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December 31,

Preferred stock convertible into common stock

Outstanding options to purchase common stock

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2019	Mar. 11, 2020	Jun. 28, 2019
[DocumentAndEntityInformationAbstract]
Entity Registrant Name	NextCure, Inc.
Entity Central Index Key	0001661059
Document Type	10-K
Document Period End Date	Dec. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Public Float			$ 236.4
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		27,509,510

BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 34,091	$ 135,173
Marketable securities	300,514
Restricted cash	1,706	460
Prepaid expenses and other current assets	3,684	152
Total current assets	339,995	135,785
Property and equipment, net	12,090	11,407
Other assets	4,083	436
Total assets	356,168	147,628
Current liabilities:
Accounts payable	1,861	2,483
Accrued liabilities	4,871	2,411
Deferred rent, current portion	215	28
Term loan, current portion	1,667	387
Deferred revenue, current portion	6,428	4,989
Total current liabilities	15,042	10,298
Deferred rent, net of current portion	359	242
Term loan, net of current portion	3,333	73
Deferred revenue, net of current portion	15,950	21,736
Total liabilities	34,684	32,349
Redeemable preferred stock:
Total redeemable preferred stock		162,223
Stockholders’ equity (deficit):
Preferred stock; par value of $0.001 per share, 10,000,000 and 0 shares authorized at December 31, 2019 and 2018. No shares issued and outstanding at December 31, 2019 and 2018, respectively
Common stock, par value of $0.001 per share; 100,000,000 and 158,745,671 shares authorized at December 31, 2019 and 2018, respectively, 27,499,260 and 1,374,812 shares issued and outstanding at December 31, 2019 and 2018, respectively	27	1
Additional paid-in capital	402,529	352
Accumulated other comprehensive loss	(38)
Accumulated deficit	(81,034)	(47,297)
Total stockholders’ equity (deficit)	321,484	(46,944)
Total liabilities, preferred stock and stockholders’ equity (deficit)	$ 356,168	147,628
Series A Preferred Stock
Redeemable preferred stock:
Total redeemable preferred stock		71,000
Series B Preferred Stock
Redeemable preferred stock:
Total redeemable preferred stock		$ 91,223

BALANCE SHEETS - (Parenthetical) - $ / shares	Dec. 31, 2019	Dec. 31, 2018
Preferred stock, par value per share	$ 0.001	$ 0.001
Preferred stock, number of shares authorized	10,000,000	0
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, number of shares authorized	100,000,000	158,745,671
Common stock, shares issued	27,499,260	1,374,812
Common stock, shares outstanding	27,499,260	1,374,812
Series A Preferred Stock
Preferred stock, par value per share	$ 0.001	$ 0.001
Preferred stock, number of shares authorized	0	68,181,819
Preferred stock, shares issued	0	68,181,819
Preferred stock, shares outstanding	0	68,181,819
Series B Preferred Stock
Preferred stock, par value per share	$ 0.001	$ 0.001
Preferred stock, number of shares authorized	0	56,828,852
Preferred stock, shares issued	0	56,828,851
Preferred stock, shares outstanding	0	56,828,851

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Revenue:
Revenue	$ 6,347
Operating expenses:
Research and development	34,216	$ 19,787
General and administrative	9,613	3,409
Total operating expenses	43,829	23,196
Loss from operations	(37,482)	(23,196)
Other income, net	3,745	397
Net loss	$ (33,737)	$ (22,799)
Net loss per common share—basic and diluted (in dollars per share)	$ (2.15)	$ (16.64)
Weighted average number of common shares —basic and diluted (in shares)	15,695,461	1,369,846
Comprehensive loss:
Net loss	$ (33,737)	$ (22,799)
Unrealized loss on marketable securities	(38)
Total comprehensive loss	$ (33,775)	$ (22,799)

STATEMENTS OF PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands	Preferred Stock Series A Preferred Stock	Preferred Stock Series A-3 preferred stock	Preferred Stock Series B Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Series A Preferred Stock	Series B Preferred Stock	Total
Balance at the beginning at Dec. 31, 2017				$ 1	$ 85	$ 0	$ (24,498)			$ (24,412)
Balance at the beginning (in shares) at Dec. 31, 2017				1,369,212
Balance at the beginning at Dec. 31, 2017	$ 40,000		$ 0
Balance at the beginning (in shares) at Dec. 31, 2017	40,000,000		0
Increase (Decrease) in Stockholders' Deficit
Stock based compensation					263					263
Issuance of stock		$ 31,000	$ 91,223		4					4
Issuance of stock (in shares)		28,181,819	56,828,851	5,600
Net loss							(22,799)			(22,799)
Balance at the end at Dec. 31, 2018				$ 1	352		(47,297)			$ (46,944)
Balance at the end (in shares) at Dec. 31, 2018				1,374,812						1,374,812
Balance at the end at Dec. 31, 2018	$ 71,000		$ 91,223					$ 71,000	$ 91,223	$ 162,223
Balance at the end (in shares) at Dec. 31, 2018	68,181,819		56,828,851
Increase (Decrease) in Stockholders' Deficit
Stock based compensation					1,886					1,886
Issuance of stock					119					119
Issuance of stock (in shares)				125,109
Public offerings of common stock, net of issuance costs of $20.7 million				$ 10	237,965					237,975
Public offerings of common stock, net of issuance costs of $20.7 million (in shares)				10,438,770
Conversion of preferred stock to common stock	$ (71,000)		$ (91,223)	$ 16	162,207					162,223
Conversion of preferred stock to common stock (in shares)	(68,181,819)		(56,828,851)	15,560,569
Unrealized loss on marketable securities						(38)				(38)
Net loss							(33,737)			(33,737)
Balance at the end at Dec. 31, 2019				$ 27	$ 402,529	$ (38)	$ (81,034)			$ 321,484
Balance at the end (in shares) at Dec. 31, 2019				27,499,260						27,499,260
Balance at the end at Dec. 31, 2019	$ 0		$ 0
Balance at the end (in shares) at Dec. 31, 2019	0		0

STATEMENTS OF PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) (Parenthetical) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Series A-3 preferred stock
Initial public offering issuance costs		$ 0
Series B Preferred Stock
Initial public offering issuance costs		$ 485,000
Common Stock
Initial public offering issuance costs	$ 20,700,000

STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities:
Net loss	$ (33,737)	$ (22,799)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	2,688	1,677
Stock-based compensation	1,886	263
Changes in operating assets and liabilities:
Prepaid expenses and other assets	(4,255)	(19)
Accounts payable	(622)	1,342
Accrued liabilities	2,460	847
Deferred rent	304	(44)
Deferred revenue	(4,347)	26,725
Net cash (used in) provided by operating activities	(35,623)	7,992
Cash flows from investing activities:
Purchase of property and equipment	(3,371)	(3,063)
Purchase of marketable securities	(300,552)
Net cash used in investing activities	(303,923)	(3,063)
Cash flows from financing activities:
Proceeds from public offering, net of issuance costs	238,384
Proceeds from issuance of preferred stock, net of issuance costs		122,223
Proceeds from other issuance of common stock	119	4
Proceeds from the term loan	4,540
Deferred financing costs		(410)
Payments of the term loan		(400)
Net cash provided by financing activities	243,043	121,417
Net (decrease) increase in cash, cash equivalents and restricted cash	(96,503)	126,346
Cash, cash equivalents and restricted cash—beginning of year	135,633	9,287
Cash, cash equivalents and restricted cash—end of year	39,130	135,633
Supplemental disclosures of cash flow information:
Cash paid for interest	191	25
Supplemental disclosures of noncash investing and financing activities:
Purchase of property and equipment included in accrued liabilities	73
Deferred financing costs included in accrued liabilities	1	$ 284
Conversion of convertible preferred stock into common stock	$ 162,223

Nature of the Business and Basis Presentation	12 Months Ended
Nature of the Business and Basis Presentation	Dec. 31, 2019
Nature of the Business and Basis of Presentation
Nature of the Business and Basis of Presentation	NEXTCURE, INC. NOTES TO FINANCIAL STATEMENTS 1. Nature of the Business and Basis of Presentation Organization NextCure, Inc. (“NextCure” or the “Company”) was incorporated in Delaware in September 2015 and is headquartered in Beltsville, Maryland. The Company is a clinical-stage biopharmaceutical company committed to discovering and developing novel, first‑in‑class immunomedicines to treat cancer and other immune‑related diseases by restoring normal immune function. Through its proprietary Functional, Integrated, NextCure Discovery in Immuno‑Oncology (“FIND‑IO”) platform, the Company studies various immune cells in order to discover and understand targets and structural components of immune cells and their functional impact in order to develop immunomedicines. Since inception, the Company has devoted substantially all of its efforts and financial resources to organizing and staffing the Company, identifying business development opportunities, raising capital, securing intellectual property rights related to the Company’s product candidates, building and optimizing the Company’s manufacturing capabilities and conducting discovery, research and development activities for the Company’s product candidates, discovery programs and its FIND‑IO platform. Public Offerings of Common Stock On May 13, 2019, the Company closed its initial public offering (“IPO”), in which the Company issued and sold 5,750,000 shares of common stock at a public offering price of $15.00 per share, for net proceeds to the Company of approximately $76.9 million after deducting underwriting discounts and commissions of $6.0 million and offering expenses of approximately $3.4 million. In preparation for the IPO, on May 3, 2019, the Company effected a one-for-8.0338 reverse stock split of its issued and outstanding common stock. The par value and authorized shares of common stock were not adjusted as a result of the reverse stock split. All of the share and per share information presented in the accompanying financial statements has been adjusted to reflect the reverse common stock split on a retroactive basis for all periods and as of all dates presented. Upon the closing of the IPO, on May 13, 2019, all of the outstanding shares of the Company’s convertible preferred stock automatically converted into 15,560,569 shares of common stock at the applicable conversion ratio then in effect. Subsequent to the closing of the IPO, there were no shares of preferred stock outstanding. Upon the closing of the IPO, on May 13, 2019, the Company’s certificate of incorporation was amended and restated to provide for 100,000,000 authorized shares of common stock with a par value of $0.001 per share and 10,000,000 authorized shares of preferred stock with a par value of $0.001 per share. On November 19, 2019, the Company completed an underwritten public offering, in which the Company issued and sold 4,077,192 shares of common stock at a public offering price of $36.75 per share. On December 2, 2019, the underwriters exercised in full their option to purchase an additional 611,578 shares of common stock at the public offering price of $36.75, for total net proceeds to the Company of approximately $160.9 million after deducting underwriting discounts and commissions of approximately $10.3 million and offering expenses of approximately $1.0 million. Liquidity The Company has not generated any revenue to date from product sales and does not expect to generate any revenues from product sales in the foreseeable future. Through December 2019, the Company has funded its operations primarily with proceeds from public offerings of its common stock, private placements of its preferred stock and upfront fees received under the Company’s former agreement with Eli Lilly and Company (Note 7). The Company expects to incur additional operating losses and negative operating cash flows for the foreseeable future. The Company expects that its operating losses and negative cash flows will continue for the foreseeable future. As of the issuance date of the financial statements for the year ended December 31, 2019, the Company expects that its cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements through at least two years from the issuance date of the financial statements. The future viability of the Company beyond that date may depend on its ability to raise additional capital to finance its operations. The Company plans to seek additional funding through public or private equity offerings, debt financings, marketing and distribution arrangements, other collaborations, strategic alliances, licensing arrangements or other methods. The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into strategic alliances or other arrangements on favorable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. If the Company is unable to obtain funding, the Company could be required to delay, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, which could adversely affect its business prospects. Although management continues to pursue these funding plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company, if at all, to fund continuing operations past two years from the issuance date of these financial statements. Risks and Uncertainties The Company is subject to risks common to early‑stage companies in the biotechnology industry including, but not limited to: having a limited operating history and no products approved for commercial sale; having a history of significant losses; its need to obtain additional financing; dependence on its ability to advance its current and future product candidates through clinical trials, marketing approval and commercialization; the unproven approach to the discovery and development of product candidates based on the Company’s FIND‑IO platform; the lengthy and expensive nature and uncertain outcomes of the clinical development process; the lengthy, time‑consuming and unpredictable nature of the regulatory approval process; the results of preclinical studies and early‑stage clinical trials that may not be predictive of future results; dependence on its key personnel; its limited manufacturing experience as an organization and with its manufacturing facility; risks related to patent protection and the Company’s pending patent applications; dependence on third‑party collaborators for the discovery, development and commercialization of current and future product candidates; and significant competition from other biotechnology and pharmaceutical companies. Pursuit of the Company’s business efforts will require significant amounts of additional capital, adequate personnel, infrastructure and extensive compliance‑reporting capabilities. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. Segment and Geographic Information Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker, or decision‑making group, in deciding how to allocate resources and in assessing performance. The chief operating decision makers view the operations and manage the business in one operating segment that operates exclusively in the United States.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements include the accounts of the Company. The Company’s financial statements have been prepared in accordance with United States generally accepted accounting principles (‘‘GAAP’’). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (‘‘ASC’’) and Accounting Standards Update (‘‘ASU’’) of the Financial Accounting Standards Board (‘‘FASB’’).

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the period presented. Although actual results could differ from those estimates, management does not believe that such differences would be material.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. The Company deposits its cash primarily in checking, sweep account and money market accounts. Cash equivalents are stated at amortized cost plus accrued interest, which approximates fair value.

Restricted Cash

At December 31, 2019 and 2018, the Company had restricted cash of $5.0 million and $460,000, respectively. The Company is required, as a condition of its Term Loan (Note 9), to maintain cash collateral on deposit in a segregated money market bank account equal to the principal portion outstanding under the Term Loan on a quarterly basis. The bank may restrict withdrawals or transfers by, or on behalf of, the Company. The required reserve totaled $5.0 million and $480,000 as of December 31, 2019 and December 31, 2018, respectively. The amounts are presented in part as restricted cash and in part as other assets on the accompanying balance sheets.

The following table reconciles cash and cash equivalents and restricted cash per the balance sheet to the statement of cash flows:


	December 31,
(in thousands)	2019		2018
Cash and cash equivalents	$	34,091	$	135,173
Restricted cash (including $3,333 in other assets as of December 31, 2019)		5,039		460
Total	$	39,130	$	135,633

Marketable Securities

Marketable securities primarily consist of government debt securities, corporate bonds and agency bonds. These marketable securities are classified as available-for-sale, and as such, are carried at fair value as determined by prices for identical or similar securities at the balance sheet date. Marketable securities consist of Level 2 financial instruments in the fair-value hierarchy. The Company’s policy is to classify all investments with contractual maturities within one year as current. Investment income is recognized when earned and reported net of investment expenses. Unrealized holding gains and losses are reported within accumulated other comprehensive income (loss) as a separate component of stockholders’ equity. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and interest on securities are included in other income, net, on the Company’s statements of operations.

At each balance sheet date, the Company assesses available-for-sale securities in an unrealized loss position to determine whether the unrealized loss is other-than-temporary. If a decline in the fair value of a marketable security below the Company’s cost basis is determined to be other-than-temporary, such marketable security is written down to its estimated fair value as a new cost basis and the amount of the write-down is included in earnings as an impairment charge. The Company considers factors including the significance of the decline in value compared to the cost basis, underlying factors contributing to a decline in the prices of securities in a single asset class, the length of time the market value of the security has been less than its cost basis, the security's relative performance versus its peers, sector or asset class, expected market volatility and the market and economy in general. The Company also evaluates whether it is more likely than not that it will be required to sell a security prior to recovery of its fair value. The cost of securities sold is based on the specific identification method.

Concentration of Credit Risk

Financial instruments that potentially expose the Company to concentrations of credit risk primarily consist of cash and cash equivalents. The Company maintains its cash and cash equivalents at one accredited financial institution that is federally insured. While balances deposited often exceed federally insured limits, the Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company's investment policy limits investments to certain types of debt securities issued by the U.S. government, its agencies and institutions with investment-grade credit ratings and places restrictions on maturities and concentration by type and issuer. The counterparties are various corporations, financial institutions and government agencies of high credit standing.

Financial instruments that potentially expose the Company to concentrations of credit risk primarily consist of cash and cash equivalents. The Company maintains its cash and cash equivalents at one accredited financial institution in amounts that exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

Fair Value of Financial Instruments

ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three‑tier value hierarchy that distinguishes between the following:

Level 1—Quoted market prices in active markets for identical assets or liabilities.

Level 2—Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves.

Level 3—Unobservable inputs developed using estimates of assumptions developed by the Company, which reflect those that a market participant would use. Use of these inputs involves significant and subjective judgments to be made by a reporting entity – e.g., determining an appropriate adjustment to a discount factor for illiquidity associated with a given security.

To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair values requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Property and Equipment, Net

Property and equipment are valued at cost less accumulated depreciation. Depreciation is recognized on a straight‑line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized on a straight‑line basis over the shorter of the useful life or term of the lease. Upon retirement or disposal, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is recorded to general and administrative expenses in the accompanying statement of operations and comprehensive loss. Routine expenditures for maintenance and repairs are expensed as incurred.

Estimated useful lives for property and equipment are as follows:


		Estimated Useful Life
Computers and peripherals		3 years
Equipment		5 years
Furniture and fixtures		7 years
Leasehold improvements		Lesser of estimated useful life or remaining lease term

The Company reviews long‑lived assets, which primarily consist of property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable based on the criteria for accounting for the impairment or disposal of long‑lived assets under ASC Topic 360, Property, Plant and Equipment. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans, or changes in anticipated future cash flows. If an impairment indicator is present, the Company evaluates recoverability by comparing the carrying amount of the assets group to future undiscounted net cash flows expected to be generated by the assets group. Assets are grouped at the lowest level for which there is identifiable cash flows that are largely independent of the cash flows generated by other asset groups. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, an impairment loss is recognized for the difference between the fair value and carrying value of assets within the group. Fair value is generally determined by estimates of discounted cash flows. The discount rate used in any estimate of discounted cash flows would be the rate required for a similar investment of like risk. No impairment losses were recognized during the years ended December 31, 2019 or 2018.

Construction in progress (Note 5) is carried at cost and consists of specifically identifiable direct and indirect development and construction costs. While under construction, costs of the property are included in construction in progress until the property is placed in service, at which time costs are transferred to the appropriate property and equipment account including, but not limited to, leasehold improvements or other such accounts.

Leases

The Company enters into lease agreements for its office and laboratory facilities and accounts for them in accordance with ASC Topic 840, Leases. These leases are classified as operating leases. Rent expense is recognized on a straight-line basis over the term of the lease and, accordingly, the Company records the difference between cash rent payments and the recognition of rent expense as a deferred rent liability. Incentives granted under the Company’s facilities leases, including allowances to fund leasehold improvements, are deferred and are recognized as adjustments to rental expense on a straight-line basis over the term of the lease.

Preferred Stock

The Company’s preferred stock is classified outside of stockholders’ deficit for the period during which it was outstanding because the shares carried deemed liquidation rights that were a contingent redemption feature not solely within the control of the Company.

Research and Development Costs, Including Clinical Trial Accruals

Research costs consist of employee-related costs, contractor expenses, laboratory supplies and facility costs, for research and development of product candidates are expensed as incurred. Development costs, including clinical trial-related expenses, incurred by third parties, such as clinical research organizations (CROs), are expensed as the contracted work is performed. Where contingent milestone payments are due to third parties under research and development arrangements, the milestone payment obligations are expensed when the milestone results are probable of being achieved. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies, including the phase or completion of events, invoices received and contracted costs.

Clinical trial expenses are a significant component of research and development expenses, and the Company outsources a significant portion of these costs to third parties. Third-party clinical trial expenses include investigator fees, site and patient costs, CRO costs, and costs for central laboratory testing and data management. The accrual for site and patient costs includes inputs such as estimates of patient enrollment, patient cycles incurred, clinical site activations, and other pass-through costs. These inputs are required to be estimated due to a lag in receiving the actual clinical information from third parties. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected on the balance sheets as a prepaid asset or accrued expenses. These third-party agreements are generally cancelable, and related costs are recorded as research and development expenses as incurred. Non-refundable advance clinical payments for goods or services that will be used or rendered for future research and development activities are recorded as a prepaid asset and recognized as expense as the related goods are delivered or the related services are performed. When evaluating the adequacy of the accrued expenses, the Company analyzes progress of the studies, including the phase or completion of events, invoices received and contracted costs. Significant judgments and estimates may be made in determining the accrued balances at the end of any reporting period. Actual results could differ from the estimates made. The historical clinical accrual estimates have not been materially different from the actual costs.

Patent Costs

All patent‑related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses in the accompanying statement of operations and comprehensive loss.

Stock‑Based Compensation

The Company accounts for its stock‑based compensation in accordance with ASC Topic 718, Compensation‑Stock Compensation (“ASC 718”). ASC 718 requires all share‑based payments to employees, consultants and directors, including grants of incentive stock options, nonqualified stock options, restricted stock awards, unrestricted stock awards or restricted stock units to employees, consultants and directors of the Company, to be recognized as expense in the statement of operations and comprehensive loss based on their grant date fair values. The Company estimates the fair value of options granted using the Black‑Scholes option pricing model (“Black‑Scholes”) for stock option grants to both employees and non‑employees and the fair value of common stock to determine the fair value of restricted stock.

The Black‑Scholes option pricing model requires inputs based on certain subjective assumptions, including (i) the expected stock price volatility, (ii) the expected term of the award, (iii) the risk‑free interest rate and (iv) expected dividends. Due to the lack of a public market for the Company’s common stock and lack of company‑specific historical and implied volatility data, the Company has based its computation of expected volatility on the historical volatility of a representative group of public companies with similar characteristics to the Company, including stage of product development and life science industry focus. The historical volatility is calculated based on a period of time commensurate with expected term assumption. The Company uses the simplified method as prescribed by the SEC Staff Accounting Bulletin No. 107, Share‑Based Payment, to calculate the expected term for options granted to employees as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The expected term is applied to the stock option grant group as a whole, as the Company does not expect substantially different exercise or post‑vesting termination behavior among its employee population. For options granted to non‑employees, the Company utilizes the simplified method also as the basis for the expected term assumption. The risk‑free interest rate is based on a treasury instrument whose term is consistent with the expected term of the stock options. The expected dividend yield is assumed to be zero because the Company has never paid dividends and has no current plans to pay any dividends on its common stock. The Company recognizes forfeitures as they occur as allowed by ASU No. 2016‑09, Improvements to Employee Share‑Based Payment Accounting (“ASU 2016‑09”).

There are significant judgments and estimates inherent in the determination of the fair value of the Company’s common stock. These estimates and assumptions include a number of objective and subjective factors, including external market conditions, the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to its common stock at the time of a liquidity event, such as the IPO or a sale, and the likelihood of such an event.

The Company expenses the fair value of its share‑based compensation awards on a straight‑line basis over the requisite service period, which is generally the vesting period.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax base. Deferred tax assets and liabilities, which relate primarily to the carrying amount of the Company’s deferred revenue and its net operating loss carryforwards, are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax expense or benefit is the result of changes in the deferred tax assets and liabilities. Valuation allowances are established when necessary to reduce deferred tax assets where, based upon the available evidence, the Company concludes that it is more‑likely‑than‑not that the deferred tax assets will not be realized. In evaluating its ability to recover deferred tax assets, the Company considers all available positive and negative evidence, including its operating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction‑by‑jurisdiction basis. Because of the uncertainty of the realization of deferred tax assets, the Company has recorded a full valuation allowance against its deferred tax assets.

Reserves are provided for tax benefits for which realization is uncertain. Such benefits are only recognized when the underlying tax position is considered more‑likely‑than‑not to be sustained on examination by a taxing authority, assuming they possess full knowledge of the position and facts. Interest and penalties related to uncertain tax positions are recognized in the provision of income taxes; however, the Company currently has no interest or penalties related to uncertain income tax benefits.

Revenue Recognition

The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine the appropriate amount of revenue to be recognized for arrangements determined to be within the scope of ASC 606, the Company performs the following five steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect consideration to which it is entitled in exchange for the goods or services it transfers to the customer.

The Company evaluates customer options for material rights or options to acquire additional goods or services for free or at a discount. If the customer options are determined to represent a material right, the material right is recognized as a separate performance obligation at the outset of the arrangement.

Performance obligations are promised goods or services in a contract to transfer a distinct good or service to the customer and are considered distinct when (i) the customer can benefit from the good or service on its own or together with other readily available resources and (ii) the promised good or service is separately identifiable from other promises in the contract. 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 to or dependent on other goods or services in the contract.

The Company estimates the transaction price based on the amount expected to be received for transferring the goods or services promised in the contract. Consideration generally may include fixed consideration or variable consideration. Should an arrangement include variable consideration, the Company will evaluate the amount of potential payments and the likelihood that the payments will be received. The Company will utilize either the most likely amount method or expected amount method to estimate the amount expected to be received based 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 will be 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.

The Company’s contracts may include development and regulatory milestone payments, which would be assessed under the most likely amount method and constrained if it is probable that a significant revenue reversal would occur. Milestone payments that are not within the Company’s control or the licensee’s control, such as regulatory approvals, will not be considered probable of being achieved until those approvals are received. At the end of each reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments would be recorded on a cumulative catch-up basis, which would affect collaboration revenues in the period of adjustment.

For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (i) when the related sales occur and (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

The Company allocates the transaction price based on the estimated stand-alone selling price of each of the performance obligations. The Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company utilizes key assumptions to determine the stand-alone selling price for service obligations, which may include other comparable transactions, pricing considered in negotiating the transaction and the estimated costs. Additionally, in determining the standalone selling price for material rights, the Company may reference comparable transactions, clinical trial success probabilities and estimates of option exercise likelihood. Variable consideration will be allocated specifically to one or more performance obligations in a contract when the terms of the variable consideration relate to the satisfaction of the performance obligation and the resulting amounts allocated are consistent with the amounts the Company would expect to receive for the satisfaction of each performance obligation.

The consideration allocated to each performance obligation is recognized as revenue when control is transferred for the related goods or services. For performance obligations which consist of licenses and other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Upfront payments and fees are recorded as deferred revenue upon receipt or when due until the Company performs its obligations under these arrangements. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue in the accompanying balance sheets. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional.

Comprehensive Loss

Comprehensive loss is the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Comprehensive loss includes net loss and the change in accumulated other comprehensive loss for the period. Accumulated other comprehensive loss consisted entirely of unrealized gains and losses on available-for-sale marketable securities at December 31, 2019.

Net Loss per Share

Basic loss per common share is determined by dividing loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted loss per share is computed by dividing the loss attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of the Company's stock option grants.

During the year ended December 31, 2018, the Company calculated basic and diluted net loss per share attributable to common stockholders in conformity with the two‑class method required for participating securities. The Company considered its Series A Preferred Stock and Series B Preferred Stock to be participating securities because in the event a dividend was paid on common stock, the holders of Series A Preferred Stock and Series B Preferred Stock were entitled to receive dividends on a basis consistent with the common stockholders. Under the two‑class method, the net loss attributable to common stockholders is not allocated to the preferred stock as the holders of the preferred stock do not have a contractual obligation to share in losses. Under the two‑class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock.

Recently Issued Accounting Pronouncements

The Company qualifies as an emerging growth company (“EGC”) as defined under the Jumpstart Our Business Startups Act (the “JOBS Act”). Using exemptions provided under the JOBS Act provided to EGCs, the Company has elected to defer compliance with new or revised financial accounting standards until it is required to comply with such standards.

In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). The new guidance will require lessees to record most leases on their balance sheets and recognize the related expenses on their income statements in a manner similar to current practice. ASU 2016-02 states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The standard is effective for the Company January 1, 2021. The Company continues to determine if it will elect to use the practical expedients permitted by the guidance and continues to gather data required to comply with the guidance. Based on the work completed to date, the Company is considering the implications of adopting the new standard, including the discount rate to be used in valuing new and existing leases and all applicable financial statement disclosures required by the new guidance. The Company is continuing to evaluate the effect of adoption and anticipates that it will result in the recognition of additional assets and corresponding liabilities related to the existing leases on its balance sheet. The Company is assessing any potential impacts on its internal controls, business processes, and accounting policies related to both the implementation of, and ongoing compliance with, the new guidance.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 will require credit losses to be reported using an expected losses model rather than the incurred losses model that is currently used, and will require additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, this standard will require allowances to be recorded instead of reducing the amortized cost of the investment. ASU 2016-13 will be effective for non-emerging growth companies for fiscal years beginning December 15, 2019 and interim periods within those fiscal years, and will be effective for the Company for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021, assuming the Company remains an emerging growth company. Early adoption is permitted. The Company is currently evaluating the effects the adoption of ASU 2016-13 will have on its financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement—Disclosure Framework-Changes to the Disclosure Requirement for Fair Value Measurement (“ASU 2018-13”). The amendments in ASU 2018-13 modify the disclosure requirements on fair value measurements in ASC Topic 820, Fair Value Measurement, based on the concepts in the FASB Concepts Statement, including the consideration of costs and benefits. ASU 2018-13 will be effective for all companies for fiscal periods beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effects the adoption of ASU 2018-13 will have on its financial statements.

Marketable Securities

12 Months Ended

Dec. 31, 2019

Marketable Securities

Marketable Securities

3. Marketable Securities

Marketable securities consist of the following:


	December 31, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
(in thousands)	Cost		Gain		Loss		Fair Value
U.S. treasury securities	$	4,991	$	—	$	—	$	4,991
Agency bonds		24,437		15		(1)		24,451
Corporate bonds		271,124		103		(155)		271,072
Total	$	300,552	$	118	$	(156)	$	300,514

As of December 31, 2019, none of the Company's fixed maturity investments were in continuous unrealized loss positions for more than 12 consecutive months. Unrealized losses on all fixed maturity investments in a continuous loss position for less than 12 consecutive months were approximately $156,000 as of December 31, 2019. All of the Company’s investments at each year end are classified as available for sale and are carried at fair value. As of December 31, 2019, no investments are considered to be other-than-temporarily impaired. The Company uses the specific identification method when calculating realized gains and losses. The Company did not have any realized gains or losses on available-for-sale securities during the years ended December 31, 2019. The Company did not have any marketable securities as of or during the year ended December 31, 2018. The Company recorded interest income of $2.0 million and $0 during the years ended December 31, 2019 and 2018, respectively, which is included in other income on the statement of operations and comprehensive loss.

The following table summarizes maturities of the Company’s investments available-for-sale as of December 31, 2019:


	December 31, 2019
			Fair
(in thousands)	Cost		Value
Maturities:
Within 1 year	$	168,186	$	168,204
From more than 1 to 5 years		132,366		132,310
Total investments available for sale	$	300,552	$	300,514

Fair Value Measurements

12 Months Ended

Dec. 31, 2019

Fair Value Measurements

Fair Value Measurements

4. Fair Value Measurements

The following tables set forth the fair value of the Company’s financial assets by level within the fair value hierarchy as of December 31, 2019 and 2018:


	December 31, 2019
					Significant
			Quoted Prices in		Other
			Active Markets or		Observable		Significant
			Identical Assets		Inputs		Unobservable
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market (Note 2)	$	19,341	$	19,341	$	—	$	—
Marketable securities:
U.S. treasury securities		4,991		—		4,991		—
Agency bonds		24,451		—		24,451		—
Corporate bonds		271,072		—		271,072		—
Total	$	319,855	$	19,341	$	300,514	$	—

December 31, 2018

Significant

Quoted Prices in

Other

Active Markets or

Observable

Significant

Identical Assets

Inputs

Unobservable

(in thousands)

Total

(Level 1)

(Level 2)

(Level 3)

Cash equivalents:

Money market (Note 2)

5,000

—

The Company did not transfer any assets measured at fair value on a recurring basis between fair value levels during the years ended December 31, 2019 and 2018.

The carrying value of financial instruments, including trade receivables, accounts payable and accrued liabilities approximate fair value because of the short-term maturity of these items. The estimated fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Property and Equipment, Net

12 Months Ended

Dec. 31, 2019

Property and Equipment, Net

Property and Equipment, Net

5. Property and Equipment, Net

Property and equipment consist of the following:


	December 31,
(in thousands)	2019		2018
Research equipment	$	10,703	$	7,787
Leasehold improvements		5,368		4,825
Computer equipment		463		167
Furniture and fixtures		93		70
Construction in progress		609		1,027
Property and equipment, gross		17,236		13,876
Less: accumulated depreciation and amortization		(5,146)		(2,469)
Property and equipment, net	$	12,090	$	11,407

Construction in progress at December 31, 2019 consists of the costs incurred for research equipment and for the build-out of additional lab and office space and at December 31, 2018 consists of the costs incurred for the build-out of a manufacturing suite at the Company’s headquarters in Beltsville, Maryland.

Depreciation and amortization expense was $2.7 million and $1.7 million for the years ended December 31, 2019 and 2018, respectively.

Accrued Liabilities

12 Months Ended

Dec. 31, 2019

Accrued Liabilities

Accrued Liabilities

6. Accrued Liabilities

Accrued liabilities consist of the following:


	December 31,
(in thousands)	2019		2018
Construction in progress	$	73	$	—
Payroll and related benefits		1,173		1,008
Clinical trial costs		1,702		271
Operating expenses		1,769		719
Financing costs		1		284
Office lease		135		127
Interest		18		2
Total accrued liabilities	$	4,871	$	2,411

Agreement with Eli Lilly and Company

12 Months Ended

Dec. 31, 2019

Agreement with Eli Lilly and Company

Agreement with Eli Lilly and Company

7. Agreement with Eli Lilly and Company

On November 2, 2018, the Company entered into a multi-year research and development collaboration agreement (the “Lilly Agreement”) with Eli Lilly and Company (“Lilly”), pursuant to which the Company agreed to use its proprietary FIND-IO platform to identify novel oncology targets for additional collaborative research and drug discovery by the Company and Lilly. Under the Lilly Agreement, Lilly and the Company granted one another an equal number of exclusive options to research, develop, manufacture and commercialize compounds and products directed to oncology targets identified through the Lilly Agreement.

During the research term under the Lilly Agreement, as a part of target discovery, the Company was responsible for providing Lilly with oncology targets identified using the Company’s FIND-IO platform. From the targets provided by the Company, Lilly could select targets to advance to target validation using criteria developed by both parties. Following completion of the agreed upon target validation plan with respect to a given target, either party could propose to advance that target to compound discovery. For each target advanced to compound discovery, Lilly had the option to obtain an exclusive license with respect to the compounds and products directed to the target. If Lilly did not exercise its option with respect to a given target or has previously exercised all of its options, the Company had the option to obtain licenses with respect to compounds and products directed to that target.

In November 2018, the Company received an upfront, non-refundable payment of $25.0 million under the Lilly Agreement and a concurrent $15.0 million equity investment (Note 10). In addition, Lilly agreed to make quarterly research and development support payments during a portion of the research term as well as to pay option exercise fees upon option exercises by Lilly.

Pursuant to the Lilly Agreement, Lilly agreed to pay an aggregate of up to $1.4 billion in development and regulatory milestones and sales milestones. Additionally, Lilly agreed to pay mid to high single-digit royalties on net sales for all products directed to each target optioned by Lilly. The Company agreed that upon the Company’s exercise of an option with respect to a given target, the Company would pay Lilly option exercise payments and also agreed to pay an aggregate of up to $710.0 million in development and regulatory milestones and sales milestones, as well as royalties.

The Company evaluated the Lilly Agreement under the provisions of ASC 606 and concluded that Lilly was a customer prior to the exercise of its option to obtain an exclusive license with respect to the compounds and products directed to a target advanced to compound discovery. The Company identified the following material promises under the Lilly Agreement: (i) a limited research license to conduct activities under the research collaboration; (ii) research and development services together with the provision of a data package in connection with Lilly’s option; (iii) various governance obligations, most notably participation on a joint steering committee; and (iv) rights related to an optional term extension by Lilly. The Company evaluated Lilly’s option to obtain an exclusive license with respect to the compounds and products directed to a target that has been advanced to compound discovery and concluded that the option was not issued at a significant and incremental discount, and therefore does not provide material rights. As such, they are excluded as performance obligations at the outset of the arrangement. The Company determined that the research license was not capable of being distinct and the related research and development services and governance activities are not distinct in the context of the contract and, as such, the Company determined that these promises should be combined into a single performance obligation, resulting in a total of two performance obligations under the Lilly Agreement; one for research and development services and one for the right related to an optional term extension by Lilly.

The transaction price at the outset of the arrangement was determined to be $32.7 million, comprised of the upfront fee received from Lilly, quarterly research and development support payments to be received from Lilly during a portion of the research term and an equity investment premium as determined by the Company with reference to a valuation of the Company’s preferred stock prepared by an unrelated third-party valuation firm in accordance with the guidance provided by the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation.

The transaction price was allocated to the two performance obligations based on their relative standalone selling price determined with reference to the Company’s estimated costs attendant to the obligations. Revenue allocated to the research and development performance obligation was recognized as the research and development services were provided using an input method calculated by comparing research and development costs incurred to date to estimated total research and development costs as a measure of progress towards satisfying the performance obligation. Revenue allocated to Lilly’s right related to an optional term extension was deferred until the right was exercised or lapsed, and will subsequently be recognized accordingly.

While the Lilly Agreement was executed in November 2018, the performance initiated in January 2019. Under the Lilly Agreement, the Company recognized revenue of $6.3 million and $0 for the years ended December 31, 2019 and 2018, respectively.

Deferred revenue consists of the following:


	December 31,
(in thousands)	2019		2018
Deferred revenue, beginning of period	$	26,725	$	—
Up-front payment		—		25,000
Attributed premium on the proceeds from Lilly’s investment in the Company		—		1,725
Research and development support billing		2,000		—
Revenue from research and development arrangement recognized		(6,347)		—
Total deferred revenue, end of period		22,378		26,725
Less: Deferred revenue, current portion		(6,428)		(4,989)
Deferred revenue, non-current portion	$	15,950	$	21,736

On January 10, 2020, Lilly notified the Company of termination of the Lilly Agreement. Refer to Note 16 for additional information on this termination.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies

Commitments and Contingencies

8. Commitments and Contingencies

Operating Leases

On February 9, 2016, the Company entered into a non-cancelable facilities operating sublease (the “2016 Sublease”). On March 15, 2019, the Company amended and restated the 2016 Sublease (as amended, the “Amended 2016 Sublease”) to include additional square footage to be used for office space, which the Company took possession of upon entering into the Amended 2016 Sublease. The Amended 2016 Sublease expires in August 2025. The base rent under the Amended 2016 Sublease is currently $32,254 per month plus the Company’s prorated share of the sublandlord’s operating expense and is subject to annual rent increases of 3%.

On January 30, 2019, the Company entered into a new lease to be used for office and laboratory space (the “New Premises”), which the Company took possession of on June 1, 2019 (the “2019 Lease”). On August 2, 2019, the Company amended the 2019 Lease (as, the “Amended 2019 Lease”) to include additional space to be used for office and laboratory space (the “Expansion Premises”), which the Company expects to take possession of on April 1, 2020. The Amended 2019 Lease expires in March 2030. Upon expiration of the Amended 2016 Sublease, the Amended 2019 Lease will also cover the space the Company is currently subleasing under the Amended 2016 Sublease. Base rent is abated until April 1, 2020 for the New Premises and until seven months after delivery of the Expansion Premises for the Expansion Premises, after which the base rent will be $19,646 per month for the New Premises and $18,178 per month for the Expansion Premises, each subject to annual rent increases of 3%. In connection with this lease, the Company executed a $39,000 letter of credit, which has not been drawn down on. Additionally, there is a base rate adjustment of 8.5% per annum multiplied by the outstanding balance of amounts paid for tenant improvements. The budgeted amounts of tenant improvements are approximately $1,477,000 for the New Premises and $1,517,000 for the Expansion Premises, which are to be fully reimbursed by the landlord.

At December 31, 2019, the Company’s minimum obligations under non-cancelable operating leases are as follows:


(in thousands)
Year Ending December 31,
2020		602
2021		915
2022		972
2023		970
Thereafter		7,736
Total future minimum payments	$	11,195

Rent expense incurred under operating leases was approximately $679,000 and $420,000 for the years ended December 31, 2019 and 2018, respectively.

Legal Proceedings

The Company, from time to time, may be party to litigation arising in the ordinary course of business. The Company is not a party to any litigation or legal proceedings, nor is management aware of any pending or threatened litigation that, in the opinion of the Company’s management, are likely to have a material adverse effect on the Company’s business. At each reporting date, the Company evaluates whether a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses the costs related to its legal proceedings as incurred. As of December 31, 2019, and 2018, the Company was not involved in any material legal proceedings.

Term Loan

12 Months Ended

Dec. 31, 2019

Term Loan

Term Loan

9. Term Loan

In April 2016, the Company entered into a $1.0 million term loan (the “Term Loan”). On January 25, 2019, the Company amended the Term Loan to increase the Company’s borrowing capacity to $5.0 million, which amount remains secured by the Company’s certificates of deposit, money market account, investment property and deposit or investment accounts. As amended, the Term Loan bears interest at the greater of the prime rate less 1% and 4.25%. The effective interest rate was 4.40% and 3.95% for the years ended December 31, 2019 and 2018, respectively. Under the Term Loan, the Company is required to make monthly interest-only payments through January 2020 and is required to make 36 equal monthly payments of principal plus accrued interest thereafter through January 2023. The Term Loan is secured by all certificates of deposit, money market accounts, cash, securities, investment property and deposit or investment accounts. Interest expense under the Term Loan was approximately $209,000 and $25,000 for the years ended December 31, 2019 and 2018, respectively. The outstanding balance on the Term Loan totaled $5.0 million and $460,000 as of December 31, 2019 and 2018, respectively.

Future maturities of the Term Loan as of December 31, 2019 are as follows:


(in thousands)
2020		1,528
2021		1,667
2022		1,667
2023		138
Total		5,000
Less: current portion of term loan		(1,667)
Term loan, net of current portion	$	3,333

Preferred Stock	12 Months Ended
Preferred Stock	Dec. 31, 2019
Preferred Stock.
Preferred Stock	10. Preferred Stock Upon the closing of the IPO, on May 13, 2019, all of the outstanding shares of the Company’s preferred stock automatically converted into shares of common stock at the applicable conversion ratio then in effect. Subsequent to the closing of the IPO, there were no shares of preferred stock outstanding. The Company’s preferred stock that was outstanding as of December 31, 2018 is classified outside of stockholders’ equity (deficit) because the shares contained deemed liquidation rights that were a contingent redemption feature not solely within the control of the Company. As of December 31, 2019, the Company’s certificate of incorporation, as amended and restated, authorized the Company to issue 10,000,000 shares of $0.001 par value preferred stock, and there were no shares of preferred stock issued or outstanding. The Company can fix the price, rights, preferences, privileges and restrictions of the preferred stock without any further vote or action by its stockholders.

Common Stock	12 Months Ended
Common Stock	Dec. 31, 2019
Common Stock.
Common Stock	11. Common Stock As of December 31, 2019, the Company’s Certificate of Incorporation, as amended and restated, authorized the Company to issue 100,000,000 shares of $0.001 par value common stock, of which 27,499,260 were issued and outstanding. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any, subject to the preferential dividend rights of any preferred stock. No dividends have been declared or paid by the Company through December 31, 2019. In the event of any liquidation or dissolution of the Company, the holders of common stock are entitled to the remaining assets of the Company legally available for distribution after the payment of the full liquidation preference for any preferred stock.

Stock-Based Compensation

12 Months Ended

Dec. 31, 2019

Stock-Based Compensation

Stock-Based Compensation

12. Stock‑Based Compensation

Employee Equity Plans

The NextCure, Inc. 2015 Omnibus Incentive Plan (the “2015 Plan”) provides for the grant of awards of stock options, restricted stock awards, unrestricted stock awards and restricted stock units to employees, consultants and directors of the Company. The 2015 Plan is administered by the board of directors or, at the discretion of the board of directors, by a committee of the board of directors.

On May 3, 2019, the Company’s stockholders approved the NextCure, Inc. 2019 Omnibus Incentive Plan (the ‘‘2019 Plan’’), which became effective on May 8, 2019, the date on which the Company’s Registration Statement on Form S-1 (Reg. No. 333-230837) was declared effective (the “Effective Date”). The Company’s board of directors (the “Board”) determined not to make additional awards under the 2015 Plan following the effectiveness of the 2019 Plan. The 2019 Plan provides for the grant of awards of stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock units, unrestricted stock, dividend equivalent rights, other equity-based awards and cash bonus awards to the Company’s officers, employees, non-employee directors and other key persons (including consultants). The number of shares of common stock reserved for issuance under the 2019 Plan is 2,900,000 plus the number of shares of stock related to awards outstanding under the 2015 Plan that subsequently terminate by expiration or forfeiture, cancellation or otherwise without the issuance of such shares. The number of shares reserved for issuance under the 2019 Plan will automatically increase on January 1, 2020 and each January 1st thereafter during the term of the 2019 Plan by 4% of the number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year or such lesser number of shares determined by the Board.

As of December 31, 2019, 2,661,566 shares were reserved for future issuance under the 2019 Plan.

Stock options granted under the 2015 Plan and 2019 Plan (together, the “Plans”) to employees generally vest over four years and expire after 10 years.

A summary of stock option activity for awards under the Plans is presented below:


	Options Outstanding and Exercisable
				Weighted
		Weighted		Average	Aggregate
		Average		Remaining	Intrinsic
	Number of	Exercise		Contractual	Value(1)
	Shares	Price		Life (Years)	(in thousands)
Outstanding as of January 1, 2018	506,586	$	0.94	9.0	$	137
Granted	1,570,136	$	5.92	9.9		—
Exercised	(5,599)	$	0.84	—		—
Forfeitures	(14,232)	$	1.11	—		—
Outstanding as of December 31, 2018	2,056,891	$	4.74	9.4	$	5,946
Granted	258,897	$	18.88	9.5		—
Exercised	(125,108)	$	0.96	7.4		—
Forfeitures	(20,468)	$	19.66	9.5		—
Outstanding as of December 31, 2019	2,170,212	$	6.51	8.6	$	—
Vested and expected to vest as of December 31, 2019	2,170,212	$	6.51	—	$	113,295
Exercisable as of December 31, 2019	716,393	$	3.75	—	$	39,370

(1)

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the common stock for the options that were in the money at December 31, 2019 and 2018.

The weighted average grant date fair value per share of stock options granted during the years ended December 31, 2019 and 2018 was $11.92 and $3.80, respectively. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2019 and 2018 was $7,225,000 and $38,000, respectively.

The aggregate grant date fair value of stock options and restricted stock vested during the year ended December 31, 2019 and 2018 was approximately $7,637,000 and $157,000, respectively.

The Company’s potential dilutive securities, which as of December 31, 2019 include common stock options, have been excluded from the computation of diluted net loss per share because the effect would be anti-dilutive. Therefore, the weighted average number of common shares used to calculate both basic and diluted net loss per common share is the same. The Company excluded 2,170,212 and 2,056,891 potential shares of common stock, presented based on amounts outstanding as of December 31, 2019 and 2018, respectively, from the computation of diluted net loss per common share for the periods indicated because including them would have had an anti-dilutive effect.

On May 3, 2019, the Company’s stockholders approved the NextCure, Inc. 2019 Employee Stock Purchase Plan (the “ESPP”), which became effective on the Effective Date. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423(b) of the Internal Revenue Code. A total of 240,000 shares of common stock were reserved for issuance under this plan. In addition, the number of shares of common stock that may be issued under the ESPP will automatically increase on January 1, 2020 and each January 1st thereafter until expiration of the ESPP, in an amount equal to the lesser of (i) 1% of the number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year, (ii) 480,000 shares of common stock and (iii) a number of shares of common stock determined by the administrator of the ESPP. As of December 31, 2019, no shares of common stock had been issued pursuant to the ESPP and 240,000 shares were reserved for future issuance thereunder.

Stock‑Based Compensation

The Company recorded stock‑based compensation expense of $1.9 million and $0.3 million during the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, there was $6.9 million of unrecognized compensation cost related to unvested stock‑based compensation arrangements granted under the Plans. This remaining compensation expense is expected to be recognized over a weighted-average period of three years as of December 31, 2019.

Stock‑based compensation expense recorded as research and development and general and administrative expenses is as follows:


	Year Ended
	December 31,
	2019		2018
Research and development	$	691	$	85
General and administrative		1,195		178
Total stock-based compensation expense	$	1,886	$	263

The assumptions used in the Black‑Scholes option‑pricing model for stock options granted were as follows:


	Year Ended
	December 31,
	2019		2018
Expected term	6.1	years	6.1	years
Expected volatility	69.7	%	69.7	%
Risk free interest rate	1.90	%	2.77	%
Expected dividend yield	—	%	—	%

Restricted Common Stock

In May 2016, the Company issued 62,237 shares of restricted common stock, which are restricted as to sale or transferability, under the 2015 Plan. These restrictions lapse over a four‑year period.

Net Loss Per Share Attributable to Common Stockholders

12 Months Ended

Dec. 31, 2019

Net Loss Per Share Attributable to Common Stockholders

Net Loss Per Share Attributable to Common Stockholders

13. Net Loss Per Share Attributable to Common Stockholders

The Company’s potential dilutive securities, which include common stock options and for the year ended December 31, 2018 included preferred stock, have been excluded from the computation of diluted net loss per share as the effect would be anti‑dilutive. 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 period end, from the computation of diluted net loss per share attributable to common stockholders for the period indicated because including them would have had an anti‑dilutive effect:

Income Taxes

12 Months Ended

Dec. 31, 2019

Income Taxes

Income Taxes

14. Income Taxes

The reconciliation of federal statutory income tax rate to the Company’s effective income tax rate is as follows:


	December 31,
	2019		2018
Expected income tax benefit at the federal statutory rate	21.0	%	21.0	%
State taxes, net of federal benefit	7.0		6.5
Research and development credit, net	4.9		7.2
Non-deductible items	(0.5)		(2.2)
Prior year provision to return adjustments	(2.5)		(7.7)
Other	—		0.3
Change in valuation allowance	(29.9)		(25.1)
Total	—	%	—	%

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The principal components of the Company’s deferred tax assets consisted of the following as of December 31, 2019 and 2018:


	December 31,
(in thousands)		2019		2018
Deferred tax assets:
Federal and state net operating loss carryforwards	$	15,080	$	11,946
Research and development tax credits		4,197		3,393
Deferred revenue		5,928		—
Charitable contribution carryforwards		306		165
Accruals and other		826		313
Gross deferred tax assets		26,337		15,817
Less: valuation allowance		(25,633)		(15,525)
Total deferred tax assets	$	704	$	292
Deferred tax liabilities:
Depreciation and amortization	$	(704)	$	(292)
Gross deferred tax liabilities	$	(704)	$	(292)
Net deferred tax assets	$	—	$	—

Based on the Company’s history of losses, the Company recorded a full valuation allowance against its deferred tax assets as of December 31, 2019. The Company increased its valuation allowance by approximately $10.1 million for the year ended December 31, 2019. The Company intends to maintain a valuation allowance until sufficient positive evidence exists to support a reversal of the allowance.

As of December 31, 2019, the Company had federal and state net operating loss carryforwards of $55.0 million and $54.0 million, respectively, some of which begin to expire in the year ending December 31, 2036. Approximately $32.3 million of the federal and state net operating loss carryforwards do not expire. The Company had federal and state research and development tax credit carryforwards of approximately $4.1 million and $0.1 million, respectively, as of December 31, 2019. The federal credits begin to expire in the year ending December 31, 2036 and the state credits begin to expire in the year ending December 31, 2024.

Under the provisions of Sections 382 and 383 of the Internal Revenue Code (the “IRC”), certain substantial changes in the Company’s ownership may have limited, or may limit in the future, the amount of net operating loss and credit carryforwards that can be used to reduce future income taxes if there has been a significant change in ownership of the Company, as defined by the IRC. Future owner or equity shifts could result in limitations on net operating loss and credit carryforwards.

The Company files income tax returns in the U.S. federal jurisdiction as well as in Maryland. The tax years 2016 to 2018 remain open to examination by the major jurisdictions in which the Company is subject to tax. Fiscal years outside the normal statute of limitation remain open to audit by tax authorities due to tax attributes generated in those early years, which have been carried forward and may be audited in subsequent years when utilized.

The Company evaluates tax positions for recognition using a more‑likely‑than‑not recognition threshold, and those tax positions eligible for recognition are measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon the effective settlement with a taxing authority that has full knowledge of all relevant information. As of December 31, 2019, the Company had no unrecognized income tax benefits that would affect the Company’s effective tax rate if recognized.

On December 22, 2017, the U.S. government signed into law the Tax Cuts and Jobs Act (the “Tax Act”) that significantly reforms the Internal Revenue Code of 1986, as amended. In 2018, the Company finished its analysis of the impact of the Tax Act. Where the Company made reasonable estimates in 2017 of the effects related to the Tax Act, the Company recorded provisional amounts. After the completed analysis, the resulting impact to the Company’s financial statements did not differ from the recorded provisional amounts.

Employee Benefit Plan	12 Months Ended
Employee Benefit Plan	Dec. 31, 2019
Employee Benefit Plan
Employee Benefit Plan	15. Employee Benefit Plan The Company sponsors a 401(k) plan that stipulates that eligible employees can elect to contribute to the 401(k) plan, subject to certain limitations, up to the lesser of the statutory maximum or 100% of eligible compensation on a pre‑tax basis. Through December 31, 2019, the Company has not provided any contributions to this plan.

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2019
Subsequent Events
Subsequent Events	16. Subsequent Events On January 10, 2020, Lilly notified the Company of its termination of the Lilly Agreement (Note 7), effective as of March 3, 2020 (the "Lilly Termination Date"). Effective as of the Lilly Termination Date, both parties have been relieved of all obligations under the agreement, including future quarterly research and development support payments to be paid by Lilly to the Company. As of December 31, 2019, the Company had deferred revenue related to the Lilly Agreement of $22.4 million, which is composed of a non-refundable up-front payment and a premium on the proceeds from Lilly's investment in the Company. The Company will recognize all of the deferred revenue as of the Lilly Termination Date in the statement of operations in the first quarter of 2020.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Summary of Significant Accounting Policies

Basis of Presentation

Use of Estimates

Cash and Cash Equivalents

Restricted Cash

The following table reconciles cash and cash equivalents and restricted cash per the balance sheet to the statement of cash flows:


	December 31,
(in thousands)	2019		2018
Cash and cash equivalents	$	34,091	$	135,173
Restricted cash (including $3,333 in other assets as of December 31, 2019)		5,039		460
Total	$	39,130	$	135,633

Marketable Securities

Concentration of Credit Risk

Financial instruments that potentially expose the Company to concentrations of credit risk primarily consist of cash and cash equivalents. The Company maintains its cash and cash equivalents at one accredited financial institution in amounts that exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

Fair Value of Financial Instruments

Level 1—Quoted market prices in active markets for identical assets or liabilities.

Level 2—Inputs other than Level 1 inputs that are either directly or indirectly observable, such as quoted market prices, interest rates and yield curves.

Property and Equipment, Net

Estimated useful lives for property and equipment are as follows:


		Estimated Useful Life
Computers and peripherals		3 years
Equipment		5 years
Furniture and fixtures		7 years
Leasehold improvements		Lesser of estimated useful life or remaining lease term

Leases

Preferred Stock

Research and Development Costs, Including Clinical Trial Accruals

Patent Costs

Stock Based Compensation

Stock‑Based Compensation

The Company expenses the fair value of its share‑based compensation awards on a straight‑line basis over the requisite service period, which is generally the vesting period.

Recently Issued Accounting Pronouncements

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Summary of Significant Accounting Policies

Summary of reconciliation cash and cash equivalents and restricted cash per the balance sheet to the statement of cash flows


	December 31,
(in thousands)	2019		2018
Cash and cash equivalents	$	34,091	$	135,173
Restricted cash (including $3,333 in other assets as of December 31, 2019)		5,039		460
Total	$	39,130	$	135,633

Summary of estimated useful lives for property and equipment


		Estimated Useful Life
Computers and peripherals		3 years
Equipment		5 years
Furniture and fixtures		7 years
Leasehold improvements		Lesser of estimated useful life or remaining lease term

Marketable Securities (Tables)

12 Months Ended

Dec. 31, 2019

Marketable Securities

Schedule of available-for-sale securities


	December 31, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
(in thousands)	Cost		Gain		Loss		Fair Value
U.S. treasury securities	$	4,991	$	—	$	—	$	4,991
Agency bonds		24,437		15		(1)		24,451
Corporate bonds		271,124		103		(155)		271,072
Total	$	300,552	$	118	$	(156)	$	300,514

Schedule of available-for-sale maturities


	December 31, 2019
			Fair
(in thousands)	Cost		Value
Maturities:
Within 1 year	$	168,186	$	168,204
From more than 1 to 5 years		132,366		132,310
Total investments available for sale	$	300,552	$	300,514

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2019

Fair Value Measurements

Summary of fair value of the Company’s financial assets


	December 31, 2019
					Significant
			Quoted Prices in		Other
			Active Markets or		Observable		Significant
			Identical Assets		Inputs		Unobservable
(in thousands)	Total		(Level 1)		(Level 2)		(Level 3)
Cash equivalents:
Money market (Note 2)	$	19,341	$	19,341	$	—	$	—
Marketable securities:
U.S. treasury securities		4,991		—		4,991		—
Agency bonds		24,451		—		24,451		—
Corporate bonds		271,072		—		271,072		—
Total	$	319,855	$	19,341	$	300,514	$	—

December 31, 2018

Significant

Quoted Prices in

Other

Active Markets or

Observable

Significant

Identical Assets

Inputs

Unobservable

(in thousands)

Total

(Level 1)

(Level 2)

(Level 3)

Cash equivalents:

Money market (Note 2)

5,000

—

Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2019

Property and Equipment, Net

Summary of property and equipment


	December 31,
(in thousands)	2019		2018
Research equipment	$	10,703	$	7,787
Leasehold improvements		5,368		4,825
Computer equipment		463		167
Furniture and fixtures		93		70
Construction in progress		609		1,027
Property and equipment, gross		17,236		13,876
Less: accumulated depreciation and amortization		(5,146)		(2,469)
Property and equipment, net	$	12,090	$	11,407

Accrued Liabilities (Tables)

12 Months Ended

Dec. 31, 2019

Accrued Liabilities

Summary of accrued liabilities


	December 31,
(in thousands)	2019		2018
Construction in progress	$	73	$	—
Payroll and related benefits		1,173		1,008
Clinical trial costs		1,702		271
Operating expenses		1,769		719
Financing costs		1		284
Office lease		135		127
Interest		18		2
Total accrued liabilities	$	4,871	$	2,411

Agreement with Eli Lilly and Company (Tables)

12 Months Ended

Dec. 31, 2019

Agreement with Eli Lilly and Company

Summary of deferred revenue included in the Company’s balance sheets


	December 31,
(in thousands)	2019		2018
Deferred revenue, beginning of period	$	26,725	$	—
Up-front payment		—		25,000
Attributed premium on the proceeds from Lilly’s investment in the Company		—		1,725
Research and development support billing		2,000		—
Revenue from research and development arrangement recognized		(6,347)		—
Total deferred revenue, end of period		22,378		26,725
Less: Deferred revenue, current portion		(6,428)		(4,989)
Deferred revenue, non-current portion	$	15,950	$	21,736

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies

Schedule of future minimum payments

At December 31, 2019, the Company’s minimum obligations under non-cancelable operating leases are as follows:


(in thousands)
Year Ending December 31,
2020		602
2021		915
2022		972
2023		970
Thereafter		7,736
Total future minimum payments	$	11,195

Term Loan (Tables)

12 Months Ended

Dec. 31, 2019

Term Loan

Schedule of future maturities

Future maturities of the Term Loan as of December 31, 2019 are as follows:


(in thousands)
2020		1,528
2021		1,667
2022		1,667
2023		138
Total		5,000
Less: current portion of term loan		(1,667)
Term loan, net of current portion	$	3,333

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2019

Stock-Based Compensation

Summary of stock option activity


	Options Outstanding and Exercisable
				Weighted
		Weighted		Average	Aggregate
		Average		Remaining	Intrinsic
	Number of	Exercise		Contractual	Value(1)
	Shares	Price		Life (Years)	(in thousands)
Outstanding as of January 1, 2018	506,586	$	0.94	9.0	$	137
Granted	1,570,136	$	5.92	9.9		—
Exercised	(5,599)	$	0.84	—		—
Forfeitures	(14,232)	$	1.11	—		—
Outstanding as of December 31, 2018	2,056,891	$	4.74	9.4	$	5,946
Granted	258,897	$	18.88	9.5		—
Exercised	(125,108)	$	0.96	7.4		—
Forfeitures	(20,468)	$	19.66	9.5		—
Outstanding as of December 31, 2019	2,170,212	$	6.51	8.6	$	—
Vested and expected to vest as of December 31, 2019	2,170,212	$	6.51	—	$	113,295
Exercisable as of December 31, 2019	716,393	$	3.75	—	$	39,370

(1)

Summary of stock based compensation expense recorded


	Year Ended
	December 31,
	2019		2018
Research and development	$	691	$	85
General and administrative		1,195		178
Total stock-based compensation expense	$	1,886	$	263

Summary of assumptions used in the Black Scholes option pricing model for stock options granted


	Year Ended
	December 31,
	2019		2018
Expected term	6.1	years	6.1	years
Expected volatility	69.7	%	69.7	%
Risk free interest rate	1.90	%	2.77	%
Expected dividend yield	—	%	—	%

Net Loss Per Share Attributable to Common Stockholders (Tables)

12 Months Ended

Dec. 31, 2019

Net Loss Per Share Attributable to Common Stockholders

Summary of shares excluded from the computation of diluted net loss per share

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Taxes

Summary of reconciliation of federal statutory income tax rate to the Company’s effective income tax rate


	December 31,
	2019		2018
Expected income tax benefit at the federal statutory rate	21.0	%	21.0	%
State taxes, net of federal benefit	7.0		6.5
Research and development credit, net	4.9		7.2
Non-deductible items	(0.5)		(2.2)
Prior year provision to return adjustments	(2.5)		(7.7)
Other	—		0.3
Change in valuation allowance	(29.9)		(25.1)
Total	—	%	—	%

Summary of components of deferred tax assets


	December 31,
(in thousands)		2019		2018
Deferred tax assets:
Federal and state net operating loss carryforwards	$	15,080	$	11,946
Research and development tax credits		4,197		3,393
Deferred revenue		5,928		—
Charitable contribution carryforwards		306		165
Accruals and other		826		313
Gross deferred tax assets		26,337		15,817
Less: valuation allowance		(25,633)		(15,525)
Total deferred tax assets	$	704	$	292
Deferred tax liabilities:
Depreciation and amortization	$	(704)	$	(292)
Gross deferred tax liabilities	$	(704)	$	(292)
Net deferred tax assets	$	—	$	—

Nature of the Business and Basis of Presentation - (Details) $ / shares in Units, $ in Thousands					12 Months Ended
	Dec. 02, 2019 USD ($) $ / shares shares	Nov. 19, 2019 $ / shares shares	May 13, 2019 USD ($) $ / shares shares	May 03, 2019	Dec. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2018 USD ($) $ / shares shares	May 14, 2019 shares
Nature of the Business
Reverse stock split ratio				0.1245
Issuance of stock (in shares) \| shares	611,578	4,077,192
Share price \| $ / shares	$ 36.75	$ 36.75
Proceeds from issuance of preferred stock, net of issuance costs \| $	$ 160,900					$ 122,223
Proceeds from issuance of shares, net \| $					$ 238,384
Underwriting discounts and commissions \| $	10,300
Offering expenses \| $	$ 1,000
Common stock, shares outstanding \| shares			15,560,569		27,499,260	1,374,812
Preferred stock, shares issued \| shares					0	0
Preferred stock, shares outstanding \| shares			0		0	0	0
Common stock, number of shares authorized \| shares			100,000,000		100,000,000	158,745,671
Common stock, par value per share \| $ / shares			$ 0.001		$ 0.001	$ 0.001
Preferred stock, number of shares authorized \| shares			10,000,000		10,000,000	0
Preferred stock, par value per share \| $ / shares			$ 0.001		$ 0.001	$ 0.001
IPO
Nature of the Business
Issuance of stock (in shares) \| shares			5,750,000
Share price \| $ / shares			$ 15.00
Proceeds from issuance of shares, net \| $			$ 76,900
Underwriting discounts and commissions \| $			6,000
Offering expenses \| $			$ 3,400

Nature of the Business and Basis of Presentation - Liquidity (Details)	12 Months Ended
	Dec. 31, 2019 segment
Nature of the Business and Basis of Presentation
Number of operating segment	1

Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Restricted Cash
Restricted cash required reserve	$ 5,000,000	$ 480,000
Reconciliation of cash and cash equivalents and restricted cash per the balance sheet to the statement of cash flows
Cash and cash equivalents	34,091,000	135,173,000
Restricted cash (including $3,333 in other assets as of December 31, 2019)	5,039,000	460,000
Total	39,130,000	$ 135,633,000	$ 9,287,000
Other assets, restricted cash	$ 3,333,000

Summary of Significant Accounting Policies - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2019
Computer equipment
Property, plant and equipment
Property, Plant and Equipment, Estimated Useful Lives	P3Y
Equipment
Property, plant and equipment
Property, Plant and Equipment, Estimated Useful Lives	P5Y
Furniture and fixtures
Property, plant and equipment
Property, Plant and Equipment, Estimated Useful Lives	P7Y

Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Impairment of Long Lived Assets
Impairment loss recognized	$ 0	$ 0
Income Taxes
Uncertain income tax benefits, interest or penalties	$ 0

Marketable Securities - (Details) - USD ($)	12 Months Ended
Marketable Securities - (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Investments
Amortized Cost	$ 300,552,000
Gross Unrealized Gain	118,000
Gross Unrealized Loss	(156,000)
Estimated Fair Value	300,514,000	$ 0
Unrealized losses in a continuous loss position for more than twelve consecutive months	0
Unrealized losses in a continuous loss position for less than twelve consecutive months	156,000
Gross realized gains	0
Gross realized losses	0
Interest income	2,000,000	$ 0
Cost Maturities:
Within 1 year	168,186,000
After 1 through 5	132,366,000
Total investments available for sale	300,552,000
Fair Value Maturities:
Within 1 year	168,204,000
After 1 through 5	132,310,000
Total investments available for sale	300,514,000
U.S. treasury securities
Investments
Amortized Cost	4,991,000
Estimated Fair Value	4,991,000
Agency bonds
Investments
Amortized Cost	24,437,000
Gross Unrealized Gain	15,000
Gross Unrealized Loss	(1,000)
Estimated Fair Value	24,451,000
Corporate bonds
Investments
Amortized Cost	271,124,000
Gross Unrealized Gain	103,000
Gross Unrealized Loss	(155,000)
Estimated Fair Value	$ 271,072,000

Fair Value Measurements - (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Fair value of the Company’s financial assets
Marketable securities	$ 300,514,000	$ 0
Assets transferred from level 1 to level 2	0	0
Assets transferred from level 2 to level 1	0	0
Fair Value
Fair value of the Company’s financial assets
Total financial assets	319,855,000
Fair Value \| Quoted Prices in Active Markets (Level 1)
Fair value of the Company’s financial assets
Total financial assets	19,341,000
Fair Value \| Significant Other Observable Inputs (Level 2)
Fair value of the Company’s financial assets
Total financial assets	300,514,000
Money market funds (cash equivalents) \| Fair Value
Fair value of the Company’s financial assets
Money market funds (cash equivalents)	19,341,000	5,000
Money market funds (cash equivalents) \| Fair Value \| Quoted Prices in Active Markets (Level 1)
Fair value of the Company’s financial assets
Money market funds (cash equivalents)	19,341,000	$ 5,000
U.S. treasury securities \| Fair Value
Fair value of the Company’s financial assets
Marketable securities	4,991,000
U.S. treasury securities \| Fair Value \| Significant Other Observable Inputs (Level 2)
Fair value of the Company’s financial assets
Marketable securities	4,991,000
Agency bonds \| Fair Value
Fair value of the Company’s financial assets
Marketable securities	24,451,000
Agency bonds \| Fair Value \| Significant Other Observable Inputs (Level 2)
Fair value of the Company’s financial assets
Marketable securities	24,451,000
Corporate bonds \| Fair Value
Fair value of the Company’s financial assets
Marketable securities	271,072,000
Corporate bonds \| Fair Value \| Significant Other Observable Inputs (Level 2)
Fair value of the Company’s financial assets
Marketable securities	$ 271,072,000

Property and Equipment, Net - (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Property and Equipment, Net
Property and equipment, gross	$ 17,236	$ 13,876
Less: accumulated depreciation and amortization	(5,146)	(2,469)
Property and equipment, net	12,090	11,407
Depreciation and amortization expense	2,688	1,677
Research equipment
Property and Equipment, Net
Property and equipment, gross	10,703	7,787
Leasehold improvements
Property and Equipment, Net
Property and equipment, gross	5,368	4,825
Computer equipment
Property and Equipment, Net
Property and equipment, gross	463	167
Furniture and fixtures
Property and Equipment, Net
Property and equipment, gross	93	70
Construction in progress
Property and Equipment, Net
Property and equipment, gross	$ 609	$ 1,027

Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Accrued Liabilities
Construction in progress	$ 73
Payroll and related benefits	1,173	$ 1,008
Clinical trial costs	1,702	271
Operating expenses	1,769	719
Financing costs	1	284
Office lease	135	127
Interest	18	2
Total accrued liabilities	$ 4,871	$ 2,411

Agreement with Eli Lilly and Company - Other (Details)			12 Months Ended
Agreement with Eli Lilly and Company - Other (Details)	Dec. 02, 2019 USD ($)	Nov. 02, 2018 USD ($)	Dec. 31, 2019 USD ($) item	Dec. 31, 2018 USD ($)
Collaborative Arrangements
Equity investment	$ 160,900,000			$ 122,223,000
Revenue			$ 6,347,000
Lilly Agreement
Collaborative Arrangements
Upfront non-refundable payment received		$ 25,000,000
Equity investment		15,000,000
The number of performance obligations. \| item			2
Revenue			$ 6,300,000	$ 0
Lilly Agreement \| Lilly
Collaborative Arrangements
Maximum development and regulatory milestones and sales milestone receivable		1,400,000,000
Maximum development and regulatory milestones and sales milestone payable upon option exercise		710,000,000
Transaction price		$ 32,700,000

Agreement with Eli Lilly and Company - Deferred revenue included in balance sheets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Deferred revenue
Deferred revenue, beginning of period	$ 26,725
Up-front payment		$ 25,000
Attributed premium on the proceeds from Lilly’s investment in the Company		1,725
Research and development support billing	2,000
Revenue from research and development arrangement recognized	(6,347)
Total deferred revenue, end of period	22,378	26,725
Less: Deferred revenue, current portion	(6,428)	(4,989)
Deferred revenue, non-current portion	$ 15,950	$ 21,736

Commitments and Contingencies - Other (Details) - USD ($)				12 Months Ended
	Aug. 02, 2019	Jan. 30, 2019	Feb. 09, 2016	Dec. 31, 2019	Dec. 31, 2018
Commitments and Contingencies
Annual base rent per month			$ 32,254
Period for which base rent is abated	7 months	7 months
Annual base rent per month after abatement	$ 18,178	$ 19,646
Percentage of annual increase in lease rent	3.00%	3.00%	3.00%
Executed letter of credit		$ 39,000
Base rate adjustment percentage per annum (as a percent)	8.50%	8.50%
Tenant improvements fully reimbursed by the landlord	$ 1,517,000	$ 1,477,000
Rent expenses operating leases				$ 679,000	$ 420,000

Commitments and Contingencies - Future Minimum Payments (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Future minimum payments:
2020	$ 602
2021	915
2022	972
2023	970
Thereafter	7,736
Total future minimum payments	$ 11,195

Term Loan - Other (Details)		12 Months Ended
Term Loan - Other (Details)	Jan. 25, 2019 USD ($) item	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Apr. 30, 2016 USD ($)
Face amount	$ 5,000,000			$ 1,000,000
Interest rate (as a percent)	4.25%	4.40%	3.95%
Number of equal monthly payments of principal plus accrued interest \| item	36
Interest expense		$ 209,000	$ 25,000
Outstanding balance		$ 5,000,000	$ 460,000
Prime rate \| Maximum
Spread (as a percent)	1.00%

Term Loan - Maturities (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Future maturities:
2020	$ 1,528,000
2021	1,667,000
2022	1,667,000
2023	138,000
Total	5,000,000	$ 460,000
Less: current portion of term loan	(1,667,000)	(387,000)
Term loan, net of current portion	$ 3,333,000	$ 73,000

Preferred Stock (Details) - $ / shares	Dec. 31, 2019	May 14, 2019	May 13, 2019	Dec. 31, 2018
Preferred Stock.
Preferred stock, number of shares authorized	10,000,000		10,000,000	0
Preferred stock, par value per share	$ 0.001		$ 0.001	$ 0.001
Preferred stock, shares issued	0			0
Preferred stock, shares outstanding	0	0	0	0

Common Stock (Details)	12 Months Ended
Common Stock (Details)	Dec. 31, 2019 Vote $ / shares shares	May 13, 2019 $ / shares shares	Dec. 31, 2018 $ / shares shares
Common Stock.
Common stock, number of shares authorized	100,000,000	100,000,000	158,745,671
Common stock, par value per share \| $ / shares	$ 0.001	$ 0.001	$ 0.001
Common stock, shares issued	27,499,260		1,374,812
Common stock, shares outstanding	27,499,260	15,560,569	1,374,812
Number of votes per share \| Vote	1
Dividends declared \| $ / shares	$ 0

Stock-Based Compensation - Stock options (Details) - USD ($)		1 Months Ended	12 Months Ended
	May 03, 2019	May 31, 2016	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Stock Based Compensation
Antidilutive securities excluded from computation of diluted net loss per share			2,170,212	17,617,460
2015 Plan
Number of Shares
Outstanding at the beginning (in shares)			2,056,891	506,586
Granted (in shares)			258,897	1,570,136
Exercised			(125,108)	(5,599)
Forfeitures			(20,468)	(14,232)
Outstanding at the end (in shares)			2,170,212	2,056,891	506,586
Vested and expected to vest at the end (in shares)			2,170,212
Exercisable at the end (in shares)			716,393
Weighted Average Exercise Price
Outstanding at the beginning (in dollars per share)			$ 4.74	$ 0.94
Granted (in dollars per share)			18.88	5.92
Exercised (in dollars per share)			0.96	0.84
Forfeitures (in dollars per share)			19.66	1.11
Outstanding at the end (in dollars per share)			6.51	$ 4.74	$ 0.94
Vested and expected to vest at the end (in dollars per share)			6.51
Exercisable at the end (in dollars per share)			$ 3.75
Weighted Average Remaining Contractual Life (Years) And Aggregate Intrinsic Value
Outstanding (in years)			8 years 7 months 6 days	9 years 4 months 24 days	9 years
Granted (in years)			9 years 6 months	9 years 10 months 24 days
Exercised (in years)			7 years 4 months 24 days
Forfeitures (in years)			9 years 6 months
Outstanding at the beginning (in dollars)			$ 5,946,000	$ 137,000
Outstanding at the end (in dollars)				$ 5,946,000	$ 137,000
Vested and expected to vest at the end (in dollars)			113,295,000
Exercisable at the end (in dollars)			$ 39,370,000
Weighted average grant date fair value per share of stock options granted			$ 11.92	$ 3.80
Aggregate intrinsic value of stock options exercised			$ 7,225,000	$ 38,000
Aggregate grant date fair value			$ 7,637,000	$ 157,000
2015 Plan \| Restricted Common Stock
Stock Based Compensation
Number of shares issued		62,237
Vesting period		4 years
Omnibus Incentive Plan
Stock Based Compensation
Number of shares reserved for issuance under the plan	2,900,000
Annual increase in number of share reserved for issuance (as percent)	4.00%
2015 Plan and 2019 Employee Stock Purchase Plan
Stock Based Compensation
Vesting period			4 years
Expiration period			10 years
Number of shares reserved for issuance under the plan			2,661,566
2019 Employee Stock Purchase Plan
Stock Based Compensation
Number of shares issued			0
Number of shares reserved for issuance under the plan	240,000		240,000
Annual increase in number of share reserved for issuance (as percent)	1.00%
Maximum annual increase in shares available for issuance under the plan	480,000
Option to purchase common stock
Stock Based Compensation
Antidilutive securities excluded from computation of diluted net loss per share			2,170,212	2,056,891

Stock-Based Compensation - Stock based compensation expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Stock based compensation expense
Unrecognized compensation cost	$ 6,900
Compensation expense recognition period	3 years
Total stock-based compensation expense	$ 1,886	$ 263
Research and development
Stock based compensation expense
Total stock-based compensation expense	691	85
General and administrative
Stock based compensation expense
Total stock-based compensation expense	$ 1,195	$ 178

Stock-Based Compensation - Assumptions (Details)	12 Months Ended
Stock-Based Compensation - Assumptions (Details)	Dec. 31, 2019	Dec. 31, 2018
Fair value assumptions
Expected term	6 years 1 month 6 days	6 years 1 month 6 days
Expected volatility	69.70%	69.70%
Risk free interest rate	1.90%	2.77%

Stock-Based Compensation - Restricted Common Stock (Details) - 2015 Plan - Restricted Common Stock	1 Months Ended
	May 31, 2016 shares
Restricted Common Stock
Number of shares issued	62,237
Vesting period	4 years

Net Loss Per Share Attributable to Common Stockholders - Anti-dilutive effect (Details) - shares	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Antidilutive Securities
Antidilutive securities excluded from computation of diluted net loss per share	2,170,212	17,617,460
Preferred Stock
Antidilutive Securities
Antidilutive securities excluded from computation of diluted net loss per share		15,560,569
Option to purchase common stock
Antidilutive Securities
Antidilutive securities excluded from computation of diluted net loss per share	2,170,212	2,056,891

Income Taxes - Reconciliation (Details)	12 Months Ended
Income Taxes - Reconciliation (Details)	Dec. 31, 2019	Dec. 31, 2018
Reconciliation of federal statutory income tax rate to the Company’s effective income tax rate
Expected income tax benefit at the federal statutory rate (as a percent)	21.00%	21.00%
State taxes, net of federal benefit (as a percent)	7.00%	6.50%
Research and development credit, net (as a percent)	4.90%	7.20%
Non-deductible items (as a percent)	(0.50%)	(2.20%)
Prior year provision to return adjustments (as a percent)	(2.50%)	(7.70%)
Other (as a percent)		0.30%
Change in valuation allowance (as a percent)	(29.90%)	(25.10%)

Income Taxes - Deferred tax assets (Details) - USD ($)	12 Months Ended
Income Taxes - Deferred tax assets (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Deferred tax assets:
Federal and state net operating loss carryforwards	$ 15,080,000	$ 11,946,000
Research and development tax credits	4,197,000	3,393,000
Deferred revenue	5,928,000
Charitable contribution carryforwards	306,000	165,000
Accruals and other	826,000	313,000
Gross deferred tax assets	26,337,000	15,817,000
Less: valuation allowance	(25,633,000)	(15,525,000)
Total deferred tax assets	704,000	292,000
Deferred tax liabilities:
Depreciation and amortization	(704,000)	(292,000)
Gross deferred tax liabilities	(704,000)	$ (292,000)
Increase in valuation allowance	10,100,000
Federal net operating loss carryforwards	55,000,000
State net operating loss carryforwards	54,000,000
Federal and state net operating loss carryforwards that do not expire	32,300,000
Federal research and development tax credit carryforwards	4,100,000
State research and development tax credit carryforwards	100,000
Unrecognized income tax benefits	$ 0

Employee Benefit Plan (Details)	12 Months Ended
Employee Benefit Plan (Details)	Dec. 31, 2019
Employee Benefit Plan
Percentage of eligible compensation on a pre tax basis	100.00%

Subsequent Events - (Details) $ in Millions	Dec. 31, 2019 USD ($)
Lilly Agreement
Subsequent Event
Deferred revenue	$ 22.4