What changed in this filing

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Item 1. Financial Statements

2021-08-12 compared with 2021-05-06 · 96 added, 67 removed, 461 unchanged (26% of the section changed)

3 unchanged sentences

(in thousands, except share and per share amounts)

March 31, 2021

June 30, 2021

December 31, 2020

21 unchanged sentences

Preferred stock, $ 0.0001 par value, 10,000,000 shares authorized;

no shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

no shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

Common stock, $ 0.0001 par value;

200,000,000 shares authorized;

50,487,649 and 50,268,666 shares issued as of March 31, 2021 and

57,088,026 and 50,268,666 shares issued as of June 30, 2021 and

December 31, 2020, respectively;

and 57,086,957 an d 50,265,575 shares

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

outstanding as of June 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

7 unchanged sentences

(in thousands, except share and per share amounts)

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Collaboration revenue

13 unchanged sentences

(in thousands)

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Other comprehensive (loss):

20 unchanged sentences

Balance at March 31, 2020

Vesting of common stock from

option exercises

Issuance of common stock from

option exercises

Stock-based compensation

Other comprehensive gain

Balance at June 30, 2020

$0.0001 Par Value

13 unchanged sentences

Balance at March 31, 2021

Issuance of common stock in follow-on offering,

net of discounts and issuance costs

Vesting of common stock from

option exercises

Issuance of common stock from

option exercises

Stock-based compensation

Other comprehensive gain

Balance at June 30, 2021

See notes to condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Three months ended March 31,

Six months ended June 30,

Cash flows from operating activities:

17 unchanged sentences

Cash flows from financing activities:

Proceeds from issuance of common stock in follow-on public offering,

net of discounts and issuance costs

Proceeds from issuance of common stock pursuant to ATM,

2 unchanged sentences

Proceeds from issuance of common stock from option exercises

Payment of deferred offering costs

Net cash provided by financing activities

6 unchanged sentences

Property and equipment additions included in accrued expenses and other liabilities

Unrealized loss on available for sale securities, net

Deferred offering costs included in accounts payable and accrued expenses

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

See notes to condensed consolidated financial statements.

16 unchanged sentences

In addition, on April 26, 2019 and May 7, 2019, in connection with the exercise in full of the underwriters’ option to purchase additional shares, the Company issued an aggregate of 833,333 shares of its common stock at a public offering price of $ 22.50 per share and received net proceeds of $ 17.6 million, after deducting underwriting discounts and commissions.

On April 6, 2021, the Company completed a follow-on public offering of its common stock.

The Company sold 6,596,306 shares of its common stock at a price of $ 7.58 per share and received net proceeds of $ 49.7 million, after deducting offering expenses of $0.3 million.

Under the terms of the underwriting agreement, the Company also granted the underwriter an option exercisable for 30 days to purchase up to an additional 989,445 shares of its common stock at a price of $ 7.58 per share.

The underwriters did not exercise this option.

The offering closed on April 9, 2021.

The shares were sold pursuant to the Company’s effective shelf registration statement on Form S-3, as amended, and a related prospectus supplement filed with the SEC on April 8, 2021.

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

5 unchanged sentences

In connection with the filing of certain post-effective amendments to the Shelf, the sales agreement prospectus supplement now covers the offering, issuance and sale by the Company of up to an aggregate $ 148.4 million of its common stock.

During the three months ended March 31, 2021, the Company sold 114,914 shares of common stock under the Sales Agreement, at an average price of approximately $ 14.00 per share, raising aggregate net proceeds of approximately $ 1.5 million after deducting an aggregate commission of 3 % and issuance costs.

As of March 31, 2021, there remained $ 148.4 million of common stock available for sale under the ATM.

During the six months ended June 30, 2021, the Company sold 114,914 shares of common stock under the Sales Agreement, at an average price of approximately $ 14.00 per share, raising aggregate

net proceeds of approximately $ 1.5 million after deducting an aggregate commission of 3 % and issuance costs of $ 0.1 million .

A s of June 30, 2021 , there remained $ 148.4 million of common stock available for sale under the ATM.

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 March 31, 2021, 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 June 30, 2021, 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) and its private placement with Pfizer.

During the three months ended March 31, 2021, the Company incurred a net loss of $ 1.1 million and as of March 31, 2021, had $ 329.4 million in accumulated deficit.

During the six months ended June 30, 2021, the Company incurred a net loss of $ 31.6 million and as of June 30, 2021, had $ 359.9 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 cash and cash equivalents and short-term investments as of March 31, 2021, together with the approximately $ 49.4 million in net proceeds received from a follow-on offering of the Company’s common stock in April 2021 (see Note 12), will enable the Company to continue its operations into the first quarter of 2023.

Based on current projections, management believes that cash and cash equivalents and short-term investments as of June 30, 2021 will enable the Company to continue its operations into the first quarter of 2023.

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.

7 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 March 31, 2021, and consolidated results of operations for the three months ended March 31, 2021 and 2020, and cash flows for the three months ended March 31, 2021 and 2020.

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, 2021, and consolidated results of operations for the three and six months ended June 30, 2021 and 2020, and cash flows for the six months ended June 30, 2021 and 2020.

Such adjustments are of a normal and recurring nature.

The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2021.

The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2021.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

92 unchanged sentences

The adoption of ASU 2020-10 did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

All other new accounting pronouncements issued, but not yet effective or adopted have been deemed to be not relevant to the Company and, accordingly, are not expected to have a material impact once adopted.

SHORT-TERM INVESTMENTS

4 unchanged sentences

Unrealized gains or losses on investments are recorded in accumulated other comprehensive income or loss, a component of stockholders’ equity, on the Company’s condensed consolidated balance sheets.

The following table summarizes the Company’s short-term investments as of March 31, 2021:

As of March 31, 2021

The following table summarizes the Company’s short-term investments as of June 30, 2021:

As of June 30, 2021

(in thousands)

3 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 months ended March 31, 2021 and 2020.

The Company had no realized gains and losses on its available-for-sale securities for the three and six months ended June 30, 2021 and 2020.

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

29 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 months ended March 31, 2021 and 2020.

There were no transfers between fair value measure levels during the three and six months ended June 30, 2021 and 2020.

PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following:

March 31, 2021

June 30, 2021

December 31, 2020

9 unchanged sentences

Property and equipment, net

Depreciation expense for the three months ended March 31, 2021 was approximately $ 2.1 million, compared to $ 1.9 million for the three months ended March 31, 2020.

The Company disposed of less than $ 0.1 million of property and equipment during the three months ended March 31, 2021.

There were no disposals of property and equipment during the three months ended March 31, 2020.

Depreciation expense for the three and six months ended June 30, 2021 was approximately $ 2.1 million and $ 4.2 million, respectively, compared to $ 2.0 million and $ 3.9 million, respectively for the three and six months ended June 30, 2020.

The Company disposed of less than $ 0.1 million of property and equipment during the three and six months ended June 30, 2021.

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

ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consist of the following:

March 31, 2021

June 30, 2021

December 31, 2020

18 unchanged sentences

The unamortized balance of the tenant improvement allowance was included in deferred rent incentives and has been recorded as a reduction to the operating right-of-use asset upon 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 March 31, 2021 and December 31, 2020, respectively, in conjunction with its current leases.

The Company maintains letters of credit, secured by restricted cash, for security deposits totaling $ 1.3 million as of June 30, 2021 and December 31, 2020, respectively, in conjunction with its current leases.

The following table summarizes operating lease costs, variable lease costs and sublease income:

Three months ended March 31,

Six months ended June 30,

(in thousands)

3 unchanged sentences

Net lease cost

The maturities of our operating lease liabilities and minimum lease payments as of March 31, 2021 were as follows:

The maturities of our operating lease liabilities and minimum lease payments as of June 30, 2021 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 March 31, 2021:

As of March 31, 2021

The following table summarizes the lease term and discount rate as of June 30, 2021:

As of June 30, 2021

Weighted-average remaining lease term (years)

3 unchanged sentences

The following table summarizes cash paid for amounts included in the measurement of the Company’s operating lease liabilities.

Three months ended March 31,

Six months ended June 30,

(in thousands)

5 unchanged sentences

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

At March 31, 2021, there were no additional shares available for future grant under the 2015 Plan.

At June 30, 2021, there were no additional shares available for future grant under the 2015 Plan.

2018 Incentive Award Plan

6 unchanged sentences

Therefore, on January 1, 2021, an additional 2,010,623 shares were added to the 2018 Plan, representing 4 % of total common shares outstanding at December 31, 2020.

As of March 31, 2021, there were 2,574,959 shares available for future grant under the 2018 Plan.

As of June 30, 2021, there were 2,390,494 shares available for future grant under the 2018 Plan.

2018 Employee Stock Purchase Plan

5 unchanged sentences

Therefore, on January 1, 2021, an additional 502,655 shares were added to the 2018 ESPP, representing 1 % of total common shares outstanding at December 31, 2020.

As of March 31, 2021, there were 1,493,513 shares available for future issuance under the 2018 ESPP.

As of June 30, 2021, there were 1,493,513 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 three months ended March 31, 2021, 48,792 shares were issued under the 2018 ESPP for aggregate proceeds to the Company of $ 0.4 million.

During the three months ended March 31, 2020, 39,471 shares were issued under the 2018 ESPP for aggregate proceeds to the Company of $ 0.5 million.

Stock-based compensation expense pursuant to the 2018 ESPP during the three months ended March 31, 2021 and 2020 was insignificant in each period.

During the six months ended June 30, 2021, 48,792 shares were issued under the 2018 ESPP for aggregate proceeds to the Company of $ 0.4 million.

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.

Pursuant to the 2018 ESPP, the Company recorded stock-based compensation of $ 0.1 million during the three and six months ended June 30, 2021, and $ 0.1 million during the three and six months ended June 30, 2020.

Stock Options

9 unchanged sentences

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

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Expected volatility

1 unchanged sentence

64.8% — 65.4%

64.6% - 67.1%

63.2% — 65.4%

Weighted-average risk-free interest rate

1 unchanged sentence

0.33% — 0.54%

0.50% - 1.20%

0.33% — 1.73%

Expected dividend yield

3 unchanged sentences

$12.66 — $18.04

The following table summarizes the Company’s stock option activity for the three months ended March 31, 2021:

$6.53 - $13.91

$12.66 — $21.75

The following table summarizes the Company’s stock option activity for the six months ended June 30, 2021:

Average Exercise

5 unchanged sentences

Cancelled/Forfeited

Outstanding at March 31, 2021

Outstanding at June 30, 2021

Vested and expected to vest at

March 31, 2021

Exercisable at March 31, 2021

The total intrinsic value of options exercised during the three months ended March 31, 2021 and 2020 was $ 0.6 million and $ 0.5 million, respectively.

The weighted-average grant date fair value per share of options granted during the three months ended March 31, 2021 and 2020 was $ 8.37 and $ 12.47 , respectively.

June 30, 2021

Exercisable at June 30, 2021

The total intrinsic value of options exercised during the six months ended June 30, 2021 and 2020 was $ 0.6 million and $ 0.5 million, respectively.

The weighted-average grant date fair value per share of options granted during the six months ended June 30, 2021 and 2020 was $ 7.77 and $ 11.22 , 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, 2021

Unvested shares - March 31, 2021

As of March 31, 2021 and December 31, 2020, 2,080 shares and 3,091 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 March 31, 2021 and December 31, 2020.

Unvested shares - June 30, 2021

As of June 30, 2021 and December 31, 2020, 1,069 shares and 3,091 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, 2021 and December 31, 2020.

Restricted Stock Units

2 unchanged sentences

In general, RSUs vest annually in three equal installments on January 1 st of each year.

The following table summarizes the Company’s RSU activity for the three months ended March 31, 2021:

The following table summarizes the Company’s RSU activity for the six months ended June 30, 2021:

Average Grant

1 unchanged sentence

Outstanding at January 1, 2021

Outstanding at March 31, 2021

Outstanding at June 30, 2021

Stock-based Compensation Expense

The Company recognizes compensation expense for awards to employees based on the grant date fair value of stock-based awards on a straight-line basis over the period during which an award holder provides service in exchange for the award, which is generally the vesting period.

The Company recorded stock-based compensation expense related to stock options and restricted stock units as follows:

Three months ended March 31,

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

Three months ended June 30,

Six months ended June 30,

(in thousands)

1 unchanged sentence

General and administrative

As of March 31, 2021, there was $ 42.3 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 2.8 years at March 31, 2021.

As of June 30, 2021, there was $ 38.4 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 June 30, 2021.

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 March 31, 2021 and 2020, 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 March 31,

The Company excluded the following potential common shares, presented based on amounts outstanding at June 30, 2021 and 2020, 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,

Unvested common stock from early exercise of options

15 unchanged sentences

The cumulative effect of revisions to the total estimated costs to complete the Company’s single performance obligation was recorded in the current period when the changes were identified and amounts could be reasonably estimated.

As such, the Company recognized a cumulative effect adjustment of approximately $ 26.9 million in collaboration revenue in the period.

As such, the Company recognized a cumulative effect adjustment of approximately $ 26.9 million in collaboration revenue in the six months ended June 30, 2021.

Revenue Recognition

2 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 March 31, 2021, the aggregate amount of the transaction price related to the unsatisfied portion of the performance obligation is $ 2.0 million, and the Company will recognize this revenue as the remaining research activities are performed, which will conclude on August 26, 2021.

During the three months ended March 31, 2021 and 2020, the Company recognized revenue under the Collaboration Agreement of $ 28.5 million and $ 0.6 million, respectively, of which $ 28.2 million and $ 0.2 million was included in deferred revenue at the beginning of each such period.

As of March 31, 2021 and December 31, 2020, there was approximately $ 2.0 million and $ 30.2 million of deferred revenue related to the Collaboration Agreement, respectively.

In addition, as of March 31, 2021 and December 31, 2020, the Company has recorded accounts receivable of $ 0.3 million and $ 0.4 million, respectively, 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.

As of June 30, 2021, the aggregate amount of the transaction price related to the unsatisfied portion of the performance obligation is $ 0.8 million, and the Company will recognize this revenue as the remaining research activities are performed, which will conclude on August 26, 2021.

During the three and six months ended June 30, 2021, the Company recognized revenue under the Collaboration Agreement of $ 1.4 million and $ 29.9 million, respectively, of which $ 1.2 million and $ 29.4 million was included in deferred revenue at the beginning of each such period.

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.

As of June 30, 2021 and December 31, 2020, there was approximately $ 0.8 million and $ 30.2 million of deferred revenue related to the Collaboration Agreement, respectively.

In addition, as of June 30, 2021 and December 31, 2020, the Company has recorded accounts receivable of $ 0.2 million and $ 0.4 million, respectively, 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.

PFIZER STOCK PURCHASE AGREEMENT

12 unchanged sentences

The Information Committee will meet regularly over the ROFR Period to share information which results in recognition of the transaction price over the 30-month ROFR Period.

During the three months ended March 31, 2021, the Company recognized collaboration revenue of $ 0.8 million, and as of March 31, 2021, there was approximately $ 6.8 million of deferred revenue related to the Company’s obligation to Pfizer.

SUBSEQUENT EVENTS

On April 6, 2021, the Company completed a follow-on offering of its common stock.

The Company sold 6,596,306 shares of its common stock at a price of $ 7.58 per share and received net proceeds of approximately $ 49.4 million, after deducting estimated offering expenses.

The offering closed on April 9, 2021 .

The shares were sold pursuant to the Company’s effective shelf registration statement on Form S-3, as amended, and a related prospectus supplement filed with the SEC on April 8, 2021.

During the three and six months ended June 30, 2021, the Company recognized collaboration revenue of $ 0.8 million and $ 1.6 million, respectively, and as of June 30, 2021, there was approximately $ 6.0 million of deferred revenue related to the Company’s obligation to Pfizer.

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