Net Loss Per Share Attributable to Common Shareholders and Stockholders

12 Months Ended

Dec. 31, 2016

Net Loss Per Share Attributable to Common Shareholders and Stockholders

13. Net Loss Per Share Attributable to Common Shareholders and Stockholders

The Company computed net loss attributable per common shareholder and stockholder using the two-class method required for participating securities through the date of the IPO. Immediately prior to the closing of the IPO, all outstanding convertible preferred stock was converted into common stock (see Note 6). The Company considered convertible preferred shares/stock to be participating securities. In the event that the Company had paid out distributions, holders of convertible preferred shares/stock would have participated in the distribution.

The two-class method is an earnings (loss) allocation method under which earnings (loss) per share is calculated for each class of common share, common stock, and participating security considering a participating security’s rights to undistributed earnings (loss) as if all such earnings (loss) had been distributed during the period. The convertible preferred shares/stock did not have an obligation to fund losses and are therefore excluded from the calculation of basic net loss per share. Starting in the first quarter of 2015 in connection with the LLC Conversion, the Company’s Series A and B convertible preferred stock were entitled to receive noncumulative dividends and in preference to any dividends on shares of the Company’s common stock.

Basic and diluted net loss per share attributable to common shareholders and stockholders is computed by dividing net loss attributable to the applicable class of common share and common stock by the weighted-average number of that class of common share and common stock outstanding during the period. For net loss per share attributable to common stockholders for the year ended December 31, 2015, the effect of the LLC Conversion is presented prospectively from January 1, 2015 as none of the losses for the year ended December 31, 2015 were allocated to the members of Aeglea LLC. For periods in which the Company generated a net loss, the Company does not include the potential impact of dilutive securities in diluted net loss per share, as the impact of these items is anti-dilutive. Additionally, the convertible preferred stock dividend is included in the loss attributable to common stockholders.

The following weighted-average equity instruments were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented:

	Year Ended December 31,
	2016		2015		2014
Series A convertible preferred shares/stock		611,392		2,172,520		1,557,870
Series B convertible preferred stock		1,407,097		4,047,734		—
Unvested restricted common stock		100,634		153,355		—
Options to purchase common stock		1,063,778		450,458		—
Forward sale contract for Series A convertible preferred shares		—		—		447,482
Unvested Class B common shares		—		—		151,936