Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2019

Summary of Significant Accounting Policies

Contract assets and contract liabilities

The following table presents changes in the Company’s contract assets and contract liabilities during the nine months ended September 30, 2019 and 2018 (in thousands):

	Balance at						Balance at
Nine months ended September 30, 2019	December 31, 2018		Additions		Deductions		End of Period
Contract asset	$	500	$	—	$	(500)	$	—
Contract liabilities	$	80,802	$	65,287	$	(237)	$	145,852

	Balance at
	January 1, 2018								Balance at
Nine months ended September 30, 2018	(ASC 606 adoption)		Additions		Deductions		Impact of Netting		End of Period
Contract asset	$	—	$	500	$	(5,000)	$	5,000	$	500
Contract liabilities	$	89,967	$	706	$	(13,368)	$	5,000	$	82,305

The Company recognized the following revenues as a result of changes in contract asset and contract liability balances in the respective periods (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Revenue recognized in the period from:
Amounts included in contract liabilities at the beginning of the period	$	79	$	172	$	237	$	13,368
Performance obligations satisfied in previous periods	$	—	$	500	$	5,000	$	500

Schedule of assets that are required to be measured at fair value on a recurring basis

As of September 30, 2019, the Company held certain assets that are required to be measured at fair value on a recurring basis. The following table represents the fair value hierarchy for the Company’s financial assets measured at fair value on a recurring basis as of September 30, 2019 (in thousands):

	Fair Value Measurements at September 30, 2019 Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Cash equivalents	$	187,759	$	187,759	$	—	$	—

As of December 31, 2018, the Company held certain assets that are required to be measured at fair value on a recurring basis. The following table represents the fair value hierarchy for the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2018 (in thousands):

	Fair Value Measurements at December 31, 2018 Using
			Quoted Prices in				Significant
			Active Markets for		Significant Other		Unobservable
			Identical Assets		Observable Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Cash equivalents	$	242,604	$	242,604	$	—	$	—

Schedule of common stock equivalents, as calculated in accordance with the treasury-stock method

The Company’s common stock equivalents, as calculated in accordance with the treasury-stock method for the options and unvested restricted stock and the if-converted method for the Convertible Notes, are shown in the following table (in thousands):

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2019	2018	2019	2018
Options outstanding to purchase common stock, shares issuable under the employee stock purchase plan, and unvested restricted stock/units at end of period	18,754	18,153	18,754	18,153
Common stock equivalents under treasury stock method for options, shares issuable under the employee stock purchase plan, and unvested restricted stock	731	3,153	926	3,378
Shares issuable upon conversion of convertible notes at end of period	501	501	501	501
Common stock equivalents under if-converted method for convertible notes	501	501	501	501

Schedule of risk-free rate of the stock options based on US Treasury rate

	Three Months Ended September 30,		Nine Months Ended September 30,
	2019	2018	2019	2018
Dividend	None	None	None	None
Volatility	81.63%	71.91%	76.28%	70.99%
Risk-free interest rate	1.78%	2.89%	2.24%	2.72%
Expected life (years)	6.0	6.0	6.0	6.0

Summary of stock option activity

A summary of option activity under the Company’s equity plans as of September 30, 2019, and changes during the nine month period then ended is presented below (in thousands, except weighted-average data):

		Weighted-
	Number	Average
	of Stock	Exercise
	Options	Price
Outstanding at December 31, 2018	15,564	$	10.20
Granted	7,340		4.28
Exercised	(86)		2.53
Forfeited/Canceled	(5,712)		9.07
Outstanding at September 30, 2019	17,106	$	8.08

Summary of restricted stock activity

A summary of restricted stock and restricted stock unit activity under the Company’s equity plans as of September 30, 2019 and changes during the nine-month period ended September 30, 2019 is presented below (in thousands):

	Number of	Weighted-
	Restricted	Average Grant
	Stock Shares	Date Fair Value
Unvested at December 31, 2018	1,816	$	2.87
Awarded	631		2.55
Vested	(504)		2.64
Forfeited	(296)		2.56
Unvested at September 30, 2019	1,647	$	2.88

Schedule of percentage of total revenues recognized from each significant customer

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
Collaborative Partner:	2019	2018	2019	2018
Roche	99%	77%	99%	57%
CytomX	-	14%	-	7%
Takeda	-	2%	-	29%