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Condensed Balance Sheets
Condensed Balance Sheets (Parenthetical)
Condensed Statements of Operations and Comprehensive Loss (Unaudited)
Condensed Statements of Stockholders' Equity (Unaudited)
Condensed Statements of Cash Flows (Unaudited)
Formation and Business of the Company; Basis of Presentation
Summary of Significant Accounting Policies
Marketable Securities
Zai License Agreements
Stockholders' Equity
Summary of Significant Accounting Policies (Policies)
Summary of Significant Accounting Policies (Tables)
Marketable Securities (Tables)
Property and Equipment, Net (Tables)
Accrued Expenses and Other Current Liabilities (Tables)
Stockholders' Equity (Tables)
Formation and Business of the Company; Basis of Presentation - Additional Information (Details)
Summary of Significant Accounting Policies - Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash to Amounts (Details)
Summary of Significant Accounting Policies - Additional Information (Details)
Summary of Significant Accounting Policies - Schedule of Outstanding Anti-Dilutive Securities not Included in Diluted Net Loss Per Share Calculation (Details)
Marketable Securities - Summary of Marketable Securities (Details)
Fair Value Measurements - Schedule of Financial Assets Subject to Fair Value Measurements on a Recurring Basis and the Level of Inputs (Details)
Property and Equipment, Net - Summary of Property and Equipment, Net (Details)
Property and Equipment, Net - Additional Information (Details)
Accrued Expenses and Other Current Liabilities - Summary of Accrued Expenses and Other Current Liabilities (Details)
Zai License Agreements - Additional Information (Details)
Commitments and Contingencies - Additional Information (Details)
Commitments and Contingencies - Summary of Operating Leases Future Minimum Payments (Details)
Stockholders' Equity - Additional Information (Details)
Stockholders' Equity - Schedule of Option Activity (Details)
Stockholders' Equity - Schedule of Fair Values of Employee Stock Options Granted (Details)
Stockholders' Equity - Summary of Restricted Stock Unit Activity (Details)
Stockholders' Equity - Summary of PSU Activity (Details)
Stockholders' Equity - Schedule of Stock Based Compensation Expense (Details)
Stockholders' Equity - Schedule of Common Stock Reserved for Future Issuance (Details)
Document and Entity Information - shares
Cover [Abstract]
Document Type 10-Q
Amendment Flag false
Document Period End Date Sep. 30, 2021
Document Fiscal Year Focus 2021
Document Fiscal Period Focus Q3
Trading Symbol TPTX
Entity Registrant Name Turning Point Therapeutics, Inc.
Entity Central Index Key 0001595893
Entity Current Reporting Status Yes
Current Fiscal Year End Date --12-31
Entity Filer Category Large Accelerated Filer
Entity Shell Company false
Entity Small Business false
Entity Emerging Growth Company false
Entity Common Stock, Shares Outstanding 49,479,508
Entity File Number 001-38871
Entity Tax Identification Number 46-3826166
Entity Address, Address Line One 10628 Science Center Drive
Entity Address, Address Line Two Ste. 200
Entity Address, City or Town San Diego
Entity Address, State or Province CA
Entity Address, Postal Zip Code 92121
City Area Code 858
Local Phone Number 926-5251
Entity Interactive Data Current Yes
Title of 12(b) Security Common Stock, $0.0001 par value per share
Security Exchange Name NASDAQ
Entity Incorporation, State or Country Code DE
Document Quarterly Report true
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Indicate number of shares or other units outstanding of each of registrant's classes of capital or common stock or other ownership interests, if and as stated on cover of related periodic report. Where multiple classes or units exist define each class/interest by adding class of stock items such as Common Class A [Member], Common Class B [Member] or Partnership Interest [Member] onto the Instrument [Domain] of the Entity Listings, Instrument.
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Indicate whether the registrant is one of the following: Large Accelerated Filer, Accelerated Filer, Non-accelerated Filer. Definitions of these categories are stated in Rule 12b-2 of the Exchange Act. This information should be based on the registrant's current or most recent filing containing the related disclosure.
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Two-character EDGAR code representing the state or country of incorporation.
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Boolean flag that is true when the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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The exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.
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Boolean flag that is true when the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.
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Local phone number for entity.
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Name of the Exchange on which a security is registered.
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Trading symbol of an instrument as listed on an exchange.
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Condensed Balance Sheets - USD ($)
Cash and cash equivalents $ 404,203 $ 554,101
Marketable securities 631,811 568,407
Prepaid and other current assets 11,127 8,171
Total current assets 1,047,141 1,130,679
Property and equipment, net 3,858 2,604
Right-of-use lease assets 5,965 3,357
Other assets 2,021 73
Total assets 1,058,985 1,136,713
Accounts payable 3,188 5,225
Accrued expenses and other current liabilities 23,045 9,183
Accrued compensation 9,025 8,588
Current portion of operating lease liabilities 3,495 1,396
Operating lease liabilities, long-term 2,895 2,423
Commitments and contingencies (Note 8)
Stockholders' equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized at September 30, 2021 and December 31, 2020, zero shares outstanding at September 30, 2021 and December 31, 2020
Common stock, $0.0001 par value; 200,000,000 shares authorized at September 30, 2021 and December 31, 2020; 49,464,156 and 48,678,540 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively 5 5
Additional paid-in capital 1,455,626 1,389,860
Accumulated other comprehensive (loss)/income (16) 209
Accumulated deficit (438,278) (280,176)
Total stockholders' equity 1,017,337 1,109,898
Total liabilities and stockholders’ equity $ 1,058,985 $ 1,136,713
Accrued expenses and other current liabilities.
Name: tptx_AccruedExpensesAndOtherCurrentLiabilities
Namespace Prefix: tptx_
Carrying value as of the balance sheet date of liabilities incurred (and for which invoices have typically been received) and payable to vendors for goods and services received that are used in an entity's business. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer).
-Subparagraph (SX 210.5-02.19(a))
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Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at period end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, unrealized gains and losses on certain investments in debt and equity securities, other than temporary impairment (OTTI) losses related to factors other than credit losses on available-for-sale and held-to-maturity debt securities that an entity does not intend to sell and it is not more likely than not that the entity will be required to sell before recovery of the amortized cost basis, as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge.
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Value received from shareholders in common stock-related transactions that are in excess of par value or stated value and amounts received from other stock-related transactions. Includes only common stock transactions (excludes preferred stock transactions). May be called contributed capital, capital in excess of par, capital surplus, or paid-in capital.
Name: us-gaap_AdditionalPaidInCapitalCommonStock
Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.
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-Subparagraph (SX 210.13-02(a)(4)(iii)(A))
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-Subparagraph (SX 210.13-01(a)(4)(ii))
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Sum of the carrying amounts as of the balance sheet date of all assets that are expected to be realized in cash, sold, or consumed within one year (or the normal operating cycle, if longer). Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events.
-Subparagraph (SX 210.5-02.9)
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Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Also includes short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Excludes cash and cash equivalents within disposal group and discontinued operation.
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Represents the caption on the face of the balance sheet to indicate that the entity has entered into (1) purchase or supply arrangements that will require expending a portion of its resources to meet the terms thereof, and (2) is exposed to potential losses or, less frequently, gains, arising from (a) possible claims against a company's resources due to future performance under contract terms, and (b) possible losses or likely gains from uncertainties that will ultimately be resolved when one or more future events that are deemed likely to occur do occur or fail to occur.
-Subparagraph (SX 210.7-03.(a),19)
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Aggregate par or stated value of issued nonredeemable common stock (or common stock redeemable solely at the option of the issuer). This item includes treasury stock repurchased by the entity. Note: elements for number of nonredeemable common shares, par value and other disclosure concepts are in another section within stockholders' equity.
Name: us-gaap_CommonStockValue
Total of the carrying values as of the balance sheet date of obligations incurred through that date and payable for obligations related to services received from employees, such as accrued salaries and bonuses, payroll taxes and fringe benefits. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer).
Name: us-gaap_EmployeeRelatedLiabilitiesCurrent
Amount of liabilities and equity items, including the portion of equity attributable to noncontrolling interests, if any.
Name: us-gaap_LiabilitiesAndStockholdersEquity
Total obligations incurred as part of normal operations that are expected to be paid during the following twelve months or within one business cycle, if longer.
Name: us-gaap_LiabilitiesCurrent
Name: us-gaap_LiabilitiesCurrentAbstract
Amount of investment in marketable security, classified as current.
Name: us-gaap_MarketableSecuritiesCurrent
Present value of lessee's discounted obligation for lease payments from operating lease, classified as current.
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Present value of lessee's discounted obligation for lease payments from operating lease, classified as noncurrent.
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Amount of lessee's right to use underlying asset under operating lease.
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Amount of noncurrent assets classified as other.
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Aggregate par or stated value of issued nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer). This item includes treasury stock repurchased by the entity. Note: elements for number of nonredeemable preferred shares, par value and other disclosure concepts are in another section within stockholders' equity.
Name: us-gaap_PreferredStockValue
Amount of asset related to consideration paid in advance for costs that provide economic benefits in future periods, and amount of other assets that are expected to be realized or consumed within one year or the normal operating cycle, if longer.
-Subparagraph (SX 210.5-02(7))
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Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures.
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The cumulative amount of the reporting entity's undistributed earnings or deficit.
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Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.
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Condensed Balance Sheets (Parenthetical) - $ / shares
Statement Of Financial Position [Abstract]
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 200,000,000 200,000,000
Common stock, shares issued 49,464,156 48,678,540
Common stock, shares outstanding 49,464,156 48,678,540
Face amount or stated value per share of common stock.
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The maximum number of common shares permitted to be issued by an entity's charter and bylaws.
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Total number of common shares of an entity that have been sold or granted to shareholders (includes common shares that were issued, repurchased and remain in the treasury). These shares represent capital invested by the firm's shareholders and owners, and may be all or only a portion of the number of shares authorized. Shares issued include shares outstanding and shares held in the treasury.
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Number of shares of common stock outstanding. Common stock represent the ownership interest in a corporation.
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Face amount or stated value per share of preferred stock nonredeemable or redeemable solely at the option of the issuer.
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The maximum number of nonredeemable preferred shares (or preferred stock redeemable solely at the option of the issuer) permitted to be issued by an entity's charter and bylaws.
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Aggregate share number for all nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer) held by stockholders. Does not include preferred shares that have been repurchased.
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Condensed Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)
Income Statement [Abstract]
Revenue $ 460 $ 25,000 $ 30,829 $ 25,000
Research and development 48,889 32,213 134,802 79,136
General and administrative 18,224 11,326 55,386 59,761
Total operating expenses 67,113 43,539 190,188 138,897
Loss from operations (66,653) (18,539) (159,359) (113,897)
Other income, net 328 834 1,257 3,981
Net loss (66,325) (17,705) (158,102) (109,916)
Unrealized (loss)/gain on marketable securities, net of tax (18) (606) (225) 141
Comprehensive loss $ (66,343) $ (18,311) $ (158,327) $ (109,775)
Net loss per share, basic and diluted $ (1.34) $ (0.42) $ (3.21) $ (2.82)
Weighted-average common shares outstanding, basic and diluted 49,426,496 42,185,824 49,185,693 38,914,789
Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income, attributable to parent entity. Excludes changes in equity resulting from investments by owners and distributions to owners.
Name: us-gaap_ComprehensiveIncomeNetOfTax
The amount of net income or loss for the period per each share in instances when basic and diluted earnings per share are the same amount and reported as a single line item on the face of the financial statements. Basic earnings per share is the amount of net income or loss for the period per each share of common stock or unit outstanding during the reporting period. Diluted earnings per share includes the amount of net income or loss for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.
Name: us-gaap_EarningsPerShareBasicAndDiluted
The aggregate total of expenses of managing and administering the affairs of an entity, including affiliates of the reporting entity, which are not directly or indirectly associated with the manufacture, sale or creation of a product or product line.
Name: us-gaap_GeneralAndAdministrativeExpense
Name: us-gaap_IncomeStatementAbstract
The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.
-Subparagraph (b)(2)
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Generally recurring costs associated with normal operations except for the portion of these expenses which can be clearly related to production and included in cost of sales or services. Includes selling, general and administrative expense.
Name: us-gaap_OperatingExpenses
Name: us-gaap_OperatingExpensesAbstract
The net result for the period of deducting operating expenses from operating revenues.
Name: us-gaap_OperatingIncomeLoss
Amount, after tax and before adjustment, of unrealized holding gain (loss) on investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale). Excludes unrealized gain (loss) on investment in debt security measured at amortized cost (held-to-maturity) from transfer to available-for-sale.
-Subparagraph (e)
Name: us-gaap_OtherComprehensiveIncomeUnrealizedHoldingGainLossOnSecuritiesArisingDuringPeriodNetOfTax
The total amount of other operating income, the components of which are not separately disclosed on the income statement, from items that are associated with the entity's normal revenue producing operation.
Name: us-gaap_OtherOperatingIncome
The aggregate costs incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or the entity's use, during the reporting period charged to research and development projects, including the costs of developing computer software up to the point in time of achieving technological feasibility, and costs allocated in accounting for a business combination to in-process projects deemed to have no alternative future use.
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Name: us-gaap_ResearchAndDevelopmentExpense
Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.
-Subparagraph (SAB Topic 11.L)
Name: us-gaap_RevenueFromContractWithCustomerExcludingAssessedTax
Average number of shares or units issued and outstanding that are used in calculating basic and diluted earnings per share (EPS).
Name: us-gaap_WeightedAverageNumberOfShareOutstandingBasicAndDiluted
Condensed Statements of Stockholders' Equity (Unaudited) - USD ($)
Accumulated Other Comprehensive Income (Loss)
Balance at Dec. 31, 2019 $ 404,351 $ 4 $ 526,960 $ 271 $ (122,884)
Balance, Shares at Dec. 31, 2019 35,915,119
Option exercises 25 25
Option exercises, Shares 7,129
Stock-based compensation expense 38,365 38,365
Net loss (60,718) (60,718)
Other comprehensive (loss) income (316) (316)
Balance at Mar. 31, 2020 381,707 $ 4 565,350 (45) (183,602)
Balance, Shares at Mar. 31, 2020 35,922,248
Balance at Dec. 31, 2019 404,351 $ 4 526,960 271 (122,884)
Net loss (109,916)
Balance at Sep. 30, 2020 701,588 $ 5 933,971 412 (232,800)
Balance, Shares at Sep. 30, 2020 42,213,364
Shares issued under employee stock purchase plan 504 504
Shares issued under employee stock purchase plan, Shares 14,425
Issuance of common stock in connection with a public offering, net of underwriting discounts, commissions, and offering costs 351,611 $ 1 351,610
Issuance of common stock in connection with a public offering, net of underwriting discounts, commissions, and offering costs, Shares 6,229,167
Stock-based compensation expense 7,404 7,404
Other comprehensive (loss) income 1,063 1,063
Balance at Jun. 30, 2020 710,827 $ 5 924,899 1,018 (215,095)
Balance, Shares at Jun. 30, 2020 42,168,889
Option exercises 508 508
Option exercises, Shares 44,475
Balance at Dec. 31, 2020 $ 1,109,898 $ 5 1,389,860 209 (280,176)
Balance, Shares at Dec. 31, 2020 48,678,540 48,678,540
Option exercises $ 9,679 9,679
Option exercises, Shares 438,500
Balance at Mar. 31, 2021 1,101,165 $ 5 1,416,817 23 (315,680)
Net loss $ (158,102)
Balance at Sep. 30, 2021 $ 1,017,337 $ 5 1,455,626 (16) (438,278)
Balance, Shares at Sep. 30, 2021 49,464,156 49,464,156
Balance at Mar. 31, 2021 $ 1,101,165 $ 5 1,416,817 23 (315,680)
Option exercises 8,398 8,398
Other comprehensive (loss) income (21) (21)
Balance at Jun. 30, 2021 1,067,507 $ 5 1,439,453 2 (371,953)
Balance at Sep. 30, 2021 $ 1,017,337 $ 5 $ 1,455,626 $ (16) $ (438,278)
Amount of increase to additional paid-in capital (APIC) for recognition of cost for award under share-based payment arrangement.
Name: us-gaap_AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue
Amount after tax and reclassification adjustments of other comprehensive income (loss).
Name: us-gaap_OtherComprehensiveIncomeLossNetOfTax
Number of shares issued during the period as a result of an employee stock purchase plan.
Name: us-gaap_StockIssuedDuringPeriodSharesEmployeeStockPurchasePlans
Number of new stock issued during the period.
Name: us-gaap_StockIssuedDuringPeriodSharesNewIssues
Number of share options (or share units) exercised during the current period.
-Subparagraph (c)(1)(iv)(2)
Name: us-gaap_StockIssuedDuringPeriodSharesStockOptionsExercised
Aggregate change in value for stock issued during the period as a result of employee stock purchase plan.
Name: us-gaap_StockIssuedDuringPeriodValueEmployeeStockPurchasePlan
Equity impact of the value of new stock issued during the period. Includes shares issued in an initial public offering or a secondary public offering.
Name: us-gaap_StockIssuedDuringPeriodValueNewIssues
Value of stock issued as a result of the exercise of stock options.
-Subparagraph (SX 210.5-02.29-31)
Name: us-gaap_StockIssuedDuringPeriodValueStockOptionsExercised
Condensed Statements of Cash Flows (Unaudited) - USD ($)
Net loss $ (158,102) $ (109,916)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation 846 647
Accretion of discount on marketable securities 4,093 175
Amortization of right-of-use operating lease asset 1,847 1,139
Prepaid expenses and other current assets (3,102) (905)
Accounts payable (2,099) 2,686
Accrued compensation 437 (929)
Net cash used in operating activities (99,734) (49,347)
Purchases of marketable securities (391,344) (351,167)
Sales and maturities of marketable securities 323,624 312,986
Purchases of property and equipment (2,040) (874)
Net cash used in investing activities (69,760) (39,055)
Proceeds from issuance of common stock under equity incentive plans 21,399 1,068
Proceeds from issuance of common stock in public offering, net of offering costs 351,611
Costs paid in connection with financing (114)
Net cash provided by financing activities 21,399 352,565
Net (decrease) increase in cash, cash equivalents and restricted cash (148,095) 264,163
Cash, cash equivalents and restricted cash at the beginning of period 554,174 48,188
Cash, cash equivalents and restricted cash at the end of period 406,079 312,351
Supplemental disclosure of cash flow information:
Cash paid for income taxes 1 1
Supplemental disclosure of non-cash investing and financing information:
Purchases of property and equipment in accounts payable 68 108
Costs incurred in connection with a public offering included in accounts payable and accrued expenses $ 81
Operating lease liabilities arising from obtaining right-of-use assets $ 4,007
Costs incurred in connection with the initial public offering included in accounts payable and accrued expenses.
Name: tptx_CostsIncurredInConnectionWithInitialPublicOfferingIncludedInAccountsPayableAndAccruedExpenses
Purchase of property and equipment in accounts payable.
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The sum of the periodic adjustments of the differences between securities' face values and purchase prices that are charged against earnings. This is called accretion if the security was purchased at a discount and amortization if it was purchased at premium. As a noncash item, this element is an adjustment to net income when calculating cash provided by or used in operations using the indirect method.
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The expense charged against earnings for the periodic recognition of capitalized leases. This element may apply to energy companies that lease mineral producing properties and to other enterprises that capitalize property, plant, or equipment obtained through capital leases.
Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef
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Amount of cash and cash equivalents, and cash and cash equivalents restricted to withdrawal or usage; including, but not limited to, disposal group and discontinued operations. Cash includes, but is not limited to, currency on hand, demand deposits with banks or financial institutions, and other accounts with general characteristics of demand deposits. Cash equivalents include, but are not limited to, short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.
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Amount of increase (decrease) in cash, cash equivalents, and cash and cash equivalents restricted to withdrawal or usage; including effect from exchange rate change. Cash includes, but is not limited to, currency on hand, demand deposits with banks or financial institutions, and other accounts with general characteristics of demand deposits. Cash equivalents include, but are not limited to, short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.
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The amount of expense recognized in the current period that reflects the allocation of the cost of tangible assets over the assets' useful lives. Includes production and non-production related depreciation.
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The amount of cash paid during the current period to foreign, federal, state, and local authorities as taxes on income, net of any cash received during the current period as refunds for the overpayment of taxes.
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The increase (decrease) during the reporting period in the aggregate amount of liabilities incurred (and for which invoices have typically been received) and payable to vendors for goods and services received that are used in an entity's business.
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Amount of increase (decrease) in accrued expenses, and obligations classified as other.
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The increase (decrease) during the reporting period in the aggregate amount of obligations related to services received from employees, such as accrued salaries and bonuses, payroll taxes and fringe benefits.
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Amount of increase (decrease) in prepaid expenses, and assets classified as other.
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Amount of cash inflow (outflow) from financing activities, including discontinued operations. Financing activity cash flows include obtaining resources from owners and providing them with a return on, and a return of, their investment; borrowing money and repaying amounts borrowed, or settling the obligation; and obtaining and paying for other resources obtained from creditors on long-term credit.
Name: us-gaap_NetCashProvidedByUsedInFinancingActivities
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Amount of cash inflow (outflow) from investing activities, including discontinued operations. Investing activity cash flows include making and collecting loans and acquiring and disposing of debt or equity instruments and property, plant, and equipment and other productive assets.
Name: us-gaap_NetCashProvidedByUsedInInvestingActivities
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Amount of cash inflow (outflow) from operating activities, including discontinued operations. Operating activity cash flows include transactions, adjustments, and changes in value not defined as investing or financing activities.
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The cash outflow for loan and debt issuance costs.
Name: us-gaap_PaymentsOfFinancingCosts
Amount of cash outflow for purchase of marketable security.
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The cash outflow associated with the acquisition of long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale; includes cash outflows to pay for construction of self-constructed assets.
Name: us-gaap_PaymentsToAcquirePropertyPlantAndEquipment
The cash inflow associated with the amount received from entity's first offering of stock to the public.
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The cash inflow associated with the aggregate amount received by the entity through sale or maturity of marketable securities (held-to-maturity or available-for-sale) during the period.
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The cash inflow associated with the amount received from the stock plan during the period.
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Amount of increase in right-of-use asset obtained in exchange for operating lease liability.
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Amount of noncash expense for share-based payment arrangement.
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Organization Consolidation And Presentation Of Financial Statements [Abstract]
1. Formation and Business of the Company; Basis of Presentation
Turning Point Therapeutics, Inc. (the Company) was organized in 2013 and commenced operations in 2014. The Company is a clinical-stage precision oncology biopharmaceutical company designing and developing novel small molecule, targeted oncology therapies. The Company’s principal operations are in the United States and the Company operates in one segment, with its headquarters in San Diego, California.
The Company’s primary activities since inception have been to build infrastructure, conduct research and development, including clinical trials, perform business and financial planning, and raise capital.
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and pursuant to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (SEC). Accordingly, since they are interim statements, the accompanying condensed financial statements do not include all of the information and notes required by GAAP for complete financial statements. The unaudited interim financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results for the periods presented. All such adjustments are of a normal and recurring nature. The condensed balance sheet at December 31, 2020 has been derived from the audited financial statements at that date, but does not include all information and footnotes required by GAAP for complete financial statements. The operating results presented in these unaudited condensed financial statements are not necessarily indicative of the results that may be expected for any future periods. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K for the year ended December 31 2020 filed with the SEC. In the opinion of management, the unaudited condensed financial statements and notes thereto include all adjustments that are of a normal and recurring nature that are necessary for the fair presentation of the Company’s financial position and of the results of operations and cash flows for the periods presented.
Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year from the financial statement issuance date. The Company determined that there are no conditions or events that raise substantial doubt about its ability to continue as a going concern within one year after the date that the unaudited condensed financial statements for the quarter ended September 30, 2021 are issued.
The COVID-19 pandemic continues to rapidly evolve and has already resulted in a significant disruption of global financial markets. The Company’s ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and further disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the pandemic. If such further disruption occurs, the Company could experience an inability to access additional capital.
Name: us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsAbstract
The entire disclosure for the general note to the financial statements for the reporting entity which may include, descriptions of the basis of presentation, business description, significant accounting policies, consolidations, reclassifications, new pronouncements not yet adopted and changes in accounting principles.
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Accounting Policies [Abstract]
2. Summary of Significant Accounting Policies
The Company’s significant accounting policies are described in Note 2 of the Notes to Financial Statements included in its Annual Report on Form 10‑K for the year ended December 31, 2020.
The Company recognizes revenue in accordance with Accounting Standards Codification (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 revenue recognition for arrangements within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer.
The Company assesses the goods or services promised within each contract and determines those that are performance obligations. Arrangements that include rights to additional goods or services that are exercisable at a customer’s discretion are generally considered options. The Company assesses if these options provide a material right to the customer and if so, they are considered performance obligations.
The Company assesses whether each promised good or service is distinct for the purpose of identifying the performance obligations in the contract. This assessment involves subjective determinations and requires management to make judgments about the individual promised goods or services and whether such are separable from the other aspects of the contractual relationship. Promised goods and services are considered distinct provided that: (i) the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (that is, the good or service is capable of being distinct) and (ii) the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (that is, the promise to transfer the good or service is distinct within the context of the contract). In assessing whether a promised good or service is distinct, the Company considers factors such as the research, manufacturing and commercialization capabilities of the collaboration partner and the availability of the associated expertise in the general marketplace. The Company also considers the intended benefit of the contract in assessing whether a promised good or service is separately identifiable from other promises in the contract. If a promised good or service is not distinct, an entity is required to combine that good or service with other promised goods or services until it identifies a bundle of goods or services that is distinct.
The transaction price is then determined and allocated to the identified performance obligations in proportion to their standalone selling prices (SSP) on a relative SSP basis. SSP is determined at contract inception and is not updated to reflect changes between contract inception and when the performance obligations are satisfied. Determining the SSP for performance obligations requires significant judgment. In developing the SSP for a performance obligation, the Company considers applicable market conditions and relevant entity-specific factors, including factors that were contemplated in negotiating the agreement with the customer and estimated costs.
If the consideration promised in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the promised goods or services to a customer. The Company determines the amount of variable consideration by using the expected value method or the most likely amount method. The Company includes the unconstrained amount of estimated variable consideration in the transaction price. The amount included in the transaction price is constrained to the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur. At the end of each subsequent reporting period, the Company re-evaluates the estimated variable consideration included in the transaction price and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis in the period of adjustment.
If an arrangement includes development and regulatory milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s control or the licensee’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received.
For arrangements with licenses of intellectual property 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 recognizes royalty revenue and sales-based milestones at the later of (i) when the related sales occur, or (ii) when the performance obligation to which the royalty has been allocated has been satisfied.
In determining the transaction price, the Company adjusts consideration for the effects of the time value of money if the timing of payments provides the Company with a significant benefit of financing. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the licensees and the transfer of the promised goods or services to the licensees will be one year or less.
The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) each performance obligation is satisfied, either at a point in time or over time, and if over time, recognition is based on the use of an output or input method.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and the disclosure of contingent liabilities in the Company’s financial statements and accompanying notes. The most significant estimates in the
Company’s financial statements relate to determining the SSP of performance obligations associated with license arrangements, preclinical and clinical trial costs and accruals and stock-based compensation costs. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions. Although the impact of the COVID-19 pandemic to the Company’s business and operating results presents additional uncertainty, the Company continues to use the best information available to update its critical accounting estimates.
Cash, Cash Equivalents and Restricted Cash
The following table presents a reconciliation of cash, cash equivalents and restricted cash to amounts shown in the unaudited condensed statement of cash flows (in thousands):
Restricted cash, as part of other assets
Total cash, cash equivalents and restricted cash
Concentration of Credit Risk
Substantially all of the Company’s cash, cash equivalents, and marketable securities are held at two financial institutions. Due to the financial strength of the depository institutions, the Company believes these financial institutions represent minimal credit risk. Cash amounts held at financial institutions are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At September 30, 2021, cash and cash equivalents and marketable securities totaling $1,035.8 million are either not subject to FDIC insurance, or exceed the FDIC insured limit. The Company’s cash and cash equivalents and marketable securities are invested in short term, high credit quality securities, and as a result, the Company believes represent a minimal credit risk.
Clinical Trial Costs and Accruals
A significant portion of the Company’s clinical trial costs relate to contracts with contract research organizations (CROs). The financial terms of the Company’s CRO contracts may result in payment flows that do not match the periods over which materials or services are provided to the Company under such contracts. The Company’s objective is to reflect the appropriate clinical trial expenses in the Company’s financial statements by matching those expenses with the period in which services and efforts are expended. As part of the process of preparing the Company’s financial statements, the Company evaluates cost information provided by the Company’s CROs concerning estimated monthly expenses for services rendered and unbilled obligations as the sponsor of the Company’s clinical trials. Accordingly, the Company’s clinical trial accrual is dependent upon the timely and accurate reporting of CROs and other third-party vendors, and the Company’s ability to accurately estimate any unbilled obligations. If the contracted amounts are modified, for instance, as a result of changes in the clinical trial protocol or scope of work to be performed, the Company modifies its accruals accordingly on a prospective basis. Revisions in the scope of a contract are charged to research and development expense in the period in which the facts that give rise to the revision become reasonably certain.
Research and development costs are expensed as incurred. These costs consist primarily of salaries and other personnel-related expenses, including stock-based compensation; facility-related expenses; depreciation of facilities and equipment; laboratory consumables; and services performed by clinical research organizations, research institutions, and other outside service providers.
The Company recorded the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced and include these costs in accrued expenses and other current liabilities in the balance sheet and within research and development expense in the statement of operations and comprehensive loss. As actual costs become known, the Company will adjust its accrued expenses and other current liabilities.
Net Loss Per Share
The Company computes basic loss per share by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss assumes the conversion, exercise or issuance of all potential common stock equivalents, unless the effect of inclusion would be anti-dilutive. For purposes of this calculation, common stock equivalents include the Company’s stock options, restricted stock units (RSUs) and contingently issuable shares. The Company excluded stock options to purchase common stock, RSUs and contingently issuable shares from the number of shares used to calculate diluted shares outstanding because the inclusion of these potentially dilutive securities would have been antidilutive.
Historical outstanding anti-dilutive securities not included in the diluted net loss per share calculation include the following:
Nine Months Ended September 30,
Options to purchase common stock
RSUs
Name: us-gaap_AccountingPoliciesAbstract
The entire disclosure for all significant accounting policies of the reporting entity.
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Investments Debt And Equity Securities [Abstract]
3. Marketable Securities
The Company invests its excess cash in marketable securities, including debt instruments of financial institutions, corporations with investment grade credit ratings, commercial paper and government agencies.
At September 30, 2021, marketable securities consisted of the following (in thousands):
Unrealized
Maturity in Years
Amortized Cost
U.S. Treasuries
2 years or less
U.S. Government agency securities
Non-U.S. Government agency securities
Corporate debt securities
Total marketable securities
At December 31, 2020, marketable securities consisted of the following (in thousands):
The Company segments its portfolio based on the underlying risk profiles of their current securities being held. The Company regularly reviews the securities in an unrealized loss position and evaluates the current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors, current and expected future economic conditions. As of September 30, 2021, the Company did not record an allowance for credit loss related to its investment portfolio.
Name: us-gaap_InvestmentsDebtAndEquitySecuritiesAbstract
The entire disclosure for investments in certain debt and equity securities.
-URI http://asc.fasb.org/subtopic&trid=2209399
-Name Regulation S-K (SK)
-Section 1403
-Paragraph (b)
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Fair Value Disclosures [Abstract]
4. Fair Value Measurements
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. The Company determines the fair value of financial assets and liabilities using three levels of inputs as follows:
Level 1—Inputs which include quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2—Inputs (other than quoted market prices included in Level 1) that are either directly or indirectly observable, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the instrument’s anticipated life.
Level 3—Unobservable inputs for assets or liabilities and include little or no market activity.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s financial assets subject to fair value measurements on a recurring basis and the level of inputs used for such measurements were as follows (in thousands):
Fair Value Measurements at September 30, 2021 Using:
Non-U.S. Government securities
Total cash equivalents and marketable securities
Fair Value Measurements at December 31, 2020 Using:
Name: us-gaap_FairValueDisclosuresAbstract
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.
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Property Plant And Equipment [Abstract]
5. Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):
Computer equipment and software
Furniture and fixtures
Property and equipment
Less: accumulated depreciation
Depreciation expense for the three months ended September 30, 2021 and 2020 was $0.3 million and $0.2 million, respectively. Depreciation expense for the nine months ended September 30, 2021 and 2020 was $0.8 million and $0.6 million, respectively.
Name: us-gaap_PropertyPlantAndEquipmentAbstract
The entire disclosure for long-lived, physical asset used in normal conduct of business and not intended for resale. Includes, but is not limited to, work of art, historical treasure, and similar asset classified as collections.
Name: us-gaap_PropertyPlantAndEquipmentDisclosureTextBlock
Payables And Accruals [Abstract]
6. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
Accrued research and development expenses
Accrued general and administrative expenses
The entire disclosure for accounts payable, accrued expenses, and other liabilities that are classified as current at the end of the reporting period.
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Research And Development [Abstract]
7. Zai License Agreements
Zai Repotrectinib Agreement
In July 2020, the Company entered into a license agreement (the Zai Repotrectinib Agreement) with Zai Lab (Shanghai) Co., Ltd. (Zai), pursuant to which the Company granted Zai exclusive rights to develop and commercialize products containing the
Company’s drug candidate, repotrectinib (the Repotrectinib Products), in Mainland China, Hong Kong, Macau and Taiwan (collectively, the Zai Territory or Greater China). The Company retains exclusive rights to, among other things, develop, manufacture and commercialize the Repotrectinib Products outside the Zai Territory. The Company will supply or have supplied to Zai the Repotrectinib Products for use in the Zai Territory pursuant to a supply agreement for agreed upon consideration, except that Zai has the right, at its election, to package and label the Repotrectinib Products in or outside the Zai Territory for use in the Zai Territory.
Pursuant to the terms of the Zai Repotrectinib Agreement, the Company has received an upfront cash payment of $25.0 million and is eligible to receive up to $151.0 million in development and sales milestone payments, consisting of up to $46.0 million of development milestones and up to $105.0 million of sales milestones. In addition, during the term of the Zai Repotrectinib Agreement, Zai is obligated to pay the Company tiered percentage royalties ranging from mid-to-high teens on annual net sales of the Repotrectinib Products in the Zai Territory, subject to adjustments in specified circumstances.
Zai is responsible for conducting the development and commercialization activities in the Zai Territory related to the Repotrectinib Products at Zai’s own expense, subject to limited exceptions pursuant to which the Company may be responsible for the cost. The Company is responsible for global clinical studies of the Repotrectinib Products, including the portions that may be conducted in the Zai Territory, at the Company’s expense, except that Zai will participate in global clinical studies of the Repotrectinib Products through clinical trial sites in the Zai Territory as agreed as of the effective date of the Zai Repotrectinib Agreement and may, at Zai’s election, participate in future global clinical studies of the Repotrectinib Products through clinical trial sites in the Zai Territory, in each case at Zai’s expense.
The Zai Repotrectinib Agreement will continue in effect until expiration of the last royalty term for a Repotrectinib Product in any region in the Zai Territory, where the royalty term for a Repotrectinib Product in a region continues until the later of (i) the date of the last-to-expire valid claim within Company’s patent rights that covers the Repotrectinib Product in such region in the Zai Territory; (ii) the expiry of the regulatory exclusivity for such Repotrectinib Product in such region; or (iii) the close of business of the day that is exactly 10 years after the date of the first commercial sale of such Repotrectinib Product in such region. Subject to the terms of the Zai Repotrectinib Agreement, Zai may terminate the Zai Repotrectinib Agreement for convenience by providing written notice to the Company, which termination will be effective following a prescribed notice period. In addition, the Company may terminate the Zai Repotrectinib Agreement under specified circumstances if Zai or certain other parties challenge the Company’s patent rights. Either party may terminate the Zai Repotrectinib Agreement for the other party’s uncured material breach of the Zai Repotrectinib Agreement, with a customary notice and cure period, for the other party’s insolvency or if the other party acquires a third party and the acquired party is engaged in activities with a competing product that is not divested or discontinued within a specified period. After termination (but not natural expiration), other than certain terminations by Zai for cause, the Company is entitled to retain a worldwide and perpetual license from Zai to exploit the Repotrectinib Products.
The Company determined that two performance obligations existed: (1) the exclusive license, bundled with the associated know-how and (2) the Company's initial obligation to supply repotrectinib for clinical development in the Zai Territory.
The total transaction price of $25.7 million was allocated to the performance obligations on the basis of the relative stand-alone selling price estimated for each performance obligation. In estimating the stand-alone selling price for each performance obligation, the Company developed assumptions that require judgment and included forecasted revenues, expected development timelines, discount rates, probabilities of technical and regulatory success and costs for manufacturing clinical supplies.
The Company delivered the license and technical know-how to Zai in the third quarter of 2020 to satisfy this performance obligation, and accordingly the Company recognized license revenue of $25.0 million in the third quarter of 2020. The $0.7 million in consideration allocable to the clinical supply performance obligation will be recognized when clinical trial material has been shipped by the Company and Zai obtains control of the goods, upon delivery, over the period of the obligation. For the three and nine months ended September 30, 2021, the Company recognized $0.5 million and $0.8 million, respectively in revenue associated with the clinical supply performance obligation.
The Company assessed the Zai Repotrectinib Agreement to determine whether a significant financing component exists and concluded that a significant financing component does not exist. For the nine months ended September 30, 2021, the Company recognized $5.0 million in development milestones. The development milestones were subject to foreign tax withholdings. The Company recorded this tax expense to general and administrative expense in the condensed statements of operations and comprehensive loss. As of September 30, 2021, the Company has not recognized any revenue associated with sales milestones.
Zai Elzovantinib Agreement
On January 10, 2021, the Company entered into a license agreement with Zai, which was amended on March 31, 2021 (the Zai Elzovantinib Agreement), pursuant to which the Company granted Zai exclusive rights to develop and commercialize products containing the Company’s drug candidate, Elzovantinib (the Elzovantinib Products), in the Zai Territory. The Company retains exclusive rights to, among other things, develop, manufacture and commercialize the Elzovantinib Products outside the Zai Territory.
Pursuant to the terms of the Zai Elzovantinib Agreement, the Company has received an upfront cash payment of $25.0 million and is eligible to receive up to $336.0 million in development and sales milestone payments, consisting of up to $121.0 million of development milestones and up to $215.0 million of sales milestones. In addition, during the term of the Zai Elzovantinib Agreement, Zai is obligated to pay the Company tiered percentage royalties ranging from mid-teens to low twenties on annual net sales of the Elzovantinib Products in the Zai Territory, subject to adjustments in specified circumstances.
Zai is responsible for conducting the development and commercialization activities in the Zai Territory related to the Elzovantinib Products at Zai’s own expense, subject to limited exceptions pursuant to which the Company may be responsible for the cost. The Company is responsible for global clinical studies of the Elzovantinib Products, including the portions that may be conducted in the Zai Territory, at the Company’s expense, except that Zai will participate in global clinical studies of the Elzovantinib Products through clinical trial sites in the Zai Territory as agreed as of the effective date of the Zai Elzovantinib Agreement and may, at Zai’s election subject to specified exceptions, participate in future global clinical studies of the Elzovantinib Products through clinical trial sites in the Zai Territory, in each case at Zai’s expense.
The Zai Elzovantinib Agreement will continue in effect until expiration of the last royalty term for a Elzovantinib Product in any region in the Zai Territory, where the royalty term for a Elzovantinib Product in a region continues until the later of (i) the date of the last-to-expire valid claim within Company’s patent rights that covers the Elzovantinib Product in such region in the Zai Territory; (ii) the expiry of the regulatory exclusivity for such Elzovantinib Product in such region; or (iii) the close of business of the day that is exactly 10 years after the date of the first commercial sale of such Elzovantinib Product in such region. Subject to the terms of the Zai Elzovantinib Agreement, Zai may terminate the Zai Elzovantinib Agreement for convenience by providing written notice to the Company, which termination will be effective following a prescribed notice period. In addition, the Company may terminate the Zai Elzovantinib Agreement under specified circumstances if Zai or certain other parties challenge the Company’s patent rights. Either party may terminate the Zai Elzovantinib Agreement for the other party’s uncured material breach of the Zai Elzovantinib Agreement, with a customary notice and cure period, for the other party’s insolvency or if the other party acquires a third party and the acquired party is engaged in activities with a competing product that is not divested or discontinued within a specified period. After termination (but not natural expiration), other than certain terminations by Zai for cause, the Company is entitled to retain a worldwide and perpetual license from Zai to exploit the Elzovantinib Products.
The Company determined that two performance obligations existed: (1) the exclusive license, bundled with the associated know-how and (2) the Company’s initial obligation to supply elzovantinib for clinical development in the Zai Territory.
The Company delivered the license and technical know-how to Zai in the first quarter of 2021 to satisfy this performance obligation, and accordingly the Company recognized license revenue of $25.0 million in the first quarter of 2021. The $0.9 million in consideration allocable to the clinical supply performance obligation will be recognized when clinical trial material has been shipped by the Company and Zai obtains control of the goods, upon delivery, over the period of the obligation. As of September 30, 2021, the Company has not recognized any revenue associated with the clinical supply performance obligation under the Zai Elzovantinib Agreement.
The Company assessed the Zai Elzovantinib Agreement to determine whether a significant financing component exists and concluded that a significant financing component does not exist. The upfront payment received by the Company was subject to foreign tax withholdings. The Company recorded this tax expense to general and administrative expense in the condensed statements of operations and comprehensive loss.
License agreement.
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Commitments And Contingencies Disclosure [Abstract]
Operating Leases
The Company has an operating lease for its corporate headquarters and laboratory space with a term that expires June 30, 2023, which resulted in an initial lease liability of $4.0 million and a right-of-use asset of $3.7 million, which is net of $0.3 million of the Company’s deferred gain from the office and laboratory space surrendered in 2019. In connection with this operating lease, in lieu of a cash security deposit, the Company’s bank issued a letter of credit on its behalf, which is secured by a deposit totaling $0.1 million and is included in other assets on the condensed balance sheet.
In February 2021, the Company entered into a lease agreement for additional office and laboratory space, which commenced on April 20, 2021, with an initial expiration date of December 31, 2021. In May 2021, the lease was amended to extend the expiration date to June 30, 2023. The Company recorded an operating lease liability and corresponding right-of-use asset of approximately $1.2 million as of the lease commencement date.
In April 2021, the Company entered into a lease agreement for additional office space, which commenced on May 24, 2021 and expires June 30, 2023 with no options to extend. In June 2021, the lease terms were amended to add additional office space which commenced on July 30, 2021. The Company recorded an operating lease liability of approximately $2.8 million and a right-of-use asset of $2.9 million, which includes lease incentives.
In May 2021, the Company entered into a lease agreement with HCP Callan Road, LLC (Landlord) for the lease of approximately 185,000 square feet of office and laboratory space, delivered in two phases, for the Company’s future principal executive offices and laboratory space. The term of the lease is approximately 11 years and nine months and is expected to commence in March 2023, with an option by the Company to extend for an additional five years. The base rent will be $1.0 million per month, and the Landlord will provide the Company with a tenant improvement allowance of up to $220 per square foot. The Landlord's construction activity of the building was minimal as of September 30, 2021. In connection with the lease, the Company is required to maintain a letter of credit for the benefit of the Landlord in the amount of $1.8 million, which was delivered in May 2021 and is included in other assets on the condensed balance sheet.
Future minimum payments under the leases as of September 30, 2021 are as follows (in thousands):
Year Ending December 31,
2021 (remaining)
Total future minimum lease payments
Less: amounts representing interest
Total lease liability
Remaining lease term
Amounts presented in the table above exclude non-cancelable future minimum lease payments for operating leases that have not commenced.
Rent expense was $0.9 million and $0.4 million for the three months ended September 30, 2021 and 2020, respectively. The Company paid $0.7 million and $0.4 million of cash payments related to its operating lease agreements for each of the three months ended September 30, 2021 and 2020, respectively.
Rent expense was $1.9 million and $1.1 million for the nine months ended September 30, 2021 and 2020, respectively. The Company paid $1.6 million and $1.2 million of cash payments related to its operating lease agreement for the nine months ended September 30, 2021 and 2020, respectively.
The Company’s operating leases had a weighted average remaining lease term of 1.8 years as of September 30, 2021 and 2.6 years as of December 31, 2020, and a weighted average discount rate of 7.1% as of September 30, 2021 and 8.5% as of December 31, 2020.
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The entire disclosure for commitments and contingencies.
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Equity [Abstract]
9. Stockholders’ Equity
At the Market Offering
In August 2020, the Company entered into an Open Market Sale AgreementSM with Jefferies LLC (ATM facility), under which the Company may offer and sell, from time to time, at its sole discretion, up to $250.0 million shares of the Company’s common stock. As of September 30, 2021, the Company had not yet sold any shares of common stock under the ATM facility.
Equity Compensation Plans
The Company’s 2019 Equity Incentive Plan (the Plan) provides for the grant of stock options, restricted stock and other equity awards of the Company’s common stock to employees, officers, consultants, and directors. In addition, the number of shares of common stock available for issuance under the Plan will be automatically increased on the first day of each calendar year through January 1, 2029, by an amount equal to 4% of the outstanding number of shares of the Company’s common stock on December 31 of the preceding calendar year or such lesser amount as determined by the Company’s board of directors. On January 1, 2021, the Company added 1,947,141 shares to the Plan. At September 30, 2021, the Plan had 3,432,812 total shares available for issuance.
Options expire within a period of not more than ten years from the date of grant. Initial option grants to employees typically vest 25% after one year and monthly thereafter over a three-year period and expire three months after employee termination. Subsequent option grants to employees and grants to non-employees typically vest monthly over a four-year period. The majority of options outstanding at September 30, 2021 had vesting periods of four years.
The following summarizes option activity under the Plan for the periods presented:
Value (in
thousands)
Balance as of December 31, 2020
Options granted
Options exercised
Options forfeited or cancelled
Balance as of September 30, 2021
Options vested and exercisable as of September 30, 2021
The fair values of the employee stock options granted during the three and nine months ended September 30, 2021 and 2020 were estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:
Three Months Ended September 30,
Risk-free interest rate
Expected term (in years)
The weighted-average grant-date fair value of options granted to employees was $47.79 and $44.97 for the three months ended September 30, 2021 and 2020, respectively and was $71.77 and $41.96 for the nine months ended September 30, 2021 and 2020, respectively. As of September 30, 2021, there was $123.7 million in total unrecognized compensation expense expected to be recognized over a weighted average period of 2.38 years.
Restricted Stock Units
The summary of the Company’s restricted stock unit activity for the periods presented is as follows:
Restricted Stock Units Outstanding
Weighted Average Grant Date Fair Value
Aggregate Intrinsic Value (in thousands)
Vested
Forfeited
Outstanding as of September 30, 2021
As of September 30, 2021, the total unrecognized compensation related to restricted stock units granted was $20.3 million, which the Company expects to recognize over a weighted-average period of approximately 3.43 years.
Performance Stock Units
The Company has granted performance stock units (PSUs) which vest based on the achievement of certain predefined Company-specific performance criteria and expire as of December 31, 2023. The fair value of PSUs is estimated based on the closing sale price of the Company’s common stock on the date of grant. The Company will recognize expense in proportion to the number of PSUs that are deemed probable of vesting, based on the Company’s evaluation of the respective performance-based criteria, at each reporting date.
The summary of the Company’s PSU activity for the periods presented is as follows:
Performance Stock Units Outstanding
As of September 30, 2021, the Company does not estimate that the achievement of any performance-based criteria is probable, and no PSUs vested during the nine months ended September 30, 2021.
2019 Employee Stock Purchase Plan
In April 2019, the Company’s board of directors and stockholders approved and adopted the 2019 Employee Stock Purchase Plan (the ESPP). The ESPP became effective immediately prior to the date of the underwriting agreement related to the Company’s initial public offering. The ESPP permits eligible employees who elect to participate in an offering under the ESPP to have up to 15% of their eligible earnings withheld, subject to certain limitations, to purchase shares of common stock pursuant to the ESPP. The price of common stock purchased under the ESPP is equal to 85 percent of the lower of the fair market value of the common stock at the commencement date of each offering period or the relevant date of purchase. Each offering period is 24 months, with new offering periods commencing every six months on the dates of June 11 and December 11 of each year. Each offering period consists of four six month purchase periods (each a Purchase Period) during which payroll deductions of the participants are accumulated under the ESPP. The last business day of each Purchase Period is referred to as the “Purchase Date.” Purchase Dates are every six months on the dates of June 10 and December 10 of each year. As of September 30, 2021, a total of 228,156 shares of common stock were available for purchase under the ESPP.
The assumptions used for the nine months ended September 30, 2021 and 2020 and the resulting estimates of weighted-average fair value per share for stock purchased under the ESPP during such periods were as follows:
0.04 - 0.16%
69.9 - 79.8%
Modifications to Outstanding Equity Awards
On March 30, 2021, Sheila Gujrathi, M.D. and Jacob M. Chacko, M.D. resigned from the Board of Directors (the Board) of the Company, effective immediately, to focus on other endeavors. Dr. Gujrathi also resigned from her position as Chair of the Board and Dr. Chacko resigned from each committee of the Board for which he was a member. In connection with the foregoing, the Board approved an amendment to the option awards held by Drs. Gujrathi and Chacko to provide that (i) all shares subject to such option awards are fully vested and exercisable as of the resignation date and (ii) the post-resignation exercise period shall be extended to September 30, 2022.
The Company determined that the modification to extend the term of vested stock options was a Type I modification pursuant to ASC 718, Compensation – Stock Compensation (ASC 718). The acceleration of the vesting of the unvested stock options was deemed a Type III modification pursuant to ASC 718, because without Board approval, these stock options would have been forfeited on the date of resignation. As a result of these modifications the Company recognized $5.6 million in stock-based compensation expense in the first quarter of 2021 in general and administrative expenses in the condensed statements of operations and comprehensive loss.
On January 9, 2020, the Company entered into a Transition Separation and Consulting Agreement (the Transition Agreement) with the Company’s former Chief Scientific Officer (CSO), Dr. Jingrong Jean Cui. In connection with this Transition Agreement, Dr. Cui resigned from her position as CSO effective January 31, 2020 and thereafter agreed to serve as a consultant to the Company on an as needed basis until June 30, 2020. In accordance with the terms of the Transition Agreement, the Company recorded $1.2 million in expense during the first quarter of 2020 representing the cash severance that was paid to Dr. Cui during 2020. The terms of the Transition Agreement allowed Dr. Cui to continue to vest her outstanding options through to the end of the consulting period on June 30, 2020. At the termination of the consulting period, Dr. Cui immediately received an additional eighteen months vesting of her stock options. In addition, the Company extended Dr. Cui’s period to exercise her vested stock options from 90 days to 12 months from the date of the termination of the consulting period.
The Company determined that the modification to extend the term of vested stock options was a Type I modification pursuant to ASC 718. The acceleration of the vesting of the unvested stock options was deemed a Type III modification pursuant to ASC 718, because pursuant to Dr. Cui’s existing employment agreement as of her resignation date, these stock options would have been forfeited on the date of termination. As a result of these modifications the Company recognized $31.4 million in stock-based compensation expense in the first quarter of 2020. Because the services performed during the consulting period were considered nonsubstantive, the Company recognized the full $31.4 million in stock-based compensation expense on the date of the modification and presented this amount in general and administrative expenses in the statement of operations and comprehensive loss.
Stock-based compensation expense for awards granted under the Company’s equity plans totaled the following (in thousands):