Intellia Therapeutics, Inc. 10-Q

Item 1. Financial Statements INTELLIA THERAPEUTICS, INC. Condensed Consolidated Balance Sheets (unaudited) (Amounts in thousands except share and per share data) March 31, 2021 December 31, 2020 ASSETS Current Assets: Cash and cash equivalents $ 141,538 $ 160,020 Marketable securities 442,525 437,351 Accounts receivable 953 2,130 Prepaid expenses and other current assets 16,068 17,016 Total current assets 601,084 616,517 Marketable securities - noncurrent 16,735 - Property and equipment, net 16,157 15,943 Operating lease right-of-use assets 77,912 39,114 Other assets 5,003 4,748 Total Assets $ 716,891 $ 676,322 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ 8,688 $ 10,460 Accrued expenses 21,215 25,554 Current portion of operating lease liability 8,255 5,696 Current portion of deferred revenue 22,544 22,544 Total current liabilities 60,702 64,254 Deferred revenue, net of current portion 45,829 51,387 Long-term operating lease liability 64,487 33,609 Commitments and contingencies (Note 6) Stockholders’ Equity: Common stock, $ 0.0001 par value; 120,000,000 shares authorized; 67,890,334 and 66,234,056 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively 7 7 Additional paid-in capital 1,027,192 962,173 Accumulated other comprehensive (loss) income ( 12 ) 1 Accumulated deficit ( 481,314 ) ( 435,109 ) Total stockholders’ equity 545,873 527,072 Total Liabilities and Stockholders’ Equity $ 716,891 $ 676,322 See notes to condensed consolidated financial statements. 3 INTELLIA THERAPEUTICS, INC. Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) (Amounts in thousands except per share data) Three Months Ended March 31, 2021 2020 Collaboration revenue $ 6,445 $ 12,916 Operating expenses: Research and development 39,276 34,650 General and administrative 13,594 11,314 Total operating expenses 52,870 45,964 Operating loss ( 46,425 ) ( 33,048 ) Interest income 220 1,242 Net loss $ ( 46,205 ) $ ( 31,806 ) Net loss per share, basic and diluted $ ( 0.69 ) $ ( 0.63 ) Weighted average shares outstanding, basic and diluted 67,183 50,491 Other comprehensive (loss) income: Unrealized (loss) gain on marketable securities ( 13 ) 112 Comprehensive loss $ ( 46,218 ) $ ( 31,694 ) See notes to condensed consolidated financial statements. 4 INTELLIA THERAPEUTICS, INC. Condensed Consolidated Statements of Cash Flows (unaudited) (Amounts in thousands) Three Months Ended March 31, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 46,205 ) $ ( 31,806 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,591 1,541 Equity-based compensation 6,424 4,157 Amortization/accretion of investment premiums/discounts 1,209 ( 200 ) Changes in operating assets and liabilities: Accounts receivable 1,177 ( 8,748 ) Prepaid expenses and other current assets ( 5,448 ) ( 448 ) Operating right-of-use assets 1,596 1,566 Other assets ( 255 ) 97 Accounts payable ( 917 ) ( 370 ) Accrued expenses ( 4,588 ) 177 Deferred revenue ( 5,558 ) ( 3,151 ) Operating lease liabilities ( 1,402 ) ( 1,360 ) Net cash used in operating activities ( 52,376 ) ( 38,545 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment ( 2,412 ) ( 845 ) Purchases of marketable securities ( 148,330 ) ( 31,207 ) Maturities of marketable securities 125,200 89,500 Net cash (used in) provided by investing activities ( 25,542 ) 57,448 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock through at-the-market offerings, net of issuance costs 45,255 4,528 Proceeds from options exercised 13,340 336 Net cash provided by financing activities 58,595 4,864 Net (decrease) increase in cash and cash equivalents and restricted cash and cash equivalents ( 19,323 ) 23,767 Cash and cash equivalents and restricted cash and cash equivalents, beginning of period 164,606 57,226 Cash and cash equivalents and restricted cash and cash equivalents, end of period $ 145,283 $ 80,993 Reconciliation of cash and cash equivalents and restricted cash and cash equivalents to condensed consolidated balance sheet: Cash and cash equivalents $ 141,538 $ 80,993 Restricted cash and cash equivalents, included in prepaids and other current assets and other assets 3,745 - Total cash and cash equivalents and restricted cash and cash equivalents $ 145,283 $ 80,993 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Purchases of property and equipment unpaid at period end $ 901 $ 750 Right-of-use assets acquired under operating leases 40,394 7,347 Proceeds from at-the-market offerings unpaid at period end - 551 See notes to condensed consolidated financial statements. 5 INTELLIA THERAPEUTICS, INC. Notes to Condensed Consolidated Financial Statements (unaudited) 1. Overview and Basis of Presentation Intellia Therapeutics, Inc. (“Intellia” or the “Company”) is a leading clinical-stage genome editing company, focused on developing proprietary, potentially curative CRISPR/Cas9-based therapeutics. CRISPR/Cas9, an acronym for C lustered, R egularly I nterspaced S hort P alindromic R epeats (“CRISPR”)/CRISPR associated 9 (“Cas9”), is a technology for genome editing, the process of altering selected sequences of genomic deoxyribonucleic acid (“DNA”). The Company believes the breakthrough 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 dose of treatment and creating enhanced engineered cell therapies. The Company’s combination of deep scientific, technical and clinical development experience, and proprietary innovations in genome editing and delivery technologies, 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”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted from this report, as is permitted by such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K (“Annual Report”) for the year ended December 31, 2020. The unaudited condensed consolidated financial statements include the accounts of Intellia Therapeutics, Inc. and its wholly owned, controlled subsidiary, Intellia Securities Corp. All intercompany balances and transactions have been eliminated in consolidation. Comprehensive loss is comprised of net loss and unrealized gain/loss on marketable securities. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates in these condensed consolidated financial statements have been made in connection with the calculation of revenues, research and development expenses and equity-based compensation expense. The Company bases its estimates on historical experience and various other assumptions that management believes to be reasonable under the circumstances at the time such estimates are made. Actual results could differ from those estimates. The Company periodically reviews its estimates in light of changes in circumstances, facts and experience. The extent of the impact of the coronavirus disease 19 (“COVID-19”) pandemic on the Company’s operational and financial performance will depend on certain developments, including the length and severity of this pandemic, as well as its effect on our employees, collaborators and vendors, all of which are uncertain and cannot be predicted. The Company cannot reasonably estimate the extent to which the disruption may materially impact its consolidated results of operations or financial position. The effects of material revisions in estimates are reflected in the condensed consolidated financial statements prospectively from the date of the change in estimate. In the opinion of management, the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the results for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. 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. Liquidity Since its inception through March 31, 2021, the Company has raised an aggregate of $ 1,165.3 million to fund its operations, of which $ 275.0 million was through its collaboration agreements, $ 170.5 million was from its initial public offering (“IPO”) and concurrent private placements, $ 438.3 million was from follow-on public offerings, $ 196.5 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 March 31, 2021, as well as research and cost reimbursement funding from its collaboration agreement with Regeneron Pharmaceuticals, Inc. (“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. 6 2. 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, 2020. There have been no material changes during the three months ended March 31, 2021, other than as noted below . Recent Accounting Pronouncements – Adopted In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify the accounting for income taxes . ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 on January 1, 2021. The adoption did not have a material effect on the Company’s condensed consolidated financial statements. 3. Marketable Securities The following table summarizes the Company’s available-for-sale marketable securities as of March 31, 2021 and December 31, 2020 at net book value: March 31, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In thousands) Marketable securities: U.S. Treasury and other government securities $ 204,473 $ 49 $ ( 4 ) $ 204,518 Financial institution debt securities 169,979 7 ( 45 ) 169,941 Corporate debt securities 51,311 1 ( 13 ) 51,299 Other asset-backed securities 33,509 1 ( 8 ) 33,502 Total $ 459,272 $ 58 $ ( 70 ) $ 459,260 December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (In thousands) Marketable securities: U.S. Treasury and other government securities $ 245,666 $ 13 $ ( 11 ) $ 245,668 Financial institution debt securities 138,445 6 ( 8 ) 138,443 Corporate debt securities 41,765 3 ( 2 ) 41,766 Other asset-backed securities 11,474 1 ( 1 ) 11,474 Total $ 437,350 $ 23 $ ( 22 ) $ 437,351 The amortized cost of available-for-sale securities is adjusted for amortization of premiums and accretion of discounts to maturity. At March 31, 2021 and December 31, 2020, the balance in the Company’s accumulated other comprehensive (loss) income was composed of activity related to the Company’s available-for-sale marketable securities. There were no realized gains or losses in the three months ended March 31, 2021 or for the year ended December 31, 2020. The Company did not reclassify any amounts out of accumulated other comprehensive (loss) income during this period. The Company did not have any securities in a material unrealized loss position at March 31, 2021 or December 31, 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 March 31, 2021 and December 31, 2020, the Company did no t hold any investments that matured beyond five years of the balance sheet date. 7 4 . Fair Value Measurements The Company classifies fair value-based measurements using a three-level hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1, quoted market prices in active markets for identical assets or liabilities; Level 2, observable inputs other than quoted market prices included in Level 1, such as quoted market prices for markets that are not active or other inputs that are observable or can be corroborated by observable market data; 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 March 31, 2021 and December 31, 2020, the Company’s financial assets recognized at fair value on a recurring basis consisted of the following: Fair Value as of March 31, 2021 Total Level 1 Level 2 Level 3 (In thousands) Cash equivalents and restricted cash equivalents $ 143,129 $ 143,129 $ - $ - Marketable securities: U.S. Treasury and other government securities 204,518 181,118 23,400 - Financial institution debt securities 169,941 - 169,941 - Corporate debt securities 51,299 - 51,299 - Other asset-backed securities 33,502 - 33,502 - Total marketable securities 459,260 181,118 278,142 - Total $ 602,389 $ 324,247 $ 278,142 $ - Fair Value as of December 31, 2020 Total Level 1 Level 2 Level 3 (In thousands) Cash equivalents and restricted cash equivalents $ 163,805 $ 163,805 $ - $ - Marketable securities: U.S. Treasury and other government securities 245,668 241,664 4,004 - Financial institution debt securities 138,443 - 138,443 - Corporate debt securities 41,766 - 41,766 - Other asset-backed securities 11,474 - 11,474 - Total marketable securities 437,351 241,664 195,687 - Total $ 601,156 $ 405,469 $ 195,687 $ - Certain of the Company’s financial assets, including cash equivalents, restricted cash equivalents and marketable securities, have been initially valued at the transaction price, and subsequently revalued at the end of each reporting period, utilizing third-party pricing services or other observable market data. The pricing services utilize industry standard valuation models and observable market inputs to determine value . After completing its validation procedures, the Company did not adjust or override any fair value measurements provided by the pricing services as of March 31, 2021 or December 31, 2020. Other financial instruments, including accounts receivable, accounts payable and accrued expense, are carried at cost, which approximates fair value due to the short duration and term to maturity. 8 5 . Accrued Expenses Accrued expenses consisted of the following: March 31, December 31, 2021 2020 (In thousands) Accrued research and development $ 10,010 $ 11,008 Employee compensation and benefits 6,244 10,920 Accrued legal and professional expenses 2,833 1,876 Accrued other 2,128 1,750 Total accrued expenses $ 21,215 $ 25,554 6. Commitments and Contingencies Litigation There have been no material changes to any of the outstanding litigation, nor is the Company a party to any new litigation, since December 31, 2020, except as described below. For further information please see the notes to the consolidated financial statements included in the Company’s Annual Report for the year ended December 31, 2020. Caribou Arbitration On October 17, 2018, the Company initiated an arbitration proceeding against Caribou Biosciences, Inc. (“Caribou”) asserting that Caribou violated the terms and conditions of a license agreement the Company entered into with them in July 2014 related to certain IP (the “Caribou License”), as well as other contractual and legal obligations to the Company, by using and seeking to license to third parties two patent families relating to specific structural or chemical modifications of guide RNAs (“gRNAs”), that were purportedly invented or controlled by Caribou, in the Company’s exclusive human therapeutic field, before an agreed-upon cutoff date of January 30, 2018. On September 26, 2019, the Company announced that the arbitration panel issued an interim award concluding that both the structural and chemical gRNA modification technologies were exclusively licensed to the Company by Caribou pursuant to the Caribou License. Nevertheless, the arbitration panel, solely with respect to the clinically modified gRNAs, stated that it will declare that Caribou has an equitable “leaseback”, which it described as exclusive, perpetual and worldwide (the “Caribou Award”). The Caribou Award does not include the structural guide modifications IP also at issue in the arbitration, any other IP exclusively licensed or sublicensed by Caribou to the Company under the Caribou License (including but not limited to the foundational CRISPR/Cas9 IP co-owned by the Regents of the University of California, University of Vienna and Dr. Emmanuelle Charpentier), or any other of the Company’s IP. On February 6, 2020, the panel clarified that the Caribou Award is limited to a particular on-going Caribou program, which seeks to develop a chimeric antigen receptor T (“CAR-T”) product directed at CD19. As instructed by the panel, the parties have been negotiating the terms of the Caribou Award, including Caribou’s future payments to the Company. License Agreements The Company is party to license agreements, which include contingent payments. These payments will become payable if and when certain development, regulatory and commercial milestones are achieved. As of March 31, 2021, the satisfaction and timing of the contingent payments is uncertain and not reasonably estimable . 7 . 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 March 31, 2021, the Company’s accounts receivable and contract liabilities were related to the Company’s collaboration with Regeneron. As of March 31, 2020, the Company’s accounts receivable and contract liabilities were related to the Company’s collaborations with Regeneron and Novartis Institutes for BioMedical Research (“Novartis”). 9 The following table presents changes in the Company’s accounts receivable and contract liabilities during the three months ended March 31, 2021 and 2020 (in thousands): Balance at Beginning of Period Additions Deductions Balance at End of Period Three Months Ended March 31, 2021 Accounts receivable $ 2,130 $ 953 $ ( 2,130 ) $ 953 Contract liabilities: Deferred revenue $ 73,931 $ - $ ( 5,558 ) $ 68,373 Balance at Beginning of Period Additions Deductions Balance at End of Period Three Months Ended March 31, 2020 Accounts receivable $ 4,620 $ 9,765 $ ( 1,017 ) $ 13,368 Contract liabilities: Deferred revenue $ 28,810 $ - $ ( 3,151 ) $ 25,659 During the three months ended March 31, 2021 and 2020, the Company recognized the following revenues as a result of changes in the contract liability balance (in thousands): Three Months Ended March 31, Revenue recognized in the period from: 2021 2020 Amounts included in the contract liability at the beginning of the period $ 5,558 $ 3,151 Costs to obtain and fulfill a contract The Company did not incur any expenses to obtain collaboration agreements and costs to fulfill those contracts do not generate or enhance resources of the Company. As such, no costs to obtain or fulfill a contract have been capitalized in any period. Regeneron Pharmaceuticals, Inc. License and Collaboration Agreement In April 2016, the Company entered into a license and collaboration agreement with Regeneron (the “2016 Regeneron Agreement”). The 2016 Regeneron Agreement has two principal components: (i) a product development component under which the parties will research, develop and commercialize CRISPR/Cas-based therapeutic products primarily focused on genome editing in the liver, and (ii) a technology collaboration component, pursuant to which the Company and Regeneron will engage in research-related activities aimed at discovering and developing novel technologies and improvements to CRISPR/Cas technology to enhance the Company’s genome editing platform. Under this agreement, the Company also may access the Regeneron Genetics Center and proprietary mouse models to be provided by Regeneron for a limited number of the Company’s liver programs. At the inception of the 2016 Regeneron Agreement, Regeneron selected the first of its 10 targets, transthyretin amyloidosis (“ATTR”), which is subject to a co-development and co-promotion agreement between the Company and Regeneron (the “ATTR Co/Co”). On May 30, 2020, the Company entered into (i) amendment no. 1 (the “2020 Regeneron Amendment”) to the 2016 Regeneron Agreement, (ii) co-development and co-funding agreements for the treatment of hemophilia A and hemophilia B (the “Hemophilia Co/Co”) agreements and (iii) a stock purchase agreement. The collaboration expansion builds upon the jointly developed targeted transgene insertion capabilities designed to durably restore missing therapeutic protein, and to overcome the limitations of traditional gene therapy. The collaboration was extended until April 2024, at which point Regeneron has an option to renew for an additional two years. The 2020 Regeneron Amendment also grants Regeneron exclusive rights to develop products for five additional in vivo CRISPR/Cas-based therapeutic liver targets and non-exclusive rights to independently develop and commercialize up to 10 ex vivo gene edited products made using certain defined cell types. Since December 31, 2020, there have been no material changes to the key terms of the 2016 Regeneron Agreement and the 2020 Regeneron Amendment (the “Amended Agreements”). For further information on the terms and conditions of these agreements, please see the notes to the consolidated financial statements included in the Company’s Annual Report for the year ended December 31, 2020. 10 Revenue Recognition – Collaboration Revenue. Through March 31, 2021, 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 $ 35.6 million primarily for research and development services under the ATTR Co/Co agreement. Through March 31, 2021 , the Company has recognized $ 129.7 million of collaboration revenue under all arrangements, including $ 6.4 million and $ 7.9 million during the three months ended March 31, 2021 and 2020, respectively, in the condensed consolidated statements of operations and comprehensive loss. This includes $ 0.9 million and $ 4.8 million during the three months ended March 31, 2021 and 2020, respectively, primarily representing payments due from Regeneron pursuant to the ATTR Co/Co agreement. As of March 31, 2021, there was approximately $ 68.4 million of the aggregate transaction price of the Amended Agreements remaining to be recognized, which the Company expects to be recognized during the research term through April 2024. As of March 31, 2021 and December 31, 2020, the Company had accounts receivable of $ 1.0 million and $ 2.1 million, respectively, and deferred revenue of $ 68.4 million and $ 73.9 million, respectively, related to the Amended Agreements. Novartis Institutes for BioMedical Research, Inc. In December 2014, the Company entered into a strategic collaboration agreement with Novartis (the “2014 Novartis Agreement”), primarily focused on the research of new ex vivo CRISPR/Cas9-edited therapies using CAR-T cells and hematopoietic stem cells (“HSCs”). The agreement was amended in December 2018 (the “Novartis Amendment”) to also include research on ocular stem cells (“OSCs”). In December 2019, per the terms of the 2014 Novartis Agreement, the research term ended, although the 2014 Novartis Agreement remains in effect, for which the Company will be eligible to receive milestone and royalty payments in the future. Since December 31, 2020, there have been no material changes to the key terms of the 2014 Novartis Agreement and the Novartis Amendment. For further information on the terms and conditions of these agreements, please see the notes to the consolidated financial statements included in the Company’s Annual Report for the year ended December 31, 2020. Revenue Recognition – Milestone . During the three months ended March 31, 2020, the U.S. Food and Drug Administration (“FDA”) accepted the investigational new drug (“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 months ended March 31, 2021 or 2020. The Company is eligible to receive additional downstream success-based milestones and royalties. As of March 31, 2021 and December 31, 2020, the Company had no accounts receivable or deferred revenue related to the 2014 Novartis Agreement and the Novartis Amendment. 8 . Leases 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 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 March 31, 2021 the Company determined, in accordance with Accounting Standards Codification 842, “Leases (Topic 842)” , that the commencement date of the lease has been met as the facility was substantially complete and available for use and, accordingly, the Company recognized a right-of-use asset and a lease liability of approximately $ 40.4 million and $ 34.8 million, respectively, in the first quarter of 2021 related to the 281 Albany Lease. In determining the lease liability, the Company used an incremental borrowing rate of 5.52 % based on a number of factors including the total lease payments, the Company’s credit rating, and the lease term. In addition, the Company had prepaid approximately $ 5.6 million in lease payments as of March 31, 2021 under the terms of this lease, which are included in the recognized right-of-use 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. In addition, the landlord agreed to contribute an aggregate of $ 4.4 million toward the cost of construction and tenant improvements for the premises. In accordance with the 281 Albany Lease, the Company is required to maintain a letter of credit in the amount of $ 1.9 million that is restricted for the 11 term of the lease. These restricted cash equivalents are reported in “Other Assets” in the Company’s condensed consolidated balance sheet. The Company has the option to extend the 281 Albany Lease for two successive five-year terms . The option for this extension is not included as part of the lease liability and right-of-use asset at March 31, 2021, as it is not reasonably certain that it will be exercised. 9. Equity-Based Compensation In April 2016, the Company adopted the Amended and Restated 2015 Stock Option and Incentive Plan (the “2015 Plan”). The 2015 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units (“RSUs”) and other stock-based awards. Recipients of incentive stock options and non-qualified stock options are eligible to purchase shares of the Company’s common stock at an exercise price equal to the fair value of such stock on the grant date. Stock options granted under the 2015 Plan generally vest 25 % on the first anniversary of the original vesting date, with the balance vesting monthly over the remaining three years , unless they contain specific performance-based vesting provisions. The maximum term of stock options granted under the 2015 Plan is ten years . As of March 31, 2021, there were 2,890,540 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 March 31, 2021 2020 (In thousands) Research and development $ 3,491 $ 2,160 General and administrative 2,933 1,997 Total $ 6,424 $ 4,157 Restricted Stock 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 three months ended March 31, 2021: Number of Shares Weighted Average Grant Date Fair Value per Share Unvested restricted stock as of December 31, 2020 193,936 $ 23.98 Granted 259,839 57.71 Vested - - Cancelled ( 11,035 ) 27.59 Unvested restricted stock as of March 31, 2021 442,740 $ 43.69 In March 2021, the Company granted 259,839 RSUs with a service condition to executive and non-executive employees as part of their annual grant, which vest over a period of four years . The weighted average grant date fair value of these RSUs was $ 57.71 . The vesting start date for these RSUs is January 1, 2021. 12 Included in the unvested restricted stock as of March 31, 2021 are 107,360 RSUs 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. The fair value of the RSUs at date of grant was $ 15.05 . There has been no additional vesting of these shares in the three months ended March 31, 2021. As of March 31, 2021, there was $ 17.8 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 3.6 years. 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 $ 36.64 and $ 7.96 per option for those options granted during the three months ended March 31, 2021 and 2020, respectively. The total intrinsic value (the amount by which the fair market value exceeded the exercise price) of stock options exercised during the three months ended March 31, 2021 and 2020 was $ 54.8 million and $ 0.3 million, respectively. Weighted average assumptions used to apply this pricing model were as follows: Three Months Ended March 31, 2021 2020 Risk-free interest rate 0.9 % 1.0 % Expected life of options 6.0 years 6.0 years Expected volatility of underlying stock 72.0 % 66.7 % Expected dividend yield 0.0 % 0.0 % Risk-free Interest Rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant with maturities approximately equal to the option’s expected term. Expected Dividend Yield. The expected dividend yield assumption is based on the fact that the Company has never paid cash dividends and has no present intention to pay cash dividends. Expected Volatility. The expected volatility was derived from a blend of the Company’s historical volatility and an average of the historical stock volatilities of several peer companies within the Company’s industry, both over a period equivalent to the expected term of the stock option grants. Expected Term. The expected term represents the period that stock option awards are expected to be outstanding. For option grants that are considered to be “plain vanilla,” the Company determines the expected term using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options. The Company uses the simplified method because it does not have sufficient historical option exercise data to provide a reasonable basis upon which to estimate the expected term. 13 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 three months ended March 3 1 , 20 2 1 : Number of Options Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (In years) (In thousands) Outstanding at December 31, 2020 6,977,440 $ 15.43 Granted 1,645,823 57.94 Exercised ( 1,014,569 ) 13.15 Forfeited ( 129,393 ) 20.71 Outstanding at March 31, 2021 7,479,301 $ 25.00 8.25 $ 413,258 Exercisable at March 31, 2021 2,734,966 As of March 31, 2021, there was $ 86.9 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 3.2 years. 10 . Loss Per Share The Company calculates basic loss per share by dividing net loss for each respective period by the weighted average number of common shares outstanding for each respective period. The Company computes diluted loss per share after giving consideration to the dilutive effect of stock options and unvested restricted stock that are outstanding during the period, except where such securities would be anti-dilutive. Basic and diluted loss per share was calculated as follows: Three Months Ended March 31, 2021 2020 (In thousands) Net loss $ ( 46,205 ) $ ( 31,806 ) Weighted average shares outstanding, basic and diluted 67,183 50,491 Net loss per share, basic and diluted $ ( 0.69 ) $ ( 0.63 ) The following common stock equivalents were excluded from the calculation of diluted loss per share because their inclusion would have been anti-dilutive: Three Months Ended March 31, 2021 2020 (In thousands) Unvested restricted stock 443 248 Stock options 7,479 7,243 7,922 7,491 14 11 . Stockholders’ Equity The following tables present changes in stockholders’ equity for the three-month periods ended March 31, 2021 and 2020 (in thousands, except share data): Additional Accumulated Other Total Common Paid-In Comprehensive Accumulated Stockholders’ Shares Amount Capital Income (Loss) Deficit Equity Balance at December 31, 2020 66,234,056 $ 7 $ 962,173 $ 1 $ ( 435,109 ) $ 527,072 Issuance of common stock through at-the-market offerings, net of issuance costs of $ 52 641,709 - 45,255 - - 45,255 Exercise of stock options 1,014,569 - 13,340 - - 13,340 Equity-based compensation - - 6,424 - - 6,424 Other comprehensive loss - - - ( 13 ) - ( 13 ) Net loss - - - - ( 46,205 ) ( 46,205 ) Balance at March 31, 2021 67,890,334 $ 7 $ 1,027,192 $ ( 12 ) $ ( 481,314 ) $ 545,873 Additional Accumulated Other Total Common Paid-In Comprehensive Accumulated Stockholders’ Shares Amount Capital Income Deficit Equity Balance at December 31, 2019 50,198,044 $ 5 $ 570,493 $ 261 $ ( 300,878 ) $ 269,881 Issuance of common stock through at-the-market offerings, net of issuance costs of $ 48 351,252 - 5,079 - - 5,079 Exercise of stock options 53,579 - 336 - - 336 Equity-based compensation - - 4,157 - - 4,157 Other comprehensive income - - - 112 - 112 Net loss - - - - ( 31,806 ) ( 31,806 ) Balance at March 31, 2020 50,602,875 $ 5 $ 580,065 $ 373 $ ( 332,684 ) $ 247,759 At-the-Market Offering Programs I n August 2019, the Company entered into an Open Market Sale Agreement (the “2019 Sales Agreement”) with Jefferies, under which Jefferies was able to offer and sell, from time to time in “at-the-market” offerings, common stock having aggregate gross proceeds of up to $ 150.0 million. The Company agreed to pay Jefferies cash commissions of 3.0 % of the gross proceeds of sales of common stock under the 2019 Sales Agreement. Please refer to the Company’s Annual Report for the year ended December 31, 2020 for additional information regarding these offerings. During the three months ended March 31, 2021, the Company issued 641,709 shares of its common stock in a series of sales at an average price of $ 72.79 per share in accordance with the 2019 Sales Agreement, for aggregate net proceeds of $ 45.3 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. During the three months ended March 31, 2020, the Company issued 351,252 shares of its common stock in a series of sales at an average price of $ 15.05 per share in accordance with the 2019 Sales Agreement, for aggregate net proceeds of $ 5.1 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 March 31, 2021, $ 47.4 million in shares of common stock remain eligible for sale under the 2019 Sales Agreement. 1 2 . Related Party Transactions 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. These transactions are reviewed quarterly and to date have not been material to the Company’s condensed consolidated financial statements. 15