)		(9,980)
Ending balance at September 30	$	17,648	$	7,326


	September 30,		December 31,
	2023		2022
Reduction of accounts receivable, net	$	1,547	$	742
Component of accrued expenses		16,101		9,046
Total revenue-related reserves	$	17,648	$	9,788

Stock-based Compensation - Unrecognized Compensation Costs (Details) $ in Millions	Sep. 30, 2023 USD ($)
Stock-based compensation
Total unrecognized compensation cost related to non-vested stock option awards	$ 69.2
Weighted-average period over which unrecognized compensation cost will be recognized	2 years 7 months 9 days
Restricted Stock Units
Stock-based compensation
Total unrecognized compensation cost related to non-vested stock awards	$ 99.0
Weighted-average period over which unrecognized compensation cost will be recognized	2 years 6 months 18 days
Performance-based restricted stock units
Stock-based compensation
Total unrecognized compensation cost related to non-vested stock awards	$ 2.5
Weighted-average period over which unrecognized compensation cost will be recognized	2 years 5 months 1 day

Marketable Securities

9 Months Ended

Sep. 30, 2023

Disclosure Text Block

Marketable Securities

4. Marketable Securities

Marketable securities consisted of the following at September 30, 2023 and December 31, 2022 (in thousands):


	Amortized		Unrealized		Unrealized		Fair
September 30, 2023	Cost		Gain		Losses		Value
Marketable securities, available-for-sale:
U.S. government agency securities	$	201,990		—		(1,127)	$	200,863
U.S. treasury obligations		571,588		7		(1,204)		570,391
Total	$	773,578	$	7	$	(2,331)	$	771,254


	Amortized		Unrealized		Unrealized		Fair
December 31, 2022	Cost		Gain		Losses		Value
Marketable securities, available-for-sale:
U.S. government agency securities	$	377,519		—		(4,848)	$	372,671
U.S. treasury obligations		591,193		22		(5,123)		586,092
Total	$	968,712	$	22	$	(9,971)	$	958,763

The following table summarizes the estimated fair value (in thousands) and number of the Company’s available-for-sale securities that are in loss position as of September 30, 2023 and December 31, 2022 by the length of time the security has been in loss position:


	September 30, 2023				December 31, 2022
	Fair		Number of		Fair		Number of
	value		securities		value		securities
Debt securities in unrealized loss position for 12 months or less	$	624,319		116	$	371,746		66
Debt securities in unrealized loss position for more than 12 months		56,975		10		550,561		56
Total debt securities in unrealized loss position	$	681,294		126	$	922,307		122

The Company has the intent and ability to hold its debt 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, 2023 and 2022.

The following table summarizes the amortized cost basis and estimated fair value of the Company’s available-for-sale securities by contractual maturity as of September 30, 2023 and December 31, 2022 (in thousands):


	September 30, 2023				December 31, 2022
	Amortized		Fair		Amortized		Fair
	Cost		value		Cost		value
Within one year	$	658,760	$	657,012	$	834,440	$	825,283
After one through five years		114,818		114,242		134,272		133,480
Total	$	773,578	$	771,254	$	968,712	$	958,763

The following table summarizes the proceeds from maturities of debt securities during the three and nine months ended September 30, 2023 and 2022 (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Proceeds from maturities of debt securities	$	237,600	$	90,500	$	855,365	$	170,123

The Company did not realize any gains or losses from maturities of debt securities for the three and nine months ended September 30, 2023 and 2022.

Marketable Securities - Impairment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Marketable Securities
Marketable debt securities, charges for credit-related impairments	$ 0	$ 0	$ 0	$ 0

Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Accrued Expenses
External research and development	$ 38,699	$ 66,041
Employee compensation	34,517	30,744
Accrued professional fees	14,592	17,588
Revenue-related reserves	16,101	9,046
Other	6,527	7,704
Total	$ 110,436	$ 131,123

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Preferred Stock Disclosures
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common Stock Disclosures
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	120,000,000	120,000,000
Common stock, shares issued (in shares)	60,740,744	59,958,919
Common Stock, shares outstanding (in shares)	60,740,744	59,958,919

Marketable Securities - Realized Gains (Losses) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Realized gains (losses) from maturities of debt securities
Realized gains (losses) from maturities of debt securities	$ 0	$ 0	$ 0	$ 0

Collaboration and License Agreements - Transaction Price (Details) - Collaborative Arrangement - USD ($) $ in Millions				2 Months Ended	9 Months Ended
	Jul. 13, 2020	Oct. 15, 2019	Jun. 01, 2018	Dec. 31, 2021	Sep. 30, 2023
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
Roche, Collaboration and License (Immunotherapy) Agreement
Collaboration Agreements
Collaborative arrangement, transaction price					$ 64.7
Collaborative arrangement, transaction price, upfront payment					45.0
Collaborative arrangement, transaction price, aggregate research milestone achieved					25.0
Collaborative arrangement, transaction price, reduction, payment for certain clinical development costs					$ 5.3
Clementia
Collaboration Agreements
Collaborative arrangement, transaction price		$ 46.5
C Stone
Collaboration Agreements
Collaborative arrangement, transaction price			$ 40.0

Leases

9 Months Ended

Sep. 30, 2023

Disclosure Text Block

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 only certain exercised renewal options were included in the calculation of the operating lease assets and the operating lease liabilities, as other renewal options were not reasonably certain of being exercised as of September 30, 2023. The lease agreements do not contain residual value guarantees and the components of lease cost for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
Operating leases:	2023		2022		2023		2022
Lease cost	$	5,758	$	5,322	$	17,301	$	16,233
Sublease income		—		(600)		—		(2,132)
Net lease cost	$	5,758	$	4,722	$	17,301	$	14,101

The Company’s sublease agreements for the 38 Sidney Street property expired in 2022. The Company has not entered into any material short-term leases or financing leases as of September 30, 2023.

Supplemental cash flow information related to leases for the nine months ended September 30, 2023 and 2022 is as follows (in thousands):


	Nine Months Ended
	September 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:	$	13,249	$	11,668
Lease liabilities arising from obtaining right-of-use assets:
Operating leases	$	109	$	—

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					6.1
Weighted average discount rate					7.4%

Collaboration and License Agreements - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Contract Assets
Accounts receivable, net	$ 40,861	$ 23,525
Unbilled accounts receivable	393	13,413
Contract Liabilities
Contract liabilities, current	3,010	4,667
Contract liabilities, noncurrent	5,000	13,624
Accrued expenses, current	38,699	66,041
Collaborative Arrangement \| Roche, Collaboration (Pralsetnib) Agreement
Contract Assets
Unbilled accounts receivable	304
Contract Liabilities
Accrued expenses	6,221	6,519
Collaborative Arrangement \| Roche, Collaboration and License (Immunotherapy) Agreement
Contract Liabilities
Contract liabilities	0	16,000
Contract liabilities, current		2,400
Accrued expenses	0	11,200
Accrued expenses, current		4,000
Collaborative Arrangement \| Clementia
Contract Liabilities
Contract liabilities	0	0
Collaborative Arrangement \| C Stone
Contract Assets
Accounts receivable, net	5,338	4,991
Unbilled accounts receivable	83	1,529
Contract Liabilities
Contract liabilities	$ 3,010	$ 2,265

Stock-based Compensation - Stock Options - Activity (Details)	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Shares
Outstanding at beginning of period (in shares) \| shares	6,233,451
Granted (in shares) \| shares	1,182,245
Exercised (in shares) \| shares	(154,433)
Cancelled (in shares) \| shares	(277,649)
Outstanding at end of period (in shares) \| shares	6,983,614
Weighted-Average Exercise Price
Outstanding at beginning of period (in dollars per share) \| $ / shares	$ 69.14
Granted (in dollars per share) \| $ / shares	45.31
Exercised (in dollars per share) \| $ / shares	22.02
Cancelled (in dollars per share) \| $ / shares	70.90
Outstanding at end of period (in dollars per share) \| $ / shares	$ 66.08
Additional disclosures
Shares - Exercisable (in shares) \| shares	4,756,302
Weighted-Average Exercise Price - Exercisable (in dollars per share) \| $ / shares	$ 68.88

Collaboration and License Agreements

9 Months Ended

Sep. 30, 2023

Disclosure Text Block

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 (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., who were each members of the Company’s board of directors at the time. 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 with the right to receive additional shares of IDRx’s Series A preferred stock through an anti-dilution provision subject to a defined financing cap. In July 2023, the Company received 192,282 additional shares under the anti-dilution provision.

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 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 during the year ended December 31, 2022. 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 reevaluates 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 adjusts 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, do 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, 2023, 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, 2023, no adjustments have been recognized related to the preferred stock investment as a result of the application of the measurement alternative.

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), to 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 program is referred to as a target program). On a target program-by-target program basis, the Company has an exclusive option to obtain a worldwide, exclusive license to develop and commercialize any licensed compound and licensed product under each target program. Proteovant has 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 records it as research and development expense over the expected research period. The Company reevaluates the expected research period at the end of each reporting period and prospectively adjusts the amortization of the asset for changes in the expected research period. Each research and development milestone payment is accrued and expensed when probable. During the three and nine months ended September 30, 2023, the Company recorded research and development expense of $0.6 million and $6.2 million, respectively, under the Proteovant collaboration agreement. 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.

Zai Lab

In November 2021, the Company entered into a collaboration (the Zai Lab agreement) with Zai Lab (Shanghai) Co., Ltd., (Zai Lab) to develop and commercialize certain licensed products 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). The collaboration aims to accelerate and expand global development of the licensed products, which currently include BLU-945 and BLU-525 (which served as a back-up candidate for BLU-701). 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 is 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 are 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, 2023, the Company did not record such reductions of expenses under the Zai Lab agreement. During the three and nine months ended September 30, 2022, the Company recorded $0.2 million and $0.5 million, respectively, in reductions 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. The revenue recognized under the Zai Lab agreement during the three and nine months ended September 30, 2023 was negligible. 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.

For the purposes of ASC 606, the transaction price of the Zai Lab agreement at 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 in 2021.

The Company reevaluates 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 adjusts 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.

Under the Roche pralsetinib collaboration agreement, the Company received an upfront cash payment of $675.0 million, and through September 30, 2023, the Company received an aggregate of $105.0 million in specified regulatory and commercialization milestones. In February 2023, the Company received written notice from Roche of their election to terminate for convenience the Roche pralsetinib collaboration agreement. The termination will become effective in February 2024, at which time the Company will regain commercialization and development rights to GAVRETO from Roche worldwide excluding the CStone Territory. Until the termination of the collaboration agreement is effective, the parties continue to perform their respective obligations under the collaboration agreement, including with respect to the development and commercialization of GAVRETO. The Company will not be entitled to receive payment for milestones, if any, achieved during the period between the receipt of the notice of termination and the effective date of termination. The termination of the collaboration agreement does not have an impact on the Company’s current accounting treatment related to the Roche pralsetinib collaboration.

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 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 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.

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 is 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 the revenue is 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, 2023, the Company has achieved an aggregate of $105.0 million in specified regulatory and commercialization milestones which were added to the estimated transaction price of the Roche pralsetinib agreement.

The following table summarizes revenue recognized under the Roche pralsetinib collaboration during the three and nine months ended September 30, 2023 and 2022 (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Manufacturing and research and development services related to ex-US territory-specific activities	$	213	$	3,971	$	570	$	4,663
Royalty revenue		300		311		1,102		910
Total Roche pralsetinib collaboration revenue	$	513	$	4,282	$	1,672	$	5,573

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.

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 (which indication was subsequently voluntarily withdrawn by Roche in June 2023, followed by the official FDA withdrawal on July 20, 2023), 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). In August 2023, the FDA converted the accelerated approval of GAVRETO to full regular approval for the treatment of adult patients with metastatic RET fusion-positive NSCLC.

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 loss sharing from product sales of GAVRETO to customers in the U.S. during the three and nine months ended September 30, 2023 and 2022 (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
The Company's share of loss in the U.S. for pralsetinib	$	1,771	$	1,665	$	4,301	$	7,076

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 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, 2023 and 2022 (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Reductions to selling, general and administrative expenses	$	3,063	$	3,560	$	8,618	$	12,808
Increases in research and development expenses	$	7,603	$	6,111	$	21,226	$	9,815

The following table summarizes the contract assets and liability associated with the Roche pralsetinib collaboration as of September 30, 2023 and December 31, 2022 (in thousands):


	September 30,		December 31,
	2023		2022
Unbilled accounts receivable	$	304	$	—
Accrued expenses	$	6,221	$	6,519

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 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.

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, 2023, 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, 2023, 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 Clementia purchased specified manufacturing inventory from the Company for a total of $1.5 million.

Unless earlier terminated in accordance with the terms of the Clementia agreement, the agreement will expire on a country-by-country, licensed product-by-licensed product basis on the date when no royalty payments are or will become due. Clementia may terminate the agreement at any time upon at least 12 months’ prior written notice to the Company. 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 at 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, and was recognized as revenue during 2019 and 2020.

During the three and nine months ended September 30, 2023, and 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 reevaluates 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 adjusts 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.

There was no revenue deferred as a contract liability associated with the Clementia agreement as of September 30, 2023 and December 31, 2022.

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, 2023, the Company has achieved an aggregate of $38.5 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, 2023, the Company will be eligible to receive up to $307.5 million in contingent payments, including specified development, regulatory and sales-based milestones for licensed products. In addition, CStone is 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 is 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 are 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, net payments received by the Company for global development activities under the CStone agreement, including manufacturing, are accounted for as a reduction of related expenses.

The Company did not have significant manufacturing and research and development services related to the global development activities during the three and nine months ended September 30, 2023. During the three and nine months ended September 30, 2022, the Company recognized a reduction of $0.5 million and $1.6 million, respectively, in expenses related to manufacturing and research and development activities, net of expenses payable to CStone.

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 at 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, 2023 and 2022. During the nine months ended September 30, 2023 and 2022, cash considerations associated with the achieved regulatory milestones of $9.0 million and $4.0 million, respectively, were added to the estimated transaction price for the CStone agreement and recognized as revenue. The Company reevaluates 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 adjusts 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.

Subsequent to the CStone agreement, the Company entered into various commercial supply and manufacturing technology transfer agreements for avapritinib and pralsetinib related to supply of drug substance and commercialization activities conducted specifically for the CStone Territory. 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, 2023 and 2022 is as follows (in thousands):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
License milestone revenue	$	—	$	—	$	9,000	$	4,000
Manufacturing services and royalty revenue related to CStone Territory-specific activities		1,820		2,915		7,861		14,209
Total CStone collaboration revenue	$	1,820	$	2,915	$	16,861	$	18,209

The following table presents the contract assets and contract liability associated with the CStone collaboration as of September 30, 2023 and December 31, 2022 (in thousands):


	September 30,		December 31,
	2023		2022
Accounts receivable, net	$	5,338	$	4,991
Unbilled accounts receivable		83		1,529
Contract liability		3,010		2,265

The contract liability associated with the CStone collaboration as of September 30, 2023 and December 31, 2022 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, 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. Four of the five development programs were ended in prior reporting periods and on April 30, 2023, the Company and Roche entered into a mutual termination agreement to terminate the Roche immunotherapy agreement, and licenses granted by the Company to Roche related to MAP4K1 (BLU-852) terminated in their entirety. Certain licenses granted by Roche to the Company survived and became exclusive, worldwide, perpetual, royalty-free and irrevocable. The Company retained ownership of the collaboration compounds directed to MAP4K1 and all of the other previously terminated kinase targets developed under the collaboration.

The Roche immunotherapy agreement represented a vendor-customer relationship under ASC 606 as the Company performed its 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.

The aggregate net transaction price of the Roche immunotherapy agreement was $64.7 million, which comprised of an upfront payment of $45.0 million, an aggregate of $25.0 million in research milestones achieved under the collaboration, and a reduction of $5.3 million as a result of the Company’s payment to Roche for certain clinical development costs. This payment resulted from a cost sharing under the clinical development plan for IND-enabling activities for BLU-852, which the Company and Roche endorsed in 2022.

The Company recognized revenue associated with the performance obligation as the research and development services were 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 for each respective period. The amounts received that had not yet been recognized as revenue were deferred as a contract liability on the Company’s consolidated balance sheet and recognized over the remaining research and development period until the performance obligation was satisfied. The performance obligation was completely satisfied as of June 30, 2023.

During the three months ended September 30, 2023, the Company did not record any revenue under the Roche immunotherapy agreement. During the nine months ended September 30, 2023, the Company recognized research and development services revenue of $25.7 million under the Roche immunotherapy agreement, of which $16.0 million resulted from changes in contract liability balances as of December 31, 2022 and $9.7 million resulted from the catch-up revenue recognized as a result of the collaboration termination effective in April 2023. The collaboration agreement termination caused the reduction in the estimated lifetime cost to satisfy the Company’s performance obligation under the Roche immunotherapy collaboration and the estimated cost to be shared with Roche for the IND-enabling activities for BLU-852, and consequently, increased the transaction price and the percentage of completion of revenue to be recognized under the collaboration agreement.

During the three and nine months ended September 30, 2022, the Company recognized $2.5 million and $1.7 million in revenue under the Roche immunotherapy agreement, respectively, of which, $1.4 million and $3.8 million was recognized due to the changes in the contract liability balances at the beginning of the respective periods, respectively.

As of September 30, 2023, the Company did not have any liabilities related to the Roche immunotherapy collaboration. As of December 31, 2022, the Company had revenue deferred as a contract liability related to the Roche immunotherapy agreement of $16.0 million, of which $2.4 million was included in current liabilities, and accrued expenses of $11.2 million, of which $4.0 million was included in current liabilities.