What changed in this filing

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Item 1. Financial Statements

2020-11-05 compared with 2020-08-06 · 103 added, 92 removed, 481 unchanged (29% of the section changed)

3 unchanged sentences

(Amounts in thousands except share and per share data)

September 30,

Current Assets:

16 unchanged sentences

Long-term operating lease liability

Other long-term liabilities

Commitments and contingencies (Note 6)

3 unchanged sentences

58,792,212 and 50,198,044 shares issued and outstanding at

June 30, 2020 and December 31, 2019, respectively

September 30, 2020 and December 31, 2019, respectively

Additional paid-in capital

7 unchanged sentences

(Amounts in thousands except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Collaboration revenue

14 unchanged sentences

(Amounts in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

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

9 unchanged sentences

Operating 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

Net cash provided by investing activities

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

2 unchanged sentences

Proceeds from issuance of common stock through at-the-market offerings,

net of issuance costs of $ 0.1 million

net of issuance costs of $ 0.1 million and $ 0.3 million, respectively

Proceeds from issuance of common stock to Regeneron

13 unchanged sentences

Right-of-use assets acquired under operating leases

Proceeds from at-the-market offerings unpaid at period end

See notes to condensed consolidated financial statements.

3 unchanged sentences

Intellia Therapeutics, Inc.

(“Intellia” or the “Company”) is a leading genome editing company focused on developing curative therapeutics utilizing a biological tool known as CRISPR/Cas9, which stands for C lustered, R egularly I nterspaced S hort P alindromic R epeats (“CRISPR”)/CRISPR associated 9 (“Cas9”) .

(“Intellia” or the “Company”) is a leading genome editing company, focused on the development of proprietary, potentially curative therapeutics using a biological tool known as CRISPR/Cas9, which stands for C lustered, R egularly I nterspaced S hort P alindromic R epeats (“CRISPR”)/CRISPR associated 9 (“Cas9”) .

This is a technology for genome editing, the process of altering selected sequences of genomic deoxyribonucleic acid (“DNA”).

The Company believes that CRISPR/Cas9 technology has the potential to transform medicine by editing disease-associated genes with a single treatment course, and that it can also be used to create novel engineered cell therapies that can replace a patient’s diseased cells or effectively target various cancers and autoimmune diseases.

The Company is leveraging its leading scientific expertise, clinical development experience and intellectual property (“IP”) position to unlock a broad set of therapeutic applications for CRISPR/Cas9 genome editing and to develop a potential new class of therapeutic products.

The Company believes the CRISPR/Cas9 technology has the potential to transform medicine by both producing therapeutics that permanently edit and/or correct disease-associated genes in the human body with a single treatment course, and creating enhanced engineered cells that can treat oncological and immunological diseases.

The Company’s combination of deep scientific, technical and clinical development experience, along with its intellectual property (“IP”) portfolio, puts it in a position to unlock broad therapeutic applications of the CRISPR/Cas9 technology and create new classes of therapeutic products.

The condensed consolidated financial statements of the Company included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

19 unchanged sentences

The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period.

Since its inception through June 30, 2020, the Company has raised an aggregate of $ 889.8 million to fund its operations, of which $ 268.8 million was through its collaboration agreements, $ 170.5 million was from its initial public offering (“IPO”) and concurrent private placements, $ 249.1 million was from follow-on public offerings, $ 116.4 million was from at-the-market offerings and $ 85.0 million was from the sale of convertible preferred stock.

The Company expects that its cash, cash equivalents and marketable securities as of June 30, 2020, as well as research and cost reimbursement funding from its collaboration agreement with Regeneron, will enable the Company to fund its ongoing operating expenses and capital expenditure requirements for at least the twelve-month period following the issuance of these condensed consolidated financial statements.

Since its inception through September 30, 2020, the Company has raised an aggregate of $ 893.6 million to fund its operations, of which $ 272.6 million was through its collaboration agreements, $ 170.5 million was from its initial public offering (“IPO”) and concurrent private placements, $ 249.1 million was from follow-on public offerings, $ 116.4 million was from at-the-market offerings and $ 85.0 million was from the sale of convertible preferred stock.

The Company expects that its cash, cash equivalents and marketable securities as of September 30, 2020, as well as research and cost reimbursement funding from its collaboration agreement with Regeneron (see Note 7), will enable the Company to fund its ongoing operating expenses and capital expenditure requirements for at least the twelve-month period following the issuance of these condensed consolidated financial statements.

Summary of Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies” to the consolidated financial statements included in the Annual Report for the year ended December 31, 2019.

There have been no material changes during the six months ended June 30, 2020, other than as noted below .

There have been no material changes during the nine months ended September 30, 2020, other than as noted below .

Restricted Cash Equivalents

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The letter of credit is required to be maintained throughout the term of the lease, which is ten years.

These restricted cash equivalents amount to $ 1.9 million and are reported in “Other Assets” in the Company’s condensed consolidated balance sheet .

These restricted cash equivalents amount to $ 1.9 million and are included in “Other Assets” in the Company’s condensed consolidated balance sheet .

Recent Accounting Pronouncements – Adopted

3 unchanged sentences

The Company adopted ASU 2018-13 on January 1, 2020.

The adoption did not have a material impact on the Company’s condensed consolidated financial statements as of and for the three or six months ended June 30, 2020.

The adoption did not have a material impact on the Company’s condensed consolidated financial statements as of and for the three or nine months ended September 30, 2020.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326):

5 unchanged sentences

The Company adopted ASU 2016-13 on January 1, 2020.

The adoption did not have a material effect on the Company’s condensed consolidated financial statements as of and for the three or six months ended June 30, 2020 .

The adoption did not have a material effect on the Company’s condensed consolidated financial statements as of and for the three or nine months ended September 30, 2020 .

Recent Accounting Pronouncements – Issued but not yet adopted

6 unchanged sentences

Marketable Securities

The following table summarizes the Company’s available-for-sale marketable securities as of June 30, 2020 and December 31, 2019 at net book value:

June 30, 2020

The following table summarizes the Company’s available-for-sale marketable securities as of September 30, 2020 and December 31, 2019 at net book value:

September 30, 2020

Gross Unrealized

6 unchanged sentences

Corporate debt securities

Other asset-backed securities

December 31, 2019

9 unchanged sentences

The amortized cost of available-for-sale securities is adjusted for amortization of premiums and accretion of discounts to maturity.

At June 30, 2020 and December 31, 2019, the balance in the Company’s accumulated other comprehensive income was composed of activity related to the Company’s available-for-sale marketable securities.

There were no material realized gains or losses in the six months ended June 30, 2020 or for the year ended December 31, 2019 and, as a result, the Company did not reclassify any amounts out of accumulated other comprehensive income during the period.

The Company did not have any securities in a material unrealized loss position at June 30, 2020.

At September 30, 2020 and December 31, 2019, the balance in the Company’s accumulated other comprehensive income was composed of activity related to the Company’s available-for-sale marketable securities.

There were no material realized gains or losses in the nine months ended September 30, 2020 or for the year ended December 31, 2019.

The Company did not reclassify any amounts out of accumulated other comprehensive income during this period.

The Company did not have any securities in a material unrealized loss position at September 30, 2020.

The Company's available-for-sale securities that are classified as short-term marketable securities in the condensed consolidated balance sheet mature within one year or less as of the balance sheet date.

Available-for-sale securities that are classified as noncurrent in the condensed consolidated balance sheet are those that mature after one year but within five years from the balance sheet date and that the Company does not intend to dispose of within the next twelve months.

At June 30, 2020 and December 31, 2019, the Company did no t hold any investments that matured beyond five years of the balance sheet date.

At September 30, 2020 and December 31, 2019, the Company did no t hold any investments that matured beyond five years of the balance sheet date.

Fair Value Measurements

5 unchanged sentences

and Level 3, unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

As of June 30, 2020 and December 31, 2019, the Company’s financial assets recognized at fair value on a recurring basis consisted of the following:

Fair Value as of June 30, 2020

As of September 30, 2020 and December 31, 2019, the Company’s financial assets recognized at fair value on a recurring basis consisted of the following:

Fair Value as of September 30, 2020

(In thousands)

4 unchanged sentences

Corporate debt securities

Other asset-backed securities

Total marketable securities

10 unchanged sentences

The pricing services utilize industry standard valuation models and observable market inputs to determine value .

After completing our validation procedures, the Company did not adjust or override any fair value measurements provided by the pricing services as of June 30, 2020 or December 31, 2019.

After completing our validation procedures, the Company did not adjust or override any fair value measurements provided by the pricing services as of September 30, 2020 or December 31, 2019.

Other financial instruments, including accounts receivable, accounts payable and accrued expense, are carried at cost, which approximate fair value due to the short duration and term to maturity.

1 unchanged sentence

Accrued expenses consisted of the following:

September 30,

(In thousands)

Accrued research and development

Employee compensation and benefits

Accrued research and development

Accrued legal and professional expenses

7 unchanged sentences

These payments will become payable if and when certain development, regulatory and commercial milestones are achieved.

As of June 30, 2020, the satisfaction and timing of the contingent payments is uncertain and not reasonably estimable .

As of September 30, 2020, the satisfaction and timing of the contingent payments is uncertain and not reasonably estimable .

Collaborations

To accelerate the development and commercialization of CRISPR/Cas9-based products in multiple therapeutic areas, the Company has formed, and intends to seek other opportunities to form, strategic alliances with collaborators who can augment its leadership in CRISPR/Cas9 therapeutic development.

As of June 30, 2020, the Company’s accounts receivable and contract liabilities were primarily related to the Company’s collaboration with Regeneron Pharmaceuticals, Inc.

As of September 30, 2020, the Company’s accounts receivable and contract liabilities were related to the Company’s collaboration with Regeneron Pharmaceuticals, Inc.

(“Regeneron”).

As of June 30, 2019, the Company’s accounts receivable and contract liabilities were primarily related to the Company’s collaborations with Regeneron and Novartis Institutes for BioMedical Research (“Novartis”).

The following table presents changes in the Company’s accounts receivable and contract liabilities during the six months ended June 30, 2020 and 2019 (in thousands):

As of September 30, 2019, the Company’s accounts receivable and contract liabilities were related to the Company’s collaborations with Regeneron and Novartis Institutes for BioMedical Research (“Novartis”).

The following table presents changes in the Company’s accounts receivable and contract liabilities during the nine months ended September 30, 2020 and 2019 (in thousands):

Balance at End

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Accounts receivable

2 unchanged sentences

Balance at End

Six Months Ended June 30, 2019

Nine Months Ended September 30, 2019

Accounts receivable

1 unchanged sentence

Deferred revenue

During the six months ended June 30, 2020 and 2019, the Company recognized the following revenues as a result of changes in the contract liability balance (in thousands):

Six Months Ended June 30,

During the nine months ended September 30, 2020 and 2019, the Company recognized the following revenues as a result of changes in the contract liability balance (in thousands):

Nine Months Ended September 30,

Revenue recognized in the period from:

34 unchanged sentences

The Company transferred the license to develop the Factor VIII target for the treatment of hemophilia A to Regeneron .

In addition, a target that was previously a Regeneron evaluation target was transferred back to the Company as an Intellia reserved liver target.

In addition, a target that was previously a Regeneron evaluation target was transferred back to the Company as an Intellia reserved liver target with certain reserved rights for Regeneron .

In connection with the 2020 Regeneron Amendment, the Company and Regeneron also entered into the Hemophilia Co/Co agreements, which are directed to Factor VIII and Factor IX for the treatment of hemophilia A and hemophilia B.

13 unchanged sentences

The Company may assist, as requested by Regeneron, with the later discovery and research of product candidates directed to any selected target.

For each selected target, Regeneron is required to use commercially reasonable efforts to submit regulatory filings necessary to achieve investigational new drug (“IND”), or other regulatory acceptance for at least one product directed to each applicable target and, following IND acceptance, to develop and commercialize at least one such product.

For each selected target, Regeneron is required to use commercially reasonable efforts to submit regulatory filings necessary to achieve investigational new drug (“IND”), or other regulatory acceptance for at least one product directed to each applicable target and, following IND or other regulatory acceptance, to develop and commercialize at least one such product.

Pursuant to the 2016 Regeneron Agreement, the parties formed a joint steering committee, which is responsible for setting research objectives and overseeing the general strategies and research and development activities undertaken by the parties.

14 unchanged sentences

Agreement Structure.

Under the 2016 Regeneron Agreement, Regeneron had the right to exercise at least four options, after TTR , to enter into a Co/Co agreement for the Company’s liver targets (other than the Company’s reserved liver targets), while the Company had the opportunity to exercise at least one option to enter into a Co/Co agreement for Regeneron’s liver targets, the exact number of options being subject to certain conditions of the target selection process.

Under the 2016 Regeneron Agreement, Regeneron had the right to exercise at least four options, after ATTR, to enter into a Co/Co agreement for the Company’s liver targets (other than the Company’s reserved liver targets), while the Company had the opportunity to exercise at least one option to enter into a Co/Co agreement for Regeneron’s liver targets, the exact number of options being subject to certain conditions of the target selection process.

In connection with the 2020 Regeneron Amendment, the Company received one additional option to enter into a Co/Co agreement, while Regeneron’s number of Co/Co options remained the same.

49 unchanged sentences

All variable consideration will be fully constrained, until such point where the constraints can be lifted, at which point the Company will allocate the consideration to the performance obligations in the arrangement accordingly.

collaboration and associated research activities and the transfer of the license to develop the Factor VIII target for h emophilia A , on a relative standalone selling price basis.

The Company estimated the standalone selling price of the transfer of the license to develop the Factor VIII target for h emophilia A using the adjusted market assessment approach, whereby the Company estimated the market in which it sells goods or services and estimated the price that a customer in that market would be willing to pay for those goods or services.

The $ 110.9 million transaction price was allocated to the performance obligations including the licenses to targets and associated research activities and evaluation plans, the combined performance obligation including the technology collaboration and associated research activities and the transfer of the license to develop the Factor VIII target for hemophilia A, on a relative standalone selling price basis.

The Company estimated the standalone selling price of the transfer of the license to develop the Factor VIII target for hemophilia A using the adjusted market assessment approach, whereby the Company estimated the market in which it sells goods or services and estimated the price that a customer in that market would be willing to pay for those goods or services.

The Company estimated the standalone selling price of the combined performance obligation of the technology collaboration and associated research activities by taking into consideration internal estimates of research and development personnel needed to perform the research and development services.

2 unchanged sentences

The $ 91.9 million allocated to the combined performance obligation, including the licenses to targets and associated research activities and evaluation plans, as well as the $ 3.7 million allocated to the combined performance obligation, including the technology collaboration and associated research activities, are being recognized using a time elapsed inputs method over the remaining period of the collaboration which, in management’s judgment, is the best measure of progress towards satisfying the performance obligation as this method provides the most faithful depiction of the entity’s performance in transferring control of the goods and services promised to Regeneron and represents the Company’s best estimate of the period of the obligation.

The Company will re-evaluate the transaction price in each reporting period and when events whose outcome are resolved or other changes in circumstances occur.

The $ 15.3 million allocated to the transfer of the license to develop the Factor VIII target for hemophilia A will be recognized at a point in time when the Company transfers control of the hemophilia A target, which is expected to be in 2020.

The Company will re-evaluate the measure of progress in each reporting period and when events whose outcome are resolved or other changes in circumstances occur.

The $ 15.3 million allocated to the transfer of the license to develop the Factor VIII target for hemophilia A was recognized when the Company transferred control of the hemophilia A target during the quarter ended September 30, 2020.

Co/Co Agreements:

4 unchanged sentences

Revenue Recognition – Collaboration Revenue.

Through June 30, 2020, excluding amounts allocated to Regeneron’s purchase of the Company’s common stock, the Company recorded $ 145.0 million in upfront payments under the Amended Agreements and $ 32.6 million primarily for research and development services under the ATTR Co/Co agreement.

Through June 30, 2020 , the Company has recognized $ 94.4 million of collaboration revenue under all arrangements, including $ 16.3 million and $ 24.2 million during the three and six months ended June 30, 2020, respectively, and $ 6.3 million and $ 12.0 million during the three and six months ended June 30, 2019, respectively, in the condensed consolidated statements of operations and comprehensive loss.

This includes $ 3.8 million and $ 8.6 million during the three and six months ended June 30, 2020, respectively, and $ 3.2 million and $ 5.8 million during the three and six months ended June 30, 2019, respectively, primarily representing payments due from Regeneron pursuant to the ATTR Co/Co agreement.

As of June 30, 2020, there was approximately $ 85.3 million of the aggregate transaction price of the Amended Agreements remaining to be recognized, which the Company expects to be recognized ratably through April 2024.

In addition, $ 15.3 million of the aggregate transaction price, related to the transfer of the license to develop the Factor VIII target for hemophilia A, remains to be recognized, which the Company expects to be recognized when control is transferred.

As of June 30, 2020 and December 31, 2019, the Company had accounts receivable of $ 3.9 million and $ 3.6 million, respectively, and deferred revenue of $ 100.7 million and $ 28.8 million, respectively, related to the Amended Agreements.

Through September 30, 2020, excluding amounts allocated to Regeneron’s purchase of the Company’s common stock, the Company recorded $ 145.0 million in upfront payments under the Amended Agreements and $ 33.8 million primarily for research and development services under the ATTR Co/Co agreement.

Through September 30, 2020 , the Company has recognized $ 116.7 million of collaboration revenue under all arrangements, including $ 22.2 million and $ 46.4 million during the three and nine months ended September 30, 2020, respectively, and $ 5.8 million and $ 17.8 million during the three and nine months ended September 30, 2019, respectively, in the condensed consolidated statements of operations and comprehensive loss.

This includes $ 1.2 million and $ 9.8 million during the three and nine months ended September 30, 2020, respectively, and $ 2.6 million and $ 8.4 million during the three and nine months ended September 30, 2019, respectively, primarily representing payments due from Regeneron pursuant to the ATTR Co/Co agreement.

As of September 30, 2020, there was approximately $ 79.6 million of the aggregate transaction price of the Amended Agreements remaining to be recognized, which the Company expects to be recognized ratably through April 2024 .

As of September 30, 2020 and December 31, 2019, the Company had accounts receivable of $ 1.2 million and $ 3.6 million, respectively, and deferred revenue of $ 79.6 million and $ 28.8 million, respectively, related to the Amended Agreements.

Novartis Institutes for BioMedical Research , Inc.

5 unchanged sentences

Revenue Recognition – Collaboration Revenue.

Through June 30, 2020, excluding amounts allocated to Novartis’ purchase of the Company’s Class A-1 and Class A-2 Preferred Units, the Company had recorded a total of $ 62.4 million in cash under the 2014 Novartis Agreement and the Novartis Amendment.

Through June 30, 2020 , the Company recognized $ 62.4 million of collaboration revenue.

No revenue was recognized during the three months ended June 30, 2020 related to the 2014 Novartis Agreement and the Novartis Amendment.

The Company recognized $ 4.8 million and $ 9.5 million during the three and six months ended June 30, 2019, in the condensed consolidated statements of operations and comprehensive loss related to the 2014 Novartis Agreement and the Novartis Amendment.

Through September 30, 2020, excluding amounts allocated to Novartis’ purchase of the Company’s Class A-1 and Class A-2 Preferred Units, the Company had recorded a total of $ 62.4 million in cash under the 2014 Novartis Agreement and the Novartis Amendment.

Through September 30, 2020 , the Company recognized $ 62.4 million of collaboration revenue.

No revenue was recognized during the three or nine months ended September 30, 2020 related to the 2014 Novartis Agreement and the Novartis Amendment.

The Company recognized $ 4.8 million and $ 14.3 million during the three and nine months ended September 30, 2019, in the condensed consolidated statements of operations and comprehensive loss related to the 2014 Novartis Agreement and the Novartis Amendment.

As of December 31, 2019, the aggregate transaction price had been recognized in full.

Revenue Recognition – Milestone .

During the six months ended June 30, 2020, the U.S.

During the nine months ended September 30, 2020, the U.S.

Food and Drug Administration (“FDA”) accepted the IND application submitted by Novartis for a CRISPR/Cas9-based engineered cell therapy for the treatment of sickle cell disease.

As a result of meeting this milestone, the Company recognized $ 5.0 million as collaboration revenue within the condensed consolidated statement of operations and comprehensive loss.

No other milestones under the 2014 Novartis Agreement and the Novartis Amendment were achieved during the three or six months ended June 30, 2020 or 2019.

No other milestones under the 2014 Novartis Agreement and the Novartis Amendment were achieved during the three or nine months ended September 30, 2020 or 2019.

The Company is eligible to receive additional downstream success-based milestones and royalties.

As of June 30, 2020, the Company had no accounts receivable related to the 2014 Novartis Agreement and the Novartis Amendment.

As of September 30, 2020, the Company had no accounts receivable related to the 2014 Novartis Agreement and the Novartis Amendment.

As of December 31, 2019, the Company had accounts receivable of $ 1.0 million related to the 2014 Novartis Agreement and the Novartis Amendment.

As of June 30, 2020 and December 31, 2019, the Company had no deferred revenue related to the 2014 Novartis Agreement and the Novartis Amendment.

As of September 30, 2020 and December 31, 2019, the Company had no deferred revenue related to the 2014 Novartis Agreement and the Novartis Amendment.

In October 2014, the Company entered into an agreement to lease office and laboratory space at 130 Brookline Street (the “130 Brookline Lease”) in Cambridge, Massachusetts under an operating lease agreement with a term through January 2020 , with an option to extend the term of the lease for an additional five-year period.

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The Second Amendment extends the term of the 130 Brookline Lease by approximately six years through January 31, 2031 .

This extended term is included as part of the lease liability and right-of-use asset at June 30, 2020.

This extended term is included as part of the lease liability and right-of-use asset at September 30, 2020.

The Second Amendment also provides an option to extend the lease for two consecutive five-year terms .

The Company recognized a right-of-use asset and lease liability of approximately $ 7.3 million related to the Second Amendment.

In the first quarter of 2020, the Company recognized a right-of-use asset and lease liability of approximately $ 7.3 million related to the Second Amendment.

In March 2020, the Company entered into an agreement to lease approximately 39,000 square feet of office and laboratory space at 281 Albany Street in Cambridge, Massachusetts under an operating lease agreement (the “281 Albany Lease”).

The 281 Albany Lease is expected to commence on October 1, 2020 , and the Company’s obligation to pay rent will start on the date that is six months after the commencement date or the date on which the Company occupies the premises, whichever occurs earlier (the “Rent Commencement Date”).

The Company’s obligation to pay rent will start on the date that is six months after the commencement date or the date on which the Company occupies the premises, whichever occurs earlier (the “Rent Commencement Date”).

The initial term of the 281 Albany Lease is ten years following the Rent Commencement Date.

As of September 30, 2020 the Company determined, in accordance with Accounting Standards Codification 842, “Leases (Topic 842)” , that the lease commencement date has not been met as the Company does not control the underlying asset.

The base rent under the 281 Albany Lease is $ 99.00 per square foot per year during the first year of the term, which is subject to scheduled annual increases up to $ 128.87 per square foot per year during the last year of the initial term, plus certain operating expenses and taxes.

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The maximum term of stock options granted under the 2015 Plan is ten years .

As of June 30, 2020, there were 2,104,706 shares available for future issuance.

As of September 30, 2020, there were 2,144,877 shares available for future issuance.

The number of shares reserved for issuance under the 2015 Plan shall be cumulatively increased by four percent of the number of shares of stock issued and outstanding on the immediately preceding December 31 or such lesser number of shares of stock as determined by the board of directors.

Equity-based compensation expense is classified in the condensed consolidated statements of operations and comprehensive loss as follows :

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

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Restricted stock is measured at fair value based on the quoted price of the Company’s common stock.

The following table summarizes the Company’s restricted stock activity for the six months ended June 30, 2020:

The following table summarizes the Company’s restricted stock activity for the nine months ended September 30, 2020:

Average Grant

1 unchanged sentence

Unvested restricted stock as of December 31, 2019

Unvested restricted stock as of June 30, 2020

As of June 3 0 , 20 20 , there was $ 2.3 million of unrecognized equity-based compensation expense related to restricted stock that is expected to vest.

Unvested restricted stock as of September 30, 2020

As of September 3 0 , 20 20 , there was $ 1.7 million of unrecognized equity-based compensation expense related to restricted stock that is expected to vest.

These costs are expected to be recognized over a weighted average remaining vesting period of 1 .

As of June 3 0 , 2020, 71,875 of the unvested restricted stock outstanding are performance-based RSUs that vest upon obtaining certain scientific, financial and regulatory milestones through 2020.

These performance-based RSU s are not included in computing the diluted loss per share because the performance criteria had not been met as of the end of the reporting period .

In January 2020, the Company granted 181,020 RSUs to certain employees that include a performance condition in addition to a service condition.

As of September 3 0 , 2020, 47,916 of the unvested restricted stock outstanding are performance-based RSUs that vest upon obtaining certain scientific and regulatory milestones through 2020.

During the three months ended September 30, 2020, 23,959 performance-based RSUs were cancelled as the performance criteria had not been met as of the milestone measurement date.

The outstanding performance-based RSUs are not included in computing the diluted loss per share because the performance criteria had not been met as of the end of the reporting period .

In January 2020, the Company granted 181,020 RSUs to certain non-executive employees that include a performance condition in addition to a service condition.

The RSUs vest over a period of three years and are subject to accelerated vesting based on the Company’s programs achieving certain development milestones before December 1, 2022.

To date, the Company has not accelerated the vesting of the RSUs.

The grant date fair value of the RSUs is $ 15.05 .

The fair value of the RSUs at date of grant was $ 15.05 .

As of September 30, 2020, the Company had not accelerated the vesting of the RSUs.

Stock Options

The weighted average grant date fair value of options, estimated as of the grant date using the Black-Scholes option pricing model, was $ 9.04 and $ 8.16 per option for those options granted during the three and six months ended June 30, 2020 and $ 9.22 and $ 9.07 per option for those options granted during the three and six months ended June 30, 2019, respectively.

The total intrinsic value (the amount by which the fair market value exceeded the exercise price) of stock options exercised during the three and six months ended June 30, 2020 was $ 0.5 million and $ 0.8 million, respectively, and during the three and six months ended June 30, 2019 was $ 1.3 million and $ 1.5 million, respectively.

The weighted average grant date fair value of options, estimated as of the grant date using the Black-Scholes option pricing model, was $ 13.38 and $ 8.55 per option for those options granted during the three and nine months ended September 30, 2020 and $ 9.66 and $ 9.21 per option for those options granted during the three and nine months ended September 30, 2019, respectively.

The total intrinsic value (the amount by which the fair market value exceeded the exercise price) of stock options exercised during the three and nine months ended September 30, 2020 was $ 0.9 million and $ 1.7 million, respectively, and during the three and nine months ended September 30, 2019 was $ 0.2 million and $ 1.6 million, respectively.

Key assumptions used to apply this pricing model were as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Risk-free interest rate

2 unchanged sentences

5.5-6.0 years

Expected volatility of underlying stock

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The Company uses the market closing price of its common stock as reported on the Nasdaq Global Select Market to determine the fair value of the shares of common stock underlying stock options.

The following is a summary of stock option activity for the six months ended June 3 0 , 20 20 :

The following is a summary of stock option activity for the nine months ended September 3 0 , 20 20 :

(In thousands)

Outstanding at December 31, 2019

Outstanding at June 30, 2020

Exercisable at June 30, 2020

As of June 30, 2020, there was $ 39.1 million of unrecognized compensation cost related to stock options that have not yet vested.

Outstanding at September 30, 2020

Exercisable at September 30, 2020

As of September 30, 2020, there was $ 35.5 million of unrecognized compensation cost related to stock options that have not yet vested.

These costs are expected to be recognized over a weighted average remaining vesting period of 2.6 years.

Of the unvested stock options outstanding as of June 30, 2020, 183,750 are performance-based stock options that vest upon obtaining certain scientific, financial and regulatory milestones through 2020 .

At June 30, 2020, 143,750 performance-based options are not included in computing the diluted loss per share because the performance criteria had not been met as of the end of the reporting period.

Of the unvested stock options outstanding as of September 30, 2020, 135,832 are performance-based stock options that vest upon obtaining certain scientific and regulatory milestones through 2020 .

During the nine months ended September 30, 2020, 77,918 performance-based options were cancelled as the performance criteria had not been met as of the milestone measurement date.

At September 30, 2020, 95,832 performance-based options are not included in computing the diluted loss per share because the performance criteria had not been met as of the end of the reporting period.

Loss Per Share

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Basic and diluted loss per share was calculated as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(In thousands)

2 unchanged sentences

The following common stock equivalents were excluded from the calculation of diluted loss per share because their inclusion would have been anti-dilutive:

Three and Six Months Ended June 30,

Three and Nine Months Ended September 30,

(In thousands)

2 unchanged sentences

Stockholders’ Equity

The following tables present changes in stockholders’ equity for the six-month periods ended June 30, 2020 and 2019 (in thousands, except share data):

The following tables present changes in stockholders’ equity for the nine-month periods ended September 30, 2020 and 2019 (in thousands, except share data):

Comprehensive

20 unchanged sentences

Balance at June 30, 2020

Exercise of stock options

Equity-based compensation

Other comprehensive loss

Balance at September 30, 2020

Comprehensive

18 unchanged sentences

Balance at June 30, 2019

Issuance of common stock through at-the-market

offerings, net of issuance costs of $ 199

Exercise of stock options

Equity-based compensation

Other comprehensive gain

Balance at September 30, 2019

Follow-on Offering

14 unchanged sentences

During the year ended December 31, 2019, the Company issued 287,231 shares of its common stock, in a series of sales, at an average price of $ 16.48 per share, in accordance with the 2019 Sales Agreement for aggregate net proceeds of $ 4.4 million, after payment of cash commissions to Jefferies and approximately $ 0.2 million related to legal, accounting and other fees in connection with the sales.

During the six months ended June 30, 2020, the Company issued 1,107,100 shares of its common stock in a series of sales at an average price of $ 13.78 per share in accordance with the 2019 Sales Agreement, for aggregate net proceeds of $ 14.7 million after payment of cash commissions to Jefferies and approximately $ 0.1 million related to legal, accounting and other fees in connection with the sales.

As of June 30, 2020, $ 130.0 million in shares of common stock remain eligible for sale under the 2019 Sales Agreement.

During the nine months ended September 30, 2020, the Company issued 1,107,100 shares of its common stock in a series of sales at an average price of $ 13.78 per share in accordance with the 2019 Sales Agreement, for aggregate net proceeds of $ 14.7 million after payment of cash commissions to Jefferies and approximately $ 0.1 million related to legal, accounting and other fees in connection with the sales.

As of September 30, 2020, $ 130.0 million in shares of common stock remain eligible for sale under the 2019 Sales Agreement.

Related Party Transactions

Research Material Supplier

In the ordinary course of business, the Company may purchase materials or supplies from entities that are associated with a party that meets the criteria of a related party of the Company.

1 unchanged sentence

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