mrna-20200630

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 June 30, 2020

☐ 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: 001-38753

Moderna, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

81-3467528

(State or Other Jurisdiction of Incorporation or Organization)

(IRS Employer Identification No.)

200 Technology Square

Cambridge,

Massachusetts

02139

(Address of Principal Executive Offices)

(Zip Code)

(617) 714-6500

(Registrant’s Telephone Number, Including Area Code)

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


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	MRNA	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 o

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 o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 o

Non-accelerated filer o

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. o

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

As of July 31, 2020, there were 394,586,852 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Form 10-Q”), including the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains express or implied forward-looking statements that are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this Form 10-Q include, but are not limited to, statements about:

•the initiation, timing, progress, results, safety and efficacy, and cost of our research and development programs and our current and future preclinical studies and clinical trials, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available, and our research and development programs;

•the ultimate impact of the current coronavirus pandemic, or the COVID-19 pandemic, or any other health epidemic, on our business, manufacturing, clinical trials, research programs, supply chain, regulatory review, healthcare systems or the global economy as a whole;

•risks related to the direct or indirect impact of the COVID-19 pandemic or any future large-scale adverse health event, such as the scope and duration of the outbreak, government actions and restrictive measures implemented in response, material delays in diagnoses, initiation or continuation of treatment for diseases that may be addressed by our development candidates and investigational medicines, or in patient enrollment in clinical trials, potential clinical trials, regulatory review or supply chain disruptions, and other potential impacts to our business, the effectiveness or timeliness of steps taken by us to mitigate the impact of the pandemic, and our ability to execute business continuity plans to address disruptions caused by the COVID-19 pandemic or future large-scale adverse health event;

•our activities with respect to mRNA-1273, our investigational vaccine against SARS-CoV-2, the novel strain of coronavirus that causes COVID-19, including our plans and expectations regarding clinical development, manufacturing, pricing, commercialization, if approved, regulatory matters and potential third-party arrangements;

•our anticipated next steps for our development candidates and investigational medicines that may be slowed down due to the impact of the COVID-19 pandemic, including our resources being significantly diverted towards mRNA-1273, including if the federal government seeks to require us to divert such resources;

•our ability to identify research priorities and apply a risk-mitigated strategy to efficiently discover and develop development candidates and investigational medicines, including by applying learnings from one program to our other programs and from one modality to our other modalities;

•our ability and the potential to successfully manufacture our drug substances, delivery vehicles, development candidates, and investigational medicines for preclinical use, for clinical trials and on a larger scale for commercial use, if approved;

•the ability and willingness of our third-party strategic collaborators to continue research, development and manufacturing activities relating to our development candidates and investigational medicines;

•our ability to obtain funding for our operations necessary to complete further development, manufacturing and commercialization of our investigational medicines;

•our ability to obtain and maintain regulatory approval of our investigational medicines;

•our ability to commercialize our products, if approved;

•the pricing and reimbursement of our investigational medicines, if approved;

•the implementation of our business model, and strategic plans for our business, investigational medicines, and technology;

•the scope of protection we are able to establish and maintain for intellectual property rights covering our investigational medicines and technology;

•estimates of our future expenses, revenues, capital requirements, and our needs for additional financing;

•the potential benefits of strategic collaboration agreements, our ability to enter into strategic collaborations or arrangements, and our ability to attract collaborators with development, regulatory, manufacturing and commercialization expertise;

•future agreements with third parties in connection with the manufacturing and commercialization of our investigational medicines, if approved;

•the size and growth potential of the markets for our investigational medicines, and our ability to serve those markets;

•our financial performance;

•the rate and degree of market acceptance of our investigational medicines;

•regulatory developments in the United States and foreign countries;

•our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;

•our ability to produce our products or investigational medicines with advantages in turnaround times or manufacturing cost;

•the success of competing therapies that are or may become available;

•our ability to attract and retain key scientific or management personnel;

•the impact of laws and regulations;

•developments relating to our competitors and our industry; and

•other risks and uncertainties, including those discussed in Part II, Item 1A - Risk Factors in this Form 10-Q.

In some cases, forward-looking statements can be identified by terminology such as “will,” “may,” “should,” “could,” “expects,” “intends,” “plans,” “aims,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the section entitled “Risk Factors” and elsewhere in this Form 10-Q. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those expressed or implied by the forward-looking statements. No forward-looking statement is a promise or a guarantee of future performance.

The forward-looking statements in this Form 10-Q represent our views as of the date of this Form 10-Q. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Form 10-Q.

This Form 10-Q includes statistical and other industry and market data that we obtained from industry publications and research, surveys, and studies conducted by third parties. Industry publications and third-party research, surveys, and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. We have not independently verified the information contained in such sources.

NOTE REGARDING COMPANY REFERENCES

Unless the context otherwise requires, the terms “Moderna,” “the Company,” “we,” “us,” and “our” in this Form 10-Q refer to Moderna, Inc. and its consolidated subsidiaries.

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PART I.		Page
Item 1.	Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets as of June 30 , 2020 and December 31, 2019	5
	Condensed Consolidated Statements of Operations for the three months and six months ended June 30 , 2020 and 2019	6
	Condensed Consolidated Statements of Comprehensive Loss for the three months and six months ended June 30 , 2020 and 2019	7
	Condensed Consolidated Statements of Stockholders' Equity for the three months and six months ended June 30 , 2020 and 2019	8
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30 , 2020 and 2019	10
	Notes to Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	43
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	62
Item 4.	Controls and Procedures	62
PART II.
Item 1.	Legal Proceedings	63
Item 1A.	Risk Factors	63
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	119
Item 5.	Other Information	119
Item 6.	Exhibits	120
SIGNATURES

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Item 1. Financial Statements

MODERNA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands, except share and per share data)


	June 30,		December 31,
	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	1,761,629	$	235,876
Investments	955,384		867,124
Accounts receivable	33,362		5,369
Prepaid expenses and other current assets	45,337		19,403
Restricted cash	1,032		1,032
Total current assets	2,796,744		1,128,804
Investments, non-current	354,916		159,987
Property and equipment, net	229,939		201,495
Right-of-use assets, operating leases	92,046		86,414
Restricted cash, non-current	10,791		10,791
Other non-current assets	1,570		1,931
Total assets	$	3,486,006	$	1,589,422
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	18,817	$	7,090
Accrued liabilities	89,204		67,652
Deferred revenue	45,244		63,310
Other current liabilities	8,382		5,063
Total current liabilities	161,647		143,115
Deferred revenue, non-current	208,478		138,995
Operating lease liabilities, non-current	99,636		93,675
Financing lease liabilities, non-current	68,136		38,689
Other non-current liabilities	1,224		138
Total liabilities	539,121		414,612
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, par value $0.0001; 162,000,000 shares authorized as of June 30, 2020 and December 31, 2019; no shares issued or outstanding at June 30, 2020 and December 31, 2019	—		—
Common stock, par value $0.0001; 1,600,000,000 shares authorized as of June 30, 2020 and December 31, 2019; 393,277,267 and 336,536,985 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively	39		34
Additional paid-in capital	4,675,987		2,669,426
Accumulated other comprehensive income	8,256		1,804
Accumulated deficit	(1,737,397)		(1,496,454)
Total stockholders’ equity	2,946,885		1,174,810
Total liabilities and stockholders’ equity	$	3,486,006	$	1,589,422

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

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MODERNA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except share and per share data)


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019 ⁽¹⁾		2020		2019 ⁽¹⁾
Revenue:
Collaboration revenue	$	28,442	$	10,030	$	32,899	$	24,145
Grant revenue	37,909		3,053		41,841		4,963
Total revenue	66,351		13,083		74,740		29,108
Operating expenses:
Research and development	151,856		128,305		266,993		258,718
General and administrative	36,622		28,487		60,736		55,740
Total operating expenses	188,478		156,792		327,729		314,458
Loss from operations	(122,127)		(143,709)		(252,989)		(285,350)
Interest income	7,092		10,322		14,944		21,294
Other expense, net	(1,530)		(1,877)		(2,684)		(3,808)
Loss before income taxes	(116,565)		(135,264)		(240,729)		(267,864)
Provision for (benefit from) income taxes	148		(324)		214		(348)
Net loss	$	(116,713)	$	(134,940)	$	(240,943)	$	(267,516)
Net loss per share, basic and diluted	$	(0.31)	$	(0.41)	$	(0.66)	$	(0.81)
Weighted average common shares used in net loss per share, basic and diluted	380,531,488		329,176,107		366,818,254		328,994,058

________

⁽¹⁾Restated to conform to ASC 842. See accompanying Note 2.

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

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MODERNA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited, in thousands)


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019 ⁽¹⁾		2020		2019 ⁽¹⁾
Net loss	$	(116,713)	$	(134,940)	$	(240,943)	$	(267,516)
Other comprehensive income:
Unrealized gain on available-for-sale debt securities, net of tax of $0 and $608, for the three months ended June 30, 2020 and 2019, respectively, and net of tax of $0 and $1,148 for the six months ended June 30, 2020 and 2019, respectively	13,171		2,167		5,561		4,075
Less: amounts recognized for net realized loss (gain) included in net loss	1,212		(17)		891		(14)
Total other comprehensive income	14,383		2,150		6,452		4,061
Comprehensive loss	$	(102,330)	$	(132,790)	$	(234,491)	$	(263,455)

______

⁽¹⁾Restated to conform to ASC 842. See accompanying Note 2.

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

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MODERNA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(Unaudited, in thousands except share data)


	Common Stock					Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount

Balance at March 31, 2020	370,102,805	$	37	$	3,267,648	$	(6,127)	$	(1,620,684)	$	1,640,874
Proceeds from public offering of common stock, net of issuance costs of $978	17,600,000	1		1,303,303		—		—		1,303,304
Vesting of restricted common stock units	46,123	—		—		—		—		—
Exercise of options to purchase common stock, net	5,354,601	1		78,196		—		—		78,197
Purchase of common stock under employee stock purchase plan	173,738	—		2,917		—		—		2,917
Stock-based compensation	—	—		23,923		—		—		23,923
Unrealized loss on marketable securities	—	—		—		14,383		—		14,383
Net loss	—	—		—		—		(116,713)		(116,713)
Balance at June 30, 2020	393,277,267	$	39	$	4,675,987	$	8,256	$	(1,737,397)	$	2,946,885


	Common Stock					Additional Paid-In Capital		Accumulated Other Comprehensive Income		Accumulated Deficit ⁽¹⁾		Total Stockholders’ Equity ⁽¹⁾
	Shares	Amount

Balance at March 31, 2019	328,853,340	$	33	$	2,556,709	$	591	$	(1,115,008)	$	1,442,325

Vesting of restricted common stock	58,564	—		—		—		—		—
Exercise of options to purchase common stock, net	1,046,268	—		3,930		—		—		3,930
Transition adjustment from adoption of ASC 606	—	—		—		—		—		—
Transition adjustment from adoption of ASC 842	—	—		—		—		—		—
Stock-based compensation	—	—		21,495		—		—		21,495
Unrealized gain on marketable securities	—	—		—		2,150		—		2,150
Net loss	—	—		—		—		(134,940)		(134,940)
Balance at June 30, 2019	329,958,172	$	33	$	2,582,134	$	2,741	$	(1,249,948)	$	1,334,960

_______

⁽¹⁾Restated to conform to ASC 842. See accompanying Note 2.

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	Common Stock					Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2019	336,536,985	$	34	$	2,669,426	$	1,804	$	(1,496,454)	$	1,174,810
Proceeds from public offering of common stock, net of issuance costs of $2,086	47,863,158	4		1,852,755		—		—		1,852,759
Vesting of restricted common stock units	160,114	—		—		—		—		—
Exercise of options to purchase common stock, net	8,543,272	1		106,553		—		—		106,554
Purchase of common stock under employee stock purchase plan	173,738	—		2,917		—		—		2,917
Stock-based compensation	—	—		44,336		—		—		44,336
Unrealized loss on marketable securities	—	—		—		6,452		—		6,452
Net loss	—	—		—		—		(240,943)		(240,943)
Balance at June 30, 2020	393,277,267	$	39	$	4,675,987	$	8,256	$	(1,737,397)	$	2,946,885


	Common Stock					Additional Paid-In Capital		Accumulated Other Comprehensive Income		Accumulated Deficit ⁽¹⁾		Total Stockholders’ Equity ⁽¹⁾
	Shares	Amount

Balance at December 31, 2018	328,798,904	$	33	$	2,538,155	$	(1,320)	$	(1,006,627)	$	1,530,241
Vesting of restricted common stock	107,475	—		—		—		—		—
Exercise of options to purchase common stock, net	1,051,793	—		3,987		—		—		3,987
Transition adjustment from adoption of ASC 606	—	—		—		—		27,984		27,984
Transition adjustment from adoption of ASC 842	—	—		—		—		(3,789)		(3,789)
Stock-based compensation	—	—		39,992		—		—		39,992
Unrealized gain on marketable securities	—	—		—		4,061		—		4,061
Net loss	—	—		—		—		(267,516)		(267,516)
Balance at June 30, 2019	329,958,172	$	33	$	2,582,134	$	2,741	$	(1,249,948)	$	1,334,960

__________

⁽¹⁾Restated to conform to ASC 842. See accompanying Note 2.

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

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MODERNA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)


	Six Months Ended June 30,
	2020		2019 ⁽¹⁾
Operating activities
Net loss	$	(240,943)	$	(267,516)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	44,336		39,992
Depreciation and amortization	15,045		14,793
Amortization/accretion of investments	1,947		(2,360)
Loss on disposal of property and equipment	226		14
Changes in assets and liabilities:
Accounts receivable	(27,993)		8,067
Prepaid expenses and other assets	(11,788)		6,035
Right-of-use assets, operating leases	(12,387)		(3,580)
Accounts payable	11,473		(1,471)
Accrued liabilities	20,189		(27,796)
Deferred revenue	51,417		(23,100)
Operating lease liabilities	14,007		3,395
Other liabilities	4,405		674

Net cash used in operating activities	(130,066)		(252,853)
Investing activities
Purchases of marketable securities	(903,613)		(843,313)
Proceeds from maturities of marketable securities	516,913		563,634
Proceeds from sales of marketable securities	108,016		39,200
Purchases of property and equipment	(24,855)		(18,181)
Net cash used in investing activities	(303,539)		(258,660)
Financing activities
Proceeds from public offering of common stock, net of issuance costs	1,852,759		—
Proceeds from issuance of common stock through equity plans, net	106,554		3,987
Charges to financing lease obligation	45		483
Net cash provided by financing activities	1,959,358		4,470
Net increase (decrease) in cash, cash equivalents and restricted cash	1,525,753		(507,043)
Cash, cash equivalents and restricted cash, beginning of year	247,699		670,491
Cash, cash equivalents and restricted cash, end of period	$	1,773,452	$	163,448
Non-cash investing and financing activities

Purchases of property and equipment included in accounts payable and accrued liabilities	$	9,210	$	6,074

______

⁽¹⁾Restated to conform to ASC 842. See accompanying Note 2.

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

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MODERNA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Description of the Business

Moderna, Inc. (collectively, with its consolidated subsidiaries, any of Moderna, we, us, or the Company) was incorporated in Delaware on July 22, 2016. We are the successor in interest to Moderna LLC, a limited liability company formed under the laws of the State of Delaware in 2013. Our principal executive office is located at 200 Technology Square, Cambridge, MA.

We are a biotechnology company creating a new generation of transformative medicines based on messenger RNA (mRNA), to improve the lives of patients. mRNA medicines are designed to direct the body’s cells to produce intracellular, membrane, or secreted proteins that have a therapeutic or preventive benefit with the potential to address a broad spectrum of diseases. Our platform builds on continuous advances in basic and applied mRNA science, delivery technology, and manufacturing, providing us the capability to pursue in parallel a robust pipeline of new development candidates. We are developing therapeutics and vaccines for infectious diseases, immuno-oncology, rare diseases, autoimmune and cardiovascular diseases, independently and with our strategic collaborators.

Since inception, we have incurred significant net losses. As of June 30, 2020, we had an accumulated deficit of $1.74 billion. We may continue to incur significant expenses and operating losses for the foreseeable future. In addition, we anticipate that our expenses will increase significantly in connection with our ongoing activities to support our platform research, drug discovery and clinical development, infrastructure and Research Engine and Early Development Engine, digital infrastructure, creation of a portfolio of intellectual property, expansion into global markets, and administrative support.

We do not expect to recognize significant revenue from sales of potential mRNA medicines unless and until we successfully complete clinical development and obtain regulatory approval for one or more of our investigational medicines. If we seek to obtain regulatory approval for any of our investigational medicines, we expect to incur significant commercialization expenses. Our investigational vaccine against the novel coronavirus (mRNA-1273), which is currently in clinical trials, has been developed rapidly to respond to the global COVID-19 pandemic. We are expending significant efforts to further the rapid development of this potential vaccine and expect to continue to do so over the next 12 months. These efforts have required and will continue to require the expenditure of significant funds and the establishment of significant worldwide infrastructure and partnerships.

As a result, we expect we will need substantial additional funding to support our continued operations and pursue our growth strategy. Until we can generate significant revenue from potential mRNA medicines, if ever, we expect to finance our operations through a combination of public or private equity offerings, structured financings and debt financings, government funding arrangements, strategic alliances and marketing, manufacturing, distribution and licensing arrangements. We may be unable to raise additional funds or enter into such other agreements on favorable terms, or at all. If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our programs. We believe that our cash, cash equivalents, and investments as of June 30, 2020 will be sufficient to enable us to fund our projected operations through at least the next 12 months from the issuance of our financial statements.

Because of the numerous risks and uncertainties associated with pharmaceutical development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate revenues from the sale of our investigational medicines, including mRNA-1273, if approved, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce our operations.

2. Summary of Basis of Presentation and Recent Accounting Standards

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements that accompany these notes have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) for interim financial reporting, consistent in all material respects with those applied in our Annual Report on Form 10-K for the year ended December 31, 2019 (2019 Form 10-K). Any reference in these notes to applicable guidance is meant to refer to the authoritative accounting principles generally accepted in the United States as found in the Accounting Standard

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Codification (ASC) and Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB). This report should be read in conjunction with the consolidated financial statements in our 2019 Form 10-K.

The consolidated financial statements include the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

We have made estimates and judgments affecting the amounts reported in our condensed consolidated financial statements and the accompanying notes. On an ongoing basis, we evaluate our estimates, including critical accounting policies or estimates related to revenue recognition, research and development expenses, income tax provisions, stock-based compensation, leases, and useful lives of long-lived assets. We base our estimates on historical experience and on various relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The actual results that we experience may differ materially from our estimates. Significant estimates relied upon in preparing these financial statements include, among others, those related to fair value of equity awards, revenue recognition, research and development expenses, leases, fair value instruments, useful lives of property and equipment, income taxes, and our valuation allowance on our deferred tax assets.

Significant Accounting Policies

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three and six months ended June 30, 2020 are consistent with those described in our 2019 Form 10-K, except for "Pre-Launch Inventory" and as noted within the “Recently Adopted Accounting Standards” section below.

Effective on December 31, 2019, we lost our emerging growth company (EGC) status which accelerated the requirement of ASC 842 (Lease Accounting) adoption. As a result, we adjusted our previously reported consolidated financial statements effective January 1, 2019 in our 2019 Form 10-K, and amendments to previously filed Forms 10-Q were not required. Accordingly, our prior period condensed consolidated financial statements and information, as presented herein, have been restated to conform to the new standard.

The following tables summarize the effects of adopting ASC 842 on our condensed consolidated financial statements for the three and six months ended June 30, 2019 (in thousands, except per share data):


	Three Months Ended June 30, 2019										Six Months Ended June 30, 2019
			ASC 842						ASC 842
	Previously reported		Adjustments		As adjusted		Previously reported		Adjustments		As adjusted
Operating expenses:
Research and development	$	128,496	$	(191)	$	128,305	$	259,071	$	(353)	$	258,718
General and administrative	28,523		(36)		28,487		55,806		(66)		55,740
Total operating expenses	157,019		(