What changed in this filing

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Item 1. Financial Statements

2020-11-09 compared with 2020-08-10 · 103 added, 87 removed, 531 unchanged (26% of the section changed)

3 unchanged sentences

(in thousands, except share and per share amounts)

June 30, 2020

September 30, 2020

December 31, 2019

26 unchanged sentences

200,000,000 shares authorized;

45,215,766 and 45,138,408 shares issued as of June 30, 2020 and

45,263,849 and 45,138,408 shares issued as of September 30, 2020 and

December 31, 2019, respectively;

and 45,259,747 an d 45,116,742 shares

outstanding as of June 30, 2020 and December 31, 2019, respectively

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

Additional paid-in capital

7 unchanged sentences

(in thousands, except share and per share amounts)

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Collaboration revenue

13 unchanged sentences

(in thousands)

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Other comprehensive gain (loss):

29 unchanged sentences

Balance at June 30, 2019

Vesting of common stock from

option exercises

Issuance of common stock from

option exercises

Issuance of common stock pursuant to

employee stock purchase plan

Stock-based compensation

Other comprehensive gain

Balance at September 30, 2019

$0.0001 Par Value

18 unchanged sentences

Balance at June 30, 2020

Vesting of common stock from

option exercises

Issuance of common stock from

option exercises

Issuance of common stock pursuant to

employee stock purchase plan

Stock-based compensation

Other comprehensive gain

Balance at September 30, 2020

See notes to condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Six months ended June 30,

Nine months ended September 30,

Cash flows from operating activities:

15 unchanged sentences

Purchases of property and equipment

Net cash provided by investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities:

12 unchanged sentences

Unrealized (loss) gain on available for sale securities, net

Deferred offering costs included in accounts payable and accrued expenses

See notes to condensed consolidated financial statements.

20 unchanged sentences

The Company also simultaneously entered into a sales agreement with Cowen and Company, LLC (“Cowen”), as sales agent, providing for the offering, issuance and sale by the Company of up to an aggregate $ 150.0 million of its common stock from time to time in “at-the-market” offerings under the Shelf (the “ATM”).

The Company did no t sell any shares of common stock pursuant to the ATM during the six months ended June 30, 2020.

At June 30, 2020, there remained $ 150.0 million of common stock available for sale under the ATM.

The Company did no t sell any shares of common stock pursuant to the ATM during the nine months ended September 30, 2020.

At September 30, 2020, there remained $ 150.0 million of common stock available for sale under the ATM.

Simultaneous with the filing of the Shelf, the previous Registration Statement on Form S-3 (File No.

1 unchanged sentence

To date, the Company has not generated any revenue from product sales and does not expect to generate any revenue from the sale of product in the foreseeable future.

Through June 30, 2020, the Company has financed its operations primarily through public offerings of its common stock, the issuance of convertible preferred stock, and with proceeds from its collaboration and license agreement with Novartis Institutes of BioMedical Research, Inc.

Through September 30, 2020, the Company has financed its operations primarily through public offerings of its common stock, the issuance of convertible preferred stock, and with proceeds from its collaboration and license agreement with Novartis Institutes of BioMedical Research, Inc.

(“Novartis”) (see Note 10).

During the six months ended June 30, 2020, the Company incurred a net loss of $ 70.7 million and as of June 30, 2020, had $ 270.3 million in accumulated deficit.

During the nine months ended September 30, 2020, the Company incurred a net loss of $ 98.9 million and as of September 30, 2020, had $ 298.6 million in accumulated deficit.

The Company expects to incur additional operating losses and negative operating cash flows for the foreseeable future.

Based on current projections, management believes that existing cash, cash equivalents and short-term investments will enable the Company to continue its operations into the fourth quarter of 2021.

In the absence of a significant sourc e of recurring revenue, the continued viability of the Company beyond that point is dependent on its ability to continue to raise additional capital to finance its operations.

There can be no assurance that the Company will be able to obtain sufficient cap ital to cover its costs on acceptable terms, if at all.

Based on current projections, management now believes that existing cash and cash equivalents, together with the anticipated proceeds of $ 60.0 million from the Pfizer Inc.

private placement (see Note 11), will enable the Company to continue its operations into the third quarter of 2022.

In the absence of a significant source of recurring revenue, the continued viability of the Company beyond that point is dependent on its ability to continue to raise additional capital to finance its operations.

There can be no assurance that the Company will be able to obtain sufficient capital to cover its costs on acceptable terms, if at all.

Basis of Presentation — The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in conformity with accounting principles generally accepted in the United States of America (“U.S.

5 unchanged sentences

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements.

In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments which are necessary for a fair statement of the Company’s financial position as of June 30, 2020, and consolidated results of operations for the three and six months ended June 30, 2020 and 2019, and cash flows for the six months ended June 30, 2020 and 2019.

In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments which are necessary for a fair statement of the Company’s financial position as of September 30, 2020, and consolidated results of operations for the three and nine months ended September 30, 2020 and 2019, and cash flows for the nine months ended September 30, 2020 and 2019.

Such adjustments are of a normal and recurring nature.

The results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2020.

The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2020.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

13 unchanged sentences

The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts shown in the condensed consolidated statements of cash flows:

September 30,

(in thousands)

77 unchanged sentences

In assessing whether promised goods or services are distinct, the Company considers factors such as the stage of development of the underlying intellectual property, the capabilities of the customer to develop the intellectual property on its own or whether the required expertise is readily available and whether the goods or services are integral or dependent to other goods or services in the contract.

The Company estimates t he transaction price based on the amount expected to be received for transferring the promised goods or services in the contract.

The Company estimates the transaction price based on the amount expected to be received for transferring the promised goods or services in the contract.

The consideration may include fixed consideration and variable consideration.

At the inception of each arrangement that includ es variable consideration, the Company evaluates the amount of consideration to which the Company expects to be entitled to.

The Company utilizes either the most likely amount method or expected value method to estimate the amount expected to be received b ased on which method best predicts the amount expected to be received.

The amount of variable consideration that is included in the transaction price may be constrained and is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period.

At the inception of each arrangement that includes variable consideration, the Company e valuates the amount of consideration to which the Company expects to be entitled to.

The Company utilizes either the most likely amount method or expected value method to estimate the amount expected to be received based on which method best predicts the a mount expected to be received.

The amount of variable consideration that is included in the transaction price may be constrained and is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of th e cumulative revenue recognized will not occur in a future period.

The Company’s contracts may include development and regulatory milestone payments that are assessed under the most likely amount method and constrained until it is probable that a significant revenue reversal would not occur.

22 unchanged sentences

2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) to improve financial reporting by requiring more timely recording of credit losses on loans and other financial instruments held by financial institutions and other organizations.

ASU 2016-13 requires the measurement of all expected credit losses for financi al assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts.

ASU 2016-13 also requires enhanced disclosures to help investors and other financial statement users better understand signifi cant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio.

Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) to improve financial reporting by requir ing more timely recording of credit losses on loans and other financial instruments held by financial institutions and other organizations.

ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date b ased on historical experience, current conditions and reasonable and supportable forecasts.

ASU 2016-13 also requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in e stimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio.

ASU 2016-13 is effective for the Company beginning January 1, 2023, with early application permitted.

Th e Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated financial statements.

The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated financial statements.

In June 2018, the FASB issued ASU No.

11 unchanged sentences

The following table summarizes the Company’s investments, which are included in cash equivalents and short-term investments:

As of June 30, 2020

As of September 30, 2020

(in thousands)

Money market mutual funds

Commercial paper

Treasury securities

Corporate debt securities

As of December 31, 2019

7 unchanged sentences

The Company utilizes the specific identification method in computing realized gains and losses.

The Company had no realized gains and losses on its available-for-sale securities for the three and six months ended June 30, 2020 and 2019.

The Company had no realized gains and losses on its available-for-sale securities for the three and nine months ended September 30, 2020 and 2019.

The contractual maturity dates of all of the Company’s investments are less than one year .

3 unchanged sentences

Assets measured at fair value on a recurring basis were as follows:

September 30,

Quoted Prices

6 unchanged sentences

Money market mutual funds

Treasury securities

Total cash equivalents

Short-term investments:

Commercial paper

Treasury securities

Corporate debt securities

Total short-term investments

Total financial assets

Quoted Prices

18 unchanged sentences

Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

There were no transfers between fair value measure levels during the three and six months ended June 30, 2020 and 2019.

There were no transfers between fair value measure levels during the three and nine months ended September 30, 2020 and 2019.

PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following:

June 30, 2020

September 30, 2020

December 31, 2019

9 unchanged sentences

Property and equipment, net

Depreciation expense for the three and six months ended June 30, 2020 was approximately $ 2.0 million and $ 3.9 million, respectively, compared to $ 1.6 million and $ 2.9 million, respectively for the three and six months ended June 30, 2019.

There were no disposals of property and equipment during the three and six months ended June 30, 2020 and 2019.

Depreciation expense for the three and nine months ended September 30, 2020 was approximately $ 2.0 million and $ 5.9 million, respectively, compared to $ 1.7 million and $ 4.6 million, respectively for the three and nine months ended September 30, 2019.

There were no disposals of property and equipment during the three and nine months ended September 30, 2020 and 2019.

Leasehold improvements consist primarily of costs associated with the buildout of the Company’s research and development, manufacturing and general office space in Bedford, Massachusetts.

1 unchanged sentence

Accrued expenses and other liabilities consist of the following:

June 30, 2020

September 30, 2020

December 31, 2019

19 unchanged sentences

The unamortized balance of the tenant improvement allowance was included in deferred rent and has been recorded as a reduction to the operating right-of-use asset upon the adoption of the new leasing standards.

The Company maintains letters of credit, secured by restricted cash, for security deposits totaling $ 1.3 million as of June 30, 2020 and December 31, 2019, respectively, in conjunction with its current leases.

The following table summarizes operating lease costs as well as sublease income for the six months ended June 30, 2020:

Six months ended June 30, 2020

The Company maintains letters of credit, secured by restricted cash, for security deposits totaling $ 1.3 million as of September 30, 2020 and December 31, 2019, respectively, in conjunction with its current leases.

The following table summarizes operating lease costs as well as sublease income for the nine months ended September 30, 2020:

Nine months ended September 30, 2020

(in thousands)

2 unchanged sentences

Net lease cost

Rent expense, net of amortization of the deferred rent incentives was $ 0.4 million and $ 0.6 million, respectively, for the three and six months ended June 30, 2019.

The maturities of our operating lease liabilities and minimum lease payments as of June 30, 2020 were as follows:

Rent expense, net of amortization of the deferred rent incentives was $ 0.4 million and $ 1.0 million, respectively, for the three and nine months ended September 30, 2019.

The maturities of our operating lease liabilities and minimum lease payments as of September 30, 2020 were as follows:

For the Years Ending December 31,

3 unchanged sentences

Present value of operating lease liabilities

The following table summarizes the lease term and discount rate as of June 30, 2020:

As of June 30, 2020

The following table summarizes the lease term and discount rate as of September 30, 2020:

As of September 30, 2020

Weighted-average remaining lease term (years)

2 unchanged sentences

Operating leases

The following table summarizes cash paid for amounts included in the measurement of the Company’s operating lease liabilities for the six months ended June 30, 2020.

Six months ended June 30,

The following table summarizes cash paid for amounts included in the measurement of the Company’s operating lease liabilities for the nine months ended September 30, 2020.

Nine months ended September 30, 2020

(in thousands)

6 unchanged sentences

Certain options provide for accelerated vesting if there is a change in control, as defined in the 2015 Plan.

At June 30, 2020, there were no additional shares available for future grant under the 2015 Plan.

At September 30, 2020, there were no additional shares available for future grant under the 2015 Plan.

2018 Incentive Award Plan

6 unchanged sentences

Therefore, on January 1, 2020, an additional 1,804,670 shares were added to the 2018 Plan, representing 4 % of total common shares outstanding at December 31, 2019.

At June 30, 2020, there were 2,550,996 shares available for future grant under the 2018 Plan.

At September 30, 2020, there were 2,430,357 shares available for future grant under the 2018 Plan.

2018 Employee Stock Purchase Plan

5 unchanged sentences

Therefore, on January 1, 2020, an additional 451,167 shares were added to the 2018 ESPP, representing 1 % of total common shares outstanding at December 31, 2019.

At June 30, 2020, there were 1,084,028 shares available for future issuance under the 2018 ESPP.

At September 30, 2020, there were 1,039,651 shares available for future issuance under the 2018 ESPP.

Under the 2018 ESPP, employees may purchase common stock through after-tax payroll deductions at a price equal to 85 % of the lower of the fair market value on the first trading day of an offering period or the last trading day of an offering period.

1 unchanged sentence

In accordance with the Internal Revenue Code, no employee will be permitted to accrue the right to purchase stock under the 2018 ESPP at a rate in excess of $25,000 worth of shares during any calendar year during which such a purchase right is outstanding (based on the fair market value per share of the Company’s common stock as of the first day of the offering period).

During the six months ended June 30, 2020, 39,471 shares were issued under the 2018 ESPP for aggregate proceeds to the Company of $ 0.5 million.

During the six months ended June 30, 2019, 28,311 shares were issued under the 2018 ESPP for aggregate proceeds to the Company of $ 0.4 million.

Pursuant to the 2018 ESPP, the Company recorded stock-based compensation of $ 0.1 million during the three and six months ended June 30, 2020, and $ 0.1 million during the three and six months ended June 30, 2019.

During the nine months ended September 30, 2020, 83,848 shares were issued under the 2018 ESPP for aggregate proceeds to the Company of $ 0.9 million.

During the nine months ended September 30, 2019, 55,234 shares were issued under the 2018 ESPP for aggregate proceeds to the Company of $ 0.8 million.

Pursuant to the 2018 ESPP, the Company recorded stock-based compensation of $ 0.1 million during the three and nine months ended September 30, 2020, and $ 0.1 million during the three and nine months ended September 30, 2019.

Stock-based compensation expense

10 unchanged sentences

The assumptions used in the Black-Scholes option pricing model are as follows:

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Expected volatility

16 unchanged sentences

The Company recorded stock-based compensation expense related to stock options and shares purchased under the 2018 ESPP as follows:

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

(in thousands)

1 unchanged sentence

General and administrative

As of June 30, 2020, there was $ 35.1 million of unrecognized compensation expense related to unvested employee and non-employee share-based compensation arrangements granted under the Plans.

The unrecognized compensation expense is estimated to be recognized over a period of 2.7 years at June 30, 2020.

A summary of option activity under the Plans during the six months ended June 30, 2020 is as follows:

As of September 30, 2020, there was $ 32.6 million of unrecognized compensation expense related to unvested employee and non-employee share-based compensation arrangements granted under the Plans.

The unrecognized compensation expense is estimated to be recognized over a period of 2.6 years at September 30, 2020.

A summary of option activity under the Plans during the nine months ended September 30, 2020 is as follows:

Average Exercise

5 unchanged sentences

Cancelled/Forfeited

Outstanding at June 30, 2020

Outstanding at September 30, 2020

Vested and expected to vest at

June 30, 2020

Exercisable at June 30, 2020

The total intrinsic value of options exercised during the six months ended June 30, 2020 and 2019 was $ 0.5 million and $ 0.6 million, respectively.

The weighted-average grant date fair value per share of options granted during the six months ended June 30, 2020 and 2019 was $ 11.22 and $ 15.12 , respectively.

September 30, 2020

Exercisable at September 30, 2020

The total intrinsic value of options exercised during the nine months ended September 30, 2020 and 2019 was $ 0.5 million and $ 1.4 million, respectively.

The weighted-average grant date fair value per share of options granted during the nine months ended September 30, 2020 and 2019 was $ 10.73 and $ 14.70 , respectively.

Stock options granted pursuant to the 2015 Plan permit option holders to elect to exercise unvested options in exchange for unvested common stock.

2 unchanged sentences

Unvested shares - January 1, 2020

Unvested shares - June 30, 2020

As of June 30, 2020 and December 31, 2019, 5,113 shares and 21,666 shares, respectively, remained subject to a repurchase right by the Company, with a related liability included in accrued expenses and other liabilities in the condensed consolidated balance sheets of less than $ 0.1 million as of June 30, 2020 and December 31, 2019.

Unvested shares - September 30, 2020

As of September 30, 2020 and December 31, 2019, 4,102 shares and 21,666 shares, respectively, remained subject to a repurchase right by the Company, with a related liability included in accrued expenses and other liabilities in the condensed consolidated balance sheets of less than $ 0.1 million as of September 30, 2020 and December 31, 2019.

NET LOSS PER SHARE

1 unchanged sentence

Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.

The Company excluded the following potential common shares, presented based on amounts outstanding at June 30, 2020 and 2019, from the computation of diluted net loss per share attributable to common stockholders because including them would have had an anti-dilutive effect:

As of June 30,

The Company excluded the following potential common shares, presented based on amounts outstanding at September 30, 2020 and 2019, from the computation of diluted net loss per share attributable to common stockholders because including them would have had an anti-dilutive effect:

As of September 30,

Unvested common stock from early exercise of options

7 unchanged sentences

Additionally, in accordance with the terms of the Collaboration Agreement, Novartis’ right to substitute other ophthalmic targets expired.

The Company also continues to work with Novartis on identifying new targets for the collaboration based on the existing exploratory research component of the agreement.

Under the terms of the Collaboration Agreement, the Company granted Novartis a research license, a development and commercialization license, and a manufacturing license, under certain of its intellectual p roperty rights to research, develop, manufacture and commercialize ophthalmic targets.

Upon entering into the Collaboration Agreement, the Company received an upfront, nonrefundable payment of $ 35.0 million and issued additional shares of its Series B pr eferred stock to Novartis for consideration of $ 10.0 million.

The Company recorded the Series B preferred stock at its estimated fair value of $ 11.7 million, including $ 1.7 million of the upfront payment, and allocated the remaining $ 33.3 million o f the upfront payment to the Collaboration Agreement.

The Company also continues to work with Novartis on identifying new targets for the collaboration based on the existing exploratory research component of the agreement, which was extended for an additional six months through an amendment to the Collaboration Agreement executed in October 2020.

Under the terms of the Collaboration Agreement, the Company grante d Novartis a research license, a development and commercialization license, and a manufacturing license, under certain of its intellectual property rights to research, develop, manufacture and commercialize ophthalmic targets.

Upon entering into the Collab oration Agreement, the Company received an upfront, nonrefundable payment of $ 35.0 million and issued additional shares of its Series B preferred stock to Novartis for consideration of $ 10.0 million.

The Company recorded the Series B preferred stock at its estimated fair value of $ 11.7 million, including $ 1.7 million of the upfront payment, and allocated the remaining $ 33.3 million of the upfront payment to the Collaboration Agreement.

The Collaboration Agreement consists of a research term, where the Company and Novartis are collaborating to perform research and conduct preclinical development to identify candidates that modulate ophthalmic targets.

The Collaboration Agreement also includes exploratory work on the applicability of the gene-editing technology with respect to other gene targets.

The Company’s obligation to perform such exploratory research concludes in November 2020.

The Company’s obligation to perform such exploratory research has been extended pursuant to the October 2020 amendment to the Collaboration Agreement and now concludes in May 2021.

Taking into account the expiration of Novartis’ rights to substitute other ophthalmic targets, the Company and Novartis will focus resources on the confirmed ophthalmic target.

20 unchanged sentences

Since the option for Novartis to obtain manufacturing during the commercialization term from the Company is at a price that would reflect the standalone selling price, the option does not provide Novartis with a material right and is therefore not a performance obligation under the contract.

The Company has concluded that the research, development and commercialization and manufacturing licenses are not distinct from the research activities and manufacturing during the research and development term as Novartis cannot benefit from the licenses without the Com pany performing the research and manufacturing services.

The Company has concluded that the research, development and commercialization and manufacturing licenses are not distinct from the research activities and manufacturing during the research and development term as Novartis cannot benefit from the licenses without the Company performing the research and manufacturing services.

These services are so specialized and rely on the Company’s expertise in gene editing technologies not available in the marketplace.

As a result, these licenses have been combined with the research a ctivities, service on the joint committees and the manufacturing during the research and development terms as a single performance obligation.

As a result, these licenses have been combined with the research activities, service on the joint committees and the manufacturing during the research and development terms as a single performance obligation.

The transaction price consists of the $ 33.3 million non-refundable upfront payment, net of amounts classified as equity, and projected reimbursable research and manufacturing activities, which have been estimated using the expected value method.

8 unchanged sentences

Under this method, revenue is recorded over the performance period as a percentage of the estimated transaction price based on the extent of progress towards completion.

As of June 30, 2020, the aggregate amount of the transaction price related to the unsatisfied portion of the performance obligation is $ 30.6 million, and the Company will recognize this revenue as the research and manufacturing activities are performed, which is expected to occur over a period of time that is estimated will conclude in 2027.

As of September 30, 2020, the aggregate amount of the transaction price related to the unsatisfied portion of the performance obligation is $ 30.4 million, and the Company will recognize this revenue as the research and manufacturing activities are performed, which is expected to occur over a period of time that is estimated will conclude in 2027.

The Company does not expect collaboration revenue to be recognized evenly over this period as it will be recognized on a percentage of completion basis as the Company performs the research, development and manufacturing services, which will likely vary from period to period.

4 unchanged sentences

While such revisions will have no impact on the Company’s reported cash flows, a significant change in these assumptions and estimates could have a material impact on the timing and amount of revenue recognized in future periods.

During the three and six months ended June 30, 2020, the Company recognized revenue under the Collaboration Agreement of $ 0.6 million and $ 1.2 million, respectively, of which $ 0.2 million and $ 0.4 million was included in deferred revenue at the beginning of each period.

During the three and six months ended June 30, 2019, the Company recognized revenue under the Collaboration Agreement of $ 0.4 million and $ 0.7 million, respectively, of which $ 0.1 million and $ 0.2 million, respectively, was included in deferred revenue at the beginning of each period.

As of June 30, 2020 and December 31, 2019, there was approximately $ 30.6 million and $ 31.0 million of deferred revenue related to the Collaboration Agreement, respectively.

In addition, as of June 30, 2020 and December 31, 2019, the Company has recorded accounts receivable of $ 0.4 million related to reimbursable research and development costs under the Collaboration Agreement, which are included in prepaid expenses and other current assets on the condensed consolidated balance sheets as of each such date.

During the three and nine months ended September 30, 2020, the Company recognized revenue under the Collaboration Agreement of $ 0.6 million and $ 1.7 million, respectively, of which $ 0.2 million and $ 0.6 million was included in deferred revenue at the beginning of each period.

During the three and nine months ended September 30, 2019, the Company recognized revenue under the Collaboration Agreement of $ 0.4 million and $ 1.1 million, respectively, of which $ 0.2 million and $ 0.4 million, respectively, was included in deferred revenue at the beginning of each period.

As of September 30, 2020 and December 31, 2019, there was approximately $ 30.4 million and $ 31.0 million of deferred revenue related to the Collaboration Agreement, respectively.

In addition, as of September 30, 2020 and December 31, 2019, the Company has recorded accounts receivable of $ 0.4 million related to reimbursable research and development costs under the Collaboration Agreement, which are included in prepaid expenses and other current assets on the condensed consolidated balance sheets as of each such date.

SUBSEQUENT EVENTS

On November 9, 2020, the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Pfizer Inc.

(“Pfizer”), pursuant to which Pfizer has agreed to purchase 5,000,000 shares of the Company’s common stock through a private placement transaction (the “Private Placement”) at a purchase price of $ 12.00 per share, for an aggregate purchase price of $ 60.0 million.

Under the Stock Purchase Agreement, Pfizer was granted an exclusive right of first refusal (“ROFR”) for a 30-month period (the “ROFR Period”) beginning on the date of the closing of the Private Placement (collectively, the “ROFR Provision”), to negotiate a potential collaboration on the development and commercialization of HMI-102 and HMI-103.

Pfizer may exercise its right of first refusal under the ROFR Provision one time for each of HMI-102 and HMI-103 during the ROFR period.

Additionally during the ROFR period, Pfizer has the right to designate a member to join the Company’s Scientific Advisory Board to participate in matters related to the development of these programs.

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