IDEAYA Biosciences, Inc. 10-Q

Item 1. Financial Statements (UNAUDITED). IDEAYA Biosciences, Inc. Condensed Balance Sheets ( in thousands, except share and per share amounts ) ( Unaudited ) June 30, December 31, 2021 2020 Assets Current assets Cash and cash equivalents $ 90,427 $ 72,037 Short-term marketable securities 183,749 211,548 Accounts receivable 1,325 1,877 Prepaid expenses and other current assets 4,288 3,143 Total current assets 279,789 288,605 Restricted cash 106 106 Long-term marketable securities 38,254 — Property and equipment, net 4,898 4,271 Right-of-use assets 4,563 5,205 Other non-current assets 791 82 Total assets $ 328,401 $ 298,269 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 2,108 $ 953 Accrued liabilities 9,910 8,516 Contract liability 22,132 27,613 Lease liabilities 1,618 1,540 Other current liabilities 3 18 Total current liabilities 35,771 38,640 Long-term contract liability 48,008 56,160 Long-term lease liabilities 4,356 5,183 Other non-current liabilities 6 12 Total liabilities 88,141 99,995 Commitments and contingencies (Note 5) Stockholders’ equity Preferred stock, $ 0.0001 par value, 10,000,000 shares authorized as of June 30, 2021 and December 31, 2020; no shares issued and outstanding as of June 30, 2021 and December 31, 2020 — — Common stock, $ 0.0001 par value, 300,000,000 shares authorized as of June 30, 2021 and December 31, 2020; 33,033,793 and 29,537,216 shares issued and outstanding as of June 30, 2021 and December 31, 2020 3 3 Additional paid-in capital 387,215 325,250 Accumulated other comprehensive income ( 4 ) 7 Accumulated deficit ( 146,954 ) ( 126,986 ) Total stockholders’ equity 240,260 198,274 Total liabilities and stockholders’ equity $ 328,401 $ 298,269 The accompanying notes are an integral part of these condensed financial statements. 4 IDEAYA Biosciences, Inc. Condensed Statements of Operations and Comprehensive Loss ( in thousands, except share and per share amounts ) ( Unaudited ) Three Months Ended June 30, Six months ended June 30, 2021 2020 2021 2020 Collaboration revenue $ 8,756 $ — $ 16,003 $ — Operating expenses Research and development 14,979 8,596 26,546 17,622 General and administrative 4,828 3,994 9,643 7,446 Total operating expenses 19,807 12,590 36,189 25,068 Loss from operations ( 11,051 ) ( 12,590 ) ( 20,186 ) ( 25,068 ) Interest income and other income (expense), net 104 199 218 634 Net loss $ ( 10,947 ) $ ( 12,391 ) $ ( 19,968 ) $ ( 24,434 ) Change in unrealized losses on marketable securities ( 3 ) 57 ( 11 ) ( 8 ) Comprehensive loss $ ( 10,950 ) $ ( 12,334 ) $ ( 19,979 ) $ ( 24,442 ) Net loss per common share, basic and diluted $ ( 0.33 ) $ ( 0.59 ) $ ( 0.62 ) $ ( 1.18 ) Weighted average number of common shares outstanding used in computing net loss per share, basic and diluted 32,854,926 21,001,730 32,321,481 20,626,139 The accompanying notes are an integral part of these condensed financial statements. 5 IDEAYA Biosciences, Inc. Condensed Statements of Stockholders’ Equity ( in thousands, except share amounts ) ( Unaudited ) Accumulated Additional Other Total Common Stock Paid-In Comprehensive Accumulated Stockholders' Shares Amount Capital Income (Loss) Deficit Equity Balances as of March 31, 2021 32,270,538 $ 3 $ 369,130 $ ( 1 ) $ ( 136,007 ) $ 233,125 Issuance of common stock related to at-the-market offering program 695,218 — 15,454 — — 15,454 Issuance of common stock upon exercise of stock options 39,292 — 243 — — 243 Employee stock purchase plan (ESPP) purchase 28,745 — 327 — — 327 Vesting of early exercised common stock options — — 3 — — 3 Stock-based compensation — — 2,058 — — 2,058 Other comprehensive loss — — — ( 3 ) — ( 3 ) Net loss — — — — ( 10,947 ) ( 10,947 ) Balances as of June 30, 2021 33,033,793 $ 3 $ 387,215 $ ( 4 ) $ ( 146,954 ) $ 240,260 Balances as of March 31, 2020 20,347,539 $ 2 $ 193,635 $ — $ ( 104,534 ) $ 89,103 Issuance of common stock upon follow-on public offering, net of issuance costs 6,666,667 1 93,623 — — 93,624 Issuance of common stock upon exercise of stock options 154,482 — 694 — — 694 Employee stock purchase plan (ESPP) purchase 18,494 132 — — 132 Repurchase of early exercised shares ( 2,358 ) — — — — — Vesting of early exercised common stock options — — 15 — — 15 Stock-based compensation — — 824 — — 824 Other comprehensive income — — — 57 — 57 Net loss — — — — ( 12,391 ) ( 12,391 ) Balances as of June 30, 2020 27,184,824 $ 3 $ 288,923 $ 57 $ ( 116,925 ) $ 172,058 The accompanying notes are an integral part of these condensed financial statements. 6 IDEAYA Biosciences, Inc. Condensed Statements of Stockholders’ Equity ( in thousands, except share amounts ) ( Unaudited ) Accumulated Additional Other Total Common Stock Paid-In Comprehensive Accumulated Stockholders' Shares Amount Capital Income (Loss) Deficit Equity Balances as of December 31, 2020 29,537,216 $ 3 $ 325,250 $ 7 $ ( 126,986 ) $ 198,274 Issuance of common stock related to at-the-market offering program 3,407,872 — 57,286 — — 57,286 Issuance of common stock upon exercise of stock options 59,960 — 355 — — 355 Employee stock purchase plan (ESPP) purchase 28,745 — 327 — — 327 Vesting of early exercised common stock options and restricted stock — — 21 — — 21 Stock-based compensation — — 3,976 — — 3,976 Other comprehensive loss — — — ( 11 ) — ( 11 ) Net loss — — — — ( 19,968 ) ( 19,968 ) Balances as of June 30, 2021 33,033,793 $ 3 $ 387,215 $ ( 4 ) $ ( 146,954 ) $ 240,260 Balances as of December 31, 2019 20,339,461 $ 2 $ 192,824 $ 65 $ ( 92,491 ) $ 100,400 Issuance of common stock upon follow-on public offering, net of issuance costs 6,666,667 1 93,623 — — 93,624 Issuance of common stock upon exercise of stock options 165,371 — 731 — — 731 Employee stock purchase plan (ESPP) purchase 18,494 — 132 132 Repurchase of early exercised shares ( 5,169 ) — — — — — Vesting of early exercised common stock options — — 31 — — 31 Stock-based compensation — — 1,582 — — 1,582 Other comprehensive income — — — ( 8 ) — ( 8 ) Net loss — — — — ( 24,434 ) ( 24,434 ) Balances as of June 30, 2020 27,184,824 $ 3 $ 288,923 $ 57 $ ( 116,925 ) $ 172,058 The accompanying notes are an integral part of these condensed financial statements. 7 IDEAYA Biosciences, Inc. Condensed Statements of Cash Flows ( in thousands ) ( Unaudited ) Six Months Ended June 30, 2021 2020 Cash flows from operating activities Net loss $ ( 19,968 ) $ ( 24,434 ) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 826 673 Net amortization (accretion) of premiums (discounts) on marketable securities 899 31 Stock-based compensation 3,976 1,582 Loss on sale of property and equipment — 2 Realized gain on marketable securities — ( 3 ) Changes in assets and liabilities Accounts receivable 552 — Prepaid expenses and other assets ( 1,719 ) ( 848 ) Right-of-use assets 642 462 Accounts payable 796 191 Accrued and other liabilities 1,724 ( 251 ) Contract liabilities ( 13,633 ) — Lease liabilities ( 749 ) ( 556 ) Net cash used in operating activities ( 26,654 ) ( 23,151 ) Cash flows from investing activities Purchases of property and equipment, net ( 1,581 ) ( 69 ) Purchases of marketable securities ( 133,046 ) ( 26,246 ) Maturities of marketable securities 117,663 68,209 Sales of marketable securities 4,018 — Net cash (used in) provided by investing activities ( 12,946 ) 41,894 Cash flows from financing activities Proceeds from issuance of common stock upon public offering, net of issuance costs — 93,875 Proceeds from issuance of common stock related to at-the-market offering program, net of issuance costs 57,308 — Proceeds from exercise of common stock options, net of repurchases 355 726 Proceeds from ESPP purchase 327 132 Net cash provided by financing activities 57,990 94,733 Net increase in cash, cash equivalents and restricted cash 18,390 113,476 Cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash, at beginning of period 72,143 34,173 Cash, cash equivalents and restricted cash, at end of period $ 90,533 $ 147,649 Reconciliation of cash, cash equivalents and restricted cash Cash and cash equivalents $ 90,427 $ 147,543 Restricted cash $ 106 $ 106 Cash, cash equivalents and restricted cash $ 90,533 $ 147,649 Supplemental disclosure of cash flow information: Cash paid for income taxes $ 4 $ 1 Cash paid for interest $ 37 $ 42 Supplemental non-cash investing and financing activities: Unpaid offering costs $ 171 $ 251 Vesting of early exercised options and restricted stock $ 21 $ 31 Purchases of property and equipment in accounts payable and accrued liabilities $ 378 $ 253 The accompanying notes are an integral part of these condensed financial statements. 8 IDEAYA Biosciences , Inc. Notes to Condensed Financial Statements (Unaudited) 1. Organization Description of the Business IDEAYA Biosciences, Inc. (the “Company”) is a synthetic lethality focused 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. 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 six months ended June 30, 2021, the Company sold an aggregate of 3,407,872 shares for net proceeds of $ 57.3 million after deducting sales commission and other expenses under the August 2020 Sales Agreement and January 2021 Sales Agreement. Liquidity The Company has incurred significant losses and negative cash flows from operations in all periods since inception and had an accumulated deficit of $ 147.0 million as of June 30, 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. To date, none of the Company’s product candidates have been approved for sale, and the Company has not generated any revenue from commercial products since inception. Management expects operating losses to continue and increase for the foreseeable future, as the Company progresses into clinical development activities for its lead product candidates. The Company’s prospects are subject to risks, expenses and uncertainties frequently encountered by companies in the biotechnology industry as discussed under Risks and Uncertainties in Note 2. While the Company has been able to raise multiple rounds of financing, there can be no assurance that in the event the Company requires additional financing, such financing will be available on terms which are favorable or at all. 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 June 30, 2021, the Company had cash, cash equivalents and marketable securities of $ 312.4 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. 2. Summary of Significant Accounting Policies Basis of Presentation The unaudited condensed financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). 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 June 30, 2021, the statements of operations and comprehensive loss for the three and six months ended June 30, 2021 and June 30, 2020, the statements of stockholders’ equity for the three and six months ended June 30, 2021 and June 30, 2020, and the statements of cash flows for the six months ended June 30, 2021 and June 30, 2020 9 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 June 30, 2021 , the results of its operations and comprehensive loss for the three and six months ended June 30, 2021 and June 30, 2020 and its cash flows for the six months ended June 30, 2021 and June 30, 2020 . The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2021 and June 30, 2020 are also unaudited. The results for the three and six months ended June 30, 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”). 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 revenue and 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. 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 The Company operates in a dynamic and highly competitive industry and is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, contract manufacturers, contract research organizations and collaboration partners, compliance with government regulations and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical studies and clinical trials and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance and reporting. The Company believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations, or cash flows: ability to obtain future financing; advances and trends in new technologies and industry standards; results of clinical trials and collaboration activities; regulatory approval and market acceptance of the Company’s products; development of sales channels; certain strategic relationships; litigation or claims against the Company based on intellectual property, patent, product, regulatory, or other factors; and the Company’s ability to attract and retain employees necessary to support its growth. Products developed by the Company require approvals from the U.S. Food and Drug Administration (“FDA”) or other international regulatory agencies prior to commercial sales. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained or maintained, that the products will receive the necessary approvals, or that any approved products will be commercially viable. If the Company was denied approval, approval was delayed or the Company was unable to maintain approval, it could have a materially adverse impact on the Company. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from other pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, consultants and other third parties. 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 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. 10 The Company has expended and will continue to expend substantial funds to complete the research, development and clinical testing of product candidates. The Company also will be required to expend additional funds to establish commercial-scale manufacturing arrangements and to provide for the marketing and distribution of products that receive regulatory approval. The Company may require additional funds to commercialize its products. The Company is unable to entirely fund these efforts with its current financial resources. If adequate funds are unavailable on a timely basis from operations or additional sources of financing, the Company may have to delay, reduce the scope of or eliminate one or more of its research or development programs which would materially and adversely affect its business, financial condition and operations. Concentration of Credit Risk 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 are of high credit quality. Such deposits may, at times, exceed federally insured limits. The Company’s investment policy addresses credit ratings, diversification, and maturity dates. The Company invests its cash equivalents and marketable securities in money market funds, U.S. 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 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 There have been no material changes in the accounting policies from those disclosed in the financial statements and the related notes included in the Form 10-K. Cloud Computing Arrangements The Company capitalizes certain implementation costs incurred under a cloud computing arrangement that is a service contract. Costs incurred during the application development stage related to the implementation of the hosting arrangement are capitalized and included within prepaid expenses and other current assets, and other non-current assets on the accompanying balance sheets. Amortization of capitalized implementation costs is recognized on a straight-line basis over the term of the associated hosting arrangement when it is ready for its intended use. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Revenue Recognition The Company follows Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. 11 The Company applies the five-step model to contracts when (1) parties have approved the contract and are committed to performing respective obligations, (2) the Company can identify each party’s rights regarding the goods or services to be transferred, (3) the Company can identify the payment terms for the goods or services to be transferred, (4) the contract has commercial substance, and (5) it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, the Company assesses the goods or services promised within each contract and determines the performance obligations by assess ing whether each promised good or service is distinct. Goods or services that are not distinct are bundled with other goods or services in the contract until a bundle of goods or services that is distinct is created. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligations when (or as) the performance obligations are satisfied. The Company constrains its estimate of the transaction price up to the amount (the “variable consideration constraint”) that a significant reversal of recognized revenue is not probable. Licenses of intellectual property: 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 applies 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. Customer options for additional goods or services: If a contract contains customer options that allow the customer to acquire additional goods or services, including a license to the Company’s intellectual property, the goods and services underlying the customer options are evaluated to determine whether they are deemed to represent a material right. In determining whether the customer option has a material right, the Company assesses whether there is an option to acquire additional goods or services at a discount. If the customer option is determined not to represent a material right, the option is not considered to be a performance obligation. If the customer option is determined to represent a material right, the material right is recognized as a separate performance obligation. The Company allocates the transaction price to material rights based on the relative standalone selling price, which is determined based on the identified discount and the probability that the customer will exercise the option. Amounts allocated to a material right are not recognized as revenue until the option is exercised. Milestone payments: At the inception of each arrangement or amendment that includes development, regulatory or commercial milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price. ASC 606 prescribes two methods to use when estimating the amount of variable consideration: the expected value method and the most likely amount method. Under the expected value method, an entity considers the sum of probability-weighted amounts in a range of possible consideration amounts. Under the most likely amount method, an entity considers the single most likely amount in a range of possible consideration amounts. Whichever method is used, it should be consistently applied throughout the life of the contract; however, it is not necessary for the Company to use the same approach for all contracts. If it is probable that a significant revenue reversal would not occur when the uncertainty associated with the milestone is resolved, the associated milestone value is included in the transaction price. Milestone payments that are highly susceptible to factors outside the Company’s influence, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. If there is more than one performance obligation, the transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis. The Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability or achievement of each milestone and any related constraint, and if necessary, adjusts its estimates of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. Royalties: For arrangements that include sales-based royalties, including milestone payments 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). 12 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. 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. Contractual cost sharing payments received from a customer or collaboration partner are accounted for as variable consideration. The Company includes an expected value in the transaction price. Contractual cost sharing payments made to a customer or collaboration partner are accounted for as a reduction to the transaction price if such payments are not related to distinct goods or services received from the customer or collaboration partner. Contracts may be amended to account for changes in contract specifications and requirements. 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. As such, the Company does not adjust its revenues for the effects of a significant financing component. Net Loss per Share Attributable to Common Stockholders Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, redeemable convertible preferred stock, stock options and restricted stock that is subject to repurchase at the original purchase price are considered to be potentially dilutive securities. Basic and diluted net loss attributable to common stockholders per share is presented in conformity with the two-class method required for participating securities. The Company considers the shares issued upon the early exercise of stock options subject to repurchase to be participating securities, because holders of such shares have non-forfeitable dividend rights in the event a dividend is paid on common stock. The holders of early exercised shares subject to repurchase do not have a contractual obligation to share in the Company’s losses. As such, the net loss was attributed entirely to common stockholders. Because the Company has reported a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share for those periods. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) under its accounting standard codifications (“ASC”) or other standard setting bodies and adopted by the Company as of the specified effective date, unless otherwise discussed below. 13 Recently Adopted Accounting Pronouncements 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, 2021 . The adoption did not result in a material impact on the Company’s financial statements and related disclosures. New Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. For public business entities, this ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The FASB subsequently issued supplemental guidance to ASC 326 within ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief , ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) and ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses . ASU 2019-05 provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. 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. 3. Fair Value Measurement and Marketable Securities The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows: Level 1—Observable inputs, such as quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3—Unobservable inputs which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. 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. 14 As of June 30, 2021, financial assets measured and recognized at fair value are as follows (in thousands): June 30, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Assets U.S. government securities Level 1 $ 65,262 $ 8 $ — $ 65,270 Corporate bonds Level 2 80,104 4 ( 16 ) 80,092 Commercial paper Level 2 76,641 — — 76,641 Marketable securities 222,007 12 ( 16 ) 222,003 Money market funds (1) Level 1 90,466 — — 90,466 Total fair value of assets $ 312,473 $ 12 $ ( 16 ) $ 312,469 (1) Included in cash and cash equivalents on the balance sheet As of December 31, 2020, financial assets measured and recognized at fair value are as follows (in thousands): December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Assets U.S. government securities Level 1 $ 80,020 $ 10 $ — $ 80,030 Corporate bonds Level 2 72,573 11 ( 14 ) 72,570 Commercial paper Level 2 63,948 — — 63,948 Marketable securities 216,541 21 ( 14 ) 216,548 Money market funds (1) Level 1 67,065 — — 67,065 Total fair value of assets $ 283,606 $ 21 $ ( 14 ) $ 283,613 (1) Included in cash and cash equivalents on the balance sheet As of June 30, 2021, all marketable securities had a remaining maturity of one year or less, except for U.S. government securities and corporate bonds with a fair value of $ 38.3 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 June 30, 2021 and December 31, 2020. 4. Balance Sheet Components Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): Useful Life June 30, December 31, (In Years) 2021 2020 Laboratory equipment 5 $ 5,851 $ 4,793 Computer equipment 3 117 117 Software 3 170 118 Leasehold improvements Shorter of useful life or lease term 3,045 2,716 Furniture and fixtures 5 421 421 Total property and equipment 9,604 8,165 Less: Accumulated depreciation and amortization ( 4,706 ) ( 3,894 ) Property and equipment, net $ 4,898 $ 4,271 15 Depreciation and amortization expense was $ 0.4 million and $ 0.4 million for the three months ended June 30, 2021 and June 30, 2020, respectively, and $ 0.8 million and $ 0.7 million for the six months ended June 30, 2021 and June 30, 2020, respectively Accrued Liabilities Accrued liabilities consisted of the following (in thousands): June 30, December 31, 2021 2020 Accrued research and development expenses $ 6,477 $ 5,259 Accrued salaries and benefits 2,700 2,685 Legal and professional fees 684 543 Other 49 29 Accrued liabilities $ 9,910 $ 8,516 5. Commitments and Contingencies Contingencies From time to time, the Company may be involved in litigation related to claims that arise in the ordinary course of its business activities. 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 June 30, 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 The Company enters into standard indemnification arrangements in the ordinary course of business with vendors, clinical trial sites and other parties. Pursuant to these arrangements, the Company indemnifies, holds harmless and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party. The term of these indemnification agreements is generally perpetual any time after the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these arrangements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the fair value of these agreements is not material. 6. Income Taxes The Company did no t record a federal or state income tax provision or benefit for the three and six months ended June 30, 2021 and June 30, 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. 16 7. Common Stock As of June 30, 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 Company’s board of directors. As of June 30, 2021 and December 31, 2020, no dividends have been declared to date. The Company had reserved common stock for future issuance as follows: June 30, December 31, 2021 2020 Exercise of outstanding options under the 2015 and 2019 Plans 3,645,582 2,591,456 Issuance of common stock options under the 2019 Plan 1,042,537 975,135 Issuance of common stock options under the Employee Stock Purchase Plan 624,227 357,600 Total 5,312,346 3,924,191 8. Stock-Based Compensation 2019 Incentive Award Plan In May 2019, the Company’s board of directors adopted and the Company’s stockholders approved the 2019 Incentive Award Plan (the “2019 Plan”), under which the Company may grant cash and equity-based incentive awards to the Company’s employees, consultants and directors. Following the effectiveness of the 2019 Plan, the Company will not make any further grants under the 2015 Equity Incentive Plan (the “2015 Plan”). However, the 2015 Plan continues to govern the terms and conditions of the outstanding awards granted under it. Shares of common stock subject to awards granted under the 2015 Plan that are forfeited or lapse unexercised and which following the effective date of the 2019 Plan are not issued under the 2015 Plan will be available for issuance under the 2019 Plan. Options granted under the 2019 Plan may be either incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”). ISOs may be granted only to Company employees (including officers and directors who are also employees). NSOs may be granted to Company employees and consultants. The exercise price of an ISO and NSO shall not be less than 100 % of the estimated fair value of the shares on the date of grant. The exercise price of an ISO granted to an employee who, at the time of grant, owns stock representing more than 10 % of the voting power of all classes of stock of the Company (a “10% stockholder”) shall be no less than 110 % of the estimated fair value of the shares on the date of grant. Options granted under the 2019 Plan have a term of 10 years (or five years if granted to a 10% stockholder) and generally vest over a 4 -year period with 1 -year cliff vesting. 2015 Equity Incentive Plan In 2015, the Company established its 2015 Plan which provides for the granting of stock options to employees and consultants of the Company. Options granted under the 2015 Plan may be either ISOs or NSOs. 2019 Employee Stock Purchase Plan In May 2019, the Company’s board of directors adopted and the Company’s stockholders approved the 2019 Employee Stock Purchase Plan (the “ESPP”). The ESPP provides eligible employees with the opportunity to acquire an ownership interest in the Company through periodic payroll deductions up to 15 % of eligible compensation. The offering period is determined by the Company in its discretion but may not exceed 27 months. The per-share purchase price on the applicable exercise date for an offering period is equal to the lesser of 85 % of the fair market value of the common stock at either the first business day or last business day of the offering period, provided that no more than 4,000 shares of common stock may be purchased by any one employee during each offering period. The ESPP is intended to constitute an “employee stock purchase plan” under Section 423(b) of the Internal Revenue Code of 1986, as amended. As of June 30, 2021, a total of 624,227 shares of common stock were reserved for issuance under the ESPP, subject to an annual increase on January 1 of each year. For the six months ended June 30, 2021, the Company recorded $ 0.2 million of compensation expense related to participation in the ESPP. 17 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 June 30, Six Months Ended June 30, 2021 2020 2021 2020 Research and development $ 873 $ 283 $ 1,669 $ 597 General and administrative 1,185 541 2,307 985 Total stock-based compensation expense $ 2,058 $ 824 $ 3,976 $ 1,582 Stock Options Activity under the Company’s 2015 and 2019 Plans is set forth below: Outstanding Options Shares available for Grant Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (Millions) Balance, January 1, 2021 975,135 2,591,456 $ 7.27 8.36 Additional shares authorized 1,181,488 — Options granted ( 1,158,800 ) 1,158,800 $ 19.75 Options exercised — ( 59,960 ) $ 6.00 Options canceled 44,714 ( 44,714 ) $ 11.03 Balance, June 30, 2021 1,042,537 3,645,582 $ 11.21 8.19 Exercisable as of June 30, 2021 1,291,105 $ 6.34 7.25 $ 18.8 Vested and expected to vest as of June 30, 2021 3,645,582 $ 11.21 8.19 $ 35.6 The weighted-average grant-date fair value of options granted during the six months ended June 30, 2021 and June 30, 2020 was $ 15.71 and $ 5.38 per share, respectively. The aggregate intrinsic value of options exercised for the six months ended June 30, 2021 and June 30, 2020 was $ 0.9 million and $ 1.0 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 June 30, 2021 and December 31, 2020, total unrecognized stock-based compensation expense for stock options was $ 21.4 million and $ 8.5 million, respectively, which is expected to be recognized over a weighted-average period of 2.70 years and 2.51 years, respectively. Early Exercise of Stock Options The terms of the 2015 Plan permit the exercise of options granted under the 2015 Plan prior to vesting, subject to required approvals. The shares so acquired prior to vesting are subject to a lapsing repurchase right in favor of the Company at the original purchase price of such shares, exercisable upon a termination of the holder’s service with the Company prior to full vesting . 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 six months ended June 30, 2021 and June 30, 2020, the Company repurchased zero and 5,169 shares of common stock, respectively. As of June 30, 2021 and December 31, 2020, shares that were subject to repurchase were 1,255 and 14,460 , respectively. The aggregate exercise price of early exercised shares as of June 30, 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. 18 Black-Scholes Assumptions The fair values of options were calculated using the assumptions set forth below: Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 Expected term 5.5 - 6.1 years 5.5 - 6.1 years 5.5 - 6.1 years 5.4 - 6.1 years Expected volatility 96.0% - 102.8% 86.7% - 91.7% 96.0% - 103.6% 84.9% - 91.7% Risk-free interest rate 0.8% - 1.1% 0.4% - 0.5% 0.6% - 1.1% 0.4% - 1.5% Dividend yield 0 % 0 % 0 % 0 % Expected term . The expected term represents the weighted-average period the stock options are expected to remain outstanding and is based on the options’ vesting terms, contractual terms and industry peers, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Expected Volatility . The Company used an average historical stock price volatility of a peer group of publicly traded companies to be representative of its expected future stock price volatility, as the Company did not have sufficient trading history for its common stock. For purposes of identifying these peer companies, the Company considered the industry, stage of development, size and financial leverage of potential comparable companies. Starting the quarter ended June 30, 2021, the Company uses an average historical stock price volatility of its own common stock, as it has accumulated sufficient trading history in accordance with ASC 718-10-S99. For each grant, the Company measures historical volatility over a period equivalent to the expected term. Risk-Free Interest Rate . The risk-free rate assumption is based on U.S. Treasury instruments whose term was consistent with the expected term of the Company’s stock options. Expected Dividend Rate . The Company has not paid and does not anticipate paying any dividends in the near future. Accordingly, the Company has estimated the dividend yield to be zero . The Company accounts for forfeitures as they occur. Fair Value of Common Stock The fair value of the Company’s common stock is determined based on its closing market price on the date of grant. Restricted Stock Restricted stock activity was as follows: Number of Shares Underlying Outstanding Restricted Stock Awards Weighted Average Grant Date Fair Value Unvested, December 31, 2020 14,625 $ 0.82 Vested ( 7,312 ) $ 0.82 Unvested, June 30, 2021 7,313 $ 0.82 As of June 30, 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 in each period, which is recorded in other non-current liabilities on the balance sheets. The restricted stock vests upon the achievement of pre-defined research milestones. The holder of restricted stock has voting and dividend rights with respect to such shares held without regard to vesting. Shares of restricted stock are subject to a right of repurchase at the original purchase price held by the Company. 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 six months ended June 30, 2021 and June 30, 2020 was $ 0.1 million and zero , respectively. 19 9. Significant Agreements GlaxoSmithKline Collaboration, Option and License Agreement In June 2020, the Company entered into a Collaboration, Option and License Agreement, or the GSK Collaboration Agreement, with an affiliate of GlaxoSmithKline, GLAXOSMITHKLINE INTELLECTUAL PROPERTY (NO. 4), Limited, or GSK, pursuant to which the Company and GSK have entered into a collaboration for its synthetic lethality programs targeting methionine adenosyltransferase 2a, or MAT2A, DNA Polymerase Theta, or Pol Theta or POLQ, and Werner Helicase, or WRN. On July 27, 2020 (“Effective Date”), the Company and GSK received Hart-Scott-Rodino Antitrust Improvements Act clearance, or HSR Clearance, and the GSK Collaboration Agreement became effective. Pursuant to the GSK Collaboration Agreement, GSK agreed to pay the Company $ 100.0 million (the “Upfront Payment”) within ten business days of the Effective Date of the GSK Collaboration Agreement. On July 31, 2020, the Company received the Upfront Payment. MAT2A Program For the MAT2A program, the Company will lead research and development through early clinical development. GSK has an exclusive option to obtain an exclusive license to continue development of and commercialize MAT2A products arising out of the MAT2A program, or the Option, exercisable within a specified time period after the Company delivers to GSK a data package resulting from its conduct of a dose escalation portion of a MAT2A Phase 1 monotherapy clinical trial. At such time of exercise, GSK has agreed to pay the Company an option exercise payment of $ 50.0 million. GSK may initiate, or request that the Company initiates, a Phase 1 combination clinical trial for a MAT2A product and GSK’s Type I PRMT inhibitor (GSK3368715) product, or the MAT2A Combination Trial, prior to GSK’s exercise of the Option. The Company will be responsible for the costs of research and early clinical development activities that the Company conducts for the MAT2A program prior to GSK’s exercise of the Option, excluding the costs of conducting the MAT2A Combination Trial. 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. As of June 30, 2021, GSK has not initiated nor requested the Company to initiate the MAT2A Combination Trial. 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. Subject to GSK’s exercise of the Option, the Company will be eligible to receive future development and regulatory milestones of up to $ 465.0 million, and commercial milestones of up to $ 475.0 million, with respect to each MAT2A product. Additionally, the Company is entitled to receive 50 % of U.S. net profits and tiered royalties on global non-U.S. net sales of MAT2A products by GSK, its affiliates and their sublicensees ranging from high single digit to sub-teen double digit percentages, subject to certain customary reductions. The Company will have a right to opt-out of the 50 % U.S. net profit share and corresponding development cost share for the MAT2A program, in which case the Company would be eligible to receive tiered royalties on U.S. net sales of MAT2A products by GSK, its affiliates and their sublicensees at the same royalty rates as for global non-U.S. net sales thereafter, with economic adjustments based on the stage of the MAT2A program at the time of opt-out. Pol Theta Program Pursuant to the GSK Collaboration Agreement, GSK holds a global, exclusive license to develop and commercialize POLQ products arising out of the POLQ program. GSK and the Company will collaborate on ongoing preclinical research for the POLQ program, and GSK will lead clinical development for the POLQ program. GSK will be responsible for all research and development costs for the POLQ program, including those incurred by the Company. The Company will be eligible to receive future development and regulatory milestones of up to $ 485.0 million, with respect to each POLQ product, including as applicable, for multiple POLQ products that target certain alternative protein domains or are based on alternative modalities. Additionally, the Company is eligible to receive up to $ 475.0 million of commercial milestones with respect to each POLQ product. The Company is also entitled to receive tiered royalties on global net sales of POLQ products by GSK, its affiliates and their sublicensees ranging from high single digit to sub-teen double digit percentages, subject to certain customary reductions. 20 WRN Program Pursuant to the GSK Collaboration Agreement, GSK holds a global, exclusive license to develop and commercialize WRN products arising out of the WRN program. The Company and GSK will collaborate on ongoing preclinical research for the WRN program, and GSK will lead clinical development for the WRN program, with IDEAYA responsible for 20 % and GSK responsible for 80 % of such global research and development costs. The cost-sharing percentages will be adjusted based on the actual ratio of U.S. to global profits for WRN products, as measured three and six years after global commercial launch thereof. The Company will be eligible to receive future development milestones of up to $ 485.0 million, with respect to each WRN product, including as applicable, for multiple WRN products that are based on alternative modalities. Additionally, the Company will be eligible to receive up to $ 475.0 million of commercial milestones with respect to each WRN product. The Company will be entitled to receive 50 % of U.S. net profits and tiered royalties on global non-U.S. net sales of WRN products by GSK, its affiliates and their sublicensees ranging from high single digit to sub-teen double digit percentages, subject to certain customary reductions. The Company will have a right to opt-out of the 50 % U.S. net profit share and corresponding research and development cost share for the WRN program, and would be eligible to receive tiered royalties on U.S. net sales of WRN products by GSK, its affiliates and their sublicensees at the same royalty rates as for global non-U.S. net sales thereafter, with economic adjustments based on the stage of the WRN program at the time of opt-out. General Under the terms of the GSK Collaboration Agreement, subject to certain exceptions, the Company and GSK will not, directly or through third parties, develop or commercialize other products whose primary and intended mechanism of action is the modulation of WRN, POLQ, or MAT2A (unless GSK does not exercise the Option, in which case such restriction shall cease to apply with respect to MAT2A) for an agreed upon period of time. The Company and GSK will form a joint steering committee, joint development committees, and joint commercialization committees responsible for coordinating all activities under the GSK Collaboration Agreement. Ownership of intellectual property developed under the GSK Collaboration Agreement is allocated between or shared by the parties depending on development and subject matter. GSK’s royalty obligations continue with respect to each country and each product until the later of (i) the date on which such product is no longer covered by certain intellectual property rights in such country and (ii) the 10th anniversary of the first commercial sale of such product in such country. Each party has the right to sublicense its rights under the GSK Collaboration Agreement subject to certain conditions. The GSK Collaboration Agreement will continue in effect on a product-by-product and country-by-country basis until the expiration of the obligation to make payments under the GSK Collaboration Agreement with respect to such product in each country, unless earlier terminated by either party pursuant to its terms. Either the Company or GSK may terminate the GSK Collaboration Agreement for the other party’s insolvency or certain uncured breaches. The Company may terminate the GSK Collaboration Agreement if GSK or any of its sublicensees or affiliates challenge certain patents of the Company. GSK may terminate the GSK Collaboration Agreement in its entirety or on a target-by-target basis upon 90 -day notice to the Company. 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, 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. 21 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 June 30, 2021, the Company has not achieved any of the development and sales milestones. 10. Revenue Recognition The Company recognizes revenue in accordance with ASC 606 for the GSK Collaboration Agreement (see No. 9, Significant Agreements). Disaggregation of Revenue The following table presents revenue disaggregated by research program (in thousands): Three Months Ended June 30, 2021 Six Months Ended June 30, 2021 MAT2A $ 1,763 $ 3,230 Pol Theta 5,074 8,609 WRN 1,919 4,164 Total collaboration revenue $ 8,756 $ 16,003 Contract balances The following table presents the significant changes in the balance of contract liabilities during the six months ended June 30, 2021 (in thousands): Contract liabilities Balance as of December 31, 2020 $ 83,773 Reclassification to revenue, as the result of performance obligations satisfied ( 16,003 ) Cash received for costs reimbursements 1,045 Increase in accounts receivable 1,325 Balance as of June 30, 2021 $ 70,140 The timing of revenue recognition, billings, and cash collections results in accounts receivable, contract assets, and contract liabilities on the balance sheets. 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 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 The Company has identified the following six performance obligations associated with the GSK Collaboration Agreement: (i) Preclinical and Phase 1 Monotherapy clinical research and development services under the MAT2A program (“MAT2A R&D Services”) (ii) Preclinical research services and the related license to IDEAYA-owned technology under the Pol Theta program (“Pol Theta R&D Services”) 22 (iii) Preclinical research services and the related license to IDEAYA-owned technology under the WRN program (“WRN R&D Services”) (iv) Material right associated with the option to license IDEAYA-owned technology under the MAT2A program (defined as the “Option” in Note 9) (v) Material right associated with the option to license to IDEAYA-owned technology under the MAT2A program to the extent necessary for preclinical activities in preparation for the MAT2A Combination Trial (“Preclinical MAT2A License”) (vi) Material right associated with the supply of MAT2A product for the MAT2A Combination Trial (“MAT2A Supply”) The Company will recognize revenue related to amounts allocated to the MAT2A R&D services as the underlying services are performed over the period through the delivery of the data package, which will be generated from its conduct of the MAT2A Phase 1 monotherapy clinical trial. The Company uses its internal research and development capability and may also engage third-party clinical research organizations, or CROs, in transferring the MAT2A R&D services, for which the Company acts as a principal. With respect to the Pol Theta and WRN programs, the Company identified two promises: (1) granting of the license to develop and commercialize Pol Theta and WRN products, respectively, and (2) the preclinical research services. The Company has determined that these two promises are not distinct within the context of the contract. As of the effective date of the GSK Collaboration Agreement, both programs were at an early stage, and the Company was yet to identify any development candidate for either program, which will require the completion of certain preclinical studies. After the Company and GSK identify a development candidate, a series of IND-enabling studies will be conducted before an Investigational New Drug application is submitted to the FDA. Due to the early stage of development, the Company’s preclinical research services are expected to transform the underlying technology and significantly modify or customize the license. Therefore, the two promises are not distinct from each other and are accounted for as a single performance obligation for each of the Pol Theta and WRN programs, respectively. The Company will recognize revenue related to amounts allocated to the Pol Theta R&D Services and WRN R&D Services as the underlying services are performed over the period through the completion of the Pol Theta and WRN preclinical research programs, respectively. Within 90 days from the end of each calendar quarter, GSK will reimburse the Pol Theta program costs incurred by the Company. Within 75 days from the end of each calendar quarter, the Company and GSK will determine the amounts of WRN program costs incurred by both parties and the net amount owed by GSK to the Company or by the Company to GSK, which will be paid within 75 days from such determination by a reimbursing party. The Company uses its internal research capability and may also engage third-party clinical research organizations, or CROs, in transferring the Pol Theta R&D services and WRN R&D services, for which the Company acts as a principal. Upon exercise of the Option, GSK will obtain the license to develop and commercialize MAT2A products. The Company has concluded that this Option results in a material right as the option exercise fee contains a discount that GSK would not have otherwise received. The Company has determined the nature of the license to develop and commercialize MAT2A products to be functional. After exercise of the Option, the Company will recognize revenue, when it makes the underlying MAT2A technology available to GSK, which will immediately be able to use and benefit from its right to use the intellectual property. 23 The Company has identified two additional customer options under the MAT2A program, both of which have been determined a material right. 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 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. During the three and six months ended June 30, 2021, the Company recognized less than $ 0.1 million of revenue from the Preclinical MAT2A License in each period. 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. The Company has concluded that this supply option results in a material right as it involves a discount that GSK would not have otherwise received. 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 June 30, 2021. Transaction price allocated to the remaining performance obligations The following table presents the transaction price allocated to the remaining performance obligations as of June 30, 2021 (in thousands): Performance Obligations Allocation of Transaction Price MAT2A R&D Services $ 13,019 Pol Theta R&D Services 17,324 WRN R&D Services 23,779 The Option 17,316 MAT2A Supply 2,362 Total transaction price allocated to the remaining performance obligations $ 73,800 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. The Company will be entitled to receive the commercial milestones either when the first commercial sale occurs, or when the predefined net sales in a calendar year are achieved, upon which the variability will be resolved. 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. 24 11. Net Loss Per Share Attributable to Common Stockholders The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Numerator: Net loss attributable to common stockholders $ ( 10,947 ) $ ( 12,391 ) $ ( 19,968 ) $ ( 24,434 ) Denominator: Weighted-average shares outstanding 32,864,249 21,070,679 32,334,859 20,705,962 Less: weighted-average unvested restricted shares and shares subject to repurchase ( 9,323 ) ( 68,949 ) ( 13,378 ) ( 79,823 ) Weighted-average shares used in computing net loss per share attributable to common stock, basic and diluted 32,854,926 21,001,730 32,321,481 20,626,139 Net loss per share attributable to common stockholders, basic and diluted $ ( 0.33 ) $ ( 0.59 ) $ ( 0.62 ) $ ( 1.18 ) 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 June 30, 2021 2020 Options to purchase common stock 3,645,582 2,480,542 Unvested restricted stock awards 7,313 14,625 Unvested early exercised common stock options 1,255 44,861 Total 3,654,150 2,540,028 12. Subsequent Event On July 12, 2021, the Company completed an underwritten public offering and sold and issued 5,333,333 shares of common stock at a price to the public of $ 17.25 per share for net proceeds of $ 86.5 million, after deducting underwriting discounts and commissions but before deducting other offering expenses, which included shares issued upon the underwriters’ exercise in full of their overallotment option to purchase 695,652 additional shares. 25