What changed in this filing

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Item 1. Financial Statements

2021-05-10 compared with 2020-11-12 · 132 added, 247 removed, 476 unchanged (44% of the section changed)

4 unchanged sentences

( Unaudited )

September 30,

Current assets

1 unchanged sentence

Short-term marketable securities

Accounts receivable

Prepaid expenses and other current assets

20 unchanged sentences

Preferred stock, $0.0001 par value, 10,000,000 shares authorized as of

September 30, 2020 and December 31, 2019;

March 31,2021 and December 31, 2020;

no shares issued and

outstanding as of September 30, 2020 and December 31, 2019

outstanding as of March 31, 2021 and December 31, 2020

Common stock, $0.0001 par value, 300,000,000 shares authorized as of

September 30, 2020 and December 31, 2019;

March 31, 2021 and December 31, 2020;

32,270,538 and 29,537,216

shares issued and outstanding as of September 30, 2020 and

shares issued and outstanding as of March 31, 2021 and

December 31, 2020

10 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

Collaboration revenue

Total revenue

Operating expenses

3 unchanged sentences

Loss from operations

Interest income and other income (expense),

Change in unrealized (losses) gains on

marketable securities

Interest income and other income (expense), net

Change in unrealized losses on marketable securities

Comprehensive loss

Net loss per common share, basic and diluted

Weighted average number of common shares

outstanding used in computing net loss per

share, basic and diluted

Weighted average number of common shares outstanding used in

computing net loss per share, basic and diluted

The accompanying notes are an integral part of these condensed financial statements.

6 unchanged sentences

Income (Loss)

Balances as of June 30, 2020

Issuance of common stock upon follow-on public offering, net of issuance costs

Issuance of common stock in private placement, net of issuance costs

Issuance of common stock upon exercise of stock options

Repurchase of early exercised shares

Vesting of early exercised common stock options

Stock-based compensation

Other comprehensive loss

Balances as of September 30, 2020

Balances as of June 30, 2019

Issuance of common stock upon exercise of stock options

Repurchase of early exercised shares

Vesting of early exercised common stock options and restricted stock

Stock-based compensation

Other comprehensive income

Balances as of September 30, 2019

The accompanying notes are an integral part of these condensed financial statements.

IDEAYA Biosciences, Inc.

Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

( in thousands, except share amounts )

( Unaudited )

Redeemable Convertible

Stockholders'

Preferred Stock

Comprehensive

Income (Loss)

Balances as of December 31, 2020

Issuance of common stock upon follow-on public offering, net of

issuance costs

Issuance of common stock in private placement, net of issuance costs

Issuance of common stock related to at-the-market offering program

Issuance of common stock upon exercise of stock options

Employee stock purchase plan (ESPP) purchase

Repurchase of early exercised shares

Vesting of early exercised common stock options

Vesting of early exercised common stock options and restricted stock

Stock-based compensation

Other comprehensive loss

Balances as of September 30, 2020

Balances as of March 31, 2021

Balances as of December 31, 2019

Conversion of redeemable convertible preferred stock into common

Issuance of common stock upon initial public offering, net of

issuance costs

Issuance of common stock upon exercise of stock options

Early exercised common stock options

Repurchase of early exercised shares

2 unchanged sentences

Other comprehensive income

Balances as of September 30, 2019

Balances as of March 31, 2020

The accompanying notes are an integral part of these condensed financial statements.

3 unchanged sentences

( Unaudited )

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities

Adjustments to reconcile net loss to net cash provided by (used in) operating activities

Adjustments to reconcile net loss to net cash used in operating activities

Depreciation and amortization

Net amortization of premiums and discounts on marketable securities

Net amortization (accretion) of premiums (discounts) on marketable securities

Stock-based compensation

2 unchanged sentences

Changes in assets and liabilities

Accounts receivable

Prepaid expenses and other assets

4 unchanged sentences

Lease liabilities

Net cash provided by (used in) operating activities

Net cash used in operating activities

Cash flows from investing activities

2 unchanged sentences

Maturities of marketable securities

Sales of marketable securities

Net cash used in investing activities

Net cash provided by investing activities

Cash flows from financing activities

Proceeds from issuance of common stock upon public offering, net of issuance costs

Proceeds from issuance of common stock in private placement, net of issuance costs

Proceeds from issuance of common stock related to at-the-market offering program,

net of issuance costs

Proceeds from exercise of common stock options, net of repurchases

Proceeds from ESPP purchase

Net cash provided by financing activities

11 unchanged sentences

Supplemental non-cash investing and financing activities:

Unpaid offering costs

Vesting of early exercised options and restricted stock

Purchases of property and equipment in accounts payable and accrued liabilities

Unpaid offering costs

Conversion of redeemable convertible preferred stock into common stock

The accompanying notes are an integral part of these condensed financial statements.

3 unchanged sentences

IDEAYA Biosciences, Inc.

(the “Company”) is an oncology-focused precision medicine company committed to the discovery and development of targeted therapeutics for patient populations selected using molecular diagnostics.

(the “Company”) is a synthetic lethality precision medicine oncology company committed to the discovery and development of targeted therapeutics for patient populations selected using molecular diagnostics.

The Company is headquartered in South San Francisco, California and was incorporated in the State of Delaware in June 2015.

To date, the Company has been primarily engaged in business planning, research, development, recruiting and raising capital.

Follow-On Offering

On June 22, 2020, the Company completed an underwritten public offering and sold and issued 6,666,667 shares of common stock at a price to the public of $15.00 per share for gross proceeds of $100.0 million.

On July 22, 2020, the Company sold and issued an additional 500,000 shares of common stock upon the exercise of the overallotment option by the underwriters for gross proceeds of $7.5 million.

The aggregate net proceeds to the Company were $100.7 million after deducting underwriting discounts and commissions and other offering costs.

Private Placement

The Company entered into a stock purchase agreement with Glaxo Group Limited, or GGL on June 17, 2020, pursuant to which, on August 3, 2020, the Company sold 1,333,333 shares at a price of $15.00 per shares to GGL for net proceeds of $20.0 million in a private placement.

The Company has incurred significant losses and negative cash flows from operations in all periods since inception and had an accumulated deficit of $121.9 million as of September 30, 2020.

At-the-Market Offering

On August 12, 2020, the Company filed a prospectus supplement to the prospectus dated June 10, 2020, activating its at-the-market facility by entering into an open market sale agreement (the “August 2020 Sales Agreement) with Jefferies LLC (“Jefferies”), pursuant to which the Company could offer and sell shares of its common stock with an aggregate offering price of up to $50.0 million under an “at the market” offering program.

As of January 15, 2021, the Company exhausted all sales under the August 2020 Sales Agreement.

On January 20, 2021, the Company entered into a new open market sale agreement (the “January 2021 Sales Agreement”) with Jefferies, pursuant to which the Company may offer and sell shares of its common stock with an aggregate offering price of up to $90.0 million under an “at the market” offering program.

For the three months ended March 31, 2021, the Company sold an aggregate of 2,712,654 shares for net proceeds of $41.9 million after deducting sales commission and other expenses under the August 2020 Sales Agreement and January 2021 Sales Agreement.

From April 1, 2021 through May 9, 2021, the Company additionally sold an aggregate of 633,304 shares for gross proceeds of $14.6 million under the January 2021 Sales Agreement.

The Company has incurred significant losses and negative cash flows from operations in all periods since inception and had an accumulated deficit of $136.0 million as of March 31, 2021.

The Company has historically financed its operations primarily through the sale of convertible notes, redeemable convertible preferred stock and common stock, and payments received from its collaboration arrangement.

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Failure to generate sufficient cash flows from operations, raise additional capital or reduce certain discretionary spending would have a material adverse effect on the Company’s ability to achieve its intended business objectives.

As of September 30, 2020, the Company had cash, cash equivalents and marketable securities of $288.8 million.

As of March 31, 2021, the Company had cash, cash equivalents and marketable securities of $310.4 million.

Management believes that the Company’s current cash, cash equivalents and marketable securities will be sufficient to fund its planned operations for at least 12 months from the date of the issuance of these financial statements.

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Certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted, and accordingly the balance sheet as of December 31, 2020 has been derived from the audited financial statements at that date but does not include all of the information required by GAAP for complete financial statements.

The accompanying balance sheet as of September 30, 2020, the statements of operations and comprehensive loss for the three and nine months ended September 30, 2020 and September 30, 2019, the statements of stockholders’ equity for the three months ended September 30, 2020 and September 30, 2019, the statements of redeemable convertible preferred stock and stockholders’ equity (deficit) for the nine months ended September 30, 2020 and September 30, 2019 and the

statements of cash flows for the nine months ended September 30 , 2020 and September 30 , 2019 are unaudited.

In the opinion of management, the unaudited data reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of September 30 , 2020 , the results of its operations and comprehensive loss for the three a nd nine months ended September 30, 2020 and September 30, 2019 and its cash flows for the nine months ended September 30 , 2020 and September 30 , 2019 .

The financial data and other information disclosed in these notes related to the three and nine months ended September 30 , 2020 and September 30 , 2019 are also unaudited.

The results for the three and nine months ended September 30 , 2020 are not necessarily indicative of results to be expected for the year ending December 31, 20 20 , any other interim period s or any future year or period .

The accompanying balance sheet as of March 31, 2021, the statements of operations and comprehensive loss for the three months ended March 31, 2021 and March 31, 2020, the statements of stockholders’ equity for the three months ended March 31, 2021 and March 31, 2020, and the statements of cash flows for the three months ended March 31, 2021 and

March 31, 2020 are unaudited.

In the opinion of management, the unaudited data reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of March 31, 2021 , the results of its operations and comprehensive loss for the three months ended March 31, 2021 and March 31, 2020 and its cash flows for the three months ended March 31, 2021 and March 31, 2020 .

The financial data and other information disclosed in these notes related to the three months ended March 31, 2021 and March 31, 2020 are also unaudited.

The results for the three months ended March 31, 2021 are not necessarily indicative of results to be expected for the year ending December 31, 2021 , any other interim periods or any future year or period .

The accompanying interim unaudited condensed financial statements should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2020, which are included in the Company’s Annual Report on Form 10-K, filed with the SEC on March 23, 2021 (the “Form 10-K”).

Reverse Stock Split

In May 2019, the Company’s board of directors approved a 1-for-10.2564 reverse stock split of the Company’s common stock and redeemable convertible preferred stock, which was effected on May 21, 2019.

The par value and authorized shares of the common stock and redeemable convertible preferred stock were not adjusted as a result of the reverse stock split.

All issued and outstanding common stock, options to purchase common stock and per share amounts contained in these financial statements have been retroactively adjusted to give effect to the reverse stock split for all periods presented.

Use of Estimates

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of expenses during the reporting period.

Such estimates include useful lives of property and equipment, determination of the discount rate for operating leases, accruals for research and development activities, revenue recognition, stock-based compensation, and income taxes.

Actual results could differ from those estimates.

On an ongoing basis, management reviews these estimates and assumptions.

Changes in facts and circumstances may alter such estimates and actual results could differ from those estimates.

Risks and Uncertainties

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Beginning in late 2019, the outbreak of a novel strain of virus named SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2), or coronavirus, which causes coronavirus disease 2019, or COVID-19, has evolved into a global pandemic.

The extent of the impact of t he coronavirus outbreak on the Company’s business will depend on certain developments, including the duration and spread of the outbreak and the extent and severity of the impact on the Company’s clinical trial activities , research activities and suppliers , all of which are uncertain and cannot be predicted.

The extent of the impact of the coronavirus outbreak on the Company’s business will depend on certain developments, including the duration and spread of the outbreak and the extent and severity of the impact on the Company’s clinical trial activities, research activities and suppliers, all of which are uncertain and cannot be predicted.

At this point, the extent to which the coronavirus outbreak may materially impact the Company’s financial condition, liquidity or results of operations is uncertain.

5 unchanged sentences

Concentration of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents and marketable securities.

Substantially all the Company’s cash is held by one financial institution that management believes is of high credit quality.

Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, marketable securities and accounts receivable.

Substantially all the Company’s cash is held by two financial institutions that management believes is of high credit quality.

Such deposits may, at times, exceed federally insured limits.

2 unchanged sentences

government securities, commercial paper, and corporate bonds.

The Company limits its credit risk associated with cash equivalents and marketable securities by placing them with banks and institutions it believes are highly creditworthy and in highly rated investments and, by policy, limits the amount of credit exposure with any one commercial issuer.

The Company limits its credit risk associated with cash equivalents and marketable securities by placing them with banks and institutions it believes are creditworthy and in highly rated investments and, by policy, limits the amount of credit exposure with any one commercial issuer.

The Company has not experienced any credit losses on its deposits of cash, cash equivalents or marketable securities.

Accounts receivable represents amounts due from GlaxoSmithKline.

The Company monitors economic conditions to identify facts or circumstances that may indicate that any of its accounts receivable are at risk of collection.

Summary of Significant Accounting Policies

16 unchanged sentences

If a license to the Company’s intellectual property is determined to be distinct from the other promised goods or services identified in an arrangement, the Company recognizes revenue from non-refundable, upfront fees allocated to the license at the point in time when the license is transferred to the customer and the customer is able to use and benefit from the license.

For licenses that are bundled with other goods or services , the Company applie s judgment to assess the nature of the combined performance obl igation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress toward satisfying the performance obligation for purposes of recognizing revenue f rom non-refundable, upfront fees.

For licenses that are bundled with other goods or services , the Company applie s judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress toward satisfying the performance obligation for purposes of recognizing revenue from non-refundable, upfront fees.

The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of progress and related revenue recognition.

20 unchanged sentences

Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment.

For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Upfront payments and fees are recorded as contract liabilities upon receipt or when due and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements.

Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional.

Amounts payable to the Company and not yet billed to the collaboration partner are recorded as contract assets.

The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less.

3 unchanged sentences

Contracts may be amended to account for changes in contract specifications and requirements.

Contract modifications exist when the amendment either creates ne w, or changes existing, enforceable rights and obligations.

When contract modifications create new performance obligations and the increase in consideration approximates the standalone selling price for goods and services related to such new performance ob ligations as adjusted for specific facts and circumstances of the contract, the modification is accounted for as a separate contract.

If a contract modification is not accounted for as a separate contract, the Company accounts for the promised goods or ser vices not yet transferred at the date of the contract modification (the remaining promised goods or services) prospectively, as if it were a termination of the existing contract and the creation of a new contract, if the remaining goods or services are dis tinct from the goods or services transferred on or before the date of the contract modification.

The Company accounts for a contract modification as if it were a part of the existing contract if the remaining goods or services are not distinct and, therefo re, form part of a single performance obligation that is partially satisfied at the date of the contract modification.

In such case the effect that the contract modification has on the transaction price, and on the entity’s measure of progress toward compl ete satisfaction of the performance obligation, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) at the date of the contract modification (the adjustment to revenue is made on a cumulative catch-up basis).

Contract modifications exist when the amendment either creates new, or changes existing, enforceable rights and obligations.

When contract modifications create new performance obligations and the increase in consideration approximates the standalone selling price for goods and services related to such new performance obligations as adjusted for specific facts and circumstances of the contract, the modification is accounted for as a separate contract.

If a contract modification is not accounted for as a separate contract, the Company accounts for the promised goods or services not yet transferred at the date of the contract modification (the remaining promised goods or services) prospectively, as if it were a termination of the existing contract and the creation of a new contract, if the remaining goods or services are distinct from the goods or services transferred on or before the date of the contract modification.

The Company accounts for a contract modification as if it were a part of the existing contract if the remaining goods or services are not distinct and, therefore, form part of a single performance obligation that is partially satisfied at the date of the contract modification.

In such case the effect that the contract modification has on the transaction price, and on the entity’s measure of progress toward complete satisfaction of the performance obligation, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) at the date of the contract modification (the adjustment to revenue is made on a cumulative catch-up basis).

Upfront payment contract liabilities resulting from the Company’s license and collaboration agreements do not represent a financing component as the payment is not financing the transfer of goods and services, and the technology underlying the licenses granted reflects research and development expenses already incurred by the Company.

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Recently Adopted Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement , which modifies the disclosure requirements on fair value measurements.

ASU 2018-13 removes the requirement to disclose:

the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy;

the policy for timing of transfers between levels;

and the valuation processes for Level 3 fair value measurements.

For public business entities, this ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years.

Early adoption is permitted.

The Company adopted this ASU on January 1, 2020.

The adoption did not result in a material impact on the Company’s financial statements and related disclosures.

In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.

ASU 2018-15 requires that certain implementation costs incurred in a cloud comput ing arrangement be deferred and recognized over the term of the arrangement.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.

ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying existing guidance.

For public business entities, this ASU is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years.

Early adoption is permitted.

The Company adopted this ASU on January 1, 2020 , using the prospective transition method .

The adoption did not result in a material impact on the Company’s financial statements and related disclosures.

In November 2018, the FASB issued ASU 2018-18, Collaborative arrangements (Topic 808)—Clarifying the interaction between Topic 808 and Topic 606 .

ASU 2018-18 (i) clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer in the context of a unit of account, (ii) adds unit-of-account guidance in Topic 808 to align with the guidance in Topic 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of Topic 606, and (iii) requires that in a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, presenting the transaction together with revenue recognized under Topic 606 is precluded if the collaborative arrangement participant is not a customer.

For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years.

Early adoption is permitted.

The Company adopted this ASU on January 1, 2021.

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ASU 2019-10 extended the effectiveness of Topic 326 for smaller reporting companies until fiscal years beginning after December 15, 2022.

ASU 2019-10 requires entities to make a one-time determination of whether an entity is eligible to be a smaller reporting company as of November 15, 2019 for the purpose of determining the effective date of ASU 2016-13.

The Company determined that it was eligible to be a smaller reporting company as of November 15, 2019.

Early adoption is permitted.

The Company is currently evaluating the impact the adoption of these ASUs will have on its financial statements and related disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.

For public business entities, this ASU is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years.

Early adoption is permitted.

The Company is currently evaluating the impact the adoption of this ASU will have on its financial statements and related disclosures.

Fair Value Measurement and Marketable Securities

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In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

As of September 30, 2020, financial assets measured and recognized at fair value are as follows (in thousands):

September 30, 2020

As of March 31, 2021, financial assets measured and recognized at fair value are as follows (in thousands):

March 31, 2021

government securities

14 unchanged sentences

Included in cash and cash equivalents on the balance sheet

As of September 30 , 2020, all marketable securities had a remaining maturity of one year or less , except for corporate bonds with a fair value of $1 0.2 million that had maturities of one to two years .

As of December 31, 2019, all marketable securities had a remaining maturity of one year or less, except for corporate bonds with a fair value o f $1.5 million that had maturities of one to two years.

There were no financial liabilities measured and recognized at fair value as of September 30 , 20 20 and December 31, 201 9 .

As of March 31, 2021, all marketable securities had a remaining maturity of one year or less, except for corporate bonds with a fair value of $8.1 million that had maturities of one to two years.

As of December 31, 2020, all marketable securities had a remaining maturity of one year or less.

There were no financial liabilities measured and recognized at fair value as of March 31, 2021 and December 31, 2020.

Balance Sheet Components

1 unchanged sentence

Property and equipment, net consisted of the following (in thousands):

September 30,

Laboratory equipment

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Property and equipment, net

Depreciation and amortization expense was $0.3 million and $0.3 million for the three months ended September 30, 2020 and September 30, 2019, respectively, and $1.0 million and $0.9 million for the nine months ended September 30, 2020 and September 30, 2019, respectively.

Depreciation and amortization expense was $0.4 million and $0.3 million for the three months ended March 31, 2021 and March 31, 2020, respectively

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

September 30,

Accrued research and development expenses

2 unchanged sentences

Accrued liabilities

Operating Leases

The Company leases its laboratory and office facilities in South San Francisco, California under a non-cancelable operating lease with expiration date in July 2024 (“Original Lease”).

On September 30, 2019, the Company and the landlord of the laboratory and office facilities in South San Francisco entered into a second amendment (“Second Amendment”) to lease additional office spaces at the same location.

The Company accounts for the Second Amendment as a separate contract and recognized a related right-of-use (“ROU”) asset and lease liability of $1.2 million on the lease commencement date in August 2020.

The maturities of operating lease liabilities as of September 30, 2020 are as follows (in thousands):

As of September 30, 2020

Operating Leases

Remaining fiscal 2020

Total lease payments

Present value of lease liabilities

Amounts recognized on the balance sheet

Current lease liabilities

Long-term lease liabilities

Total lease liabilities

Operating lease cost was $0.4 million and $0.4 million for the three months ended September 30, 2020 and September 30, 2019, respectively, and $1.1 million and $1.2 million for the nine months ended September 30, 2020 and September 30, 2019, respectively.

As of September 30, 2020, the ROU assets of $5.5 million are included in non-current assets on the balance sheet, and lease liabilities of $7.1 million are included in current liabilities and non-current liabilities on the balance sheet.

As of September 30, 2020, the remaining term for the operating lease in South San Francisco, California is 3.8 years, and the discount rate used to measure the lease liability for such operating lease upon recognition is 7.0% for the Original Lease and 6.0% for the Second Amendment.

During the nine months ended September 30, 2020, cash paid for amounts included in operating lease liabilities of $1.2 million is included in cash flows from operating activities on the statement of cash flows.

Commitments and Contingencies

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The Company accrues for these matters when it is probable that future expenditures will be made and these expenditures can be reasonably estimated.

As of September 30, 2020, the Company does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or cash flows.

As of March 31, 2021, the Company does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Indemnification

5 unchanged sentences

As a result, the Company believes the fair value of these agreements is not material.

The Company did not record a federal or state income tax provision or benefit for the nine months ended September 30, 2020 and September 30, 2019 as it has incurred net losses since inception.

The Company did not record a federal or state income tax provision or benefit for the three months ended March 31, 2021 and March 31, 2020 as it has incurred net losses since inception.

In addition, the net deferred tax assets generated from net operating losses are fully offset by a valuation allowance as the Company believes it is not more likely than not that the benefit will be realized.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was enacted and signed into law and GAAP requires recognition of the tax effects of new legislation during the reporting period that includes the enactment date.

The CARES Act includes changes to the tax provisions that benefits business entities, and makes certain technical corrections to the 2017 Tax Cuts and Jobs Act.

The tax relief measures for businesses in the CARES Act include a five-year net operating loss carryback for certain net operating losses , suspension of the annual deduction limitation of 80% of taxable income for certain net operating losses , changes in the deductibility of interest, acceleration of alternative minimum tax credit refunds, payroll tax relief, and a technical correction to allow accelerated deductions for qualified improvement property.

The CARES Act also provides other non-tax benefits to assist those impacted by the pandemic.

The Company evaluated the impact of the CARES Act and determined that there is no material impact to the income tax provision for the quarter ended September 30, 2020 .

On June 29, 2020, California Assembly Bill 85 (AB 85) was signed into law, which suspends the use of net operating losses and limits the use of research tax credits for 2020, 2021 and 2022, respectively.

The Company evaluated the impact of AB 85 and determined that the new legislation did not materially impact the Company’s income tax provision for the quarter ended September 30, 2020.

As of September 30, 2020 and December 31, 2019, the Company’s certificate of incorporation authorized the Company to issue 300,000,000 shares of common stock at a par value of $0.0001 per share.

As of March 31, 2021 and December 31, 2020, the Company’s certificate of incorporation authorized the Company to issue 300,000,000 shares of common stock at a par value of $0.0001 per share.

Each share of common stock is entitled to one vote.

The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors.

As of September 30, 2020 and December 31, 2019, no dividends have been declared to date.

The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Company’s board of directors.

As of March 31, 2021 and December 31, 2020, no dividends have been declared to date.

The Company had reserved common stock for future issuance as follows:

September 30,

Exercise of outstanding options under the 2015 and 2019 Plans

22 unchanged sentences

The ESPP is intended to constitute an “employee stock purchase plan” under Section 423(b) of the Internal Revenue Code of 1986, as amended.

A total of 195,000 shares of common stock were initially reserved for issuance under the ESPP, subject to an annual increase on January 1 of each year, beginning on January 1, 2020.

For the nine months ended September 30, 2020, the Company recorded less than $0.1 million of compensation expense related to participation in the ESPP.

As of March 31, 2021, a total of 652,972 shares of common stock were reserved for issuance under the ESPP, subject to an annual increase on January 1 of each year.

For the three months ended March 31, 2021, the Company recorded $0.1 million of compensation expense related to participation in the ESPP.

Stock-Based Compensation Expense

Total stock-based compensation expense recorded related to awards granted to employees and non-employees was as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Research and development

4 unchanged sentences

Outstanding Options

Aggregate Intrinsic Value (Millions)

Balance, January 1, 2020

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Options exercised

Options repurchased

Options canceled

Balance, September 30, 2020

Exercisable as of September 30, 2020

Balance, March 31, 2021

Exercisable as of March 31, 2021

Vested and expected to vest as of

September 30, 2020

The weighted-average grant-date fair value of options granted during the nine months ended September 30 , 2020 and September 30 , 2019 was $ 6.00 and $ 7.20 per share, respectively.

The aggregate intrinsic value of options exercised for the nine months ended September 30 , 2020 and September 30 , 2019 was $ 1.4 millio n and $ 0.7 million, respectively.

March 31, 2021

The weighted-average grant-date fair value of options granted during the three months ended March 31, 2021 and March 31, 2020 was $15.59 and $5.03 per share, respectively.

The aggregate intrinsic value of options exercised for the three months ended March 31, 2021 and March 31, 2020 was $0.3 million and less than $0.1 million, respectively.

Intrinsic values are calculated as the difference between the exercise price of the underlying options and the fair value of the common stock on the date of exercise.

As of September 30, 2020 and December 31, 2019, total unrecognized stock-based compensation expense for stock options was $9.0 million and $5.9 million, respectively, which is expected to be recognized over a weighted-average period of 2.67 years and 2.81 years, respectively.

As of March 31, 2021 and December 31, 2020, total unrecognized stock-based compensation expense for stock options was $21.8 million and $8.5 million, respectively, which is expected to be recognized over a weighted-average period of 2.85 years and 2.51 years, respectively.

Early Exercise of Stock Options

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The proceeds are initially recorded in other liabilities from the early exercise of stock options and are reclassified to additional paid-in capital as the Company’s repurchase right lapses.

During the nine months ended September 30, 2020 and September 30, 2019, the Company repurchased 10,518 and 14,244 shares of common stock, respectively.

As of September 30, 2020 and December 31, 2019, shares that were subject to repurchase were 26,463 and 84,964, respectively.

The aggregate exercise price of early exercised shares as of September 30, 2020 and December 31, 2019 was less than $0.1 million and $0.1 million, respectively, which were recorded in other current liabilities and other non-current liabilities.

During the three months ended March 31, 2021 and March 31, 2020, the Company repurchased zero and 2,811 shares of common stock, respectively.

As of March 31, 2021 and December 31, 2020, shares that were subject to repurchase were 2,473 and 14,460, respectively.

The aggregate exercise price of early exercised shares as of March 31, 2021 and December 31, 2020 was less than $0.1 million in each period, which were recorded in other current liabilities and other non-current liabilities.

Black-Scholes Assumptions

The fair values of options were calculated using the assumptions set forth below:

September 30, 2020

September 30, 2019

Nine Months Ended

September 30, 2020

Nine Months Ended

September 30, 2019

Three Months Ended

March 31, 2021

Three Months Ended

March 31, 2020

Expected term

5.4 - 6.1 years

5.5 - 6.1 years

5.4 - 6.1 years

Expected volatility

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84.9% - 86.7%

84.9% - 95.1%

77.2% - 82.2%

Risk-free interest rate

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Unvested, December 31, 2020

Unvested, September 30, 2020

As of September 30, 2020 and December 31, 2019, 14,625 shares of restricted stock were outstanding with an aggregate purchase price of less than $0.1 million, which is recorded in other non-current liabilities on the balance sheets.

Unvested, March 31, 2021

As of March 31, 2021 and December 31, 2020, 7,313 and 14,625 shares of restricted stock, respectively, were outstanding with an aggregate purchase price of less than $0.1 million, which is recorded in other non-current liabilities on the balance sheets.

The restricted stock vests upon the achievement of pre-defined research milestones.

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As the restricted stock was purchased by an employee at a price equal to its fair value at the time of issuance, there was no stock-based compensation expense related to these awards.

The total fair value of restricted stock vested during the nine months ended September 30, 2020 and September 30, 2019 was zero and less than $0.1 million in each period.

The total fair value of restricted stock vested during the three months ended March 31, 2021 and March 31, 2020 was $0.1 million and zero, respectively.

Significant Agreements

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GSK will be solely responsible for costs of the conduct of the MAT2A Combination Trial, except for supply of the MAT2A product therefor, to be provided by the Company at its own cost.

Subject to GSK’s exerc ise of the Option, GSK will lead later stage global clinical development for the MAT2A program, with IDEAYA responsible for 20% and GSK responsible for 80% of further development costs.

The cost-sharing percentages will be adjusted based on the actual rati o of U.S.

Subject to GSK’s exercise of the Option, GSK will lead later stage global clinical development for the MAT2A program, with IDEAYA responsible for 20% and GSK responsible for 80% of further development costs.

The cost-sharing percentages will be adjusted based on the actual ratio of U.S.

to global profits for MAT2A products, as measured three and six years after global commercial launch thereof.

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Pfizer Clinical Trial Collaboration and Supply Agreement

In March 2020, the Company entered into a clinical trial collaboration and supply agreement with Pfizer Inc., or the Supply Agreement, which was subsequently amended in September 2020.

Pursuant to the Supply Agreement, Pfizer supplies the Company with their MEK inhibitor, binimetinib, and cMET inhibitor, crizotinib, to evaluate the combination in patients with tumors harboring activating GNAQ or GNA11 hotspot mutations.

Under the Supply Agreement, the Company will sponsor a Phase 1/2 clinical trial for its product candidate, IDE196, and Pfizer will supply the Company with binimetinib and crizotinib for use in the clinical trial at no cost to the Company.

In March 2020, the Company entered into a clinical trial collaboration and supply agreement with Pfizer Inc., or the Supply Agreement, as amended in September 2020 and April 2021.

Pursuant to the Supply Agreement, Pfizer supplies the Company with their MEK inhibitor, binimetinib, and cMET inhibitor, crizotinib, to evaluate combinations of darovasertib independently with each of the Pfizer compounds, in patients with tumors harboring activating GNAQ or GNA11 hotspot mutations.

Under the Supply Agreement, the Company will sponsor a Phase 1/2 clinical trial, and Pfizer will supply the Company with binimetinib and crizotinib for use in the clinical trial at no cost to the Company.

The Supply Agreement provides that the Company and Pfizer will jointly own clinical data generated from the clinical trial.

Novartis License Agreement

In September 2018, the Company entered into a license agreement with Novartis International Pharmaceuticals Ltd.

(“Novartis”) to develop and commercialize Novartis’ LXS196 (also known as IDE196), a Phase 1 protein kinase C (“PKC”) inhibitor for the treatment of cancers having GNAQ and GNA11 mutations.

Under the license agreement, the Company is liable to make contingent development and sales milestone payments of up to $29.0 million and mid to high single digit royalty payments of the net sales of licensed products.

As of March 31, 2021, the Company has not achieved any of the development and sales milestones.

Revenue Recognition

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9, Significant Agreements).

Disaggregation of Revenue

The following table presents revenue disaggregated by research program (in thousands):

Three Months Ended

March 31, 2021

Total collaboration revenue

Contract balances

As of September 30, 2020, the company had $91.0 million of contract liabilities, and no balance of accounts receivable or contract asset related to the GSK Collaboration Agreement.

The following table presents the significant changes in the balance of contract liabilities during the year ended December 31, 2020 (in thousands):

Contract liabilities

Balance as of December 31, 2020

Reclassification to revenue, as the result of performance obligations satisfied

Increase in accounts receivable

Balance as of March 31, 2021

The timing of revenue recognition, billings, and cash collections results in accounts receivable, contract assets, and contract liabilities on the balance sheets.

Subsequent to each quarter end, when the Company and GSK finalizes the reimbursable program costs, the Company recognizes accounts receivable, which are derecognized upon reimbursement.

Based on the estimated reimbursable program costs for a quarter, the Company recognizes accounts receivable, which are derecognized upon reimbursement.

When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded.

Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met.

Contract liabilities are derecognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met.

Performance obligations

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The Company has identified two additional customer options under the MAT2A program, both of which have been determined a material right.

G SK may elect to conduct certain pre clinical activities in preparation for the MAT2A Combination Trial and may elect to exercise the option to license to MAT2A technology.

GSK may be able to use and exploit the license to the extent necessary for GSK’s performance of such preclinical activit ies.

GSK may elect to conduct certain preclinical activities in preparation for the MAT2A Combination Trial and may elect to exercise the option to license to MAT2A technology.

GSK may be able to use and exploit the license to the extent necessary for GSK’s performance of such preclinical activities.

The Company will not receive any consideration for providing such license and has concluded that this license option results in a material right as it involves a discount that GSK would not have otherwise received.

The Company has determined the natur e of such license to MAT2A technology to be functional.

As of September 30, 2020, GSK has exercised the Preclinical MAT2A License, and t he Company has made the underlying MAT2A technology available to GSK, which is immediately able to use and benefit from its right to use the intellectual property.

Accordingly, the Company recognized revenue from the Preclinical MAT2A License in the quarter ended September 30, 2020.

The Company has determined the nature of such license to MAT2A technology to be functional.

During the year ended December 31, 2020, GSK exercised the Preclinical MAT2A License, and the Company has made the underlying MAT2A technology available to GSK, which is immediately able to use and benefit from its right to use the intellectual property.

The Company recognized less than $0.1 million of revenue from the Preclinical MAT2A License in the three months ended March 31, 2021.

If GSK elects to conduct the MAT2A Combination Trial, the Company will supply MAT2A product to be used for the MAT2A Combination Trial at its own cost.

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The Company will recognize revenue, as it transfers the control of the MAT2A product to GSK.

The Company has not supplied MAT2A product as of September 30, 2020.

The Company has not supplied MAT2A product as of March 31, 2021.

Transaction price allocated to the remaining performance obligations

At inception of the GSK Collaboration Agreement, the Company determined that the transaction price was $108.5 million, including the Upfront Payment, and the estimated reimbursable program costs.

The remaining aggregated performance obligations as of September 30, 2020 were $96.6 million, $48.7 million of which is expected to be satisfied over the next 12 months.

The following table presents the transaction price allocated to the remaining performance obligations as of March 31, 2021 (in thousands):

Performance Obligations

Allocation of Transaction Price

MAT2A R&D Services

Pol Theta R&D Services

WRN R&D Services

Total transaction price allocated to the remaining performance obligations

The Company applies the sales-based royalty exception to the commercial milestones and tiered royalties for all programs because GSK would ascribe significantly more value to the license than to the other goods or services to which the commercial milestones and tiered royalties relate.

1 unchanged sentence

Also, the Company will be entitled to receive the tiered royalties during a calendar year when global net sales of each product occur, upon which the variability will be resolved.

Significant judgements

In applying ASC 606 to the GSK Collaboration Agreement, the Company made the following judgments that significantly affect the timing and amount of revenue recognition:

Determination of the transaction price, including whether any variable consideration is included at inception of the contract

The transaction price is the amount of consideration that the Company expects to be entitled to in exchange for transferring promised goods or services to the customer.

The transaction price must be determined at inception of a contract and may include amounts of variable consideration.

However, there is a constraint on inclusion of variable consideration in the transaction price, if there is uncertainty at inception of the contract as to whether such consideration will be recognized in the future.

The decision as to whether or not it is probable that a significant reversal of revenue will occur in the future, depends on the likelihood and magnitude of the reversal and is highly susceptible to factors outside the Company’s influence (for example, the Company cannot determine the outcome of clinical trials;

the Company cannot determine if or when the counterparty will initiate or complete clinical trials;

and the Company cannot determine if or when an regulatory agency provides any approval).

In addition, the uncertainty is not expected to be resolved for a long period and finally, the Company has limited experience in the field.

Therefore, at inception of the GSK Collaboration Agreement, development and regulatory milestones were fully constrained and were not included in the transaction price based on the factors noted above.

The Company constrains estimates of other variable consideration , such as reimbursable program costs, to amounts that are not expected to result in a significa nt revenue reversal in the future.

The Company re-evaluates the transaction price, including the estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as uncertain events are resolved o r other changes in circumstances occur.

Determination of the estimate of the standalone selling price of performance obligations

In order to recognize revenue under ASC 606, for contracts for which more than one distinct performance obligation has been identified, the Company must allocate the transaction price to the performance obligations based upon their standalone selling prices.

The best evidence of standalone selling price is an observable price of a good or service when sold separately by an entity in similar circumstances to similar customers.

If such evidence is not available, standalone selling price should be estimated so that the amount that is allocated to each performance obligation equals the amount that the entity expects to receive for transferring goods or services.

The Company has identified more than one performance obligation in the GSK Collaboration Agreement.

Since evidence based on observable prices is not available for the performance obligations, the Company considered market conditions and entity-specific factors, including those contemplated in negotiating the agreements, as well as certain internally developed estimates.

The Company determined the estimate of standalone selling price of the MAT2A R&D Services, Pol Theta R&D Services, and WRN R&D Services by using the expected costs of satisfying the performance obligation, adjusted for probabilities of technical success where appropriate.

The Company determined the estimate of standalone selling price of the Option by using risk-adjusted net present value analysis.

Finally, the Company determined the estimate of standalone selling price of the Preclinical MAT2A License and MAT2A Supply by using the expected costs of satisfying the performance obligation.

Determination of the method of allocation of the transaction price to the distinct performance obligations

At inception of the GSK Collaboration Agreement, the Company allocated the transaction price among the six performance obligations based on their relative selling prices, determined as described above.

Determination of the timing of satisfaction of performance obligations

The Company recognizes revenue from the MAT2A R&D Services, Pol Theta R&D Services and WRN R&D Services over time, as GSK simultaneously receives and consumes the benefits provided by the Company’s performance as the Company performs.

The Company measures its progress toward complete satisfaction of the MAT2A R&D Services, Pol Theta R&D Services and WRN R&D Services based on the costs incurred as a percentage of the estimated total costs to be incurred to complete the performance obligations.

As the Company performs, it shares the results of research and development studies with GSK through the joint development committee.

Accordingly, the cost incurred method faithfully depicts the Company’s performance of the MAT2A R&D Services, Pol Theta R&D Services and WRN R&D Services.

The license to IDEAYA-owned technology under the MAT2A program underlying the Option and Preclinical MAT2A License is functional in nature.

Upon the exercise of the material right associated with the option to license to IDEAYA-owned technology under the MAT2A program, the Company will recognize revenue upon the later of transfer of the underlying technology to GSK and the beginning of the period during which GSK is able to use and benefit from its right to use the underlying technology.

After the exercise of the material right associated with the supply of MAT2A product for the MAT2A Combination Trial, the Company recognize revenue as it transfers the control of MAT2A product to GSK.

Net Loss Per Share Attributable to Common Stockholders

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Three Months Ended

September 30,

Nine Months Ended

September 30,

Net loss attributable to common stockholders

Weighted-average shares outstanding

weighted-average unvested restricted shares and

shares subject to repurchase

Weighted-average shares used in computing net loss

per share attributable to common stock,

basic and diluted

Net loss per share attributable to common stockholders,

basic and diluted

weighted-average unvested restricted shares and shares

subject to repurchase

Weighted-average shares used in computing net loss per share

attributable to common stock, basic and diluted

Net loss per share attributable to common stockholders, basic and diluted

The following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive:

As of September 30,

As of March 31,

Options to purchase common stock

1 unchanged sentence

Unvested early exercised common stock options

As of September 30, 2020, the Company has contributions from plan participants of $0.2 million under the ESPP, which if converted, would be equivalent to 22,236 shares based on 85% of the stock price at the beginning of the offering period.

Subsequent Event

From April 1, 2021 through May 9, 2021, the Company additionally sold an aggregate of 633,304 shares for gross proceeds of $14.6 million under the January 2021 Sales Agreement..

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements