10-Q 1 ngm-10q_20190331.htm 10-Q ngm-10q_20190331.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _______ to _______

 

Commission File Number: 001-38853

 

NGM BIOPHARMACEUTICALS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware

26-1679911

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

333 Oyster Point Boulevard

South San Francisco, CA

94080

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (650) 243-5555

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class of Securities Registered

Trading Symbol

Name of Each Exchange on which Securities are Registered

Common Stock, par value $0.001 per share

NGM

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

Emerging growth company

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of May 10, 2019, the registrant had 66,021,863 shares of common stock, $0.001 par value per share, outstanding.

 

 

 


Table of Contents

 

 

 

 

 

Page

PART I.

 

FINANCIAL INFORMATION

 

1

Item 1.

 

Financial Statements (Unaudited)

 

1

 

 

Condensed Consolidated Balance Sheets

 

1

 

 

Condensed Consolidated Statements of Operations

 

2

 

 

Condensed Consolidated Statements of Comprehensive Loss

 

3

 

 

Condensed Consolidated Convertible Preferred Stock and Stockholders’ Deficit

 

4

 

 

Condensed Consolidated Statements of Cash Flows

 

5

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

 

6

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

28

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

39

Item 4.

 

Controls and Procedures

 

40

PART II.

 

OTHER INFORMATION

 

41

Item 1.

 

Legal Proceedings

 

41

Item 1A.

 

Risk Factors

 

41

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

80

Item 3.

 

Defaults Upon Senior Securities

 

81

Item 4.

 

Mine Safety Disclosures

 

81

Item 5.

 

Other Information

 

81

Item 6.

 

Exhibits

 

82

Signatures

 

83

 

 

 

i


PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

NGM BIOPHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In Thousands, Except Share and Per Share Amounts)

 

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018*

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

47,313

 

 

$

56,923

 

Short-term marketable securities

 

 

146,126

 

 

 

149,710

 

Related party receivable from collaboration

 

 

 

 

 

3,669

 

Prepaid expenses and other current assets

 

 

5,706

 

 

 

4,255

 

Total current assets

 

 

199,145

 

 

 

214,557

 

Property and equipment, net

 

 

23,319

 

 

 

23,893

 

Restricted cash

 

 

2,249

 

 

 

2,249

 

Deferred IPO costs

 

 

3,669

 

 

 

2,292

 

Other non-current assets

 

 

3,245

 

 

 

3,094

 

Total assets

 

$

231,627

 

 

$

246,085

 

Liabilities, convertible preferred stock and stockholders' deficit

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

4,203

 

 

$

5,775

 

Accrued liabilities

 

 

13,916

 

 

 

14,003

 

Deferred rent, current

 

 

2,719

 

 

 

2,683

 

Deferred revenue, current

 

 

22,041

 

 

 

19,025

 

Total current liabilities

 

 

42,879

 

 

 

41,486

 

Deferred rent, non-current

 

 

11,532

 

 

 

12,221

 

Deferred revenue, non-current

 

 

 

 

 

3,942

 

Early exercise stock option liability

 

 

1,322

 

 

 

1,559

 

Convertible preferred stock warrant liability

 

 

 

 

 

198

 

Total liabilities

 

 

55,733

 

 

 

59,406

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

 

 

Convertible preferred stock, $0.001 par value;

   96,268,206 shares authorized at March 31, 2019 and December 31,

   2018; 47,283,846 and 47,267,466 shares issued and outstanding

   at March 31, 2019 and December 31, 2018, respectively;

   aggregate liquidation preference of $277,802 and $277,774 at

   March 31, 2019 and December 31, 2018, respectively

 

 

295,072

 

 

 

294,874

 

Stockholders' deficit:

 

 

 

 

 

 

 

 

Common stock, $0.001 par value; 129,000,000 shares authorized at

   March 31, 2019 and December 31, 2018; 7,026,717 and 6,937,890

   shares issued and outstanding at March 31, 2019 and December

   31, 2018, respectively

 

 

7

 

 

 

7

 

Additional paid-in capital

 

 

42,477

 

 

 

39,258

 

Accumulated other comprehensive loss

 

 

(45

)

 

 

(267

)

Accumulated deficit

 

 

(161,617

)

 

 

(147,193

)

Total deficit

 

 

(119,178

)

 

 

(108,195

)

Total liabilities, convertible preferred stock and stockholders' deficit

 

$

231,627

 

 

$

246,085

 

 

*The condensed consolidated balance sheet as of December 31, 2018 has been derived from the audited financial statements as of that date.

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

1


NGM BIOPHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In Thousands, Except Share and Per Share Amounts)

 

 

 

Three Months Ended March 31,

 

 

 

2019

 

 

2018

 

Related party revenue

 

$

25,552

 

 

$

18,613

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

 

29,527

 

 

 

19,454

 

General and administrative

 

 

5,367

 

 

 

3,874

 

Total operating expenses

 

 

34,894

 

 

 

23,328

 

Loss from operations

 

 

(9,342

)

 

 

(4,715

)

Interest income

 

 

1,110

 

 

 

752

 

Other income (expense), net

 

 

(36

)

 

 

22

 

Net loss

 

$

(8,268

)

 

$

(3,941

)

Net loss per common share, basic and diluted

 

$

(1.21

)

 

$

(0.64

)

Weighted average shares used to compute net loss per common

   share, basic and diluted

 

 

6,812,129

 

 

 

6,127,040

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

2


NGM BIOPHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(In Thousands)

 

 

 

Three Months Ended March 31,

 

 

 

2019

 

 

2018

 

Net Loss

 

$

(8,268

)

 

$

(3,941

)

Other comprehensive gain (loss), net of tax:

 

 

 

 

 

 

 

 

Net unrealized gain (loss) on available-for-sale marketable

   securities

 

 

222

 

 

 

(223

)

Total comprehensive loss

 

$

(8,046

)

 

$

(4,164

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

3


NGM BIOPHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

(Unaudited)

(In Thousands)

 

 

 

Convertible

Preferred Stock

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Other

Comprehensive

 

 

Accumulated

 

 

Total

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Deficit

 

Balance at December 31, 2017

 

 

47,267

 

 

$

294,874

 

 

 

 

6,105

 

 

$

6

 

 

$

26,147

 

 

$

(431

)

 

$

(146,700

)

 

$

(120,978

)

Vesting of common stock from early

   exercises

 

 

 

 

 

 

 

 

 

35

 

 

 

 

 

 

108

 

 

 

 

 

 

 

 

 

108

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

35

 

 

 

 

 

 

71

 

 

 

 

 

 

 

 

 

71

 

Repurchase of common stock

 

 

 

 

 

 

 

 

 

(23

)

 

 

 

 

 

(185

)

 

 

 

 

 

 

 

 

(185

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,179

 

 

 

 

 

 

 

 

 

2,179

 

Changes in unrealized gain on

   available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(223

)

 

 

 

 

 

(223

)

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,941

)

 

 

(3,941

)

Balance at March 31, 2018

 

 

47,267

 

 

$

294,874

 

 

 

 

6,152

 

 

$

6

 

 

$

28,320

 

 

$

(654

)

 

 

(150,641

)

 

$

(122,969

)

Balance at December 31, 2018

 

 

47,267

 

 

$

294,874

 

 

 

 

6,733

 

 

$

7

 

 

$

39,258

 

 

$

(267

)

 

$

(147,193

)

 

$

(108,195

)

Issuance of common stock to

   participants in 401(k) Plan

 

 

 

 

 

 

 

 

 

8

 

 

 

 

 

 

98

 

 

 

 

 

 

 

 

 

98

 

Vesting of common stock from early

   exercises

 

 

 

 

 

 

 

 

 

34

 

 

 

 

 

 

237

 

 

 

 

 

 

 

 

 

237

 

Exercise of stock options

 

 

 

 

 

 

 

 

 

80

 

 

 

 

 

 

279

 

 

 

 

 

 

 

 

 

279

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,605

 

 

 

 

 

 

 

 

 

2,605

 

Changes in unrealized loss on

   available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

222

 

 

 

 

 

 

222

 

Net exercise of preferred stock warrant

   to Series A preferred stock

 

 

16

 

 

 

198

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cumulative effect adjustment upon

   adoption of ASU 2014-09

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,156

)

 

 

(6,156

)

Net loss and comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,268

)

 

 

(8,268

)

Balance at March 31, 2019

 

 

47,283

 

 

$

295,072

 

 

 

 

6,855

 

 

$

7

 

 

$

42,477

 

 

$

(45

)

 

$

(161,617

)

 

$

(119,178

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


NGM BIOPHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In Thousands)

 

 

 

Three Months Ended March 31,

 

 

 

2019

 

 

2018

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(8,268

)

 

$

(3,941

)

Adjustments to reconcile net loss to net cash used in operating activities

 

 

 

 

 

 

 

 

Depreciation

 

 

1,961

 

 

 

1,743

 

Amortization of discount on marketable securities

 

 

(453

)

 

 

(51

)

Stock-based compensation expenses

 

 

2,605

 

 

 

2,268

 

Other non-cash expenses

 

 

98

 

 

 

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

Receivable from related party collaboration

 

 

3,669

 

 

 

 

Prepaid expenses and other assets

 

 

(1,602

)

 

 

(845

)

Accounts payable

 

 

(1,193

)

 

 

1,681

 

Accrued expenses and other liabilities

 

 

(1,182

)

 

 

(3,374

)

Deferred rent

 

 

(653

)

 

 

(326

)

Deferred revenue

 

 

(7,082

)

 

 

(1,620

)

Net cash used in operating activities

 

 

(12,100

)

 

 

(4,465

)

Cash flows from investing activities

 

 

 

 

 

 

 

 

Purchase of marketable securities

 

 

(72,734

)

 

 

(36,966

)

Proceeds from maturities of marketable securities

 

 

76,993

 

 

 

68,575

 

Purchase of property and equipment

 

 

(1,766

)

 

 

(1,033

)

Net cash provided by investing activities

 

 

2,493

 

 

 

30,576

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock upon exercise of

   stock options

 

 

252

 

 

 

71

 

Payments of deferred financing costs

 

 

(255

)

 

 

 

Repurchase of common stock

 

 

 

 

 

(185

)

Net cash used in provided by financing activities

 

 

(3

)

 

 

(114

)

Net (decrease) increase in cash and cash equivalents

 

 

(9,610

)

 

 

25,997

 

Cash, cash equivalents, and restricted cash at beginning of period

 

 

59,172

 

 

 

27,842

 

Cash, cash equivalents, and restricted cash at end of period

 

$

49,562

 

 

$

53,839

 

Non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Net exercise of convertible preferred stock warrant to Series

   A preferred stock

 

$

198

 

 

$

 

Vesting of common stock from early exercises

 

 

237

 

 

 

108

 

Cost of property and equipment in accounts payable and

   accrued liabilities

 

 

228

 

 

 

925

 

Deferred IPO costs in accounts payable and accrued

   liabilities

 

 

1,122

 

 

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

5


 

NGM BIOPHARMACEUTICALS, INC.

NOTES TO UNAUDITED CONDSENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Description of Business

NGM Biopharmaceuticals, Inc. and its wholly owned subsidiary (collectively referred to as the “Company”) is a research-driven, clinical-stage biopharmaceutical company committed to discovering and developing first-in-class therapeutics for major diseases with an initial focus on cardio-metabolic and liver diseases. The Company’s current portfolio is composed of seven product candidates (NGM282, NGM313, NGM386, NGM395, NGM217, NGM120 and NGM621) focused on non-alcoholic steatohepatitis, or NASH, diabetes, obesity, oncology and age-related macular degeneration, or AMD.

The Company was incorporated in Delaware on December 20, 2007 and its headquarters are located at 333 Oyster Point Blvd., South San Francisco, California 94080. The Company operates in one business segment.  

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and include the consolidated accounts of the Company and its subsidiary. During 2012, the Company established a wholly owned foreign subsidiary in Australia. All intercompany balances and transactions have been eliminated in consolidation.

The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2018, included in the Company’s final prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended, on April 4, 2019 (the Prospectus).

Stock Split

On March 22, 2019, the Company filed an amendment to the Company’s amended and restated certificate of incorporation to effect a reverse split of shares of the Company’s common stock on a two-for-one basis (the Reverse Stock Split). In connection with the Reverse Stock Split, the conversion ratio for the Company’s outstanding convertible preferred stock was proportionately adjusted such that the common stock issuable upon conversion of such preferred stock was decreased in proportion to the Reverse Stock Split. The par value of the common stock was not adjusted as a result of the Reverse Stock Split. All references to common stock, options to purchase common stock, early exercised options, share data, per share data, convertible preferred stock (to the extent presented on an as-converted to common stock basis) and related information contained in these condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented.

Initial Public Offering

The Company filed its S-1 on September 28, 2018 and the first amendment to the S-1 on March 25, 2019.  The Company disclosed 7,666,667 shares of its common stock would be registered, which included 1,000,000 shares of its common stock issued pursuant to the over-allotment option granted to the underwriters, at an estimated price range to the public of $14.00 to $16.00 per share. It also announced the Company had applied to list its stock on the Nasdaq Global Select Market under the ticker symbol “NGM”. Refer to Note 12 for more information on the Company’s initial public offering (“IPO”).

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make judgments, assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. Specific accounts that require management estimates include, but are not limited to, stock-based compensation, research and development periods under multiple element agreements, the valuation of convertible preferred stock warrants, the fair value of convertible preferred and common stock, contract manufacturing accruals, clinical trial accruals and revenue in accordance with Accounting Standards Codification 606 (ASC 606). Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from those estimates.

6


 

Need for Additional Capital

Since inception, the Company has incurred net losses and negative cash flow from operations. During the three months ended March 31, 2019 and 2018, the Company incurred net losses of $8.3 million and $3.9 million, respectively. At March 31, 2019, the Company had an accumulated deficit of $161.6 million and does not expect to experience positive cash flows from operations in the near future. The Company had $193.4 million of cash, cash equivalents and marketable securities at March 31, 2019. To fully implement the Company’s business plan and fund its operations, the Company intends to raise capital through the issuance of equity securities or debt financings, collaborations, strategic alliances and licensing arrangements, government or other third-party funding or a combination of these.  However, if capital is not available at adequate levels, the Company will need to reevaluate its operating plan and may be required to delay the development of its product candidates.  The Company expects that its cash and cash equivalents and investments will be sufficient to fund its operations for a period of at least one year from the date the unaudited condensed financial statements are filed with the Securities and Exchange Commission (“SEC”).

Deferred Initial Public Offering Costs

Costs incurred in connection with the IPO primarily consist of direct incremental legal, printing and accounting fees. Initial public offering costs are capitalized as incurred and will be offset against proceeds upon consummation of this offering. As of March 31, 2019 and December 31, 2018, there were $3.7 million and $2.3 million, respectively, of deferred initial public offering costs included on the accompanying condensed consolidated balance sheets.

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, receivables from collaborations, the related party receivables from collaboration, and other current assets and liabilities approximate their respective fair values because of the short-term nature of those instruments. Fair value accounting is applied to the convertible preferred stock warrant liabilities that are recorded at their estimated fair value in the condensed consolidated financial statements.

Cash and Cash Equivalents

Cash and cash equivalents are stated at fair value. Cash equivalents relate to securities having an original maturity of three months or less at the time of purchase. The Company limits its credit risk associated with cash and cash equivalents by placing its investments with a bank it believes is highly creditworthy and with highly rated money market funds. As of March 31, 2019 and December 31, 2018, cash and cash equivalents consisted of bank deposits and investments in money market funds.

Marketable Securities

The Company determines the appropriate classification of its marketable securities at the time of purchase and re-evaluates such designation at each balance sheet date. All of the Company’s securities are considered as available-for-sale and carried at estimated fair values and reported in cash equivalents, short-term marketable securities or long-term marketable securities. Unrealized gains and losses on available-for-sale securities are excluded from net loss and reported in accumulated other comprehensive loss as a separate component of stockholders’ deficit. Other income (expense), net, includes interest, amortization of purchase premiums and accretion of purchase discounts, realized gains and losses on sales of securities and other-than-temporary declines in the fair value of securities, if any. The cost of securities sold is based on the specific identification method.

The Company regularly reviews all of its investments for other-than-temporary declines in fair value. This review includes the consideration of the cause of the impairment, including the creditworthiness of the security issuers, the number of securities in an unrealized loss position, the severity and duration of the unrealized losses, whether the Company has the intent to sell the securities and whether it is more likely than not that the Company will be required to sell the securities before the recovery of their amortized cost basis. When the Company determines that the decline in fair value of an investment is below its carrying value and this decline is other-than-temporary, the Company reduces the carrying value of the security it holds and records a loss for the amount of such decline.  

Restricted Cash

As of March 31, 2019 and December 31, 2018, the Company had $2.2 million of restricted cash classified as a non-current asset. The restricted cash serves as collateral for a facility lease entered into in 2015 (Note 7). Restricted cash is classified as a current asset if the collateral will be returned in less than 12 months.

7


 

Concentration of Credit and Other Risks

Cash and cash equivalents and marketable securities from the Company’s available-for-sale and marketable security portfolio potentially subject the Company to concentrations of credit risk. The Company invests in money market funds and marketable securities through custodial relationships with major U.S. and Australian banks. Under its investment policy, the Company limits amounts invested in such securities by credit rating, maturity, industry group, investment type and issuer, except for securities issued by the U.S. government.

Receivables and related party receivables from collaborations (Notes 5 and 6) are typically unsecured. Accordingly, the Company may be exposed to credit risk generally associated with its current collaboration agreement (“Collaboration Agreement”) with Merck Sharp & Dohme Corp. (“Merck”) and any future collaboration agreements with other collaboration partners. To date, the Company has not experienced any losses related to these receivables.

Merck accounted for 100% of the Company’s revenue for the three months ended March 31, 2019 and 2018.

Property and Equipment, Net

Property and equipment is recorded at cost and consists of computer equipment, laboratory equipment and office furniture and leasehold improvements. Maintenance and repairs, and training on the use of equipment, are charged to expense as incurred. Costs that improve assets or extend their economic lives are capitalized. Depreciation is recognized using the straight-line method based on an estimated useful life of the asset, which is as follows:

 

Computer equipment

3 years

Laboratory equipment and office furniture

3 years

Leasehold improvement

Shorter of life of asset or lease term

 

Leases

The Company’s lease agreement for its laboratory and office facilities are classified as operating leases. Rent expense is recognized on a straight-line basis over the term of the lease. Incentives granted under the Company’s facilities leases, including allowances to fund leasehold improvements and rent holidays, are capitalized and are recognized as reductions to rental expense on a straight-line basis over the term of the lease.

Impairment of Long-Lived Assets

Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset. As of March 31, 2019 and December 31, 2018, no revision to the remaining useful lives or write-down of long-lived assets was required.

Income Taxes

Income taxes are accounted for under the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and the operating loss and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Deferred tax assets and liabilities are measured at the balance sheet date using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period such tax rate changes are enacted.

8


 

Convertible Preferred Stock Warrant

Freestanding warrants to purchase the Company’s convertible preferred stock are classified as a liability on the condensed consolidated balance sheet at December 31, 2018. The convertible preferred stock warrants are recorded as a liability and subject to remeasurement at each balance sheet date, with changes in estimated fair value recognized as a component of total other income (expense), net in the Company’s consolidated statements of operations, because the underlying shares of convertible preferred stock are contingently redeemable, which, therefore, may obligate the Company to transfer assets at some point in the future to settle these warrants. On February 3, 2019 all convertible preferred stock warrants were automatically exercised on a net basis into 16,380 shares of Series A convertible preferred stock at a fair value of $0.2 million.

Revenue Recognition

On January 1, 2019, the Company adopted Accounting Standards Update 2014-09, Revenue from Contracts with Customers, and subsequent amendments (ASC 606), using the modified retrospective transition method applied to those contracts that were not completed as of January 1, 2019. ASC 606 supersedes all prior revenue recognition guidance. Results for operating periods beginning after January 1, 2019 are presented under ASC 606, while prior period amounts have not been adjusted and continue to be reported in accordance with previous accounting rules under Accounting Standards Codification Topic 605, Revenue Recognition (“ASC 605”).

The core principle in ASC 606 requires an entity to recognize revenue upon the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company applies the following five-step revenue recognition model outlined in ASC 606 to adhere to this core principle: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the Company satisfies a performance obligation.

All of the Company’s revenue to date has been generated from its collaboration agreements. The terms of these agreements generally require the Company to provide (i) license options for its compounds, (ii) research and development services, and (iii) non-mandatory services in connection with participation in research or steering committees. Payments received under these arrangements may include non-refundable upfront license fees, partial or complete reimbursement of research and development costs, contingent consideration payments based on the achievement of defined collaboration objectives, and royalties on sales of commercialized products. In some agreements, the collaboration partner is solely responsible for meeting defined objectives that trigger contingent or royalty payments. Often the partner only pursues such objectives subsequent to exercising an optional license on compounds identified as a result of the research and development services performed under the Collaboration Agreement.

The Company assesses whether the promises in its arrangements, including any options provided to the customer, are considered distinct performance obligations that should be accounted for separately. Judgment is required to determine whether the license to a compound is distinct from research and development services or participation in steering committees, as well as whether options create material rights in the contract.

The transaction price in each arrangement is generally comprised of a non-refundable upfront fee and variable consideration related to the performance of research and development services. The Company typically submits a budget for the research and development services to the customer in advance of performing the services. The transaction price is allocated to the identified performance obligations based on the standalone selling price (“SSP”) of each distinct performance obligation. Judgment is required to determine SSP. In instances where SSP is not directly observable, such as when a license or service is not sold separately, SSP is determined using information that may include market conditions and other observable inputs. The Company utilizes judgment to assess the nature of its performance obligations to determine whether they are satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress toward completion. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

The Company’s collaboration agreements may include contingent payments related to specified development and regulatory milestones or contingent payments for royalties based on sales of a commercialized product. Milestones can be achieved for such activities in connection with progress in clinical trials, regulatory filings in various geographical markets and marketing approvals from regulatory authorities. Sales-based royalties are generally related to the volume of annual sales of a commercialized product. At the inception of each agreement that includes such payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in

9


 

the transaction price by 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 or its customer’s control, such as those related to regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation based on a relative SSP basis. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of each such milestone and any related constraint and, if necessary, adjusts its estimate of the overall transaction price. Pursuant to the guidance in ASC 606, sales-based royalties are not included in the transaction price. Instead, royalties are recognized at the later of when the performance obligation is satisfied or partially satisfied, or when the sale that gives rise to the royalty occurs.

Prior to the adoption of ASC 606, the Company’s revenue from collaboration agreements was recognized when the Company determined that persuasive evidence of an arrangement exists, services had been rendered, the price was fixed or determinable, and collectability was reasonably assured. The Company would record amounts received prior to satisfying the above revenue recognition criteria as deferred revenue until all applicable revenue recognition criteria were met. Revenue allocated to research activities was generally recognized in the period the services were performed, and revenue allocated to licenses was generally recognized on a straight-line basis over the contractual term. Allocations to non-contingent elements were based on the relative selling price of each element using vendor-specific objective evidence or third-party evidence, where available. In the absence of either of these measures, the Company used the best estimate of selling price for that deliverable.

The most significant change to the Company’s policies upon the adoption of ASC 606 is the estimation of an arrangement’s total transaction price, which would include any variable consideration and the recognition of that transaction price based on a cost-based input method that requires significant estimates to determine, at each reporting period, the percentage of completion based on the estimated total effort required to complete the project and the total transaction price.  Given the differences in revenue recognition policies, the revenue recognized in prior years is not strictly comparable to revenue recorded in the quarter ending March 31, 2019 or in future periods (see Recently Adopted Accounting Pronouncements).

Research and Development

Research and development costs are expensed as incurred. Research and development expenses primarily include salaries and benefits for medical, clinical, quality, preclinical, manufacturing and research personnel, costs related to research activities, preclinical studies, clinical trials, drug manufacturing expenses and allocated overhead and facility occupancy costs. The Company accounts for non-refundable advance payments for goods or services that will be used in future research and development activities as expenses when the goods have been received or when the service has been performed rather than when the payment is made.

Clinical trial costs are a component of research and development expenses. The Company expenses costs for its clinical trial activities performed by third parties, including clinical research organizations and other service providers, as they are incurred, based upon estimates of the work completed over the life of the individual study in accordance with associated agreements. The Company uses information it receives from internal personnel and outside service providers to estimate the clinical trial costs incurred.

Stock-Based Compensation

The Company values stock-based payments to employees on the grant date of each award and recognizes the estimated fair value of such awards over the period during which the employee is required to provide service in exchange for the award, which is generally the vesting period of each award. Stock-based payments to consultants are subject to periodic remeasurement over their vesting terms. Stock-based payments are valued using the Black-Scholes option-pricing model. Because non-cash stock-based compensation expense is based on awards ultimately expected to vest, it is reduced by an estimate for future forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from estimates.

Foreign Currency Transactions

The functional currency of NGM Biopharmaceuticals Australia Pty Ltd., a wholly owned subsidiary, is the U.S. dollar. Accordingly, all monetary assets and liabilities of the subsidiary are remeasured into U.S. dollars at the current period-end exchange rates and non-monetary assets are remeasured using historical exchange rates. Income and expense elements

10


 

are remeasured to U.S. dollars using the average exchange rates in effect during the period. Remeasurement gains and losses are recorded as other income (expense).

The Company is subject to foreign currency risk with respect to its clinical and manufacturing contracts denominated in currencies other than the U.S. dollar, primarily British Pounds, Swiss Francs and the Euro. Payments on contracts denominated in foreign currencies are made at the spot rate on the day of payment. Changes in the exchange rate between billing dates and payment dates are recorded to other income (expense), net on the condensed consolidated statements of operations.

Comprehensive Loss

Comprehensive loss is comprised of net loss and certain changes in equity that are excluded from net loss. For the three months ended March 31, 2019 and 2018, the difference between comprehensive loss and net loss consisted of changes in net unrealized gain on marketable securities of $0.2 million, and changes in net unrealized loss on marketable securities of $0.2 million, respectively.

Net Loss per Common Share

Basic net loss per common share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period, less shares subject to repurchase, and excludes any dilutive effects of stock-based awards and warrants. Diluted net loss per common share is computed giving effect to all potentially dilutive common shares, including common stock issuable upon exercise of stock options, and unvested restricted common stock and stock units. As the Company had net losses for the three months ended March 31, 2019 and 2018, all potential common shares were determined to be anti-dilutive.

The following table sets forth the computation of net loss per common share (in thousands, except share and per share):

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2019

 

 

2018

 

Numerator:

 

 

 

 

 

 

 

 

Net loss

 

$

(8,268

)

 

$

(3,941

)

Denominator:

 

 

 

 

 

 

 

 

Weighted-average number of common shares used in calculating net income

   per share—basic and diluted

 

 

6,812,129

 

 

 

6,127,040

 

Net loss per share—basic and diluted

 

$

(1.21

)

 

$

(0.64

)

 

Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows:

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2019

 

 

2018

 

Convertible preferred stock

 

 

47,283,846

 

 

 

47,267,466

 

Options to purchase common stock

 

 

11,183,787

 

 

 

9,648,987

 

Warrants to purchase convertible preferred stock

 

 

 

 

 

19,637

 

Total

 

 

58,467,633

 

 

 

56,936,090

 

 

Segment and Geographical Information

The Company operates in one segment. Substantially all of the Company’s long-lived assets are based in the United States. Long-lived assets are primarily comprised of property and equipment. For the three months ended March 31, 2019 and 2018, the Company’s revenues were entirely within the United States based upon the location of the customers.

11


 

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on our condensed consolidated financial statements upon adoption. Under the Jumpstart Our Business Startups Act of 2012, as amended (the JOBS Act), we meet the definition of an emerging growth company, and have elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act.

Recently Adopted Accounting Pronouncements

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230)—Restricted Cash, to clarify the presentation of the change in restricted cash on the statement of cash flows. The new standard clarifies the FASB’s position that changes to restricted cash are not reflective of an entity’s operating, investing or financing activities, and therefore should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The ASU is effective for fiscal years beginning after December 15, 2018. The Company elected to early adopt this ASU using the retrospective transition method to each period presented having no effect within the classification of its condensed consolidated statements of cash flows due to there being no changes in the Company’s restricted cash balances for any of the years presented.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (ASC 606), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 replaced existing revenue recognition guidance and permits the use of either the full retrospective or modified retrospective transition method. Additionally, in March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (ASC 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the implementation guidance on principal versus agent considerations in ASU No. 2014-09. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (ASC 606): Identifying Performance Obligations and Licensing, which clarifies certain aspects of identifying performance obligations and licensing implementation guidance. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (ASC 606): Narrow-Scope Improvements and Practical Expedients, which relates to disclosures of remaining performance obligations, as well as other amendments to guidance on collectability, non-cash consideration and the presentation of sales and other similar taxes collected from customers. For the Company, these standards (collectively ASC 606) have the same effective date and transition date of January 1, 2019.

The Company adopted ASC 606 on January 1, 2019, using the modified retrospective transition method and, therefore, evaluated its contract with Merck under ASC 606. The Company recorded adjustments upon the adoption of ASC 606 as a result of the Company concluding that licenses and research and development services promised in the agreement are a single combined performance obligation. This determination impacts the timing of recognition of both the non-refundable upfront fee and the payments related to the services. Under previous guidance, the upfront fee was recognized ratably over the contract term, and fees related to the services were recognized in the period the services were performed. Under ASC 606, revenue for the single performance obligation is recognized over time using a cost-based input method to measure progress toward completion of the single combined performance obligation. The adoption of ASC 606 impacted the Company’s contract liabilities and accumulated deficit balance as of January 1, 2019 as follows (in thousands):

 

 

December 31,

2018

 

 

Adjustments due to the Adoption of ASC 606

 

 

January 1, 2019

 

Deferred revenue, current

 

$

19,025

 

 

$

5,171

 

 

$

24,196

 

Deferred revenue, noncurrent

 

 

3,942

 

 

 

985

 

 

 

4,927

 

Accumulated deficit

 

 

(147,193

)

 

 

(6,156

)

 

 

(153,349

)

The impact of the adoption of ASC 606 on the condensed consolidated balance sheet as of March 31, 2019, condensed consolidated statement of operations and cash flows for the three months ended March 31, 2019 was as follows (in thousands):

 

 

 

As of March 31, 2019

 

 

 

Amount Under

ASC 605

 

 

Adjustments

 

 

As Reported

Under ASC 606

 

Deferred revenue, current

 

$

16,877

 

 

$

5,164

 

 

$

22,041

 

Accumulated deficit

 

 

(156,453

)

 

 

(5,164

)

 

 

(161,617

)

12


 

 

 

 

Three Months Ended March 31, 2019

 

 

 

Amount Under

ASC 605

 

 

Adjustments

 

 

As Reported

Under ASC 606

 

Related party revenue

 

$

24,560

 

 

$

992

 

 

$

25,552

 

Loss from operations

 

 

(10,334

)

 

 

992

 

 

 

(9,342

)

Net loss

 

 

(9,260

)

 

 

992

 

 

 

(8,268

)

Net loss per common share, basic and diluted

 

 

(1.36

)

 

 

 

 

 

 

(1.21

)

 

 

 

Three Months Ended March 31, 2019

 

 

 

Amount Under

ASC 605

 

 

Adjustments

 

 

As Reported

Under ASC 606

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(9,260

)

 

$

992

 

 

$

(8,268

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Deferred revenue

 

 

(6,090

)

 

 

(992

)

 

 

(7,082

)

 

Recent Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which increases lease transparency and comparability among organizations. Under the new standard, lessees will be required to recognize all assets and liabilities arising from leases on the balance sheet, with the exception of leases with a term of 12 months or less, which permits a lessee to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities. In March 2018, the FASB approved an alternative transition method to the modified retrospective approach, which eliminates the requirement to restate prior period financial statements and allows the cumulative effect of the retrospective allocation to be recorded as an adjustment to the opening balance of retained earnings at the date of adoption. The Company is currently assessing the timing of adoption and the impact that the adoption of ASU 2016-02 will have on its condensed consolidated financial statements and related disclosures.

In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Non-Employee Share-Based Payment Accounting as part of the FASB simplification initiative. The new standard expands the scope of Topic 718, allowing the Company to apply the requirements of Topic 718 to certain non-employee awards to acquire goods and services from non-employees. This ASU will be effective for the Company for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020, with early adoption permitted. The Company is currently assessing the timing of adoption and the impact that the adoption of ASU 2018-07 will have on its condensed consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement as part of the FASB’s disclosure framework project. This ASU modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement by removing the requirement to disclose amounts of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation process for Level 3 fair value measurements. This ASU also modifies existing disclosure requirements by clarifying that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date, and it adds required disclosures for the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This ASU will be effective for the Company for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently assessing the impact of this ASU on its condensed consolidated financial statements.

In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (ASC 808): Clarifying the Interaction between ASC 808 and ASC 606, which clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under ASC 606 when then collaborative arrangement participant is a customer in the context of a unit of account. In those situations, all the guidance in ASC 606 should be applied, including recognition, measurement, presentation, and disclosure requirements. This ASU adds unit-of-account guidance in ASC 808 to align with the guidance in ASC 606 (that is, a distinct good or service) when an entity is assessing whether the collaborative arrangement or a part of the arrangement is within the scope of ASC 606, and requires that in a transaction with a collaborative arrangement participant that is not directly related to sales to third parties, presenting the transaction

13


 

together with revenue recognized under ASC 606 is precluded if the collaborative arrangement participant is not a customer. This ASU will be effective for the Company for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The Company is currently assessing the impact of this ASU on its condensed consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. The new guidance amended guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For available for sale debt securities, credit losses will be presented as an allowance rather than as a write-down. This standard is effective for the Company’s fiscal year beginning after December 31, 2020. Early adoption is permitted for all entities. The Company is currently assessing the timing of adoption and the impact that the adoption of ASU 2016-13 will have on its condensed consolidated financial statements and related disclosures.

3. Fair Value Measurements

Financial assets and liabilities are recorded at fair value. The carrying amount of certain financial instruments, including cash and cash equivalents, receivable from collaboration, related party receivable from collaboration and other current assets and liabilities approximate fair value due to their relatively short maturities. Assets and liabilities recorded at fair value on a recurring basis in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value accounting is applied to the convertible preferred stock warrant liabilities that are recorded at their estimated fair value in the condensed consolidated financial statements.

The FASB defined fair value as the exchange price that would be received for an asset or paid to transfer a liability, or an exit price, in the principal or most advantageous market for that asset or liability in an orderly transaction between market participants on the measurement date, and established a fair value hierarchy that requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value. The FASB set forth three levels of inputs that may be used to measure fair value:

 

Level 1:

Quoted prices in active markets for identical assets or liabilities.

 

Level 2:

Observable inputs other than Level 1 prices, 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 assets or liabilities.

 

Level 3:

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

To date, the Company has not recorded any impairment charges on marketable securities related to other-than-temporary declines in market value. In determining whether a decline is other than temporary, the Company considers various factors including the length of time and extent to which the market value has been less than cost, the financial condition and near-term prospects of the issuer and the Company’s intent and ability to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value.

The Company estimates the fair values of investments in corporate agency bond securities, commercial paper and government agencies securities using level 2 inputs, by taking into consideration valuations obtained from third-party pricing services. 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 securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data and other observable inputs.

14


 

Cash equivalents and marketable securities, all of which are classified as available-for-sale securities consisted of the following (in thousands):

 

 

 

Amortized

Cost

 

 

Gross

Unrealized

Gain

 

 

Gross

Unrealized

Loss

 

 

Fair

Value

 

As of March 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

36,821

 

 

$

 

 

$

 

 

$

36,821

 

Corporate and agency bonds

 

 

69,895

 

 

 

 

 

 

(52

)

 

 

69,843

 

Commercial paper

 

 

12,577

 

 

 

 

 

 

 

 

 

12,577

 

U.S. government agencies securities

 

 

63,699

 

 

 

7

 

 

 

 

 

 

 

63,706

 

Total

 

$

182,992

 

 

$

7

 

 

$

(52

)

 

$

182,947

 

Classified as:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

$

36,821

 

Short-term marketable securities (amortized

   cost of $146,171)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

146,126

 

Total cash equivalents and marketable

   securities

 

 

 

 

 

 

 

 

 

 

 

 

 

$

182,947

 

 

 

 

Amortized

Cost

 

 

Gross

Unrealized

Gain

 

 

Gross

Unrealized

Loss

 

 

Fair

Value

 

As of December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

34,983

 

 

$

 

 

$

 

 

$

34,983

 

Corporate and agency bonds

 

 

68,323

 

 

 

 

 

 

(241

)

 

 

68,082

 

Commercial paper

 

 

17,904

 

 

 

 

 

 

 

 

 

17,904

 

U.S. government agencies securities

 

 

63,751

 

 

 

 

 

 

(26

)

 

 

63,725

 

Total

 

$

184,961

 

 

$

 

 

$

(267

)

 

$

184,694

 

Classified as:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

$

34,984

 

Short-term marketable securities (amortized

   cost of $149,978)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

149,710

 

Total cash equivalents and marketable

   securities

 

 

 

 

 

 

 

 

 

 

 

 

 

$

184,694

 

 

Cash and cash equivalents in the table above excludes cash on deposit with banks of $10.5 million and $21.9 million as of March 31, 2019 and December 31, 2018, respectively.

As of March 31, 2019 and December 31, 2018, the Company’s marketable securities had remaining contractual maturities less than one year.

 

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table sets forth the estimated fair value of the Company’s financial assets and liabilities that were measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018 (in thousands):

 

 

 

Fair Value Measurements at March 31, 2019

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

36,821

 

 

$

 

 

$

 

 

$

36,821

 

Corporate and agency bonds

 

 

 

 

 

69,843

 

 

 

 

 

 

69,843

 

Commercial paper

 

 

 

 

 

12,577

 

 

 

 

 

 

12,577

 

U.S. government agencies securities

 

 

 

 

 

63,706

 

 

 

 

 

 

63,706

 

 

 

$

36,821

 

 

$

146,126

 

 

$

 

 

$

182,947

 

15


 

 

 

 

Fair Value Measurements at December 31, 2018

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

34,983

 

 

$

 

 

$

 

 

$

34,983

 

Corporate and agency bonds