Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 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 years ended December 31, 2019 and 2018 (in thousands):

	Balance at								Balance at
Year ended December 31, 2019	December 31, 2018		Additions		Deductions		Impact of Netting		December 31, 2019
Contract asset	$	500	$	8,000	$	(500)	$	(4,369)	$	3,631
Contract liabilities	$	80,802	$	65,816	$	(14,817)	$	(4,369)	$	127,432

	Balance at
	January 1, 2018								Balance at
Year ended December 31, 2018	(ASC 606 adoption)		Additions		Deductions		Impact of Netting		December 31, 2018
Contract asset	$	—	$	500	$	(5,000)	$	5,000	$	500
Contract liabilities	$	89,967	$	730	$	(14,895)	$	5,000	$	80,802

During the years ended December 31, 2019 and 2018, the Company recognized the following revenue as a result of changes in contract asset and contract liability balances in the respective periods (in thousands):

	Years Ended
	December 31,
	2019		2018
Revenue recognized in the period from:
Amounts included in contract liabilities at the beginning of the period	$	14,817	$	14,139
Performance obligations satisfied in previous periods	$	12,672	$	1,476

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

As of December 31, 2019 and 2018, the Company held certain assets that are required to be measured at fair value on a recurring basis. The following tables represent the fair value hierarchy for the Company’s financial assets measured at fair value on a recurring basis as of each date (in thousands):

	Fair Value Measurements at December 31, 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	$	163,674	$	163,674	$	—	$	—

	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 components of other accrued liabilities

Other accrued liabilities consisted of the following at December 31, 2019 and 2018 (in thousands):

	December 31,		December 31,
	2019		2018
Accrued contract payments	$	5,188	$	6,389
Accrued clinical trial costs		6,418		11,087
Accrued professional services		1,274		1,171
Accrued employee benefits		314		651
Accrued public reporting charges		180		164
Other current accrued liabilities		558		1,003
Total	$	13,932	$	20,465

Schedule of estimated useful lives of property and equipment

Machinery and equipment	5 years
Computer hardware and software	3 years
Furniture and fixtures	5 years
Leasehold improvements	Shorter of remaining lease term or 7 years

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):

	Years Ended December 31,
	2019	2018	2017
Options outstanding to purchase common stock, shares issuable under the employee stock purchase plan, and unvested restricted stock/units at end of period	14,815	17,380	14,290
Common stock equivalents under treasury stock method for options, shares issuable under the employee stock purchase plan, and unvested restricted stock	1,020	3,001	1,579
Shares issuable upon conversion of convertible notes at end of period	501	501	501
Common stock equivalents under if-converted method for convertible notes	501	501	501

Schedule of assumptions

	December 31,
	2019	2018	2017
Dividend	None	None	None
Volatility	76.67%	71.02%	67.34%
Risk-free interest rate	2.20%	2.73%	2.00%
Expected life (years)	6.0	6.0	6.0

	December 31, 2019	June 30, 2019	December 31, 2018
Dividend	None	None	None
Volatility	131.9%	67.3%	70.1%
Risk-free interest rate	2.10%	2.51%	2.14%
Expected life (years)	0.5	0.5	0.5

Summary of stock option activity

A summary of option activity under the option plans as of December 31, 2019, 2018 and 2017, is presented below (in thousands, except weighted-average data):

		Weighted-		Weighted-
	Number	Average		Average	Aggregate
	of Stock	Exercise		Remaining	Intrinsic
	Options	Price		Life in Yrs.	Value
Outstanding at December 31, 2016	13,679	$	10.70	6.55	$	23
Granted	1,589		3.21
Exercised	(191)		3.42
Forfeited/Canceled	(3,106)		10.33
Outstanding at December 31, 2017	11,971		9.92	6.17	$	13,513
Outstanding at December 31, 2017—vested or unvested and expected to vest	11,881	$	9.96	6.15	$	13,283
Exercisable at December 31, 2017	7,996	$	12.16	4.97	$	3,733
Outstanding at December 31, 2017	11,971	$	9.92
Granted	5,513		10.36
Exercised	(742)		4.67
Forfeited/Canceled	(1,178)		11.49
Outstanding at December 31, 2018	15,564		10.20	6.46	$	5,818
Outstanding at December 31, 2018—vested or unvested and expected to vest	15,386	$	10.21	6.43	$	5,781
Exercisable at December 31, 2018	8,405	$	11.47	4.45	$	3,122
Outstanding at December 31, 2018	15,564	$	10.20
Granted	7,820		4.20
Exercised	(794)		2.79
Forfeited/Canceled	(9,072)		9.66
Outstanding at December 31, 2019	13,518		7.53	7.18	$	10,657
Outstanding at December 31, 2019—vested or unvested and expected to vest	13,321	$	7.57	7.15	$	10,406
Exercisable at December 31, 2019	5,801	$	10.16	4.79	$	3,218

Summary of restricted stock activity

	Number of	Weighted-
	Restricted	Average Grant
	Stock Shares	Date Fair Value
Unvested at December 31, 2016	199	$	4.41
Awarded	2,253		2.71
Vested	(25)		5.87
Forfeited	(108)		2.68
Unvested at December 31, 2017	2,319	$	2.82
Vested	(503)		2.64
Unvested at December 31, 2018	1,816	$	2.87
Awarded	631		2.55
Vested	(504)		2.64
Forfeited	(646)		2.54
Unvested at December 31, 2019	1,297	$	2.97

Summary of vested stock option activity

A summary of option activity for options vested during the years ended December 31, 2019, 2018, and 2017 is presented below (in thousands):

	Years Ended December 31,
	2019		2018		2017
Total fair value of options vested	$	13,747	$	7,496	$	10,964
Total intrinsic value of options exercised		556		3,787		598
Cash received for exercise of stock options		2,873		4,301		650

Schedule of percentage of total revenues recognized from each significant customer

	Years Ended December 31,
Collaborative Partner:	2019	2018	2017
CytomX	13%	8%	13%
Debiopharm	-%	2%	26%
Roche	64%	60%	24%
Sanofi	-%	-%	31%
Takeda	-%	23%	4%
Jazz	18%	-%	-%