Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2018	Jul. 31, 2018
Document and Entity Information
Entity Registrant Name	Rubius Therapeutics, Inc.
Entity Central Index Key	0001709401
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		79,042,603
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 116,922	$ 104,288
Marketable securities	64,808
Prepaid expenses and other current assets	965	700
Restricted cash	122
Total current assets	182,817	104,988
Property and equipment, net	21,130	2,415
Restricted cash	1,102	284
Deferred offering costs	2,484
Total assets	207,533	107,687
Current liabilities:
Accounts payable	6,967	2,033
Accrued expenses and other current liabilities	7,635	2,986
Current portion of long-term debt	306	2,139
Total current liabilities	14,908	7,158
Long-term debt, net of discount and current portion	5,156	3,302
Deferred rent	140	158
Preferred stock warrant liability	2,627	866
Liability for early exercise of stock options and restricted stock	223	100
Lease liability, net of current portion	14,412
Total liabilities	37,466	11,584
Commitments and contingencies (Note 11)
Convertible preferred stock (Series A, B and C), $0.001 par value; 51,981,005 and 44,070,808 shares authorized at June 30, 2018 and December 31, 2017, respectively, 51,845,438 and 43,933,006 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively; liquidation preference of $239,442 and $138,242 at June 30, 2018 and December 31, 2017, respectively	240,776	139,790
Stockholders' deficit:
Common stock, $0.001 par value; 79,000,000 and 65,000,000 shares authorized at June 30, 2018 and December 31, 2017, respectively, 15,009,817 and 14,977,317 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively	15	15
Additional paid-in capital	34,636	17,277
Accumulated other comprehensive loss	(27)
Accumulated deficit	(105,333)	(60,979)
Total stockholders' deficit	(70,709)	(43,687)
Total liabilities, convertible preferred stock and stockholders' deficit	$ 207,533	$ 107,687

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Convertible preferred stock, shares authorized ( in shares)	51,981,005	44,070,808
Convertible preferred stock, shars outstanding (in shares)	51,845,438	43,933,006
Convertible preferred stock, liquidation preference	$ 239,442	$ 138,242
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, share authorized (in shares)	79,000,000	65,000,000
Common stock, shares issued (in shares)	15,009,817	14,977,317
Common stock, shares outstanding (in shares)	15,009,817	14,977,317
Convertible preferred stock
Convertible preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Convertible preferred stock, shares authorized ( in shares)	51,981,005	44,070,808
Convertible preferred stock, shars issued (in shares)	51,845,438	43,933,006
Convertible preferred stock, shars outstanding (in shares)	51,845,438	43,933,006
Convertible preferred stock, liquidation preference	$ 239,442	$ 138,242

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Operating expenses:
Research and development	$ 11,965	$ 4,821	$ 21,615	$ 8,502
General and administrative	16,279	4,212	22,076	5,314
Total operating expenses	28,244	9,033	43,691	13,816
Loss from operations	(28,244)	(9,033)	(43,691)	(13,816)
Other income (expense):
Change in fair value of preferred stock warrant liability	(1,718)	(493)	(1,761)	(517)
Interest expense	(89)	(72)	(172)	(122)
Interest income and other income (expense), net	952	44	1,270	44
Total other expense, net	(855)	(521)	(663)	(595)
Net loss	(29,099)	(9,554)	(44,354)	(14,411)
Accretion of Series A redeemable convertible preferred stock to redemption value		(280)		(656)
Net loss attributable to common stockholders	$ (29,099)	$ (9,834)	$ (44,354)	$ (15,067)
Net loss per share attributable to common stockholders, basic and diluted	$ (3.33)	$ (1.25)	$ (5.19)	$ (1.93)
Weighted average common shares outstanding, basic and diluted	8,727,392	7,866,955	8,542,362	7,808,681
Comprehensive loss:
Net loss	$ (29,099)	$ (9,554)	$ (44,354)	$ (14,411)
Other comprehensive income (loss):
Unrealized gains (losses) on marketable securities, net of tax of $0	18		(27)
Comprehensive loss	$ (29,081)	$ (9,554)	$ (44,381)	$ (14,411)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Unrealized gains (losses) on marketable securities, tax	$ 0	$ 0	$ 0	$ 0

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net loss	$ (44,354)	$ (14,411)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	17,219	4,670
Depreciation and amortization expense	502	109
Change in fair value of preferred stock warrant liability	1,761	517
Accretion of discount on marketable securities	(120)
Non-cash interest expense	21	18
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(265)	(1)
Accounts payable	3,033	788
Accrued expenses and other current liabilities	1,434	356
Deferred rent	(18)	(10)
Net cash used in operating activities	(20,787)	(7,964)
Cash flows from investing activities:
Purchases of property and equipment	(1,458)	(716)
Purchases of marketable securities	(78,425)
Sales and maturities of marketable securities	13,710
Net cash used in investing activities	(66,173)	(716)
Cash flows from financing activities:
Proceeds from issuance of convertible preferred stock, net of issuance costs	100,986	120,379
Payments of initial public offering costs	(715)
Proceeds from issuance of common stock upon exercise of stock options	18	28
Proceeds from sale of restricted common stock		100
Proceeds from repayment of promissory notes	245
Payments of debt issuance costs		(11)
Proceeds from borrowings under loan and security agreement		1,500
Net cash provided by financing activities	100,534	121,996
Net increase in cash, cash equivalents and restricted cash	13,574	113,316
Cash, cash equivalents and restricted cash at beginning of period	104,572	7,068
Cash, cash equivalents and restricted cash at end of period	118,146	120,384
Supplemental disclosure of non-cash investing and financing information:
Accretion of Series A redeemable convertible preferred stock to redemption value		656
Purchases of property and equipment included in accounts payable	850	360
Issuance of preferred stock warrant in connection with loan and security agreement		14
Amounts capitalized under build-to-suit lease transaction	16,918
Deferred offering costs and issuance costs included in accounts payable and accrued expenses	$ 1,769	$ 312

Nature of the Business and Basis of Presentation	6 Months Ended
Nature of the Business and Basis of Presentation	Jun. 30, 2018
Nature of the Business and Basis of Presentation
Nature of the Business and Basis of Presentation	1. Nature of the Business and Basis of Presentation Rubius Therapeutics, Inc. ("Rubius" or the "Company") is a therapeutics company focused on using its platform to develop red cell therapeutics for the treatment of patients with severe diseases. Rubius was incorporated in April 2013 as VL26, Inc. under the laws of the State of Delaware. In January 2015, the Company changed its name to Rubius Therapeutics, Inc. The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, the ability to establish clinical- and commercial-scale manufacturing processes and the ability to secure additional capital to fund operations. In addition, the Company is subject to uncertainty regarding the performance and safety of red cell therapeutics in humans. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company’s drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales. On July 20, 2018, the Company completed its initial public offering (“IPO”), pursuant to which it issued and sold 12,055,450 shares of common stock, inclusive of 1,572,450 shares sold by the Company pursuant to the full exercise of the underwriters’ option to purchase additional shares. The aggregate net proceeds received by the Company from the IPO were $257.9 million, after deducting underwriting discounts and commissions, but before deducting offering costs payable by the Company, which are estimated to be $3.5 million. Upon the closing of the IPO, all of the shares of the Company’s outstanding convertible preferred stock then outstanding automatically converted into 51,845,438 shares of common stock (see Note 7 and Note 14). The accompanying consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business. Since inception, the Company has funded its operations with proceeds from sales of convertible preferred stock and borrowings under a loan and security agreement, and most recently, with proceeds from the IPO completed in July 2018. The Company has incurred recurring losses since inception, including net losses of $44.4 million for the six months ended June 30, 2018 and $43.8 million for the year ended December 31, 2017. As of June 30, 2018, the Company had an accumulated deficit of $105.3 million. The Company expects to continue to generate operating losses in the foreseeable future. As of August 31, 2018, the issuance date of the interim consolidated financial statements, the Company expects that its cash, cash equivalents and marketable securities, including net proceeds it received from the completion of the IPO, will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the issuance date of the interim consolidated financial statements. The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2018

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Unaudited Interim Financial Information

The consolidated balance sheet at December 31, 2017 was derived from audited financial statements but does not include all disclosures required by GAAP. The accompanying unaudited consolidated financial statements as of June 30, 2018 and for the three and six months ended June 30, 2018 and 2017 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2017 included in the Company’s Registration Statement on Form S‑1, as amended, File No. 333‑225840 on file with the SEC. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s consolidated financial position as of June 30, 2018 and consolidated results of operations for the three and six months ended June 30, 2018 and 2017 and the consolidated cash flows for the six months ended June 30, 2018 and 2017, have been made. The Company’s consolidated results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2018.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, the accrual of research and development expenses, the valuation of common stock, the valuation of stock-based awards and the valuation of the preferred stock warrant liability. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates as there are changes in circumstances, facts and experience. Actual results may differ from those estimates or assumptions.

Concentrations of Credit Risk and of Significant Suppliers

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents. As of June 30, 2018 and December 31, 2017, the Company did not maintain cash balances in excess of federally insured limits. The Company’s cash equivalents as of June 30, 2018 consisted of U.S. government money market funds and U.S. government treasury notes. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

The Company relies, and expects to continue to rely, on a small number of vendors to manufacture supplies and raw materials for its development programs. These programs could be adversely affected by a significant interruption in these manufacturing services or the availability of raw materials.

Deferred Offering Costs

The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of an equity financing, these costs are recorded in stockholders' equity (deficit) as a reduction of additional paid-in capital generated as a result of the offering. Should the in-process equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the statements of operations and comprehensive loss. The Company did not record any deferred offering costs as of December 31, 2017. As of June 30, 2018, deferred offering costs of $2.5 million were recorded in the consolidated balance sheet.

Restricted Cash

As of June 30, 2018 and December 31, 2017, the Company maintained letters of credit totaling $1.2 million and $0.3 million, respectively, for the benefit of the landlords of its leased properties. The Company was required to maintain separate cash balances of these amounts to secure the letters of credit. Related to these separate cash balances, the Company classified $1.1 million and $0.3 million as restricted cash (non-current) in its consolidated balance sheet as of June 30, 2018 and December 31, 2017, respectively, and classified $0.1 million as restricted cash (current) in its consolidated balance sheet as of June 30, 2018.

Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents.

Marketable Securities

The Company's marketable securities are classified as available-for-sale and are carried at fair value, with the unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in stockholders' equity (deficit). Realized gains and losses and declines in value determined to be other than temporary are based on the specific identification method and are included as a component of other income (expense), net in the consolidated statements of operations and comprehensive loss. The Company classifies its marketable securities with maturities beyond one year as short-term, based on their highly liquid nature and because such marketable securities are available for current operations.

The Company evaluates its marketable securities with unrealized losses for other-than-temporary impairment. When assessing marketable securities for other-than-temporary declines in value, the Company considers such factors as, among other things, how significant the decline in value is as a percentage of the original cost, how long the market value of the investment has been less than its original cost, the Company's ability and intent to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair value and market conditions in general. If any adjustment to fair value reflects a decline in the value of the investment that the Company considers to be "other than temporary," the Company reduces the investment to fair value through a charge to the statement of operations and comprehensive loss. No such adjustments were necessary during the periods presented.

Fair Value Measurements

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The Company’s cash equivalents and marketable securities are carried at fair value, determined according to the fair value hierarchy described above (see Note 3). The carrying values of the Company’s accounts payable and accrued expenses approximate their fair values due to the short-term nature of these liabilities. The carrying value of the Company’s long-term debt approximates its fair value due to its variable interest rate, which approximates a market interest rate.

Recently Issued Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) ("ASU 2016-02"), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less may be accounted for similar to existing guidance for operating leases today. For public entities, the guidance is effective for annual reporting periods beginning after December 15, 2018 and for interim periods within those fiscal years. For nonpublic entities, the guidance is effective for annual reporting periods beginning after December 15, 2019 and for interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities. The Company is currently evaluating whether to early-adopt ASU 2016‑02 and evaluating the impact that the adoption of ASU 2016‑02 will have on its consolidated financial statements.

In July 2017, the FASB issued ASU No. 2017‑11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815) I. Accounting for Certain Financial Instruments with Down Round Features II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception ("ASU 2017‑11"). Part I applies to entities that issue financial instruments such as warrants, convertible debt or convertible preferred stock that contain down-round features. Part II replaces the indefinite deferral for certain mandatorily redeemable noncontrolling interests and mandatorily redeemable financial instruments of nonpublic entities contained within Accounting Standards Codification ("ASC") Topic 480 with a scope exception and does not impact the accounting for these mandatorily redeemable instruments. For public entities, this guidance is required to be adopted for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. For nonpublic entities, this guidance is effective for annual periods beginning after December 15, 2019 and for interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company is currently evaluating whether to early-adopt ASU 2017-11 and evaluating the impact that the adoption of ASU 2017-11 will have on its consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018‑07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting ("ASU 2018‑07"). This ASU is intended to simplify aspects of share-based compensation issued to non-employees by making the guidance consistent with the accounting for employee share-based compensation. For public entities, ASU 2018‑07 is required to be adopted for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. For non-public entities, ASU 2018‑07 is effective for annual periods beginning after December 15, 2019. Early adoption is permitted for all entities but no earlier than the Company’s adoption of ASU 2014‑09. The Company is currently evaluating whether to early-adopt ASU 2018-07 and evaluating the impact that the adoption of ASU 2018-07 will have on its consolidated financial statements.

Fair Value of Financial Assets and Liabilities

6 Months Ended

Jun. 30, 2018

Fair Value of Financial Assets and Liabilities

Fair Value of Financial Assets and Liabilities

3. Fair Value of Financial Assets and Liabilities

Marketable securities by security type consisted of the following (in thousands):


	June 30, 2018
			Gross		Gross
	Amortized		unrealized		unrealized
	cost		gains		losses		Fair value
U.S. treasury notes (due within one year)	$	56,381	$	—	$	(22)	$	56,359
U.S. government agency bonds (due within one year)		8,454		—		(5)		8,449
	$	64,835	$	—	$	(27)	$	64,808

The Company did not have any marketable securities as of December 31, 2017.

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):


	Fair Value Measurements at June 30, 2018 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	114,923	$	—	$	—	$	114,923
U.S. treasury notes		—		1,999		—		1,999
Marketable securities:
U.S. government agency bonds		—		8,449		—		8,449
U.S. treasury notes		—		56,359		—		56,359
	$	114,923	$	66,807	$	—	$	181,730
Liabilities:
Preferred stock warrant liability	$	—	$	—	$	2,627	$	2,627

Money market funds were valued by the Company based on quoted market prices, which represent a Level 1 measurement within the fair value hierarchy. U.S. treasury notes and U.S. government agency bonds were valued by the Company using quoted prices in active markets for similar securities, which represent a Level 2 measurement within the fair value hierarchy. There have been no changes to the valuation methods during the six months ended June 30, 2018. We evaluate transfers between levels at the end of each reporting period. There were no transfers between Level 1, Level 2 or Level 3 during the six months ended June 30, 2018.

The preferred stock warrant liability in the table above consisted of the fair value of warrants to purchase Series A and Series B convertible preferred stock (see Note 8) and was based on significant inputs not observable in the market, which represent a Level 3 measurement within the fair value hierarchy. The Company's valuation of the preferred stock warrants utilized the Black-Scholes option-pricing model, which incorporates assumptions and estimates to value the preferred stock warrants. The Company assesses these assumptions and estimates on a quarterly basis as additional information impacting the assumptions was obtained. Changes in the fair value of the preferred stock warrants are recognized as other income (expense) in the consolidated statements of operations and comprehensive loss.

The quantitative elements associated with the Company’s Level 3 inputs impacting the fair value measurement of the preferred stock warrant liability include the fair value per share of the underlying Series A and Series B convertible preferred stock, the remaining contractual term of the warrants, risk-free interest rate, expected dividend yield and expected volatility of the price of the underlying preferred stock. The most significant assumption in the Black-Scholes option-pricing model impacting the fair value of the preferred stock warrants is the fair value of the Company’s convertible preferred stock as of each remeasurement date. The Company determines the fair value per share of the underlying preferred stock by taking into consideration its most recent sales of its convertible preferred stock as well as additional factors that the Company deems relevant. As of June 30, 2018 and December 31, 2017, the fair value of the Series A convertible preferred stock was $19.85 per share and $6.73 per share, respectively. As of June 30, 2018 and December 31, 2017, the fair value of the Series B convertible preferred stock was $19.85 per share and $9.88 per share, respectively. The Company historically has been a private company and lacks company-specific historical and implied volatility information of its stock. Therefore, it estimates its expected stock volatility based on the historical volatility of publicly traded peer companies for a term equal to the remaining contractual term of the warrants. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining contractual term of the warrants. The Company has estimated a 0% dividend yield based on the expected dividend yield and the fact that the Company has never paid or declared dividends.

The following table provides a roll-forward of the aggregate fair values of the Company’s preferred stock warrants for which fair value is determined by Level 3 inputs (in thousands):


	Preferred Stock
	Warrant Liability
Fair value at December 31, 2017	$	866
Change in fair value		1,761
Fair value at June 30, 2018	$	2,627

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Property and Equipment, Net

6 Months Ended

Jun. 30, 2018

Property and Equipment, Net

Property and Equipment, Net

4. Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):


	June 30, 2018		December 31, 2017
Laboratory equipment	$	4,636	$	2,751
Leasehold improvements		117		117
Computer equipment		57		57
Construction-in-progress		17,406		74
		22,216		2,999
Less: Accumulated depreciation and amortization		(1,086)		(584)
	$	21,130	$	2,415

Construction-in-progress as of June 30, 2018 included $16.9 million related to the Company’s build-to-suit lease (see Note 11).

Accrued Expenses and Other Current Liabilities

6 Months Ended

Jun. 30, 2018

Accrued Expenses and Other Current Liabilities

Accrued Expenses and Other Current Liabilities

5. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	June 30, 2018		December 31, 2017
Accrued employee compensation and benefits	$	1,345	$	1,339
Accrued external research and development expenses		1,852		1,230
Accrued lease liability, current portion		2,506		—
Accrued professional fees		1,762		219
Other		170		198
	$	7,635	$	2,986

Debt

6 Months Ended

Jun. 30, 2018

Debt

Debt

6. Debt

The Company is party to a loan and security agreement , as amended (the “2015 Credit Facility”), under which the Company had borrowed an aggregate of $5.5 million. Until May 2018, borrowings under the 2015 Credit Facility bore interest at an annual rate equal to the bank's prime rate plus 1.25%, subject to a floor of 4.5%, and were repayable in monthly interest-only payments through May 2018 and in equal monthly payments of principal plus accrued interest from June 2018 until the maturity date in November 2019. In May 2018, the Company further amended the 2015 Credit Facility to modify the interest rate and extend the interest-only payment period and the maturity date. Currently, outstanding borrowings under the 2015 Credit Facility bear interest at an annual rate equal to the bank's prime rate plus 0.75%, subject to a floor of 5.5%, and are repayable in monthly interest-only payments through May 2019 and in equal monthly payments of principal plus accrued interest from June 2019 until the maturity date in November 2020. As of June 30, 2018, the interest rate applicable to borrowings under the 2015 Credit Facility was 5.75%.

The May 2018 amendment to the 2015 Credit Facility was accounted for as a debt modification, rather than a debt extinguishment, based on a comparison of the present value of the cash flows under the terms of the debt immediately before and after the amendment, which resulted in a change of less than 10%. As a result, issuance costs paid to the lender in connection with the amendment were recorded as a reduction of the carrying amount of the debt liability and were not significant. Unamortized issuance costs as of the date of the modification will be amortized to interest expense using the effective interest method over the revised repayment term. Issuance costs paid to third parties were recorded as expense and were not significant.

Borrowings under the 2015 Credit Facility are collateralized by substantially all of the Company's personal property, other than its intellectual property. There are no financial covenants associated with the 2015 Credit Facility; however, the Company is subject to certain affirmative and negative covenants restricting the Company's activities, including limitations on dispositions, mergers or acquisitions; encumbering its intellectual property; incurring indebtedness or liens; paying dividends; making certain investments; and engaging in certain other business transactions. The obligations under the 2015 Credit Facility are subject to acceleration upon the occurrence of specified events of default, including a material adverse change in the Company's business, operations or financial or other condition.

As of June 30, 2018, the estimated future principal payments due were as follows (in thousands):


Year Ending December 31,
2018 (six months ending December 31)	$	—
2019		2,139
2020		3,361
	$	5,500

Convertible Preferred Stock

6 Months Ended

Jun. 30, 2018

Convertible Preferred Stock

Convertible Preferred Stock

7. Convertible Preferred Stock

The Company had issued Series A redeemable convertible preferred stock (the "Series A Preferred Stock"), Series B convertible preferred stock (the "Series B Preferred Stock") and Series C convertible preferred stock (the "Series C Preferred Stock"). The Series A Preferred Stock, the Series B Preferred Stock and the Series C Preferred Stock are collectively referred to as the "Preferred Stock". Upon issuance of the Series A Preferred Stock, the holders of such shares were entitled to receive cumulative dividends of 8.0% per year, compounding annually, and such shares were redeemable at the option of the holder after five years from issuance date of the Series A Preferred Stock. In connection with the issuance and sale of Series B Preferred Stock, the holders of Series A Preferred Stock agreed to remove the cumulative dividend rights and redemption features of the Series A Preferred Stock. The change to the terms of the Series A Preferred Stock was accounted for as a modification, rather than an extinguishment, of the Series A Preferred Stock based on a comparison of the fair value of the stock immediately before and after the change in terms, which resulted in a fair value change of less than 10%. This modification did not have any impact on the Company’s consolidated financial statements. For periods after the June 2017 date of the modification of the Series A Preferred Stock, the Company no longer accretes the carrying value of the Series A Preferred Stock to redemption value as such shares are no longer redeemable.

In June 2017, the Company issued and sold 14,362,344 shares of Series B Preferred Stock at a price of $8.39 per share for gross proceeds of $120.5 million. The Company incurred issuance costs in connection with the Series B Preferred Stock of $0.4 million.

In February 2018, the Company issued and sold 7,912,432 shares of Series C Preferred Stock at a price of $12.79 per share for gross proceeds of $101.2 million. The Company incurred issuance costs in connection with the Series C Preferred Stock of $0.2 million.

As of each balance sheet date, the Preferred Stock consisted of the following (in thousands, except share amounts):


	June 30, 2018
		Preferred stock					Common stock
	Preferred stock	issued and			Liquidation		issuable upon
	authorized	outstanding	Carrying value		preference		conversion
Series A Preferred Stock	29,703,995	29,570,662	$	19,723	$	17,742	29,570,662
Series B Preferred Stock	14,364,578	14,362,344		120,067		120,500	14,362,344
Series C Preferred Stock	7,912,432	7,912,432		100,986		101,200	7,912,432
	51,981,005	51,845,438	$	240,776	$	239,442	51,845,438


	December 31, 2017
		Preferred stock					Common stock
	Preferred stock	issued and			Liquidation		issuable upon
	authorized	outstanding	Carrying value		preference		conversion
Series A Preferred Stock	29,703,995	29,570,662	$	19,723	$	17,742	29,570,662
Series B Preferred Stock	14,366,813	14,362,344		120,067		120,500	14,362,344
	44,070,808	43,933,006	$	139,790	$	138,242	43,933,006

Upon the closing of the IPO, all of the shares of the Company’s outstanding convertible preferred stock automatically converted into shares of common stock (see Note 14).

Warrants to Purchase Convertible Preferred Stock	6 Months Ended
Warrants to Purchase Convertible Preferred Stock	Jun. 30, 2018
Warrants to Purchase Convertible Preferred Stock
Warrants to Purchase Convertible Preferred Stock	8. Warrants to Purchase Convertible Preferred Stock The Company had outstanding warrants issued in 2015 to purchase up to 133,333 shares of Series A Preferred Stock in connection with the 2015 Credit Facility (see Note 6). The warrants are exercisable at a price of $0.60 per share and have a contractual term of ten years from issuance. In May 2017, the Company issued warrants to purchase up to 2,234 shares of Series B Preferred Stock in connection with an amendment to the 2015 Credit Facility (see Note 6). The warrants are exercisable at a price of $8.39 per share and have a contractual term of ten years from issuance. The fair value of the warrants on the issuance date of less than $0.1 million was recorded as a debt discount and as a preferred stock warrant liability. The Company remeasures the fair value of the liability for these preferred stock warrants at each reporting date and records any adjustments as other income (expense). The warrants outstanding at each reporting date were remeasured using the Black-Scholes option-pricing model (see Note 3), and the resulting change in fair value was recorded in other income (expense) in the Company's consolidated statements of operations and comprehensive loss. Upon the closing of the IPO, the Company’s outstanding warrants to purchase Series A Preferred Stock automatically became warrants to purchase an aggregate of 135,567 shares of common stock. In July 2018, the holders of such warrants completed a cashless exercise of the warrants, resulting in the Company’s issuance of 131,273 shares of common stock, whereby 4,294 shares of common stock were withheld by the Company to pay for the exercise price of the warrants (see Note 14).

Common Stock	6 Months Ended
Common Stock	Jun. 30, 2018
Common Stock
Common Stock	9. Common Stock Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are not entitled to receive dividends, unless declared by the board of directors. In February 2018, the Company increased the number of authorized shares of common stock from 65,000,000 shares to 75,000,000 shares. In April 2018, the Company increased the number of authorized shares of common stock from 75,000,000 shares to 78,800,000 shares. In June 2018, the Company increased the number of authorized shares of common stock from 78,800,000 shares to 79,000,000 shares.

Stock-Based Compensation

6 Months Ended

Jun. 30, 2018

Stock-Based Compensation

Stock-Based Compensation

10. Stock-Based Compensation

2014 Stock Incentive Plan

The Company’s 2014 Stock Incentive Plan (the "2014 Plan") provides for the Company to sell or issue incentive stock options or nonqualified stock options, restricted stock, restricted stock units and other equity awards to employees, directors and consultants of the Company. The 2014 Plan is administered by the board of directors or, at the discretion of the board of directors, by a committee of the board of directors. The exercise prices, vesting and other restrictions are determined at the discretion of the board of directors, or its committee if so delegated.

Stock options granted under the 2014 Plan with service-based vesting conditions generally vest over three or four years and expire after ten years. The exercise price for stock options granted is not less than the fair value of common shares as determined by the board of directors as of the date of grant. The Company's board of directors values the Company's common stock, taking into consideration its most recently available valuation of common stock performed by third parties as well as additional factors which may have changed since the date of the most recent contemporaneous valuation through the date of grant. The 2014 Plan allows for the early exercise of unvested stock options, subject to certain restrictions, including the ability of the Company to repurchase such options upon an option holder's termination of employment with the Company if such options have not yet vested. Restricted stock granted under the 2014 Plan with service-based vesting conditions generally vest over three or four years.

The total number of shares of common stock that may be issued under the 2014 Plan was 19,152,328 shares as of June 30, 2018, of which 47,447 shares remained available for future issuance. Upon effectiveness of the Company’s 2018 Stock Option and Incentive Plan (the “2018 Plan”) in July 2018 (see Note 14), the remaining shares available under the 2014 Plan ceased to be available for issuance and no future issuances will be made under the 2014 Plan. The shares of common stock underlying outstanding awards under the 2014 Plan that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of stock, expire or are otherwise terminated (other than by exercise) will be added to the shares of common stock available for issuance under the 2018 Plan.

Stock Option Valuation

The fair value of stock option grants is estimated using the Black-Scholes option-pricing model. The Company historically has been a private company and lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. For options with service-based vesting conditions, the expected term of the Company’s stock options has been determined utilizing the "simplified" method for awards that qualify as "plain-vanilla" options. The expected term of stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

The following table presents, on a weighted average basis, the assumptions used in the Black-Scholes option-pricing model to determine the fair value of stock-based awards granted to employees and directors:


	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Risk-free interest rate	2.86	%	2.06	%	2.77	%	2.06	%
Expected volatility	74	%	75	%	74	%	75	%
Expected dividend yield	—		—		—		—
Expected term (in years)	6.0		6.6		6.1		6.6

The following table presents the assumptions used in the Black-Scholes option-pricing model to determine the fair value of stock awards granted to non-employees:


	Three Months Ended June 30,														Six Months Ended June 30,
	2018							2017							2018							2017
Risk-free interest rate		2.22	%	-		2.97	%		2.14	%	-		2.31	%		2.02	%	-		2.97	%		2.14	%	-		2.31	%
Expected volatility		63	%	-		82	%		74	%	-		85	%		63	%	-		85	%		74	%	-		85	%
Expected dividend yield						—							—							—							—
Expected term (in years)		1		-		10			7		-		10			1		-		10			7		-		10
Fair value of common stock	$	8.66		-	$	19.85		$	2.51		-	$	3.65		$	6.28		-	$	19.85		$	0.19		-	$	3.65

During the six months ended June 30, 2018, the Company granted options to employees and directors for the purchase of 7,381,846 shares of common stock with a weighted average exercise price of $7.71 per share and a weighted average grant-date fair value of $7.38 per share.

In April 2017, an executive officer early exercised an option to purchase 1,400,000 shares of common stock, at an exercise price of $0.18 per share, for cash proceeds of $0.1 million and a promissory note for $0.2 million. The employee received shares of restricted common stock upon such exercise. The unvested shares of restricted common stock issued upon exercise are subject to the Company’s repurchase right at the lesser of the original exercise price per share or the fair value of such shares on the repurchase date. The $0.1 million of cash proceeds from the early exercise of this stock option was recorded as a liability in the Company’s consolidated balance sheet and will be reclassified to stockholders’ equity (deficit) as the shares vest and the Company’s repurchase rights related to such shares lapse. The promissory note was partial-recourse, but was treated as nonrecourse for accounting purposes. As a result, (i) this early exercise of common stock with a promissory note continued to be accounted for as an outstanding stock option and (ii) no receivable for amounts due under the promissory note was recorded on the Company’s consolidated balance sheet. Stock-based compensation expense related to this award is being recognized over the requisite service period of the award based on the grant-date fair value of the award, which was determined using the Black-Scholes option-pricing model. On June 21, 2018, the principal balance of $0.2 million and all interest that had accrued thereon, totaling less than $0.1 million, was repaid in full by the executive officer and the promissory note was terminated (see Note 13).

As of June 30, 2018, the Company has outstanding options for the purchase of an aggregate of 679,500 shares of common stock with performance-based vesting conditions. As of June 30, 2018, the achievement of these performance conditions was determined not to be probable, and, therefore, the Company has not recorded any compensation expense related to these stock options.

Restricted Common Stock

The Company has granted restricted common stock with service-based vesting conditions. Shares of unvested restricted common stock may not be sold or transferred by the holder. These restrictions lapse according to the time-based vesting conditions of each award.

In April 2017, the Company issued 460,000 shares of restricted common stock, at a price of $0.19 per share, to an executive officer in exchange for a promissory note in the principal amount of $0.1 million. The promissory note was partial-recourse, but was treated as nonrecourse for accounting purposes and, as such, (i) this purchase of common stock with a promissory note was accounted for as if it were a stock option grant and (ii) no receivable for amounts due under the promissory note was recorded on the Company’s consolidated balance sheet. Stock-based compensation expense related to this award is being recognized over the requisite service period of the award based on the grant-date fair value of the award, which was determined using the Black-Scholes option-pricing model. On June 21, 2018, the principal balance of $0.1 million and all interest that had accrued thereon, totaling less than $0.1 million, was repaid in full by the executive officer and the promissory note was terminated (see Note 13).

In January 2017 and May 2017, the Company issued 3,667,014 shares and 1,100,000 shares, respectively, of restricted common stock at prices of $0.19 per share and $1.65 per share, respectively, to the chairman of the Company’s board of directors in exchange for two promissory notes totaling $2.5 million. The promissory notes are partial-recourse, but were treated as nonrecourse for accounting purposes and, as such, (i) each of these purchases of common stock with a promissory note was accounted for as if it were a stock option grant and (ii) no receivable for amounts due under the promissory note was recorded on the Company’s consolidated balance sheet. All of the stock-based awards issued to the chairman of the Company’s board of directors were issued for his services as a consultant and are being accounted for as non-employee stock-based awards. As a result, stock-based compensation expense related to the awards is being recognized over the requisite service period of the award based on the remeasured fair value of the award at each reporting period until the award vests, which is determined using the Black-Scholes option-pricing model. On June 21, 2018, the aggregate principal balance of both promissory notes of $2.5 million and all interest that had accrued thereon, totaling $0.1 million, was forgiven by the Company and the promissory notes were terminated (see Note 13). The forgiveness of these promissory notes by the Company resulted in the recognition of incremental stock-based compensation expense of $1.2 million during the three months ended June 30, 2018, which represents the change in the fair value of the vested portion of the awards resulting from the forgiveness. Stock-based compensation expense related to these awards will continue to be recognized over the requisite service period of the awards, based on the remeasured fair value of the awards at each reporting period. The aggregate amount of stock-based compensation expense related to these restricted stock awards recognized during the three and six months ended June 30, 2018 was $8.2 million and $10.7 million, respectively. The aggregate amount of stock-based compensation expense related to these restricted stock awards recognized during the three and six months ended June 30, 2017 was $3.2 million and $3.3 million, respectively (see Note 13).

Stock-Based Compensation

The Company recorded stock-based compensation expense in the following expense categories of its consolidated statements of operations and comprehensive loss (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Research and development expenses	$	1,323	$	545	$	1,732	$	1,220
General and administrative expenses		12,439		3,265		15,487		3,450
	$	13,762	$	3,810	$	17,219	$	4,670

As of June 30, 2018, total unrecognized compensation cost related to the unvested employee and director stock-based awards was $54.3 million, which is expected to be recognized over a weighted average period of 3.7 years.

As of June 30, 2018, there were outstanding unvested service-based stock options held by non-employees for the purchase of 169,588 shares of common stock. As of June 30, 2018, there were 1,886,944 shares of unvested restricted common stock held by non-employees. Amounts expensed during the remaining vesting periods of the stock-based awards held by non-employees will be determined based on the fair value of the awards at each reporting period until the awards vest.

Pursuant to the second amended and restated chairman agreement dated June 21, 2018, upon effectiveness of the Company's Form S-1 registration statement on July 17, 2018, the Company’s chairman was granted an option to purchase 1,902,977 shares of common stock at the public offering price of $23.00 per share. The options will vest in full on the third anniversary of the date of grant. The grant-date fair value of this award was $36.4 million, however, stock-based compensation expense related to this award will be recognized over the requisite service period of the award based on the remeasured fair value of the award at each reporting period until the award vests.

Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies

Commitments and Contingencies

11. Commitments and Contingencies

Operating Leases

The Company leases its office and laboratory facilities in Cambridge, Massachusetts under two noncancelable operating leases that expire in December 2018 and September 2021. The lease agreements include lease incentives, payment escalations and rent holidays, which are accrued or deferred as appropriate such that rent expense for each lease is recognized on a straight-line basis over the terms of occupancy. Rent expense for the three and six months ended June 30, 2018 was $0.4 million and $0.7 million, respectively. Rent expense for the three and six months ended June 30, 2017 was $0.2 million and $0.3 million, respectively.

Build-to-Suit Lease

In January 2018, the Company entered into a lease for office and laboratory space in Cambridge, Massachusetts. The lease term is expected to commence on or about November 1, 2018 and expires eight years from the commencement date. The Company is entitled to one five-year option to extend. The initial annual base rent is approximately $3.8 million, and such amount will increase during the initial term by 3% annually on the anniversary of the commencement date. The Company is obligated to pay its portion of real estate taxes and costs related to the premises, including costs of operations, maintenance, repair, replacement and management of the new leased premises. In connection with the lease, the Company maintains a letter of credit for the benefit of the landlord in the amount of $0.9 million, which is secured by a cash deposit of the same amount. The lease agreement allows for a landlord-provided tenant improvement allowance of $9.4 million to be applied to the costs of the construction of the leasehold improvements.

The Company is not the legal owner of the leased space. However, in accordance with ASC 840, Leases, the Company is deemed to be the owner of the leased space during the construction period because of certain indemnification provisions within the lease agreement. As a result, as of June 30, 2018, the Company capitalized approximately $16.9 million (equal to the estimated fair value of its leased portion of the premises) as construction-in-progress within property and equipment and recorded a corresponding build-to-suit facility lease financing obligation. As of June 30, 2018, the current portion of the lease financing obligation of $2.5 million was classified within accrued expenses and other current liabilities and the remaining $14.4 million was classified as a lease liability, net of current portion, on its consolidated balance sheet. The construction is expected to be completed in the fourth quarter of 2018, at which time the Company will assess and determine if the assets and corresponding liability should be de-recognized.

Future Lease Payments

As of June 30, 2018, minimum commitments under the Company’s facilities’ leases are as follows (in thousands):


Year Ending December 31,
2018 (six months ending December 31)	$	1,331
2019		4,470
2020		4,604
2021		4,555
2022		4,128
Thereafter		16,995
	$	36,083

License Agreement with the Whitehead Institute for Biomedical Research

The Company has a license agreement with the Whitehead Institute for Biomedical Research ("WIBR"), as amended, under which the Company has been granted an exclusive, sublicensable, nontransferable license under certain patent families related to the development of the Company's red cell therapies (the "WIBR License"). The Company is obligated to pay WIBR annual license maintenance fees of less than $0.1 million as well as patent-related costs, including legal fees, and low single-digit royalties based on annual net sales of licensed products and licensed services by the Company and its sublicensees. Based on the progress the Company makes in the advancement of products covered by the licensed patent rights, the Company is required to make aggregate milestone payments of up to $1.6 million upon the achievement of specified preclinical, clinical and regulatory milestones. In addition, the Company is required to pay to WIBR a percentage of the non-royalty payments that it receives from sublicensees of the patent rights licensed by WIBR. This percentage varies from low single-digit to low double-digit percentages and will be based upon the clinical stage of the product that is the subject of the sublicense. Royalties shall be paid by the Company on a licensed product-by-licensed product and country-by-country basis, beginning on the first commercial sale of such licensed product in such country until expiration of the last valid patent claim covering such licensed product in such country.

The Company has the right to terminate the WIBR License in its entirety, on a patent-by-patent or country-by-country basis, at will upon three months' notice to WIBR. WIBR may terminate the agreement upon breach of contract or in the event of the Company's bankruptcy, liquidation, insolvency or cessation of business related to the license.

401(k) Plan

In January 2018, the Company established a defined-contribution plan under Section 401(k) of the Internal Revenue Code (the "401(k) Plan"). The 401(k) Plan covers all employees who meet defined minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. The Company will make matching contributions at a rate of 50% of each employee’s contribution up to a maximum employee contribution of 6% of eligible plan compensation. For each of the three and six months ended June 30, 2018, the Company made matching contributions of $0.1 million.

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, contract research organizations, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors and its executive officers that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. The Company has not incurred any material costs as a result of such indemnifications and is not currently aware of any indemnification claims.

Legal Proceedings

The Company is not currently party to any material legal proceedings. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. The Company expenses as incurred the costs related to such legal proceedings.

Net Loss Per Share

6 Months Ended

Jun. 30, 2018

Net Loss Per Share

Net Loss Per Share

12. Net Loss per Share

Basic and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands, except share and per share amounts):


	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Numerator:
Net loss	$	(29,099)	$	(9,554)	$	(44,354)	$	(14,411)
Accretion of Series A redeemable convertible preferred stock to redemption value		—		(280)		—		(656)
Net loss attributable to common stockholders	$	(29,099)	$	(9,834)	$	(44,354)	$	(15,067)

Denominator:
Weighted average common shares outstanding, basic and diluted		8,727,392		7,866,955		8,542,362		7,808,681
Net loss per share attributable to common stockholders, basic and diluted	$	(3.33)	$	(1.25)	$	(5.19)	$	(1.93)

The Company’s potential dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following potential common shares from the periods in the table above, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:


	June 30,
	2018	2017
Convertible preferred stock (as converted to common stock)	51,845,438	43,933,006
Warrants to purchase convertible preferred stock (as converted to common stock)	135,567	135,567
Restricted common stock	3,058,612	6,679,099	(1)
Stock options to purchase common stock	11,961,731	3,085,530
	67,001,348	53,833,202

(1) Includes vested restricted common stock issued for promissory note prior to settlement.

Related Parties	6 Months Ended
Related Parties	Jun. 30, 2018
Related Parties
Related Parties	13. Related Parties In April 2013, the Company entered into a services agreement with Flagship Ventures Management, Inc. ("Flagship"), an affiliate of one of its principal stockholders, to provide general and administrative services to the Company, including certain consulting services and the provision of employee health and dental benefit plans for the Company's employees. The Company recorded general and administrative expense for services received under this agreement of $0.3 million and $0.5 million during the three and six months ended June 30, 2018, respectively. The Company made cash payments of $0.2 million and $0.4 million for the three and six months ended June 30, 2018, respectively, related to these services. The Company recorded general and administrative expense for services received under this agreement of $0.2 million and $0.5 million during the three and six months ended June 30, 2017, respectively. The Company made cash payments of $0.3 million and $0.5 million for the three and six months ended June 30, 2017, respectively, related to these services. As of June 30, 2018, the Company had $0.1 million payable to Flagship for costs related to the services agreement. In January 2017, the Company loaned $0.7 million to the chairman of its board of directors to purchase shares of common stock pursuant to a promissory note and a restricted stock agreement (see Note 10). In May 2017, the Company loaned $1.8 million to the chairman of its board of directors to purchase shares of common stock pursuant to a promissory note and a restricted stock agreement (see Note 10). On June 21, 2018, the aggregate principal balance of both promissory notes of $2.5 million and all interest that had accrued thereon, totaling $0.1 million, was forgiven by the Company and the promissory notes were terminated (see Note 10). In April 2017, the Company loaned $0.2 million to an executive officer of the Company to purchase shares of common stock pursuant to two promissory notes and two restricted stock agreements (see Note 10). On June 21, 2018, the aggregate principal balance of both promissory notes of $0.2 million and all interest that had accrued thereon, totaling less than $0.1 million, was repaid in full by the executive officer and the promissory notes were terminated.

Subsequent Events	6 Months Ended
Subsequent Events	Jun. 30, 2018
Subsequent Events
Subsequent Events	14. Subsequent Events 2018 Equity Incentive Plan On July 6, 2018, the Company's board of directors adopted and its stockholders approved the 2018 Plan, which became effective on July 16, 2018. The 2018 Plan provides for the grant of incentive stock options, non-qualified options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards. The number of shares initially reserved for issuance under the 2018 Plan is 5,708,931, which shall be cumulatively increased on January 1, 2019 and each January 1 thereafter by 4% of the number of shares of the Company's common stock outstanding on the immediately preceding December 31 or such lesser number of shares determined by the Company's board of directors or compensation committee of the board of directors. The shares of common stock underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, reacquired by the Company prior to vesting, satisfied without the issuance of stock, expire or are otherwise terminated (other than by exercise) under the 2018 Plan and the 2014 Plan will be added back to the shares of common stock available for issuance under the 2018 Plan. 2018 Employee Stock Purchase Plan On July 6, 2018, the Company's board of directors adopted and its stockholders approved the 2018 Employee Stock Purchase Plan (the "ESPP"), which became effective on July 16, 2018. A total of 951,488 shares of common stock were reserved for issuance under this plan. In addition, the number of shares of common stock that may be issued under the ESPP will automatically increase on January 1, 2019, and each January 1 thereafter through January 1, 2028, by the least of (i) 951,488 shares of common stock, (ii) 1% of the number of shares of the Company's common stock outstanding on the immediately preceding December 31 or (iii) such lesser number of shares as determined by the administrator of the Company's ESPP. Initial Public Offering On July 20, 2018, the Company completed its IPO, pursuant to which it issued and sold 12,055,450 shares of common stock, inclusive of 1,572,450 shares sold by the Company pursuant to the full exercise of the underwriters’ option to purchase additional shares. The aggregate net proceeds received by the Company from the IPO were $257.9 million, after deducting underwriting discounts and commissions, but before deducting offering costs payable by the Company, which are estimated to be $3.5 million. Upon the closing of the IPO, all of the shares of the Company’s outstanding convertible preferred stock then outstanding automatically converted into 51,845,438 shares of common stock (see Note 7). Upon conversion of the convertible preferred stock, the Company reclassified the carrying value of the convertible preferred stock to common stock and additional paid-in capital. Upon the closing of the IPO, the Company’s outstanding warrants to purchase Series A Preferred Stock automatically became warrants to purchase an aggregate of 135,567 shares of common stock. In July 2018, the holders of such warrants completed a cashless exercise of the warrants, resulting in the Company’s issuance of 131,273 shares of common stock, whereby 4,294 shares of common stock were withheld by the Company to pay for the exercise price of the warrants. Upon the closing of the IPO whereby the warrants for the purchase of preferred stock automatically became warrants for the purchase of common stock, the Company reclassified the carrying value of the warrants from a non-current liability to additional paid-in capital in its consolidated balance sheet. Manufacturing Facility On July 31, 2018, the Company completed its purchase of a 135,000 square foot manufacturing facility located in Smithfield, Rhode Island for a purchase price of $8.0 million. The Company plans to renovate and customize this facility to manufacture clinical supply of its product candidates. Changes to Authorized Common and Preferred Shares On July 20, 2018, the Company filed a restated certificate of incorporation in the State of Delaware, which, among other things, restated the number of shares of all classes of stock that the Company has authority to issue to 160,000,000 shares, consisting of (i) 150,000,000 shares of common stock, $0.001 par value per share, and (ii) 10,000,000 shares of preferred stock, $0.001 par value per share. The shares of preferred stock are currently undesignated.

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Summary of Significant Accounting Policies

Unaudited Interim Financial Information

Use of Estimates

Concentrations of Credit Risk and of Significant Suppliers

Deferred Offering Costs

Restricted Cash

Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents.

Marketable Securities

Fair Value Measurements

Level 1—Quoted prices in active markets for identical assets or liabilities.

Recently Issued Accounting Pronouncements