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Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2020	Jul. 30, 2020
Document And Entity Information
Document Quarterly Report	true
Document Transition Report	false
Document Type	10-Q
Document Period End Date	Jun. 30, 2020
Entity Registrant Name	Corvus Pharmaceuticals, Inc.
Entity Tax Identification Number	46-4670809
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity File Number	001-37719
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	863 Mitten Road, Suite 102
Entity Address, City or Town	Burlingame
Entity Address, Postal Zip Code	94010
Entity Address, State or Province	CA
City Area Code	650
Local Phone Number	900-4520
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Title of 12(b) Security	Common Stock
Security Exchange Name	NASDAQ
Trading Symbol	CRVS
Entity Common Stock, Shares Outstanding		28,035,733
Entity Central Index Key	0001626971
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 20,705	$ 5,154
Marketable securities	38,553	72,828
Prepaid and other current assets	1,303	1,362
Total current assets	60,561	79,344
Property and equipment, net	1,119	1,462
Operating lease right-of-use asset	1,996	2,327
Other assets	501	513
Total assets	64,177	83,646
Current liabilities:
Accounts payable	2,779	2,448
Operating lease liability	976	878
Accrued and other liabilities	7,798	6,899
Total current liabilities	11,553	10,225
Operating lease liability	1,784	2,310
Total liabilities	13,337	12,535
Commitments and contingencies (Note 12)
Stockholders' equity:
Preferred stock: $0.0001 par value; 10,000,000 shares authorized at June 30, 2020 and December 31, 2019; 0 shares issued and outstanding at June 30, 2020 and December 31, 2019
Common stock: $0.0001 par value; 290,000,000 shares authorized at June 30, 2020 and December 31, 2019; 28,034,733 and 27,953,233 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively	3	3
Additional paid-in capital	291,475	288,224
Accumulated other comprehensive income	53	29
Accumulated deficit	(240,691)	(217,145)
Total stockholders' equity	50,840	71,111
Total liabilities and stockholders' equity	$ 64,177	$ 83,646

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
CONSOLIDATED BALANCE SHEETS
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	290,000,000	290,000,000
Common stock, shares issued	28,034,733	27,953,233
Common stock, shares outstanding	28,034,733	27,953,233

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Operating expenses:
Research and development	$ 7,857	$ 10,640	$ 18,020	$ 20,059
General and administrative	2,910	2,956	6,016	5,842
Total operating expenses	10,767	13,596	24,036	25,901
Loss from operations	(10,767)	(13,596)	(24,036)	(25,901)
Interest income and other expense, net	156	618	490	1,280
Net loss	$ (10,611)	$ (12,978)	$ (23,546)	$ (24,621)
Net loss per share, basic and diluted (in dollars per share)	$ (0.36)	$ (0.44)	$ (0.80)	$ (0.84)
Shares used to compute net loss per share, basic and diluted (in shares)	29,428,249	29,309,150	29,419,741	29,301,505
Other comprehensive loss:
Unrealized gain on marketable securities	$ 10	$ 28	$ 24	$ 73
Comprehensive loss	$ (10,601)	$ (12,950)	$ (23,522)	$ (24,548)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock.	Additional Paid-In Capital	Accumulated Other Comprehensive Income	Accumulated Deficit	Total
Balance at Dec. 31, 2018	$ 3	$ 280,840	$ (34)	$ (170,473)	$ 110,336
Balance (in shares) at Dec. 31, 2018	29,323,930
Increase (Decrease) in Stockholders' Deficit
Common stock issued on exercise of stock options		1			1
Common stock issued on exercise of stock options (in shares)	2,970
Vesting of restricted stocks issued upon early exercise of stock options		5			5
Stock-based compensation expense		1,953			1,953
Unrealized gain on marketable securities			45		45
Net loss				(11,643)	(11,643)
Balance at Mar. 31, 2019	$ 3	282,799	11	(182,116)	100,697
Balance (in shares) at Mar. 31, 2019	29,326,900
Balance at Dec. 31, 2018	$ 3	280,840	(34)	(170,473)	110,336
Balance (in shares) at Dec. 31, 2018	29,323,930
Increase (Decrease) in Stockholders' Deficit
Net loss					(24,621)
Balance at Jun. 30, 2019	$ 3	284,706	39	(195,094)	89,654
Balance (in shares) at Jun. 30, 2019	29,348,400
Balance at Mar. 31, 2019	$ 3	282,799	11	(182,116)	100,697
Balance (in shares) at Mar. 31, 2019	29,326,900
Increase (Decrease) in Stockholders' Deficit
Common stock issued on exercise of stock options		5			5
Common stock issued on exercise of stock options (in shares)	21,500
Vesting of restricted stocks issued upon early exercise of stock options		4			4
Stock-based compensation expense		1,898			1,898
Unrealized gain on marketable securities			28		28
Net loss				(12,978)	(12,978)
Balance at Jun. 30, 2019	$ 3	284,706	39	(195,094)	89,654
Balance (in shares) at Jun. 30, 2019	29,348,400
Balance at Dec. 31, 2019	$ 3	288,224	29	(217,145)	71,111
Balance (in shares) at Dec. 31, 2019	27,953,233
Increase (Decrease) in Stockholders' Deficit
Stock-based compensation expense		1,845			1,845
Unrealized gain on marketable securities			14		14
Net loss				(12,935)	(12,935)
Balance at Mar. 31, 2020	$ 3	290,069	43	(230,080)	60,035
Balance (in shares) at Mar. 31, 2020	27,953,233
Balance at Dec. 31, 2019	$ 3	288,224	29	(217,145)	71,111
Balance (in shares) at Dec. 31, 2019	27,953,233
Increase (Decrease) in Stockholders' Deficit
Net loss					(23,546)
Balance at Jun. 30, 2020	$ 3	291,475	53	(240,691)	50,840
Balance (in shares) at Jun. 30, 2020	28,034,733
Balance at Mar. 31, 2020	$ 3	290,069	43	(230,080)	60,035
Balance (in shares) at Mar. 31, 2020	27,953,233
Increase (Decrease) in Stockholders' Deficit
Common stock issued on exercise of stock options		23			23
Common stock issued on exercise of stock options (in shares)	81,500
Stock-based compensation expense		1,383			1,383
Unrealized gain on marketable securities			10		10
Net loss				(10,611)	(10,611)
Balance at Jun. 30, 2020	$ 3	$ 291,475	$ 53	$ (240,691)	$ 50,840
Balance (in shares) at Jun. 30, 2020	28,034,733

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities
Net loss	$ (23,546)	$ (24,621)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	343	372
Accretion related to marketable securities	(68)	(384)
Stock-based compensation	3,228	3,851
Changes in operating assets and liabilities:
Prepaid and other current assets	59	(313)
Operating lease right-of-use asset	331	292
Other assets	12	(50)
Accounts payable	331	640
Accrued and other liabilities	899	2,384
Operating lease liability	(428)	(375)
Net cash used in operating activities	(18,839)	(18,204)
Cash flows from investing activities
Purchases of marketable securities	(29,734)	(64,502)
Sales of marketable securities	1,009
Maturities of marketable securities	63,092	73,703
Purchases of property and equipment		(16)
Net cash provided by investing activities	34,367	9,185
Cash flows from financing activities
Proceeds from exercise of common stock options	23	6
Net cash provided by financing activities	23	6
Net increase (decrease) in cash and cash equivalents	15,551	(9,013)
Cash and cash equivalents at beginning of the period	5,154	39,196
Cash and cash equivalents at end of the period	$ 20,705	$ 30,183

Organization

6 Months Ended

Jun. 30, 2020

Organization

Organization

1. Organization

Corvus Pharmaceuticals, Inc. (“Corvus” or the “Company”) was incorporated in Delaware on January 27, 2014 and commenced operations in November 2014. Corvus is a clinical-stage biopharmaceutical company. The Company’s operations are located in Burlingame, California. The Company has two insignificant subsidiaries.

Initial Public Offering

On March 22, 2016, the Company’s registration statement on Form S-1 (File No. 333-208850) relating to its initial public offering (“IPO”) of its common stock was declared effective by the Securities and Exchange Commission (“SEC”) and the shares of its common stock began trading on the Nasdaq Global Market on March 23, 2016. The public offering price of the shares sold in the IPO was $15.00 per share. The IPO closed on March 29, 2016, pursuant to which the Company sold 4,700,000 shares of its common stock. On April 26, 2016, the Company sold an additional 502,618 shares of its common stock to the underwriters upon partial exercise of their over-allotment option, at the initial offering price of $15.00 per share. The Company received aggregate net proceeds of approximately $70.6 million, after underwriting discounts, commissions and offering expenses. Immediately prior to the consummation of the IPO, all outstanding shares of convertible preferred stock were converted into common stock.

Follow-on Public Offering

In March 2018, the Company completed a follow-on public offering in which the Company sold 8,117,647 shares of common stock at a price of $8.50 per share, which included 1,058,823 shares issued pursuant to the underwriters’ exercise of their option to purchase additional shares of common stock. The aggregate net proceeds received by the Company from the offering were approximately $64.9 million, net of underwriting discounts and commissions and offering expenses payable by the Company.

Liquidity

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, protection of proprietary technology, dependence on key personnel, contract manufacturer and contract research organizations, compliance with government regulations and the need to obtain additional financing to fund operations. Since commencing operations in 2014, the majority of the Company’s efforts have been focused on the research and development of ciforadenant, CPI-006 and CPI-818. The Company believes that it will continue to expend substantial resources for the foreseeable future as it continues clinical development of, seek regulatory approval for and, if approved, prepare for the commercialization of ciforadenant, CPI-006, and CPI-818, as well as product candidates under the Company’s other development programs. These expenditures will include costs associated with research and development, conducting preclinical studies and clinical trials, obtaining regulatory approvals, manufacturing and supply, sales and marketing and general operations. In addition, other unanticipated costs may arise. Because the outcome of any clinical trial and/or regulatory approval process is highly uncertain, the Company may not be able to accurately estimate the actual amounts necessary to successfully complete the development, regulatory approval process and commercialization of ciforadenant, CPI-006, CPI-818 or any other product candidates. The Company does not expect its existing capital resources to be sufficient to enable it to fund the completion of all of its ongoing or planned clinical trials and remaining development program of ciforadenant, CPI-006 or CPI-818 through commercialization. In addition, its operating plan may change as a result of many factors, including those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed on March 9, 2020.

The Company has incurred significant losses and negative cash flows from operations in all periods since inception and had an accumulated deficit of $240.7 million as of June 30, 2020. The Company has historically financed its operations primarily through the sale of redeemable convertible preferred stock and common stock. While the

Company has been able to raise multiple rounds of financing, there can be no assurance that in the event the Company requires additional financing, such financing will be available on terms which are favorable or at all. Failure to generate sufficient cash flows from operations, raise additional capital or reduce certain discretionary spending would have a material adverse effect on the Company’s ability to achieve its intended business objectives.

As of June 30, 2020, the Company had cash, cash equivalents and short-term marketable securities of $59.3 million. Management believes that the Company’s current cash, cash equivalents and short-term marketable securities will be sufficient to fund its planned operations for at least 12 months from the date of the issuance of these financial statements.

The current COVID-19 (coronavirus) pandemic, which is impacting worldwide economic activity, poses risks that the Company or its employees, contractors, suppliers, and other partners may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities. The extent to which COVID-19 impacts the Company’s business, including its clinical trials and financial condition, will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the pandemic, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease. As COVID-19 continues to spread around the globe, we will likely experience disruptions, including delays or difficulties in enrolling patients in our clinical trials, delays or difficulties in clinical site initiation, interruption of key clinical trial activities, delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials and delays in necessary interactions with local reguloatry authorities. COVID-19 may also impact the Company’s ability to raise additional capital on a timely basis or at all, which could negatively impact short-term and long-term liquidity.

Exchange Warrants

On November 8, 2019, the Company entered into an exchange agreement (the “Exchange Agreement”) with an Investor and its affiliates (the “Exchanging Stockholders”), pursuant to which the Company exchanged an aggregate of 1,458,000 shares of the Company’s common stock, par value $0.0001 per share, owned by the Exchanging Stockholders for pre-funded warrants (the “Exchange Warrants”) to purchase an aggregate of 1,458,000 shares of common stock (subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the Exchange Warrants), with an exercise price of $0.0001 per share. The Exchange Warrants will expire ten years from the date of issuance. The Exchange Warrants are exercisable at any time prior to expiration except that the Exchange Warrants cannot be exercised by the Exchanging Stockholders if, after giving effect thereto, the Exchanging Stockholders would beneficially own more than 9.99% of the Company’s common stock, subject to certain exceptions. In accordance with Accounting Standards Codification Topic 505, Equity, and Accounting Research Bulletin 43, the Company recorded the retirement of the common stock exchanged as a reduction of common shares outstanding and elected to record the excess over par value as a debit to additional paid-in-capital at the fair value of the Exchange Warrants on the issuance date. The Exchange Warrants are classified as equity in accordance with Accounting Standards Codification Topic 480, Distinguishing Liabilities from Equity, and Accounting Standards Codification Topic 815, Derivatives and Hedging, and the fair value of the Exchange Warrants was recorded as a credit to additional paid-in capital and is not subject to remeasurement. The Company determined that the fair value of the Exchange Warrants is substantially similar to the fair value of the retired shares on the issuance date due to the negligible exercise price for the Exchange Warrants. As of June 30, 2020, none of the Exchange Warrants have been exercised.

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2020

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s functional and reporting currency is the U.S. dollar. The accompanying condensed consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and discharge of liabilities in the normal

course of business. Since its inception, the Company has incurred significant losses and negative cash flows from operations. As of June 30, 2020, the Company had an accumulated deficit of $240.7 million and cash, cash equivalents and marketable securities of $59.3 million. The Company has financed its operations primarily with the proceeds from the sale of stock. The Company will need to raise additional capital to meet its business objectives. The Company believes that its current cash, cash equivalents and marketable securities will be sufficient to fund its planned expenditures and meet its obligations through at least the next twelve months from the issuance of these financial statements.

Unaudited Interim Financial Information

The accompanying interim condensed consolidated financial statements and related disclosures are unaudited, have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented.

The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The condensed consolidated results of operations for the six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period. The accompanying condensed consolidated financial statements should be read in conjunction with the audited financial statements and the related notes for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 9, 2020.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from such estimates.

Concentrations of Credit Risk and Other Risks and Uncertainties

Substantially all of the Company’s cash and cash equivalents are deposited in accounts with two financial institutions that management believes are of high credit quality. Such deposits may, at times, exceed federally insured limits. The Company maintains its cash with an accredited financial institution and accordingly, such funds are subject to minimal credit risk. The Company’s marketable securities consist of investments in U.S. Treasury securities, U.S. government agency securities and corporate debt obligations, which can be subject to certain credit risks. However, the Company mitigates the risks by investing in high-grade instruments, limiting its exposure to any one issuer, and monitoring the ongoing creditworthiness of the financial institutions and issuers. The Company has not experienced any losses on its deposits of cash, cash equivalents or marketable securities.

The Company is subject to a number of risks similar to other early stage biopharmaceutical companies, including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical testing or clinical trials, its reliance on third parties to conduct its clinical trials, the need to obtain marketing approval for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of the Company’s product candidates, its right to develop and commercialize its product candidates pursuant to the terms and conditions of the licenses granted to the Company, and protection of proprietary technology. If the Company does not successfully commercialize or partner any of its product candidates, it will be unable to generate product revenue or achieve profitability.

Segments

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment, that of the development of and commercialization of precisely targeted oncology therapies.

Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2 to its consolidated financial statements for the year ended December 31, 2019, included in its Annual Report on Form 10-K. There have been no material changes to the Company’s significant accounting policies during the three months ended June 30, 2020.

Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize an ROU asset and lease liability on the balance sheet. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The Company adopted the new standard on January 1, 2019 and has elected the ‘package of practical expedients’, which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter is not applicable to the Company. Upon adoption of ASU 2016-02, the Company recognized an operating lease, right-of-use asset of $2.8 million and a corresponding liability of $3.8 million and eliminated $1.0 million of deferred rent in the Company’s condensed balance sheet. The adoption of ASU 2016-02 did not have any impact on the Company’s condensed statements of operations and comprehensive loss. See also Note 11.

Net Loss per Share

6 Months Ended

Jun. 30, 2020

Net Loss per Share

Net Loss per Share

3. Net Loss per Share

The following table shows the calculation of net loss per share (in thousands, except share and per share data):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Numerator:
Net loss - basic and diluted	$	(10,611)	$	(12,978)	$	(23,546)	$	(24,621)
Denominator:
Weighted average common shares outstanding		29,428,249		29,329,229		29,419,741		29,328,075
Less: weighted average common shares subject to repurchase		—		(20,079)		—		(26,570)
Weighted average common shares outstanding used to compute basic and diluted net loss per share		29,428,249		29,309,150		29,419,741		29,301,505
Net loss per share, basic and diluted	$	(0.36)	$	(0.44)	$	(0.80)	$	(0.84)

Weighted average common shares outstanding for the three and six months ended June 30, 2020 include 1,458,000 shares of common stock issuable on the conversion of pre-funded warrants described in Note 1.

The amounts in the table below were excluded from the calculation of diluted net loss per share, due to their anti-dilutive effect:


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2020	2019	2020	2019
Common stock subject to repurchase	—	12,384	—	12,384
Outstanding options	5,561,098	4,157,154	5,561,098	4,157,154
Total shares of common stock equivalents	5,561,098	4,169,538	5,561,098	4,169,538

Fair Value Measurements

6 Months Ended

Jun. 30, 2020

Fair Value Measurements

Fair Value Measurements

4. Fair Value Measurements

Financial assets and liabilities are measured and recorded at fair value. The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. The fair value hierarchy prioritizes valuation inputs based on the observable nature of those inputs. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The hierarchy defines three levels of valuation inputs:

●

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

●

Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

●

Level 3—Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability

There have been no transfers of assets and liabilities between levels of hierarchy.

The Company’s Level 2 investments are valued using third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar investments, issuer credit spreads, benchmark investments, prepayment/default projections based on historical data and other observable inputs.

The following tables present information as of June 30, 2020 and December 31, 2019 about the Company’s assets that are measured at fair value on a recurring basis and indicate the level of the fair value hierarchy the Company utilized to determine such fair values (in thousands):


	June 30, 2020
	Fair Value Measured Using						Total
	(Level 1)		(Level 2)		(Level 3)		Balance
Assets
Cash equivalents	$	19,834	$	—	$	—	$	19,834
Marketable securities		3,029		35,524		—		38,553
	$	22,863	$	35,524	$	—	$	58,387


	December 31, 2019
	Fair Value Measured Using						Total
	(Level 1)		(Level 2)		(Level 3)		Balance
Assets
Cash equivalents	$	4,252	$	—	$	—	$	4,252
Marketable securities		7,023		65,805		—		72,828
	$	11,275	$	65,805	$	—	$	77,080

As of June 30, 2020, marketable securities had a maximum remaining maturity of twelve months.

As of June 30, 2020 and December 31, 2019, the fair value of available for sale marketable securities by type of security were as follows (in thousands):


	June 30, 2020
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
U.S. Treasury securities	$	3,025	$	4	$	—	$	3,029
U.S. Government agency securities		24,481		24		(2)		24,503
Corporate debt obligations		10,994		27		—		11,021
	$	38,500	$	55	$	(2)	$	38,553


	December 31, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
U.S. Treasury securities	$	7,019	$	4	$	—	$	7,023
U.S. Government agency securities		17,701		16		—		17,717
Corporate debt obligations		48,079		17		(8)		48,088
	$	72,799	$	37	$	(8)	$	72,828

- 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

License and Collaboration Agreements

6 Months Ended

Jun. 30, 2020

License and Collaboration Agreements

License and Collaboration Agreements

5. License and Collaboration Agreements

Scripps Licensing Agreement

In December 2014, the Company entered into a license agreement with The Scripps Research Institute (“Scripps”), pursuant to which it was granted a non-exclusive, world-wide license for all fields of use under Scripps’ rights in certain know-how and technology related to a mouse hybridoma clone expressing an anti-human CD73 antibody, and to progeny, mutants or unmodified derivatives of such hybridoma and any antibodies expressed by such hybridoma, from which we developed CPI-006. Scripps also granted the Company the right to grant sublicenses in conjunction with other proprietary rights the Company holds, or to others collaborating with or performing services for the Company. Under this license agreement, Scripps has agreed not to grant any additional commercial licenses with respect to such materials, other than march-in rights granted to the U.S. government.

Upon execution of the agreement, the Company made a one-time cash payment to Scripps of $10,000 in 2015 and is also obligated to pay a minimum annual fee to Scripps of $25,000. The one-time cash payment was recorded as research and development expense as technological feasibility of the asset had not been established and there was no alternative future use. A minimum annual fee payment is due on each anniversary of the effective date of the agreement for the term of the agreement. The Company is also required to make performance-based cash payments upon successful completion of clinical and sales milestones. The aggregate potential milestone payments are $2.6 million. The Company is also required to pay royalties on net sales of licensed products (including CPI-006) sold by it, its affiliates and its sublicensees at a rate in the low-single digits. In addition, should the Company sublicense the rights licensed under the agreement, it has agreed to pay a percentage of sublicense revenue received at specified rates that start at double digit percentages and decrease to single digit percentages based on the elapsed time from the effective date of the agreement and the time of entry into such sublicense. To date, no milestone payments have been made.

The Company’s license agreement with Scripps will terminate upon expiration of its obligation to pay royalties to Scripps under the license agreement. The Company’s license agreement with Scripps is terminable by the consent of the parties, at will by the Company upon providing 90 days written notice to Scripps, or by Scripps for certain material breaches, or if the Company undergoes a bankruptcy event. In addition, Scripps may terminate the license on a product-by-product basis, or the entire agreement, if the Company fails to meet specified diligence obligations related to the development and commercialization of licensed products. Scripps may also terminate the agreement after the third anniversary of the effective date of the agreement if it reasonably believes, based on reports the Company provides to Scripps, that the Company has not used commercially reasonable efforts as required under the agreement, subject to a specified notice and cure period.

Vernalis Licensing Agreement

In February 2015, the Company entered into a license agreement with Vernalis (R&D) Limited (“Vernalis”), which was subsequently amended as of November 5, 2015, and, pursuant to which the Company was granted an exclusive, worldwide license under certain patent rights and know-how, including a limited right to grant sublicenses, for all fields of use to develop, manufacture and commercialize products containing certain adenosine receptor antagonists, including ciforadenant (formerly CPI-444). Pursuant to this agreement, the Company made a one-time cash payment to Vernalis in the amount of $1.0 million, which was recorded as research and development expense as technological feasibility of the asset had not been established and there was no alternative future use. The Company is also required to make cash milestone payments to Vernalis upon the successful completion of clinical and regulatory milestones for licensed products depending on the indications for which such licensed products are developed and upon achievement of certain sales milestones. In February 2017, the Company made a milestone payment of $3.0 million to Vernalis following the expansion of a cohort of patients with renal cell cancer treated with single agent ciforadenant in the Company’s Phase 1/1b clinical trial. The aggregate potential milestone payments are approximately $220 million for all indications.

The Company has also agreed to pay Vernalis tiered incremental royalties based on the annual net sales of licensed products containing ciforadenant on a product-by-product and country-by-country basis, subject to certain offsets and reductions. The tiered royalty rates for products containing ciforadenant range from the mid-single digits up to the low-double digits on a country-by-country net sales basis. The royalties on other licensed products that do not include ciforadenant also increase with the amount of net sales on a product-by-product and country-by-country basis and range from the low-single digits up to the mid-single digits on a country-by-country net sales basis. The Company is also obligated to pay to Vernalis certain sales milestones as indicated above when worldwide net sales reach specified levels over an agreed upon time period.

The agreement will expire on a product-by-product and country-by-country basis upon the expiration of the Company’s payment obligations to Vernalis in respect of a particular product and country. Both parties have the right to terminate the agreement for an uncured material breach by the other party. The Company may also terminate the agreement at its convenience by providing 90 days written notice, provided that the Company has not received notice of its own default under the agreement at the time the Company exercises such termination right. Vernalis may also terminate the agreement if the Company challenges a licensed patent or undergoes a bankruptcy event.

Genentech Collaboration Agreements

In October 2015, the Company entered into a clinical trial collaboration agreement with Genentech to evaluate the safety, tolerability and preliminary efficacy of ciforadenant combined with Genentech’s investigational cancer immunotherapy, Tecentriq (atezolizumab), a fully humanized monoclonal antibody targeting protein programmed cell death ligand 1(“PD-L1”), in a variety of solid tumors in a Phase 1/1b clinical trial. Pursuant to this agreement, the Company will be responsible for the conduct and cost of the relevant studies, under the supervision of a joint development committee made up of representatives of the Company and representatives of Genentech. Genentech will supply Tecentriq. As part of the agreement, the Company granted Genentech certain rights of first negotiation to participate in future clinical trials that the Company may conduct evaluating the administration of ciforadenant in combination with an anti-PD-1 or anti-PD-L1 antibody. If the Company and Genentech do not reach agreement on the terms of any such participation by Genentech within a specified time period, the Company retains the right to collaborate with third parties in such activities. The Company also granted Genentech certain rights of first negotiation should it decide to license development and commercialization rights to ciforadenant. Should the Company and Genentech not reach agreement on the terms of such a license within a specified time period, it retains the right to enter into a license with another third party.

The Company and Genentech each have the right to terminate the agreement for material breach by the other party. In addition, the agreement may be terminated by either party due to safety considerations, if directed by a regulatory authority or if development of ciforadenant or Tecentriq is discontinued. Further, the agreement will expire after a set period of time following the provision by the Company of the final clinical study report to Genentech.

In May 2017, the Company signed a second clinical trial collaboration agreement with Genentech. Under the second agreement, ciforadenant administered in combination with Tecentriq is being evaluated in a Phase 1b/2 randomized, controlled clinical study, known as Morpheus, as second-line therapy in patients with non-small cell lung cancer who are resistant and/or refractory to prior therapy with an anti-PD-(L)1 antibody. The patients in the Morpheus trial are currently in the follow-up phase of the trial. Genentech is responsible for the conduct of the study and the parties share the cost of the Morpheus trial, which began enrolling patients in the fourth quarter of 2017. The Company is responsible for supplying ciforadenant and retains global development and commercialization rights to ciforadenant. The Company and Genentech each have the right to terminate the agreement for material breach by the other party. In addition, the agreement may be terminated by either party due to safety considerations, if directed by a regulatory authority or if development of ciforadenant or Tecentriq is discontinued.

Monash License Agreement

In April 2017, the Company entered into a license agreement with Monash University (Monash), pursuant to which the Company was granted an exclusive, sublicensable worldwide license under certain know-how, patent rights and other intellectual property rights controlled by Monash to research, develop, and commercialize certain antibodies directed to CXCR2 for the treatment of human diseases.

Upon execution of the agreement, the Company made a one-time cash payment to Monash of $275,000 and reimbursed Monash for certain patent prosecution costs incurred prior to execution of the agreement. The Company us also obligated to pay an annual license maintenance fee to Monash of $25,000 until a certain development milestone is met with respect to the licensed product, after which no further maintenance fee will be due. The Company is also required to make development and sales milestone payments to Monash with respect to the licensed products in the aggregate of up to $45.1 million. The Company is also required to pay to Monash tiered royalties on net sales of licensed products sold by it, its affiliates and its sublicensees at a rate ranging in the low-single digits. In addition, should the Company sublicense its rights under the agreement, the Company has agreed to pay a percentage of sublicense revenue received at specified rates that are currently at low double digit percentages and decrease to single digit percentages based on the achievement of development milestones.

The term of the Company’s agreement with Monash continues until the expiration of its obligation to pay royalties to Monash thereunder. The license agreement is terminable at will by the Company upon providing 30 days written notice to Monash, or by either party for material breaches by the other party. In addition, Monash may terminate the entire agreement or convert the license to a non-exclusive license if the Company has materially breached our obligation to use commercially reasonable efforts to develop and commercialize a licensed product, subject to a specified notice and cure mechanism.

Balance Sheet Components

6 Months Ended

Jun. 30, 2020

Balance Sheet Components

Balance Sheet Components

6. Balance Sheet Components (in thousands)


	June 30,		December 31,
	2020		2019
Prepaid and Other Current Assets
Interest receivable	$	128	$	329
Prepaid research and development manufacturing expenses		81		240
Prepaid facility expenses		160		157
Prepaid insurance		521		150
Other		413		486
	$	1,303	$	1,362
Property and Equipment
Laboratory equipment	$	2,396	$	2,396
Computer equipment and purchased software		142		142
Leasehold improvements		2,084		2,084
		4,622		4,622
Less: accumulated depreciation and amortization		(3,503)		(3,160)
	$	1,119	$	1,462
Accrued and Other Liabilities
Accrued clinical trial related	$	4,384	$	4,300
Accrued manufacturing expense		1,064		696
Personnel related		1,749		1,624
Other		601		279
	$	7,798	$	6,899

Common Stock

6 Months Ended

Jun. 30, 2020

Common Stock

Common Stock

7. Common Stock

As of June 30, 2020, the amended and restated certificate of incorporation authorizes the Company to issue 290 million shares of common stock and 10 million shares of preferred stock.

Each share of common stock is entitled to one vote. Common stockholders are entitled to dividends if and when declared by the board of directors. As of June 30, 2020, no dividends on common stock had been declared.

In March 2020, the Company entered into an open market sale agreement (the “Sales Agreement”) with Jefferies LLC (“Jefferies”) to sell shares of the Company’s common stock, from time to time, with aggregate gross sales proceeds of up to $50,000,000, through an at-the-market equity offering program under which Jefferies will act as its sales agent. The issuance and sale of shares of common stock by the Company pursuant to the Sales Agreement are deemed an “at-the-market” offering under the Securities Act of 1933, as amended. Jefferies is entitled to compensation for its services equal to up to 3.0% of the gross proceeds of any shares of common stock sold through Jefferies under the Sales Agreement. As of June 30, 2020, the Company had received no proceeds from the sale of shares of common stock pursuant to the Sales Agreement.

The Company has reserved shares of common stock for issuance as follows:


	June 30,	December 31,
	2020	2019
Exchange warrants	1,458,000	1,458,000
Shares available for future option grants	2,822,995	1,704,183
Outstanding options	5,561,098	5,643,410
Shares reserved for employee stock purchase plan	400,000	400,000
Total	10,242,093	9,205,593

Stock Option Plans

6 Months Ended

Jun. 30, 2020

Stock Option Plans

Stock Option Plans

8. Stock Option Plans

In February 2014, the Company adopted the 2014 Equity Incentive Plan (the “2014 Plan”), which was subsequently amended in November 2014, July 2015 and September 2015, under which it granted incentive stock options (“ISOs”) or non-qualified stock options (“NSOs”). Terms of stock agreements, including vesting requirements, are determined by the board of directors or a committee authorized by the board of directors, subject to the provisions of the 2014 Plan. In general, awards granted by the Company vest over four years and have a maximum exercise term of 10 years. The 2014 Plan provides that grants must be at an exercise price of 100% of fair market value of the Company’s common stock as determined by the board of directors on the date of the grant.

In connection with the consummation of the IPO in March 2016, the 2016 Equity Incentive Award Plan (the “2016 Plan”), became effective. Under the 2016 Plan, incentive stock options, non-statutory stock options, stock purchase rights and other stock-based awards may be granted. Terms of stock agreements, including vesting requirements, are determined by the board of directors or a committee authorized by the board of directors, subject to the provisions of the 2016 Plan. In general, awards granted by the Company vest over four years and have a maximum exercise term of 10 years. The 2016 Plan provides that grants must be at an exercise price of 100% of fair market value of the Company’s common stock as determined by the board of directors on the date of the grant. In conjunction with adopting the 2016 Plan, the 2014 Plan was terminated and no further awards will be granted under the 2014 Plan. Options outstanding under the 2014 Plan as of the effective date of the 2016 Plan that are forfeited or lapse unexercised may be re-issued under the 2016 Plan, up to a maximum of 1,136,229 shares.

Activity under the Company’s stock option plans is set forth below:


		Options Outstanding
			Weighted ‑
	Shares		Average
	Available	Number of	Exercise
	for Grant	Options	Price
Balance at December 31, 2019	1,704,183	5,643,410	$	8.05
Additional shares authorized	1,118,000	—		—
Options granted	(190,000)	190,000		2.68
Options exercised	—	(81,500)		0.28
Options forfeited	190,812	(190,812)		7.07
Balance at June 30, 2020	2,822,995	5,561,098	$	8.01

Stock-Based Compensation

6 Months Ended

Jun. 30, 2020

Stock-Based Compensation

Stock-Based Compensation

9. Stock-Based Compensation

The Company’s results of operations include expenses relating to employee and non-employee stock-based awards as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Research and development	$	715	$	800	$	1,584	$	1,598
General and administrative		668		1,098		1,644		2,253
Total	$	1,383	$	1,898	$	3,228	$	3,851

Income Taxes

6 Months Ended

Jun. 30, 2020

Income Taxes

Income Taxes

10. Income Taxes

During the three and six months ended June 30, 2020 and 2019, the Company recorded no income tax benefits for the net operating losses (NOLs) incurred due to the uncertainty of realizing a benefit from those items. The Company continues to maintain a full valuation allowance against its net deferred tax assets.

Facility Lease

6 Months Ended

Jun. 30, 2020

Facility Lease

Facility lease

11. Facility Lease

In January 2015, the Company signed an initial operating lease, effective February 1, 2015 for 8,138 square feet of office and laboratory space with a one year term. Between January 2015 and October 2018, the Company entered into a series of lease amendments to increase the amount of leased space to 27,280 square feet and extend the expiration of the lease to February 2023. The lease agreement includes annual rent escalations. Under the lease and subsequent amendments, the landlord provided approximately $1.9 million in free rent and lease incentives. The Company records rent expense on a straight-line basis over the effective term of the lease, including any free rent periods and incentives. As the interest rate implicit in lease arrangements is typically not readily available, in calculating the present value of the lease payments, the Company has utilized its incremental borrowing rate, which is determined based on the prevailing market rates for collateralized debt with maturity dates commensurate with the term of its lease. The Company’s facility lease is a net lease, as the non-lease components (i.e. common area maintenance) are paid separately from rent based on actual costs incurred. Therefore, the non-lease components were not included in the right-of-use asset and liability and are reflected as an expense in the period incurred.

As of June 30, 2020 and December 31, 2019, the right-of-use asset under operating lease was $2.0 million and $2.3 million, respectively. The elements of lease expense for the three and six months ended June 30, 2020 and 2019 were as follows (in thousands):


		Three Months Ended				Six Months Ended
	Statements of operations and	June 30,				June 30,
	comprehensive loss location	2020		2019		2020		2019
Costs of operating lease
Operating lease costs	Research and development, General and administrative	$	239	$	233	$	478	$	481
Costs of non-lease components (previously common area maintenance)	Research and development, General and administrative		87		81		175		162
Total operating lease cost		$	326	$	314	$	653	$	643
Other Information
Operating cash flows used for operating lease		$	377	$	370	$	755	$	729
Remaining lease term			2.6 years		3.6 years		2.6 years		3.6 years
Discount rate			10.0%		10.0%		10.0%		10.0%

As of June 30, 2020, minimum rental commitments under this lease were as follows (in thousands):


Year Ended December 31 (in thousands)
2020*	$	579
2021		1,260
2022		1,299
Total lease payments		3,138
Less: imputed interest		(378)
Total	$	2,760

* Remainder of the year

As of December 31, 2019, minimum rental commitments under this lease were as follows (in thousands):


Year Ended December 31 (in thousands)
2020	$	1,159
2021		1,260
2022		1,299
Total lease payments		3,718
Less: imputed interest		(530)
Total	$	3,188

Commitments and Contingencies

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies

Commitments and Contingencies

12. Commitments and Contingencies

In August 2015, the Company entered into an agreement for a line of credit of $0.1 million for the purpose of issuing its landlord a letter of credit of $0.1 million as a security deposit under its facility lease. The Company pledged money market funds and marketable securities as collateral for the line of credit. For further discussion of the Company’s facility lease agreement, see Note 11.

Pursuant to the Company’s license agreements with each of Vernalis, Scripps and Monash, it has obligations to make future milestone and royalty payments to these parties, respectively. However, because these amounts are contingent, they have not been included on the Company’s balance sheet. For further discussion of the Vernalis, Scripps and Monash licensing agreements, see Note 5.

Indemnifications

In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. There have been no claims to date and the Company has a directors and officers insurance policy that may enable it to recover a portion of any amounts paid for future claims.

Legal Proceedings

The Company is not a party to any material legal proceedings.

Summary of Significant Accounting Policies (Policies)	6 Months Ended
Summary of Significant Accounting Policies (Policies)	Jun. 30, 2020
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s functional and reporting currency is the U.S. dollar. The accompanying condensed consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and discharge of liabilities in the normal course of business. Since its inception, the Company has incurred significant losses and negative cash flows from operations. As of June 30, 2020, the Company had an accumulated deficit of $240.7 million and cash, cash equivalents and marketable securities of $59.3 million. The Company has financed its operations primarily with the proceeds from the sale of stock. The Company will need to raise additional capital to meet its business objectives. The Company believes that its current cash, cash equivalents and marketable securities will be sufficient to fund its planned expenditures and meet its obligations through at least the next twelve months from the issuance of these financial statements.
Unaudited Interim Financial Information	Unaudited Interim Financial Information The accompanying interim condensed consolidated financial statements and related disclosures are unaudited, have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. The condensed consolidated results of operations for the six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the full year or for any other future year or interim period. The accompanying condensed consolidated financial statements should be read in conjunction with the audited financial statements and the related notes for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 9, 2020.
Use of Estimates	Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from such estimates.
Concentrations of Credit Risk and Other Risks and Uncertainties	Concentrations of Credit Risk and Other Risks and Uncertainties Substantially all of the Company’s cash and cash equivalents are deposited in accounts with two financial institutions that management believes are of high credit quality. Such deposits may, at times, exceed federally insured limits. The Company maintains its cash with an accredited financial institution and accordingly, such funds are subject to minimal credit risk. The Company’s marketable securities consist of investments in U.S. Treasury securities, U.S. government agency securities and corporate debt obligations, which can be subject to certain credit risks. However, the Company mitigates the risks by investing in high-grade instruments, limiting its exposure to any one issuer, and monitoring the ongoing creditworthiness of the financial institutions and issuers. The Company has not experienced any losses on its deposits of cash, cash equivalents or marketable securities. The Company is subject to a number of risks similar to other early stage biopharmaceutical companies, including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical testing or clinical trials, its reliance on third parties to conduct its clinical trials, the need to obtain marketing approval for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of the Company’s product candidates, its right to develop and commercialize its product candidates pursuant to the terms and conditions of the licenses granted to the Company, and protection of proprietary technology. If the Company does not successfully commercialize or partner any of its product candidates, it will be unable to generate product revenue or achieve profitability.
Segments	Segments Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment, that of the development of and commercialization of precisely targeted oncology therapies.
Significant Accounting Policies	Significant Accounting Policies The Company’s significant accounting policies are described in Note 2 to its consolidated financial statements for the year ended December 31, 2019, included in its Annual Report on Form 10-K. There have been no material changes to the Company’s significant accounting policies during the three months ended June 30, 2020.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use (ROU) model that requires a lessee to recognize an ROU asset and lease liability on the balance sheet. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. The Company adopted the new standard on January 1, 2019 and has elected the ‘package of practical expedients’, which permit it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter is not applicable to the Company. Upon adoption of ASU 2016-02, the Company recognized an operating lease, right-of-use asset of $2.8 million and a corresponding liability of $3.8 million and eliminated $1.0 million of deferred rent in the Company’s condensed balance sheet. The adoption of ASU 2016-02 did not have any impact on the Company’s condensed statements of operations and comprehensive loss. See also Note 11.

Net Loss per Share (Tables)

6 Months Ended

Jun. 30, 2020

Net Loss per Share

Schedule of net loss per share, basic and diluted


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Numerator:
Net loss - basic and diluted	$	(10,611)	$	(12,978)	$	(23,546)	$	(24,621)
Denominator:
Weighted average common shares outstanding		29,428,249		29,329,229		29,419,741		29,328,075
Less: weighted average common shares subject to repurchase		—		(20,079)		—		(26,570)
Weighted average common shares outstanding used to compute basic and diluted net loss per share		29,428,249		29,309,150		29,419,741		29,301,505
Net loss per share, basic and diluted	$	(0.36)	$	(0.44)	$	(0.80)	$	(0.84)

Schedule of antidilutive securities excluded from calculation of diluted net loss per share


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2020	2019	2020	2019
Common stock subject to repurchase	—	12,384	—	12,384
Outstanding options	5,561,098	4,157,154	5,561,098	4,157,154
Total shares of common stock equivalents	5,561,098	4,169,538	5,561,098	4,169,538

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Measurements

Schedule of fair value of assets measured at fair value on a recurring basis, by level of fair value hierarchy


	June 30, 2020
	Fair Value Measured Using						Total
	(Level 1)		(Level 2)		(Level 3)		Balance
Assets
Cash equivalents	$	19,834	$	—	$	—	$	19,834
Marketable securities		3,029		35,524		—		38,553
	$	22,863	$	35,524	$	—	$	58,387


	December 31, 2019
	Fair Value Measured Using						Total
	(Level 1)		(Level 2)		(Level 3)		Balance
Assets
Cash equivalents	$	4,252	$	—	$	—	$	4,252
Marketable securities		7,023		65,805		—		72,828
	$	11,275	$	65,805	$	—	$	77,080

Schedule of fair value of available for sale marketable securities


	June 30, 2020
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
U.S. Treasury securities	$	3,025	$	4	$	—	$	3,029
U.S. Government agency securities		24,481		24		(2)		24,503
Corporate debt obligations		10,994		27		—		11,021
	$	38,500	$	55	$	(2)	$	38,553


	December 31, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
U.S. Treasury securities	$	7,019	$	4	$	—	$	7,023
U.S. Government agency securities		17,701		16		—		17,717
Corporate debt obligations		48,079		17		(8)		48,088
	$	72,799	$	37	$	(8)	$	72,828

Balance Sheet Components (Tables)

6 Months Ended

Jun. 30, 2020

Balance Sheet Components

Schedule of balance sheet components


	June 30,		December 31,
	2020		2019
Prepaid and Other Current Assets
Interest receivable	$	128	$	329
Prepaid research and development manufacturing expenses		81		240
Prepaid facility expenses		160		157
Prepaid insurance		521		150
Other		413		486
	$	1,303	$	1,362
Property and Equipment
Laboratory equipment	$	2,396	$	2,396
Computer equipment and purchased software		142		142
Leasehold improvements		2,084		2,084
		4,622		4,622
Less: accumulated depreciation and amortization		(3,503)		(3,160)
	$	1,119	$	1,462
Accrued and Other Liabilities
Accrued clinical trial related	$	4,384	$	4,300
Accrued manufacturing expense		1,064		696
Personnel related		1,749		1,624
Other		601		279
	$	7,798	$	6,899

Common Stock (Tables)

6 Months Ended

Jun. 30, 2020

Common Stock

Schedule of shares of common stock reserved for issuance


	June 30,	December 31,
	2020	2019
Exchange warrants	1,458,000	1,458,000
Shares available for future option grants	2,822,995	1,704,183
Outstanding options	5,561,098	5,643,410
Shares reserved for employee stock purchase plan	400,000	400,000
Total	10,242,093	9,205,593

Stock Option Plans (Tables)

6 Months Ended

Jun. 30, 2020

Stock Option Plans

Summary of stock option activity


		Options Outstanding
			Weighted ‑
	Shares		Average
	Available	Number of	Exercise
	for Grant	Options	Price
Balance at December 31, 2019	1,704,183	5,643,410	$	8.05
Additional shares authorized	1,118,000	—		—
Options granted	(190,000)	190,000		2.68
Options exercised	—	(81,500)		0.28
Options forfeited	190,812	(190,812)		7.07
Balance at June 30, 2020	2,822,995	5,561,098	$	8.01

Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2020

Stock-Based Compensation

Schedule of expenses relating to employee and non-employee stock-based awards


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Research and development	$	715	$	800	$	1,584	$	1,598
General and administrative		668		1,098		1,644		2,253
Total	$	1,383	$	1,898	$	3,228	$	3,851

Facility Lease (Tables)

6 Months Ended

Jun. 30, 2020

Facility Lease

Elements of lease expense


		Three Months Ended				Six Months Ended
	Statements of operations and	June 30,				June 30,
	comprehensive loss location	2020		2019		2020		2019
Costs of operating lease
Operating lease costs	Research and development, General and administrative	$	239	$	233	$	478	$	481
Costs of non-lease components (previously common area maintenance)	Research and development, General and administrative		87		81		175		162
Total operating lease cost		$	326	$	314	$	653	$	643
Other Information
Operating cash flows used for operating lease		$	377	$	370	$	755	$	729
Remaining lease term			2.6 years		3.6 years		2.6 years		3.6 years
Discount rate			10.0%		10.0%		10.0%		10.0%

Minimum rental commitments


Year Ended December 31 (in thousands)
2020*	$	579
2021		1,260
2022		1,299
Total lease payments		3,138
Less: imputed interest		(378)
Total	$	2,760

* Remainder of the year

As of December 31, 2019, minimum rental commitments under this lease were as follows (in thousands):


Year Ended December 31 (in thousands)
2020	$	1,159
2021		1,260
2022		1,299
Total lease payments		3,718
Less: imputed interest		(530)
Total	$	3,188

Organization - Public Offerings (Details) - USD ($) $ / shares in Units, $ in Thousands				1 Months Ended	6 Months Ended
	Nov. 08, 2019	Apr. 26, 2016	Mar. 29, 2016	Mar. 31, 2018	Jun. 30, 2020	Dec. 31, 2019
Public Offerings
Accumulated deficit					$ (240,691)	$ (217,145)
Cash, cash equivalents and short-term marketable securities					$ 59,300
Common stock, par value (in dollars per share)					$ 0.0001	$ 0.0001
Exchange warrants issued					1,458,000
Exchange Warrants
Public Offerings
Issuance of stock (in shares)	1,458,000				1,458,000
Common stock, par value (in dollars per share)	$ 0.0001				$ 0.0001
Exchange warrants issued	1,458,000
Warrant exercise price	$ 0.0001
Exchange warrant expiry term	10 years
Percentage of shares owned by exchanging shareholders	9.99%
Warrants Exercised					0
Over-Allotment Option
Public Offerings
Shares Issued, Price Per Share		$ 15.00
Issuance of stock (in shares)		502,618		1,058,823
FPO
Public Offerings
Shares Issued, Price Per Share				$ 8.50
Proceeds from sale of stock				$ 64,900
Issuance of stock (in shares)				8,117,647
IPO
Public Offerings
Shares Issued, Price Per Share			$ 15.00
Net proceeds from IPO		$ 70,600
Issuance of stock (in shares)			4,700,000

Summary of Significant Accounting Policies - Basis of Presentation, Credit Risk and Income Taxes (Details) $ in Thousands		6 Months Ended
	Jan. 01, 2019 USD ($)	Jun. 30, 2020 USD ($) item segment	Dec. 31, 2019 USD ($)
Accumulated deficit		$ (240,691)	$ (217,145)
Cash, cash equivalents and marketable securities		$ 59,300
Concentrations of Credit Risk and Other Risks and Uncertainties
Number of financial institutions used for cash and cash equivalent deposits \| item		2
Segments
Number of operating segments \| segment		1
Recent accounting pronouncements
Package of practical expedients adopted	true
Use of hindsight adopted	false
Operating lease right-of-use asset		$ 1,996	2,327
Operating lease liabilities		$ 2,760	$ 3,188
ASU 2016-02
Recent accounting pronouncements
Operating lease right-of-use asset	$ 2,800
Operating lease liabilities	3,800
Deferred rent	$ 1,000

Net Loss per Share - Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Numerator:
Net loss - basic and diluted	$ (10,611)	$ (12,935)	$ (12,978)	$ (11,643)	$ (23,546)	$ (24,621)
Denominator:
Weighted average common shares outstanding	29,428,249		29,329,229		29,419,741	29,328,075
Less: weighted average common shares subject to repurchase			(20,079)			(26,570)
Weighted average common shares outstanding used to compute basic and diluted net loss per share	29,428,249		29,309,150		29,419,741	29,301,505
Net loss per share, basic and diluted (in dollars per share)	$ (0.36)		$ (0.44)		$ (0.80)	$ (0.84)
Shares of common stock issuable on the conversion of pre-funded warrants	1,458,000				1,458,000

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Net Loss per Share - Anti-Dilutive Securities (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Excluded from the calculation of diluted net loss per share, due to anti-dilutive effect
Shares of common stock equivalents	5,561,098	4,169,538	5,561,098	4,169,538
Common stock subject to repurchase
Excluded from the calculation of diluted net loss per share, due to anti-dilutive effect
Shares of common stock equivalents		12,384		12,384
Outstanding options
Excluded from the calculation of diluted net loss per share, due to anti-dilutive effect
Shares of common stock equivalents	5,561,098	4,157,154	5,561,098	4,157,154

Fair Value Measurements - Recurring (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Transfer between levels
Transfer of assets from level 1 to 2	$ 0
Transfer of assets from level 2 to 1	0
Transfer of liabilities from level 1 to 2	0
Transfer of liabilities from level 2 to 1	0
Transfer of assets into level 3	0
Transfer of assets out of level 3	0
Transfer of liabilities into level 3	0
Transfer of liabilities out of level 3	$ 0
Assets
Maximum remaining maturity of marketable securities	12 months
Recurring
Assets
Cash equivalents	$ 19,834	$ 4,252
Marketable securities	38,553	72,828
Total Assets	58,387	77,080
Recurring \| Level 1
Assets
Cash equivalents	19,834	4,252
Marketable securities	3,029	7,023
Total Assets	22,863	11,275
Recurring \| Level 2
Assets
Marketable securities	35,524	65,805
Total Assets	$ 35,524	$ 65,805

Fair Value Measurements - Available For Sale (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Fair value of available for sale marketable securities
Amortized Cost	$ 38,500	$ 72,799
Gross Unrealized Gains	55	37
Gross Unrealized Losses	(2)	(8)
Fair Value	38,553	72,828
U.S. Treasury securities
Fair value of available for sale marketable securities
Amortized Cost	3,025	7,019
Gross Unrealized Gains	4	4
Fair Value	3,029	7,023
U.S. Government agency securities
Fair value of available for sale marketable securities
Amortized Cost	24,481	17,701
Gross Unrealized Gains	24	16
Gross Unrealized Losses	(2)
Fair Value	24,503	17,717
Corporate debt obligations
Fair value of available for sale marketable securities
Amortized Cost	10,994	48,079
Gross Unrealized Gains	27	17
Gross Unrealized Losses		(8)
Fair Value	$ 11,021	$ 48,088

License and Collaboration Agreements (Details) - USD ($)	6 Months Ended
	Jun. 30, 2020	Feb. 28, 2017	Dec. 31, 2015	Feb. 28, 2015
Monash License
License and Collaboration Agreements
Minimum annual fee	$ 25,000
Aggregate potential milestone payments	$ 45,100,000
Period of written notice to terminate	30 days
Monash License \| Research and development
License and Collaboration Agreements
One-time cash payment	$ 275,000
Licensing Agreement \| Scripps Research Institute
License and Collaboration Agreements
Minimum annual fee			$ 25,000
Aggregate potential milestone payments	2,600,000
Milestone payments made	$ 0
Period of written notice to terminate	90 days
Licensing Agreement \| Scripps Research Institute \| Research and development
License and Collaboration Agreements
One-time cash payment			$ 10,000
Licensing Agreement \| Vernalis (R&D) Limited
License and Collaboration Agreements
Milestone payments made		$ 3,000,000.0
Period of written notice to terminate	90 days
Licensing Agreement \| Vernalis (R&D) Limited \| Minimum
License and Collaboration Agreements
Aggregate potential milestone payments	$ 220,000,000
Licensing Agreement \| Vernalis (R&D) Limited \| Research and development
License and Collaboration Agreements
One-time cash payment				$ 1,000,000.0

Balance Sheet Components - Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Prepaid and Other Current Assets
Interest receivable	$ 128	$ 329
Prepaid research and development manufacturing expenses	81	240
Prepaid facility expenses	160	157
Prepaid insurance	521	150
Other	413	486
Total of prepaid and other current assets	$ 1,303	$ 1,362

Balance Sheet Components - Property and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Property and Equipment
Property and equipment, gross	$ 4,622	$ 4,622
Less: accumulated depreciation and amortization	(3,503)	(3,160)
Property and equipment, net	1,119	1,462
Laboratory equipment
Property and Equipment
Property and equipment, gross	2,396	2,396
Computer equipment and purchased software
Property and Equipment
Property and equipment, gross	142	142
Leasehold improvements
Property and Equipment
Property and equipment, gross	$ 2,084	$ 2,084

Balance Sheet Components - Accrued and Other Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Accrued and Other Liabilities
Accrued clinical trial related	$ 4,384	$ 4,300
Accrued manufacturing expense	1,064	696
Personnel related	1,749	1,624
Other accrued expenses	601	279
Total of accrued and other liabilities	$ 7,798	$ 6,899

Common Stock (Details)		1 Months Ended	6 Months Ended
Common Stock (Details)	Nov. 08, 2019 shares	Mar. 31, 2020 USD ($)	Jun. 30, 2020 USD ($) Vote shares	Dec. 31, 2019 shares
Common Stock
Common stock, shares authorized for issuance			290,000,000	290,000,000
Preferred stock, shares authorized for issuance			10,000,000	10,000,000
Number of votes per share of common stock \| Vote			1
Dividends on common stock \| $			$ 0
Shares of common stock reserved for issuance, on an as-converted basis
Shares reserved for exchange warrants			1,458,000	1,458,000
Shares available for future option grants			2,822,995	1,704,183
Outstanding options			5,561,098	5,643,410
Shares reserved for employee stock purchase plan			400,000	400,000
Total			10,242,093	9,205,593
Exchange Warrants
Shares of common stock reserved for issuance, on an as-converted basis
Exchange warrants	1,458,000		1,458,000
At-the-market offering \| Cowen
Common Stock
Proceeds from sale of stock \| $			$ 0
At-the-market offering \| Cowen \| Maximum
Common Stock
Potential gross proceeds \| $		$ 50,000,000
Stock issuance costs, as a percent of gross proceeds		3.00%

Stock Option Plans - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended			6 Months Ended
	Mar. 31, 2016	Feb. 28, 2014	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020
Shares Available for Grant
Beginning balance						1,704,183
Exercised			$ 23	$ 5	$ 1
Ending balance			2,822,995			2,822,995
Number of Options
Beginning balance						5,643,410
Ending balance			5,561,098			5,561,098
2014 Plan
Stock Option Plans
Vesting period		4 years
Maximum exercise term		10 years
Exercise price of common stock of its fair value (as a percent)		100.00%
Maximum number of options that may be re-issued under the 2016 plan	1,136,229
Shares Available for Grant
Ending balance	0
2016 Plan
Stock Option Plans
Vesting period	4 years
Maximum exercise term	10 years
Exercise price of common stock of its fair value (as a percent)	100.00%
Shares Available for Grant
Beginning balance						1,704,183
Additional shares authorized						1,118,000
Granted						(190,000)
Forfeited						190,812
Ending balance			2,822,995			2,822,995
Number of Options
Beginning balance						5,643,410
Granted						190,000
Exercised						(81,500)
Forfeited						(190,812)
Ending balance			5,561,098			5,561,098
Weighted-Average Exercise Price
Beginning balance (in dollars per share)						$ 8.05
Granted (in dollars per share)						2.68
Exercised (in dollars per share)						0.28
Forfeited (in dollars per share)						7.07
Ending balance (in dollars per share)			$ 8.01			$ 8.01

Stock-Based Compensation - Expense Allocation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Stock-based compensation
Stock-based compensation expense	$ 1,383	$ 1,898	$ 3,228	$ 3,851
Research and development
Stock-based compensation
Stock-based compensation expense	715	800	1,584	1,598
General and administrative
Stock-based compensation
Stock-based compensation expense	$ 668	$ 1,098	$ 1,644	$ 2,253

Income Taxes - Tax Cut and Jobs Act (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Taxes
Income tax benefits	$ 0	$ 0	$ 0	$ 0

Facility Lease - Lessee information (Details) $ in Thousands	1 Months Ended
	Oct. 31, 2018 USD ($) ft²	Jun. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)	Jan. 31, 2015 ft²
Lessee Disclosure [Abstract]
Area of leased facility \| ft²	27,280			8,138
Lease term				1 year
Landlord Provided Free Rent And Lease Incentives	$ 1,900
Operating lease right-of-use asset		$ 1,996	$ 2,327

Facility Lease - Lease cost (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Operating lease cost
Operating lease costs	$ 239	$ 233	$ 478	$ 481
Costs of non-lease components (previously common area maintenance)	87	81	175	162
Total operating lease cost	326	314	653	643
Other Information
Operating cash flows used for operating lease	$ 377	$ 370	$ 755	$ 729
Remaining lease term	2 years 7 months 6 days	3 years 7 months 6 days	2 years 7 months 6 days	3 years 7 months 6 days
Discount rate	10.00%	10.00%	10.00%	10.00%

Facility Lease - Minimum rental commitments (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Minimum rental commitments under Topic 842
2020*	$ 579
2020		$ 1,159
2021	1,260	1,260
2022	1,299	1,299
Total lease payments	3,138	3,718
Less: imputed interest	(378)	(530)
Total	$ 2,760	$ 3,188

Commitments and Contingencies - Line of Credit (Details) $ in Millions	Aug. 31, 2015 USD ($)
Line of credit
Security deposit	$ 0.1
Secured debt
Line of credit
Line of credit	$ 0.1