0001558370-20-012720 | 10-Q | XBRL Viewer

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Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2020	Nov. 02, 2020
Document And Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	001-36485
Entity Registrant Name	ARDELYX, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	26-1303944
Entity Address, Address Line One	34175 Ardenwood Boulevard
Entity Address, City or Town	Fremont
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94555
City Area Code	510
Local Phone Number	745-1700
Title of 12(b) Security	Common Stock, par value $0.0001
Trading Symbol	ARDX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		90,248,465
Entity Central Index Key	0001437402
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Amendment Flag	false

CONDENSED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 91,009	$ 181,133
Short-term investments	94,488	66,379
Unbilled revenue	750	750
Prepaid expenses and other current assets	7,546	3,800
Total current assets	193,793	252,062
Property and equipment, net	2,111	3,436
Right-of-use assets	2,402	3,970
Other assets	249	314
Total assets	198,555	259,782
Current liabilities:
Accounts payable	2,490	2,187
Accrued compensation and benefits	3,722	4,453
Current portion of operating lease liability	2,770	2,608
Loan payable, current portion		1,183
Deferred revenue	885	4,541
Accrued expenses and other current liabilities	6,667	7,248
Total current liabilities	16,534	22,220
Operating lease liability, net of current portion		2,076
Loan payable, net of current portion	50,681	48,831
Total liabilities	67,215	73,127
Commitments and contingencies (Note 11)
Stockholders' equity:
Preferred stock, $0.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively.
Common stock, $0.0001 par value; 300,000,000 shares authorized; 90,243,409 and 88,817,741 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively.	9	9
Additional paid-in capital	657,130	647,078
Accumulated deficit	(525,889)	(460,452)
Accumulated other comprehensive income	90	20
Total stockholders' equity	131,340	186,655
Total liabilities and stockholders' equity	$ 198,555	$ 259,782

CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
CONDENSED BALANCE SHEETS (Parenthetical)
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	90,243,409	88,817,741
Common stock, shares outstanding	90,243,409	88,817,741

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenues:
Total revenues	$ 2,713	$ 3,013	$ 5,762	$ 3,031
Operating expenses:
Cost of revenue		600	141	600
Research and development	12,240	17,580	46,948	57,436
General and administrative	7,634	6,922	21,810	17,410
Total operating expenses	19,874	25,102	68,899	75,446
Loss from operations	(17,161)	(22,089)	(63,137)	(72,415)
Interest expense	(1,202)	(1,443)	(3,785)	(4,328)
Other income, net	255	294	1,485	1,896
Loss before provision for income taxes	(18,108)	(23,238)	(65,437)	(74,847)
Provision for income taxes		301		303
Net loss	$ (18,108)	$ (23,539)	$ (65,437)	$ (75,150)
Net loss per common share, basic and diluted	$ (0.20)	$ (0.37)	$ (0.73)	$ (1.20)
Shares used in computing net loss per share - basic and diluted	89,365,798	62,828,513	89,109,772	62,676,591
Comprehensive loss:
Net loss	$ (18,108)	$ (23,539)	$ (65,437)	$ (75,150)
Unrealized (losses) gains on available-for-sale securities	(227)	(12)	70	42
Comprehensive loss	(18,335)	(23,551)	(65,367)	(75,108)
Licensing
Revenues:
Total revenues		3,000	706	3,000
Collaborative development
Revenues:
Total revenues	1,356		3,656
Other
Revenues:
Total revenues	$ 1,357	$ 13	$ 1,400	$ 31

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive (Loss) Income	Total
Balance, amount at Dec. 31, 2018	$ 6	$ 481,357	$ (365,512)	$ (38)	$ 115,813
Balance, shares at Dec. 31, 2018	62,516,627
Issuance of common stock under employee stock purchase plan, amount		397			397
Issuance of common stock under employee stock purchase plan, shares	160,744
Issuance of common stock for services, amount		311			311
Issuance of common stock for services, shares	113,136
Issuance of common stock upon exercise of options, amount		21			21
Issuance of common stock upon exercise of options, shares	6,964
Issuance of common stock upon vesting of restricted stock units, shares	85,609
Stock-based compensation		7,724			7,724
Unrealized (losses) gains on available-for-sale securities				42	42
Net loss			(75,150)		(75,150)
Balance, amount at Sep. 30, 2019	$ 6	489,810	(440,662)	4	49,158
Balance, shares at Sep. 30, 2019	62,883,080
Balance, amount at Jun. 30, 2019	$ 6	485,718	(417,123)	16	68,617
Balance, shares at Jun. 30, 2019	62,800,869
Issuance of common stock under employee stock purchase plan, amount		200			200
Issuance of common stock under employee stock purchase plan, shares	77,698
Issuance of common stock upon exercise of options, amount		13			13
Issuance of common stock upon exercise of options, shares	4,513
Stock-based compensation		3,879			3,879
Unrealized (losses) gains on available-for-sale securities				(12)	(12)
Net loss			(23,539)		(23,539)
Balance, amount at Sep. 30, 2019	$ 6	489,810	(440,662)	4	49,158
Balance, shares at Sep. 30, 2019	62,883,080
Balance, amount at Dec. 31, 2019	$ 9	647,078	(460,452)	20	186,655
Balance, shares at Dec. 31, 2019	88,817,741
Issuance of common stock under employee stock purchase plan, amount		834			834
Issuance of common stock under employee stock purchase plan, shares	169,931
Issuance of common stock for services, amount		310			310
Issuance of common stock for services, shares	42,403
Issuance of common stock upon exercise of options, amount		759			759
Issuance of common stock upon exercise of options, shares	346,806
Issuance of common stock upon vesting of restricted stock units, shares	866,528
Stock-based compensation		8,149			8,149
Unrealized (losses) gains on available-for-sale securities				70	70
Net loss			(65,437)		(65,437)
Balance, amount at Sep. 30, 2020	$ 9	657,130	(525,889)	90	131,340
Balance, shares at Sep. 30, 2020	90,243,409
Balance, amount at Jun. 30, 2020	$ 9	653,805	(507,781)	317	146,350
Balance, shares at Jun. 30, 2020	89,140,563
Issuance of common stock under employee stock purchase plan, amount		459			459
Issuance of common stock under employee stock purchase plan, shares	94,127
Issuance of common stock upon exercise of options, amount		339			339
Issuance of common stock upon exercise of options, shares	142,191
Issuance of common stock upon vesting of restricted stock units, shares	866,528
Stock-based compensation		2,527			2,527
Unrealized (losses) gains on available-for-sale securities				(227)	(227)
Net loss			(18,108)		(18,108)
Balance, amount at Sep. 30, 2020	$ 9	$ 657,130	$ (525,889)	$ 90	$ 131,340
Balance, shares at Sep. 30, 2020	90,243,409

CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019
Operating activities
Net loss	$ (65,437)	$ (75,150)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense	1,399	1,993
Amortization of deferred financing costs	416	550
Amortization of deferred compensation for services	235	231
Amortization of premium on investment securities	(241)	(666)
Non-cash lease expense	1,568	1,356
Stock-based compensation	8,149	7,724
Change in derivative liabilities	290	246
Non-cash interest associated with debt discount accretion	393	353
Changes in operating assets and liabilities:
Unbilled revenue		5,000
Prepaid expenses and other assets	(3,748)	(3,068)
Accounts payable	303	541
Accrued compensation and benefits	(731)	81
Lease liabilities	(1,914)	(1,301)
Accrued and other liabilities	(871)	(3,237)
Deferred revenue	(3,656)
Net cash used in operating activities	(63,845)	(65,347)
Investing activities
Proceeds from maturities of investments	79,402	115,484
Purchases of investments	(107,200)	(36,325)
Purchases of property and equipment	(74)	(325)
Net cash (used in) provided by investing activities	(27,872)	78,834
Financing activities
Proceeds from issuance of common stock under equity incentive and stock purchase plans	1,593	418
Net cash provided by financing activities	1,593	418
Net (decrease) increase in cash and cash equivalents	(90,124)	13,905
Cash and cash equivalents at beginning of period	181,133	78,768
Cash and cash equivalents at end of period	91,009	92,673
Supplementary disclosure of cash flow information:
Income taxes paid	$ 1	2
Supplementary disclosure of non-cash activities:
Right-of-use assets obtained in exchange for lease obligations		$ 5,810

Organization and Basis of Presentation

9 Months Ended

Sep. 30, 2020

Organization and Basis of Presentation

Organization and Basis of Presentation

NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION

Ardelyx, Inc. (the “Company,” “we,” “us” or “our”) is a specialized biopharmaceutical company focused on developing innovative first-in-class medicines to improve treatment for people with kidney and cardiovascular diseases.

The Company operates in one business segment, which is the research and development of biopharmaceutical products.

Basis of Presentation

These condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information that are normally required by U.S. GAAP have been condensed or omitted. These condensed financial statements have been prepared on the same basis as the Company’s most recent annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary to present fairly the Company’s financial position at September 30, 2020 and results of operations, changes in stockholders’ equity, and cash flows for the interim periods ended September 30, 2020 and 2019.

The accompanying condensed financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The results for the three and nine months ended September 30, 2020 are not necessarily indicative of results to be expected for the entire year ending December 31, 2020, or for any other interim period or future year.

Liquidity

As of September 30, 2020, the Company had cash, cash equivalents and short-term investments of approximately $185.5 million. The Company believes its current available cash, cash equivalents and short-term investments will be sufficient to fund the Company’s planned expenditures and meet its obligations for at least 12 months following the filing of this Report on Form 10-Q.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes thereto. On an ongoing basis, management evaluates its estimates, including those related to recognition of revenue, clinical trial accruals, contract manufacturing accruals, the fair value of assets and liabilities, income taxes and stock-based compensation. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Actual results could materially differ from those estimates.

Summary of Significant Accounting Policies

There have been no changes to the significant accounting policies disclosed in the Company’s most recent Annual Report on Form 10-K.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In December 2019, as part of its initiative to reduce complexity in the accounting standards, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and simplifies other aspects of the accounting for income taxes. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company early adopted ASU 2019-12 on April 1, 2020 and this adoption had no material impact on the Company’s financial position or results of operations.

In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 (“ASU 2018-18”), which clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under the FASB’s Accounting Standards Codification (“ASC”) No. 606, Revenue from Contracts with Customers (“ASC 606”) when the collaborative arrangement participant is a customer. The Company adopted ASU 2018-18 on January 1, 2020, and the adoption of this standard did not have a material impact on the Company’s financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework— Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which considers cost and benefits and removes, modifies and adds disclosure requirements in Topic 820. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty is to be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments were to be applied retrospectively to all periods presented. The Company adopted ASU 2018-13 on January 1, 2020, and the adoption of this standard did not have a material impact on the Company’s financial statements.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional guidance to companies impacted by the transition away from the London Interbank Offered Rate (“LIBOR”). The guidance provides certain expedients and exceptions to applying GAAP in order to lessen the potential accounting burden when contracts, hedging relationships, and other transactions that reference LIBOR as a benchmark rate are modified. This guidance was effective upon issuance and expires on December 31, 2022. The Company adopted ASU 2020-04 on April 1, 2020, and the adoption of this standard did not have a material impact on the Company’s financial statements.

Recent Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, an amendment which modifies the measurement and recognition of credit losses for most financial assets and certain other instruments. The amendment updates the guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the “incurred loss” model with an “expected loss” model. Accordingly, these financial assets will be presented at the net amount expected to be collected. The amendment also requires that credit losses related to available-for-sale debt securities be recorded as an allowance through net income rather than reducing the carrying amount under the current, other-than-temporary-impairment model. For smaller reporting companies the guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. Management is currently assessing the impact of this standard on the Company’s financial statements.

Cash, Cash Equivalents and Short-Term Investments

9 Months Ended

Sep. 30, 2020

Cash, Cash Equivalents and Short-Term Investments

Cash, Cash Equivalents and Short-Term Investments

NOTE 2. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

Securities classified as cash, cash equivalents and short-term investments as of September 30, 2020 and December 31, 2019 are summarized below.


	September 30, 2020
			Gross Unrealized
	Amortized Cost		Gains		Losses		Fair Value
Cash and cash equivalents:
Money market funds	$	83,011	$	—	$	—	$	83,011
Commercial paper		6,499		—		—		6,499
Cash		1,499		—		—		1,499
Total cash and cash equivalents		91,009		—		—		91,009
Short-term investments
Commercial paper	$	41,625	$	30	$	(1)	$	41,654
Corporate bonds		39,219		58		(3)		39,274
U.S. government-sponsored agency bonds		9,334		3		—		9,337
Asset-backed securities		3,221		2		—		3,223
U.S. treasury notes		999		1		—		1,000
Total short-term investments		94,398		94		(4)		94,488
Total cash equivalents and short-term investments	$	185,407	$	94	$	(4)	$	185,497


	December 31, 2019
			Gross Unrealized
	Amortized Cost		Gains		Losses		Fair Value
Cash and cash equivalents:
Money market funds	$	147,208	$	—	$	—	$	147,208
Commercial paper		19,357		3		—		19,360
Corporate bonds		11,441		—		—		11,441
Cash		3,124		—		—		3,124
Total cash and cash equivalents		181,130		3		—		181,133
Short-term investments
Commercial paper	$	36,667	$	14	$	—	$	36,681
Corporate bonds		21,690		6		(3)		21,693
Asset-backed securities		8,005		—		—		8,005
Total short-term investments		66,362		20		(3)		66,379
Total cash equivalents and short-term investments	$	247,492	$	23	$	(3)	$	247,512

All available-for-sale securities held as of September 30, 2020 had contractual maturities of less than one year. The Company’s available-for-sale securities are subject to a periodic impairment review. The Company considers a debt security to be impaired when the fair value of that security is less than its carrying cost, in which case the Company would further evaluate the investment to determine whether the security is other-than-temporarily impaired. When the Company evaluates an investment for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below cost basis, the financial condition or creditworthiness of the issuer and any changes thereto, intent to sell, and whether it is more likely than not the Company will be required to sell the investment before the recovery of its cost basis. If an investment is other-than-temporarily impaired, the Company writes the investment down through the statement of operations to its fair value and establishes that value as the new cost basis for the investment. Management has determined that none of the Company’s available-for-sale securities were other-than-temporarily impaired in any of the periods presented, and as of September 30, 2020, no investment was in a continuous

unrealized loss position for more than one year. As such, the Company believes that it is more likely than not that the investments will be held until maturity or a forecasted recovery of fair value.

While our investment policy requires that we only invest in highly-rated securities and limit our exposure to any single issuer, the COVID-19 pandemic may materially affect the financial conditions of issuers, which could result in a default by one or more issuers or result in downgrades below our minimum credit rating requirements.

Fair Value Measurements

9 Months Ended

Sep. 30, 2020

Fair Value Measurements

Fair Value Measurements

NOTE 3. FAIR VALUE MEASUREMENTS

The Company’s financial instruments consist of cash and cash equivalents, short-term investments, prepaid expenses, other current assets, accounts payable, accrued expenses, and the Term Loan, as defined and discussed in Note 5. Fair value estimates of these instruments are made at a specific point in time based on relevant market information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment. The carrying amounts of financial instruments such as cash and cash equivalents, prepaid expenses, other current assets, accounts payable and accrued expenses approximate the related fair values due to the short maturities of these instruments. Based on prevailing borrowing rates available to the Company for loans with similar terms, the Company believes the fair value of the Term Loan, considering level 2 inputs, approximates this instrument’s carrying value.

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.

The three-level hierarchy for the inputs to valuation techniques is briefly summarized as follows:

Level 1 – Valuations are based on quoted prices in active markets for identical assets or liabilities and readily accessible by the Company at the reporting date.

Level 2 – Valuations based on inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Valuations based on unobservable inputs for which there is little or no market data, which require the Company to develop its own assumptions.

The following table sets forth the fair value of the Company’s financial assets and liabilities that are measured or disclosed on a recurring basis:


	September 30, 2020
	Total Fair Value		Level 1		Level 2		Level 3
Assets:
Money market funds	$	83,011	$	83,011	$	—	$	—
Commercial paper		48,153		—		48,153		—
Corporate bonds		39,274		—		39,274		—
U.S. government-sponsored agency bonds		9,337		9,337
Asset-backed securities		3,223		—		3,223		—
U.S. treasury notes		1,000		1,000		—		—
Total	$	183,998	$	93,348	$	90,650	$	—

Liabilities:
Derivative liability for Exit Fee	$	1,259	$	—	$	—	$	1,259
Total	$	1,259	$	—	$	—	$	1,259


	December 31, 2019
	Total Fair Value		Level 1		Level 2		Level 3
Assets:
Money market funds	$	147,208	$	147,208	$	—	$	—
Commercial paper		56,041		—		56,041		—
Corporate bonds		33,134		—		33,134		—
Asset-backed securities		8,005		—		8,005		—
Total	$	244,388	$	147,208	$	97,180	$	—

Liabilities:
Derivative liability for Exit Fee	$	969	$	—	$	—	$	969
Total	$	969	$	—	$	—	$	969

Where quoted prices are available in an active market, securities are classified as Level 1. The Company classifies money market funds, U.S. government-sponsored agency bonds and U.S. treasury notes as Level 1. When quoted market prices are not available for the specific security, the Company estimates fair value by using benchmark yields, reported trades, broker/dealer quotes and issuer spreads. The Company classifies corporate bonds, commercial paper, asset-backed securities and foreign currency derivative contracts as Level 2. In certain cases, where there is limited activity or less transparency around inputs to valuation, securities or derivative liabilities such as the Exit Fee, as defined and discussed in Note 4, are classified as Level 3.

- 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

Derivative Liability

9 Months Ended

Sep. 30, 2020

Derivative Liability

Derivative Liability

NOTE 4. DERIVATIVE LIABILITY

In May 2018, in connection with entering into the Loan Agreement, as defined and discussed in Note 5, the Company entered into an agreement pursuant to which the Company agreed to pay $1.5 million in cash (the “Exit Fee”) upon any change of control transaction in respect of the Company or if the Company obtains both (i) U.S. Food and Drug Administration (“FDA”) approval of tenapanor for the treatment of hyperphosphatemia in chronic kidney disease (“CKD”) patients on dialysis and (ii) FDA approval of tenapanor for the treatment of patients with irritable bowel syndrome with constipation (“IBS-C”), which was obtained on September 12, 2019 when the FDA approved IBSRELA® (tenapanor), a 50 milligram, twice daily oral pill for the treatment of IBS-C in adults (the “Exit Fee Agreement”). Notwithstanding the prepayment or termination of the Term Loan, as defined and discussed in Note 5, the Company’s obligation to pay the Exit Fee will expire on May 16, 2028. The Company concluded that the Exit Fee is a freestanding derivative which should be accounted for at fair value on a recurring basis. The estimated fair value of the Exit Fee is recorded as a derivative liability and included in accrued expenses and other current liabilities on the accompanying condensed balance sheets.

The fair value of the derivative liability was determined using a discounted cash flow analysis, and the key assumptions included in the calculation of the estimated fair value of the derivative liability include: (i) the Company’s estimates of both the probability and timing of payment of the Exit Fee to Solar Capital Ltd. and Western Alliance Bank as a result of the FDA approvals and (ii) a variable discount rate. Generally, increases or decreases in the probability of occurrence would result in a directionally similar impact in the fair value measurement of the derivative liability, and it is estimated that a 10% increase or decrease in the probability of occurrence would result in a fair value fluctuation of approximately $0.1 million.

Changes in fair value, which are presented as other income, net, in the Company's condensed statements of operations, were as follows:


	Nine Months Ended September 30,
		2020		2019
Fair value of Exit Fee derivative liability at January 1	$	969	$	533
Change in estimated fair value of derivative liability		290		246
Fair value of Exit Fee derivative liability at September 30	$	1,259	$	779

Borrowing

9 Months Ended

Sep. 30, 2020

Borrowing

Borrowing

NOTE 5. BORROWING

Solar Capital and Western Alliance Bank Loan Agreement

On May 16, 2018, the Company entered into a loan and security agreement (the “Loan Agreement”), with Solar Capital Ltd. and Western Alliance Bank (collectively the “Lenders”). The Loan Agreement provides for a $50.0 million term loan facility with a maturity date of November 1, 2022 (the “Term Loan”).

On October 9, 2020, the Company and the Lenders entered into an amendment to the Loan Agreement to extend the date through which the Company is permitted to make interest-only payments on the Term Loan by twelve months. Please see Note 13 for additional information. Borrowings under the Term Loan, before the October 2020 amendment, bore interest at a floating per annum rate equal to 7.45% plus the one-month LIBOR, and the Company was permitted to make interest-only payments on the Term Loan until December 1, 2020.

The Company paid a closing fee of 1% of the Term Loan, or $0.5 million, upon the closing of the Term Loan, and the Company is obligated to pay a final fee equal to 3.95% of the Term Loan upon the earliest to occur of the maturity date, the acceleration of the Term Loan, the prepayment or repayment of the Term Loan or the termination of the Loan Agreement. The Company may voluntarily prepay the outstanding Term Loan, subject to a prepayment premium of (i) 3% of the principal amount of the Term Loan if prepaid prior to or on the first anniversary of the Closing Date, (ii) 2% of the principal amount of the Term Loan if prepaid after the first anniversary of the Closing Date through and including the second anniversary of the Closing Date, or (iii) 1% of the principal amount of the Term Loan if prepaid after the second anniversary of the Closing Date and prior to the maturity date. The Term Loan is secured by substantially all the Company’s assets, except for the Company’s intellectual property and certain other customary exclusions. Additionally, in connection with the Term Loan, the Company entered into the Exit Fee Agreement, as discussed in Note 4.

The Loan Agreement contains customary representations and warranties and customary affirmative and negative covenants. As of September 30, 2020, the Company was in compliance with all of the covenants set forth in the Loan Agreement.

The Loan Agreement also contains customary events of default that entitle the Lender to cause the Company’s indebtedness under the Loan Agreement to become immediately due and payable, and to exercise remedies against the Company and the collateral securing the Term Loan, including the Company’s cash. Upon the occurrence and for the duration of an event of default, an additional default interest rate equal to 4.0% per annum will apply to all amounts owed under the Loan Agreement. As of September 30, 2020, to the Company’s knowledge, there were no facts or circumstances in existence that would give rise to an event of default.

As of September 30, 2020, the Company’s future payment obligations related to the Term Loan, excluding interest payments and the Exit Fee, are as follows:


Total repayment obligations	$	51,975
Less: Unamortized discount and debt issuance costs		(467)
Less: Unaccreted value of final fee		(827)
Loan payable		50,681
Less: Loan payable, current portion		—
Loan payable, net of current portion	$	50,681

Leases

9 Months Ended

Sep. 30, 2020

Leases

Leases

NOTE 6. LEASES

All of the Company’s leases, which primarily include the right to use office and laboratory space, are operating leases, and certain of the leases have both lease and non-lease components. The Company has elected to account for each separate lease component and the non-lease components associated with that lease component as a single lease component for all classes of underlying assets.

The following table provides additional details related to our facility leases, as presented in the Company’s condensed balance sheet as of September 30, 2020:


Facilities
Right of use assets	$	2,402

Current portion of lease liabilities		2,770
Operating lease liability, net of current portion		—
Total	$	2,770

Weighted-average remaining life (years)		1.00
Weighted-average discount rate		12.99	%

Other information related to the Company’s facilities leases is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Operating lease expense	$	648	$	648	$	1,944	$	1,944
Cash paid for operating lease	$	767	$	660	$	2,288	$	1,890

The following table summarizes the Company’s undiscounted cash payment obligations for its operating lease liabilities as of September 30, 2020:


Remainder of 2020	$	777
2021		2,183
Total undiscounted operating lease payments		2,960
Imputed interest expenses		(190)
Total operating lease liabilities		2,770
Less: Current portion of operating lease liability		2,770
Operating lease liability, net of current portion	$	—

Equity Incentive Plans

9 Months Ended

Sep. 30, 2020

Equity Incentive Plans

Equity Incentive Plans

NOTE 7. EQUITY INCENTIVE PLANS

Stock Option Plan

During the three and nine months ended September 30, 2020, options were granted to employees and members of the board of directors to purchase 460,167 and 3,109,683 shares, respectively, of the Company's common stock. The weighted-average grant-date estimated fair value of options granted during the three and nine months ended September 30, 2020 was $4.09 and $5.03, respectively.

During the three and nine months ended September 30, 2020, options were exercised to purchase 142,191 and 346,806 shares, respectively, of the Company's common stock, resulting in corresponding approximately $0.3 million and $0.8 million net proceeds, respectively, to the Company. During the three and nine months ended September 30, 2019, options were exercised to purchase 4,513 and 6,964 shares, respectively, of the Company's common stock, resulting in corresponding $13,000 and $21,000 net proceeds to the Company.

Restricted Stock Units (“RSUs”)

In July 2018, the Company granted 903,374 performance-based restricted stock units (“PRSUs”) to its employees that were to vest upon the achievement of certain performance conditions, subject to the employees’ continued service relationship with the Company through the achievement date. The primary performance condition was acceptance by the FDA of the Company’s filing of its New Drug Application (“NDA”) of tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis. Additionally, during the second quarter of 2020, the Company granted 30,000 PRSUs, in aggregate, with the same performance criteria to its chief commercial officer and chief financial officer hired during that period. On September 15, 2020, the Company announced the performance conditions were achieved and 866,528 of these PRSUs that were outstanding on the achievement date were vested and issued. Based on the achievement of the performance conditions, the Company recorded stock-based compensation expense of $0.2 million and $1.6 million for the three and nine months ended September 30, 2020, respectively. The Company had recorded a one-time catch-up of stock-based compensation expense of $2.1 million for each of the three and nine months ended September 30, 2019 as the related performance condition had become probable as of September 30, 2019. The related compensation cost was recognized as an expense ratably over the estimated vesting period. The expense recognized for these awards was based on the grant date fair value of the Company’s common stock multiplied by the number of units granted.

For each of the three and nine months ended September 30, 2020 and 2019, the Company issued zero and 85,609 shares, respectively, of its common stock upon vesting of time-based RSUs to its employees. No time-based RSUs were granted to employees during the three and nine months ended September 30, 2020 or 2019.

Employee Stock Purchase Plan

In August 2020, the Company sold 94,127 shares of its common stock under the Company’s employee stock purchase program (“ESPP”). The shares were purchased by employees at a purchase price of $4.88 per share with proceeds to the Company of approximately $0.4 million. In February 2020, the Company sold 75,804 shares of its common stock under the ESPP. The shares were purchased by employees at a purchase price of $4.95 per share with proceeds to the Company of approximately $0.4 million.

In August 2019, the Company sold 77,698 shares of its common stock under the ESPP. The shares were purchased by employees at a purchase price of $2.58 per share with proceeds to the Company of approximately $0.2 million. In February 2019, the Company sold 83,046 shares of its common stock under the ESPP. The shares were purchased by employees at a purchase price of $2.39 per share with proceeds to the Company of approximately $0.2 million.

Issuance of Common Stock for Services

For the three and nine months ended September 30, 2020, the Company issued zero and 42,403 shares, respectively, of its common stock to members of the board of directors who elected to receive stock in lieu of their cash fees under the Company’s Amended and Restated Non-Employee Director Compensation Program. The shares issued were valued at

$0.3 million based on the fair value of the common stock on the date of grant. For the three and nine months ended September 30, 2019, the Company issued zero and 113,136 shares, respectively, of its common stock to members of the board of directors who elected to receive stock in lieu of their cash fees. The shares issued were valued at $0.3 million based on the fair value of the common stock on the date of grant.

Stock-Based Compensation

Stock-based compensation expense recognized for stock options, RSUs, PRSUs and the Company’s ESPP are recorded as operating expenses in the Company’s condensed statements of operations and comprehensive loss, as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019

Research and development	$	963	$	1,670	$	3,165	$	3,197
General and administrative		1,564		2,209		4,984		4,527
Total	$	2,527	$	3,879	$	8,149	$	7,724

As of September 30, 2020, the Company’s total unrecognized stock-based compensation expense, net of estimated forfeitures, and average remaining vesting period, included the following:


	Unrecognized Compensation Expense		Average Remaining Vesting Period (Years)
Stock options	$	14,605	2.8
ESPP	$	186	0.2

Stockholders' Equity

9 Months Ended

Sep. 30, 2020

Stockholders' Equity

Stockholders' Equity

NOTE 8. STOCKHOLDERS’ EQUITY

Warrants

In June 2015, the Company sold and issued warrants to purchase 2,172,899 shares of common stock. The purchase price for the warrants was $0.125 per warrant. The warrants were exercisable for an exercise price of $13.91 per share at any time prior to the earlier of (i) 5 years from the date of issuance or (ii) certain changes in control of the Company. In June 2020, the warrants expired with none of the warrants exercised.

At the Market Offerings Agreement

In July 2020, the Company filed a Form S-3 registration statement, which became effective in August 2020, containing (i) a base prospectus for the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $250,000,000 of the Company’s common stock, preferred stock, debt securities, warrants and/or units, from time to time in one or more offerings; and (ii) a prospectus supplement for the offering, issuance and sale by the Company of up to a maximum aggregate offering price of $100,000,000 of the Company’s common stock that may be issued and sold, from time to time, under a sales agreement with Jefferies LLC, deemed to be “at the market offerings.” As of September 30, 2020, no shares have been offered, issued or sold pursuant to this sales agreement.

Net Loss Per Share

9 Months Ended

Sep. 30, 2020

Net Loss Per Share

Net Loss Per Share

NOTE 9. NET LOSS PER SHARE

Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period, less shares subject to repurchase, and excludes any dilutive effects of stock-based awards and warrants. Diluted net loss per common share is computed giving effect to all potential dilutive common shares, including common stock issuable upon exercise of stock options, and unvested restricted common stock and stock units. As the Company had net losses for the three and nine months ended September 30, 2020 and 2019, all potential common shares were determined to be anti-dilutive. The following table sets forth the computation of net loss per common share:


	Three Months Ended				Nine Months Ended September 30,
	2020		2019		2020		2019
Numerator:
Net loss	$	(18,108)	$	(23,539)	$	(65,437)	$	(75,150)
Denominator:
Weighted average common shares outstanding - basic and diluted		89,365,798		62,828,513		89,109,772		62,676,591
Net loss per share - basic and diluted	$	(0.20)	$	(0.37)	$	(0.73)	$	(1.20)

For the three and nine months ended September 30, 2020, the total number of securities that could potentially dilute basic net loss per share in the future that were not included in the computation of diluted net loss per share because the effect would have been antidilutive was 9.6 million and 10.4 million, respectively.

For the three and nine months ended September 30, 2019, the total number of securities that could potentially dilute basic net loss per share in the future that were not included in the computation of diluted net loss per share because the effect would have been antidilutive was 10.5 million and 10.2 million, respectively.

Collaboration and Licensing Agreements

9 Months Ended

Sep. 30, 2020

Collaboration and Licensing Agreements

Collaboration and Licensing Agreements

NOTE 10. COLLABORATION AND LICENSING AGREEMENTS

Kyowa Kirin Co., Ltd. (“KKC”)

2019 KKC Agreement

In November 2019, the Company entered into a research collaboration and option agreement with KKC (the “2019 KKC Agreement”) for research associated with identifying two pre-clinical compounds that are ready for designation as development compounds (“DCs”), with one compound inhibiting the first undisclosed target (“Program 1”), and a second inhibiting the second undisclosed target (“Program 2”). Pursuant to the 2019 KKC Agreement, upon completion of the research and designation by the research steering committee of one or more DCs, KKC has the right to execute one or more separate collaborative agreements relating to the development and commercialization of one or both DCs in certain specified territories.

Under the terms of the 2019 KKC Agreement, KKC agreed to pay the Company a non-refundable, non-creditable upfront fee of $10.0 million, payable as follows: the first installment of $5.0 million within 30 days of November 11, 2019 (the “Effective Date”), and the second installment of $5.0 million on the first anniversary of the Effective Date, unless the 2019 KKC Agreement is earlier terminated by KKC due to material breach by the Company. The term of the 2019 KKC Agreement commenced on the Effective Date and ends on the earliest of: (i) two years following the Effective Date, (ii) the nomination of a program DC for both programs, (iii) the nomination of one program DC and the decision by the parties to cease research for the other program, or (iv) the decision by the parties to cease research for both programs. The Company assessed the 2019 KKC Agreement in accordance with ASC 606 and concluded that the contract’s counterparty, KKC, is a customer. Management also considered the modification guidance prescribed in ASC 606 and concluded that the 2019 KKC Agreement should be accounted for as a separate contract from the 2017 KKC Agreement, as defined and discussed below.

The Company identified various promises in the 2019 KKC Agreement, including: the grant of an initial research license; the Program 1 research; the Program 2 research; the right to obtain certain development and commercialization rights to a Program 1 DC in certain territories; the right to obtain development and commercialization rights to a Program 2 DC in certain territories; and participation in a joint steering committee (“JSC”). The Company determined that KKC could not benefit from either of the research programs without the research license and participation in the JSC. As such, the combined license, research programs and participation in the JSC were deemed to be the highest level of goods and services that can be deemed distinct for each of the Program 1 research and Program 2 research. The Company concluded that the options to obtain additional development and commercialization rights that are exercisable by KKC under certain circumstances are not performance obligations of the contract at inception because the option fees reflect the standalone selling price of the options, and therefore, the options are not considered to be material rights.

At the outset of the 2019 KKC Agreement, the Company determined that the initial transaction price amounted to $10.0 million and that revenue associated with the combined performance obligations will be recognized as services are provided using an input method. Since transfer of control occurs over time, in management’s judgment this input method is the best measure of progress towards satisfying the performance obligations and reflects a faithful depiction of the transfer of goods and services. Revenue will be recognized over the Program 1 and Program 2 research periods, which are currently expected to extend through the end of 2021. Management will re-evaluate the estimates related to the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur and adjust the timing of revenue recognition as necessary.

During the three and nine months ended September 30, 2020, the Company recognized $1.4 million and $3.7. million, respectively, as revenue under the 2019 KKC Agreement in the accompanying statement of operations and comprehensive loss. The aggregate amount of the transaction price allocated to the Company’s partially unsatisfied performance obligations as of September 30, 2020 was $5.9 million, of which $0.9 million is presented in the accompanying condensed balance sheet as deferred revenue. As of September 30, 2020, the Company expects to recognize the remaining transaction price allocated to the Company’s partially unsatisfied performance obligations over the remaining research terms, which, as noted above, are currently expected to extend through the end of 2021. There were no significant changes in estimates associated with the 2019 KKC Agreement during the three or nine months ended September 30, 2020.

2017 KKC Agreement

In November 2017, the Company entered into an exclusive license agreement with KKC (the “2017 KKC Agreement”), for the development, commercialization and distribution of tenapanor in Japan for cardiorenal indications. The Company granted KKC an exclusive license to develop and commercialize certain sodium hydrogen exchanger 3 (“NHE3”) inhibitors including tenapanor in Japan for the treatment of cardiorenal diseases and conditions, excluding cancer. The Company retained the rights to tenapanor outside of Japan, and also retained the rights to tenapanor in Japan for indications other than those stated above. Pursuant to the 2017 KKC Agreement, KKC is responsible for all costs and expenses incurred in the development and commercialization of tenapanor for the treatment of cardiorenal diseases and conditions, excluding cancer in Japan. Under the 2017 KKC Agreement, the Company is responsible for supplying the tenapanor drug product for KKC’s use in development and during commercialization until KKC has assumed such responsibility. Additionally, the Company is responsible for supplying the tenapanor drug substance for KKC’s use in development and commercialization throughout the term of the 2017 KKC Agreement, provided that KKC may exercise an option to manufacture the tenapanor drug substance under certain conditions.

The Company assessed these arrangements in accordance with ASC 606 and concluded that the contract counterparty, KKC, is a customer. Under the terms of the 2017 KKC Agreement, the Company received $30.0 million in upfront license fees, which was recognized as revenue when the agreement was executed. Based on the Company’s assessment, management determined that the license and the manufacturing supply services were its material performance obligations at the inception of the 2017 KKC Agreement, and as such, each of the performance obligations is distinct. Additionally, the Company recorded unbilled revenue of $5.0 million and an increase in uncharged license fees of $1.0 million related to the first milestone under the 2017 KKC Agreement that KKC; this first milestone was achieved in February 2019.

In addition to the $30.0 million upfront license fee, the Company may be entitled to receive up to $55.0 million in total development milestones, of which $5.0 million has been received to date, and approximately $80.4 million in

commercialization milestones, as well as reimbursement of costs plus a reasonable overhead for the supply of product and high-teen royalties on net sales throughout the term of the agreement. The variable consideration related to the remaining development milestone payments has not been included in the transaction price as these were fully constrained at September 30, 2020.

During each of the three and nine months ended September 30, 2020, the Company recognized $1.4 million as other revenue related to the manufacturing supply of tenapanor and other materials to KKC pursuant to the 2017 KKC Agreement. Similarly, for the three and nine months ended September 30, 2019, $13,000 and $31,000, respectively, was recognized as other revenue.

Xuanzhu (HK) Biopharmaceutical Limited (“XuanZhu”)

In November 2019, the Company entered into a license agreement with XuanZhu (the “XuanZhu Agreement”), pursuant to which the Company granted XuanZhu a license to certain specific patent and patent applications. The Company assessed the XuanZhu Agreement in accordance with ASC 606 and concluded that the contract counterparty, XuanZhu, is a customer. Under the terms of the XuanZhu Agreement, the Company recognized $1.5 million in license fees, which constituted the initial transaction price, when the agreement was executed, of which $750,000 was received upfront in November 2019, and achievement for the second $750,000 payment, related to the issuance and grant of a specific patent, was determined to be not materially at risk and probable of achievement. Based on management’s assessment, the Company determined that it has one combined performance obligation, which is the license and the specific patent grant.

No revenue related to the XuanZhu Agreement was recorded during the three and nine months ended September 30, 2020.

Shanghai Fosun Pharmaceutical Industrial Development Co. Ltd. (“Fosun Pharma”)

In December 2017, the Company entered into an exclusive license agreement with Fosun Pharma (the “Fosun Agreement”), for the development, commercialization and distribution of tenapanor in China for both hyperphosphatemia and IBS-C. The Company assessed these arrangements in accordance with ASC 606 and concluded that the contract counterparty, Fosun Pharma, is a customer. Under the terms of the Fosun Agreement, the Company received $12.0 million in upfront license fees which was recognized as revenue when the agreement was executed. Based on management’s assessment, the Company determined that the license and the manufacturing supply services represented the material performance obligations at the inception of the agreement, and as such, each of the performance obligations is distinct.

The Company may be entitled to additional development and commercialization milestones of up to $110.0 million, as well as reimbursement of cost plus a reasonable overhead for the supply of product and tiered royalties on net sales ranging from the mid-teens to 20%. The variable consideration related to the remaining development milestone payments has not been included in the transaction price as these were fully constrained at September 30, 2020.

The Company has recorded no revenue during the three and nine months ended September 30, 2020 related to the Fosun Agreement. During each of the three and nine months ended September 30, 2019, $3.0 million licensing revenue was recorded upon the achievement of a development milestone pursuant to the Fosun Agreement.

Knight Therapeutics, Inc. (“Knight“)

In March 2018, the Company entered into an exclusive license agreement with Knight (the “Knight Agreement”), for the development, commercialization and distribution of tenapanor in Canada for hyperphosphatemia and IBS-C. The Company assessed this arrangement in accordance with ASC 606 and concluded that the contract counterparty, Knight, is a customer. Based on management’s assessment, the Company determined that the license and the manufacturing supply services represented the material performance obligations at the inception of the agreement, and as such, each of the performance obligations is distinct.

Under the terms of the agreement, the Company received a $2.3 million nonrefundable, one-time upfront payment in March 2018 and is eligible to receive additional development and commercialization milestone payments worth up to

$16.4 million. The Company is also eligible to receive royalties throughout the term of the agreement, and a transfer price for manufacturing services. The variable consideration related to the remaining development milestone payments has not been included in the transaction price as these were fully constrained at September 30, 2020.

In April 2020, Knight announced that it had received approval from Health Canada for IBSRELA^® (tenapanor) for the treatment of IBS-C, and in May 2020, the Company received a development milestone payment from Knight related to the achievement of the aforementioned milestone.

For the three and nine months ended September 30, 2020 the Company recognized zero and $0.7 million, respectively, as licensing revenue, and for the three and nine months ended September 30, 2019, no revenue was recognized related to the Knight Agreement.

AstraZeneca AB (“AstraZeneca”)

In June 2015, the Company entered into a termination agreement with AstraZeneca (the “AstraZeneca Termination Agreement”) pursuant to which the Company has agreed to pay AstraZeneca (i) future royalties at a royalty rate of 10% of net sales of tenapanor or other NHE3 products by the Company or its licensees, and (ii) 20% of non-royalty revenue received from a new collaboration partner should the Company elect to license, or otherwise provide rights to develop and commercialize tenapanor or another NHE3 inhibitor, up to a maximum of $75.0 million in aggregate for (i) and (ii). As of September 30, 2020, to date in aggregate, the Company has recognized $10.6 million of the $75.0 million, recorded as cost of revenue, and has paid AstraZeneca $10.6 million. For the three and nine months ended September 30, 2020 the Company has recognized and recorded as cost of revenue zero and $0.1 million, respectively, related to the AstraZeneca Termination Agreement. Similarly, for each of the three and nine months ended September 30, 2019 the Company recognized $0.1 million as cost of revenue.

The following table presents changes in the Company’s deferred revenue balance, which is attributable entirely to the 2019 KKC Agreement discussed above, during the reporting period:



	Deferred revenue
Balance at December 31, 2019	$	4,541
Increases due to cash received, excluding amounts recognized as revenue during the period		—
Decreases due to revenue recognized in the period for which cash has been received		(1,828)
Decreases due to revenue recognized in the period for which cash has not been received		(1,828)
Balance at September 30, 2020	$	885

Contingencies

9 Months Ended

Sep. 30, 2020

Contingencies

Contingencies

NOTE 11. CONTINGENCIES

From time to time the Company may be involved in claims arising in connection with its business. Based on information currently available, management believes that the amount, or range, of reasonably possible losses in connection with any pending actions against the Company will not be material to the Company’s financial condition or cash flows, and no contingent liabilities were accrued as of September 30, 2020 or 2019.

Income Taxes

9 Months Ended

Sep. 30, 2020

Income Taxes

Income Taxes

NOTE 12. INCOME TAXES

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law. The CARES Act includes, among other features, provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. While the Company continues to evaluate the impact of the CARES Act, it does not expect the provisions of the legislation to have a significant impact on the effective tax rate or on the income tax provision or deferred income tax positions of the Company.

Subsequent Events

9 Months Ended

Sep. 30, 2020

Subsequent Events

Subsequent Events

NOTE 13. SUBSEQUENT EVENT

On October 9, 2020, the Company and the Lenders entered into an amendment to the Loan Agreement, as defined and discussed in Note 5, to extend the date through which the Company is permitted to make interest-only payments on the Term Loan from December 1, 2020 to December 1, 2021 (the “Amended Interest Only Period”); provided that, if (a) the FDA does not approve the Company’s NDA for tenapanor for control of serum phosphorus in adult CKD patients on dialysis on or before May 31, 2021 or (b) the FDA issues a complete response letter (“CRL”) for tenapanor for the control of serum phosphorus in adult CKD patients on dialysis, then the Amended Interest Only Period will be shortened to the earlier of June 1, 2021 or the first day of the month immediately following the date that the FDA issues the CRL. In addition, the Company and the Lenders have agreed to increase the fee that is due upon the earliest to occur of the maturity date, the acceleration of the Term Loan, the prepayment or repayment of the Term Loan or the termination of the Loan Agreement from 3.95% of the Term Loan to 4.95% of the Term Loan and set a minimum LIBOR rate of 0.25%. The Company paid an amendment fee of $125,000, in aggregate, to the Lenders in October 2020 and November 2020. The amendment to the interest-only payments period results in the classification of the loan payable as non-current in the condensed balance sheet at September 30, 2020.

Organization and Basis of Presentation (Policies)	9 Months Ended
Organization and Basis of Presentation (Policies)	Sep. 30, 2020
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation These condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules and regulations, certain footnotes or other financial information that are normally required by U.S. GAAP have been condensed or omitted. These condensed financial statements have been prepared on the same basis as the Company’s most recent annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary to present fairly the Company’s financial position at September 30, 2020 and results of operations, changes in stockholders’ equity, and cash flows for the interim periods ended September 30, 2020 and 2019. The accompanying condensed financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The results for the three and nine months ended September 30, 2020 are not necessarily indicative of results to be expected for the entire year ending December 31, 2020, or for any other interim period or future year.
Liquidity	Liquidity As of September 30, 2020, the Company had cash, cash equivalents and short-term investments of approximately $185.5 million. The Company believes its current available cash, cash equivalents and short-term investments will be sufficient to fund the Company’s planned expenditures and meet its obligations for at least 12 months following the filing of this Report on Form 10-Q.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes thereto. On an ongoing basis, management evaluates its estimates, including those related to recognition of revenue, clinical trial accruals, contract manufacturing accruals, the fair value of assets and liabilities, income taxes and stock-based compensation. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Actual results could materially differ from those estimates.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In December 2019, as part of its initiative to reduce complexity in the accounting standards, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and simplifies other aspects of the accounting for income taxes. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company early adopted ASU 2019-12 on April 1, 2020 and this adoption had no material impact on the Company’s financial position or results of operations. In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 (“ASU 2018-18”), which clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under the FASB’s Accounting Standards Codification (“ASC”) No. 606, Revenue from Contracts with Customers (“ASC 606”) when the collaborative arrangement participant is a customer. The Company adopted ASU 2018-18 on January 1, 2020, and the adoption of this standard did not have a material impact on the Company’s financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework— Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which considers cost and benefits and removes, modifies and adds disclosure requirements in Topic 820. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty is to be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments were to be applied retrospectively to all periods presented. The Company adopted ASU 2018-13 on January 1, 2020, and the adoption of this standard did not have a material impact on the Company’s financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional guidance to companies impacted by the transition away from the London Interbank Offered Rate (“LIBOR”). The guidance provides certain expedients and exceptions to applying GAAP in order to lessen the potential accounting burden when contracts, hedging relationships, and other transactions that reference LIBOR as a benchmark rate are modified. This guidance was effective upon issuance and expires on December 31, 2022. The Company adopted ASU 2020-04 on April 1, 2020, and the adoption of this standard did not have a material impact on the Company’s financial statements. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, an amendment which modifies the measurement and recognition of credit losses for most financial assets and certain other instruments. The amendment updates the guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the “incurred loss” model with an “expected loss” model. Accordingly, these financial assets will be presented at the net amount expected to be collected. The amendment also requires that credit losses related to available-for-sale debt securities be recorded as an allowance through net income rather than reducing the carrying amount under the current, other-than-temporary-impairment model. For smaller reporting companies the guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. Management is currently assessing the impact of this standard on the Company’s financial statements.
Fair Value Measurements	The Company’s financial instruments consist of cash and cash equivalents, short-term investments, prepaid expenses, other current assets, accounts payable, accrued expenses, and the Term Loan, as defined and discussed in Note 5. Fair value estimates of these instruments are made at a specific point in time based on relevant market information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment. The carrying amounts of financial instruments such as cash and cash equivalents, prepaid expenses, other current assets, accounts payable and accrued expenses approximate the related fair values due to the short maturities of these instruments. Based on prevailing borrowing rates available to the Company for loans with similar terms, the Company believes the fair value of the Term Loan, considering level 2 inputs, approximates this instrument’s carrying value. 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. The three-level hierarchy for the inputs to valuation techniques is briefly summarized as follows: Level 1 – Valuations are based on quoted prices in active markets for identical assets or liabilities and readily accessible by the Company at the reporting date. Level 2 – Valuations based on inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Valuations based on unobservable inputs for which there is little or no market data, which require the Company to develop its own assumptions.

Cash, Cash Equivalents and Short-Term Investments (Tables)

9 Months Ended

Sep. 30, 2020

Cash, Cash Equivalents and Short-Term Investments

Schedule of Securities Classified as Cash, Cash Equivalents and Short-Term Investments


	September 30, 2020
			Gross Unrealized
	Amortized Cost		Gains		Losses		Fair Value
Cash and cash equivalents:
Money market funds	$	83,011	$	—	$	—	$	83,011
Commercial paper		6,499		—		—		6,499
Cash		1,499		—		—		1,499
Total cash and cash equivalents		91,009		—		—		91,009
Short-term investments
Commercial paper	$	41,625	$	30	$	(1)	$	41,654
Corporate bonds		39,219		58		(3)		39,274
U.S. government-sponsored agency bonds		9,334		3		—		9,337
Asset-backed securities		3,221		2		—		3,223
U.S. treasury notes		999		1		—		1,000
Total short-term investments		94,398		94		(4)		94,488
Total cash equivalents and short-term investments	$	185,407	$	94	$	(4)	$	185,497


	December 31, 2019
			Gross Unrealized
	Amortized Cost		Gains		Losses		Fair Value
Cash and cash equivalents:
Money market funds	$	147,208	$	—	$	—	$	147,208
Commercial paper		19,357		3		—		19,360
Corporate bonds		11,441		—		—		11,441
Cash		3,124		—		—		3,124
Total cash and cash equivalents		181,130		3		—		181,133
Short-term investments
Commercial paper	$	36,667	$	14	$	—	$	36,681
Corporate bonds		21,690		6		(3)		21,693
Asset-backed securities		8,005		—		—		8,005
Total short-term investments		66,362		20		(3)		66,379
Total cash equivalents and short-term investments	$	247,492	$	23	$	(3)	$	247,512

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Measurements

Summary of Fair Value Measurements of Company's Financial Assets and Liabilities


	September 30, 2020
	Total Fair Value		Level 1		Level 2		Level 3
Assets:
Money market funds	$	83,011	$	83,011	$	—	$	—
Commercial paper		48,153		—		48,153		—
Corporate bonds		39,274		—		39,274		—
U.S. government-sponsored agency bonds		9,337		9,337
Asset-backed securities		3,223		—		3,223		—
U.S. treasury notes		1,000		1,000		—		—
Total	$	183,998	$	93,348	$	90,650	$	—

Liabilities:
Derivative liability for Exit Fee	$	1,259	$	—	$	—	$	1,259
Total	$	1,259	$	—	$	—	$	1,259


	December 31, 2019
	Total Fair Value		Level 1		Level 2		Level 3
Assets:
Money market funds	$	147,208	$	147,208	$	—	$	—
Commercial paper		56,041		—		56,041		—
Corporate bonds		33,134		—		33,134		—
Asset-backed securities		8,005		—		8,005		—
Total	$	244,388	$	147,208	$	97,180	$	—

Liabilities:
Derivative liability for Exit Fee	$	969	$	—	$	—	$	969
Total	$	969	$	—	$	—	$	969

Derivative Liability (Tables)

9 Months Ended

Sep. 30, 2020

Derivative Liability

Schedule of Changes in Fair Value


	Nine Months Ended September 30,
		2020		2019
Fair value of Exit Fee derivative liability at January 1	$	969	$	533
Change in estimated fair value of derivative liability		290		246
Fair value of Exit Fee derivative liability at September 30	$	1,259	$	779

Borrowing (Tables)

9 Months Ended

Sep. 30, 2020

Borrowing

Schedule of Future Debt Payment Obligations


Total repayment obligations	$	51,975
Less: Unamortized discount and debt issuance costs		(467)
Less: Unaccreted value of final fee		(827)
Loan payable		50,681
Less: Loan payable, current portion		—
Loan payable, net of current portion	$	50,681

Leases (Tables)

9 Months Ended

Sep. 30, 2020

Leases

Summary of Additional Details of the Leases


Facilities
Right of use assets	$	2,402

Current portion of lease liabilities		2,770
Operating lease liability, net of current portion		—
Total	$	2,770

Weighted-average remaining life (years)		1.00
Weighted-average discount rate		12.99	%

Summary of Lease Costs


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Operating lease expense	$	648	$	648	$	1,944	$	1,944
Cash paid for operating lease	$	767	$	660	$	2,288	$	1,890

Summary of Undiscounted Cash Payment Obligations for Operating Lease Liabilities


Remainder of 2020	$	777
2021		2,183
Total undiscounted operating lease payments		2,960
Imputed interest expenses		(190)
Total operating lease liabilities		2,770
Less: Current portion of operating lease liability		2,770
Operating lease liability, net of current portion	$	—

Equity Incentive Plans (Tables)

9 Months Ended

Sep. 30, 2020

Equity Incentive Plans

Summary of Stock-Based Compensation Expense Recognized


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019

Research and development	$	963	$	1,670	$	3,165	$	3,197
General and administrative		1,564		2,209		4,984		4,527
Total	$	2,527	$	3,879	$	8,149	$	7,724

Summary of Total Unrecognized Stock-Based Compensation Expense, Net of Estimated Forfeitures


	Unrecognized Compensation Expense		Average Remaining Vesting Period (Years)
Stock options	$	14,605	2.8
ESPP	$	186	0.2

Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2020

Net Loss Per Share

Computation of Basic and Diluted Loss Per Share Attributable to Common Stockholders


	Three Months Ended				Nine Months Ended September 30,
	2020		2019		2020		2019
Numerator:
Net loss	$	(18,108)	$	(23,539)	$	(65,437)	$	(75,150)
Denominator:
Weighted average common shares outstanding - basic and diluted		89,365,798		62,828,513		89,109,772		62,676,591
Net loss per share - basic and diluted	$	(0.20)	$	(0.37)	$	(0.73)	$	(1.20)

Collaboration and Licensing Agreements (Tables)

9 Months Ended

Sep. 30, 2020

Collaboration and Licensing Agreements

Schedule of Changes in Deferred Revenue



	Deferred revenue
Balance at December 31, 2019	$	4,541
Increases due to cash received, excluding amounts recognized as revenue during the period		—
Decreases due to revenue recognized in the period for which cash has been received		(1,828)
Decreases due to revenue recognized in the period for which cash has not been received		(1,828)
Balance at September 30, 2020	$	885

Organization and Basis of Presentation - Additional Information (Details)	9 Months Ended
	Sep. 30, 2020 segment
Organization and Basis of Presentation
Number of operating segments	1

Organization and Basis of Presentation - Prior Period Errors (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Summary of Significant Accounting Policies
Research and Development Expense	$ 12,240	$ 17,580	$ 46,948	$ 57,436
Accrued Liabilities and Other Liabilities	$ 6,667		$ 6,667		$ 7,248

Organization and Basis of Presentation - Liquidity (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Organization and Basis of Presentation
Cash equivalents and short-term investments, Fair Value	$ 185,497	$ 247,512

Cash, Cash Equivalents and Short-Term Investments - Schedule of Securities Classified as Cash, Cash Equivalents and Short-Term Investments (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019	Sep. 30, 2019	Dec. 31, 2018
Cash Cash Equivalents And Short Term Investments [Line Items]
Cash and cash equivalents, Amortized Cost	$ 91,009	$ 181,133	$ 92,673	$ 78,768
Cash and cash equivalents, Amortized Cost		181,130
Cash and cash equivalents, Gross Unrealized Gains		3
Cash and cash equivalents, Fair Value	91,009	181,133
Short-term investments, Amortized Cost	94,398	66,362
Short-term investments, Gross Unrealized Gains	94	20
Short-term investments, Gross Unrealized Losses	(4)	(3)
Short-term investments, Fair Value	94,488	66,379
Cash equivalents and short-term investments, Amortized Cost	185,407	247,492
Cash equivalents and short-term investments, Gross Unrealized Gains	94	23
Cash equivalents and short-term investments, Gross Unrealized Losses	(4)	(3)
Cash equivalents and short-term investments, Fair Value	185,497	247,512
Money Market Funds [Member]
Cash Cash Equivalents And Short Term Investments [Line Items]
Cash and cash equivalents, Amortized Cost	83,011	147,208
Cash and cash equivalents, Fair Value	83,011	147,208
Commercial Paper (Cash Equivalents) [Member]
Cash Cash Equivalents And Short Term Investments [Line Items]
Cash and cash equivalents, Amortized Cost	6,499	19,357
Cash and cash equivalents, Gross Unrealized Gains		3
Cash and cash equivalents, Fair Value	6,499	19,360
Corporate Bonds (Investments) [Member]
Cash Cash Equivalents And Short Term Investments [Line Items]
Cash and cash equivalents, Amortized Cost		11,441
Cash and cash equivalents, Fair Value		11,441
Cash [Member]
Cash Cash Equivalents And Short Term Investments [Line Items]
Cash and cash equivalents, Amortized Cost	1,499	3,124
Cash and cash equivalents, Fair Value	1,499	3,124
Commercial Paper (Investments) [Member]
Cash Cash Equivalents And Short Term Investments [Line Items]
Short-term investments, Amortized Cost	41,625	36,667
Short-term investments, Gross Unrealized Gains	30	14
Short-term investments, Gross Unrealized Losses	(1)
Short-term investments, Fair Value	41,654	36,681
Corporate Bonds (Investments) [Member]
Cash Cash Equivalents And Short Term Investments [Line Items]
Short-term investments, Amortized Cost	39,219	21,690
Short-term investments, Gross Unrealized Gains	58	6
Short-term investments, Gross Unrealized Losses	(3)	(3)
Short-term investments, Fair Value	39,274	21,693
U.S. Government-Sponsored Agency Bonds [Member]
Cash Cash Equivalents And Short Term Investments [Line Items]
Short-term investments, Amortized Cost	9,334
Short-term investments, Gross Unrealized Gains	3
Short-term investments, Fair Value	9,337
Asset-Backed Securities [Member]
Cash Cash Equivalents And Short Term Investments [Line Items]
Short-term investments, Amortized Cost	3,221	8,005
Short-term investments, Gross Unrealized Gains	2
Short-term investments, Fair Value	3,223	$ 8,005
U.S. Treasury Notes [Member]
Cash Cash Equivalents And Short Term Investments [Line Items]
Short-term investments, Amortized Cost	999
Short-term investments, Gross Unrealized Gains	1
Short-term investments, Fair Value	$ 1,000

Cash, Cash Equivalents and Short-Term Investments - Additional Information (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Cash Cash Equivalents And Short Term Investments [Line Items]
Investment in continuous unrealized loss position for more than one year	$ 0
Available-for-sale securities that were other-than-temporarily impaired	$ 0	$ 0
Maximum
Cash Cash Equivalents And Short Term Investments [Line Items]
Available for sale securities contractual maturity period	1 year

Fair Value Measurements - Summary of Fair Value Measurements of Company's Financial Assets and Liabilities (Details) - Fair Value, Recurring [Member] - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Assets:
Assets at fair value	$ 183,998	$ 244,388
Liabilities:
Derivative liability	1,259	969
Level 1 [Member]
Assets:
Assets at fair value	93,348	147,208
Level 2 [Member]
Assets:
Assets at fair value	90,650	97,180
Level 3 [Member]
Liabilities:
Derivative liability	1,259	969
Derivative Liability Exit Fee [Member]
Liabilities:
Derivative liability	1,259	969
Derivative Liability Exit Fee [Member] \| Level 3 [Member]
Liabilities:
Derivative liability	1,259	969
Money Market Funds [Member]
Assets:
Assets at fair value	83,011	147,208
Money Market Funds [Member] \| Level 1 [Member]
Assets:
Assets at fair value	83,011	147,208
Commercial Paper [Member]
Assets:
Assets at fair value	48,153	56,041
Commercial Paper [Member] \| Level 2 [Member]
Assets:
Assets at fair value	48,153	56,041
Corporate Bonds [Member]
Assets:
Assets at fair value	39,274	33,134
Corporate Bonds [Member] \| Level 2 [Member]
Assets:
Assets at fair value	39,274	33,134
U.S. Government-Sponsored Agency Bonds [Member]
Assets:
Assets at fair value	9,337
U.S. Government-Sponsored Agency Bonds [Member] \| Level 1 [Member]
Assets:
Assets at fair value	9,337
Asset-Backed Securities [Member]
Assets:
Assets at fair value	3,223	8,005
Asset-Backed Securities [Member] \| Level 2 [Member]
Assets:
Assets at fair value	3,223	$ 8,005
U.S. Treasury Notes [Member]
Assets:
Assets at fair value	1,000
U.S. Treasury Notes [Member] \| Level 1 [Member]
Assets:
Assets at fair value	$ 1,000

Derivative Liability - Additional Information (Details) - USD ($) $ in Millions	1 Months Ended
	May 31, 2018	Sep. 30, 2020
Derivative [Line Items]
Exit Fee	$ 1.5
Solar Capital and Western Alliance Bank Loan Agreement [Member] \| Level 3 [Member]
Derivative [Line Items]
Percentage of increase in risk component		10.00%
Percentage decrease in risk component		10.00%
Fair value fluctuation due to increase in risk component		$ 0.1
Fair value fluctuation due to decrease in risk component		$ 0.1

Derivative Liability - Schedule of Changes in Fair Value (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Derivative Liability
Fair value of Exit Fee derivative liability at beginning	$ 969	$ 533
Change in estimated fair value of derivative liability	290	246
Fair value of Exit Fee derivative liability at ending	$ 1,259	$ 779

Borrowing (Details) - USD ($) $ in Thousands	May 16, 2018	Sep. 30, 2020	Dec. 31, 2019
Term Loans
Amount of term loan facility	$ 50,000	$ 51,975
Base interest rate	7.45%
Percentage of premium payable on redemption of the term loan	1.00%
Amount of fee payable upon closing of the term loan	$ 500
Additional default interest rate	4.00%
Future debt payment obligations
Total repayment obligations	$ 50,000	51,975
Less: Unamortized discount and debt issuance costs		(467)
Less: Unaccreted value of final fee		(827)
Loan payable		50,681
Loan payable, current portion			$ 1,183
Loan payable, net of current portion		$ 50,681	$ 48,831
At Maturity
Term Loans
Prepayment fee (as a percent)	3.95%
Prior to first anniversary of closing date
Term Loans
Prepayment fee (as a percent)	3.00%
After first anniversary of closing date
Term Loans
Prepayment fee (as a percent)	2.00%
After second anniversary to maturity date
Term Loans
Prepayment fee (as a percent)	1.00%
LIBOR
Term Loans
Floating interest rate	one-month LIBOR

Leases - Balance Sheet and Statement of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Additional details of the leases
Right-of-use assets	$ 2,402		$ 2,402		$ 3,970
Current portion of lease liabilities	2,770		2,770		2,608
Operating lease liability, net of current portion					$ 2,076
Total operating lease liabilities	$ 2,770		$ 2,770
Weighted-average remaining life	1 year		1 year
Weighted-average discount rate	12.99%		12.99%
Facilities
Operating lease expense	$ 648	$ 648	$ 1,944	$ 1,944
Cash paid for operating lease	$ 767	$ 660	$ 2,288	$ 1,890

Leases - Undiscounted Cash Payment Obligations (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Undiscounted cash payment obligations for its operating lease liabilities
Remainder of 2020	$ 777
2021	2,183
Total undiscounted operating lease payments	2,960
Imputed interest expenses	(190)
Total operating lease liabilities	2,770
Current portion of operating lease liability	$ 2,770	$ 2,608
Operating lease liability, net of current portion		$ 2,076

Equity Incentive Plans - Additional Information (Details) - USD ($)	1 Months Ended					3 Months Ended			9 Months Ended
	Aug. 31, 2020	Feb. 29, 2020	Aug. 31, 2019	Feb. 28, 2019	Jul. 31, 2018	Sep. 30, 2020	Jun. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average grant-date estimated fair value of options granted						$ 4.09			$ 5.03
Proceeds from issuance of common stock under stock plans									$ 1,593,000	$ 418,000
Stock-based compensation expenses						$ 2,527,000		$ 3,879,000	8,149,000	7,724,000
Proceeds						$ 459,000		$ 200,000	834,000	397,000
Issuance of common stock for services, amount									$ 310,000	$ 311,000
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares issued under ESPP	94,127	75,804	77,698	83,046
Purchase price	$ 4.88	$ 4.95	$ 2.58	$ 2.39
Proceeds	$ 400,000	$ 400,000	$ 200,000	$ 200,000
Options to Purchase Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, granted						460,167			3,109,683
Number of options exercised						142,191		4,513	346,806	6,964
Proceeds from issuance of common stock under stock plans						$ 300,000		$ 13,000	$ 800,000	$ 21,000
Issuance of common stock for services, shares						0		0	42,403	113,136
Issuance of common stock for services, amount						$ 300,000		$ 300,000	$ 300,000	$ 300,000
Performance-Based Restricted Stock Units (PRSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, granted					903,374		30,000
Number of shares, outstanding						866,528			866,528
Stock-based compensation expenses						$ 200,000		$ 2,100,000	$ 1,600,000	$ 2,100,000
Time Based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, granted						0		0	0	0
Number of shares issued upon vesting of restricted stock units						0		85,609	0	85,609

Equity Incentive Plans - Summary of Stock-Based Compensation Expense Recognized (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expenses	$ 2,527	$ 3,879	$ 8,149	$ 7,724
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expenses	963	1,670	3,165	3,197
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expenses	$ 1,564	$ 2,209	$ 4,984	$ 4,527

Equity Incentive Plans - Unrecognized Stock-Based Compensation (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($)
Options to Purchase Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized Compensation Expense	$ 14,605
Average Vesting Period	2 years 9 months 18 days
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized Compensation Expense	$ 186
Average Vesting Period	2 months 12 days

Stockholders' Equity (Details) - USD ($)	1 Months Ended	6 Months Ended
Stockholders' Equity (Details) - USD ($)	Jun. 30, 2015	Jun. 30, 2020	Sep. 30, 2020	Jul. 31, 2020
Subsidiary, Sale of Stock [Line Items]
Warrants sold and issued to purchase common stock	2,172,899
Purchase price of common shares	$ 0.125
Exercise price for warrants	$ 13.91
Warrant exercise period	5 years
Warrants exercised		0
Maximum aggregate offering price				$ 250,000,000
AT The Market Offering [Member]
Subsidiary, Sale of Stock [Line Items]
Number of shares offered, issued or sold			0
Common Stock \| AT The Market Offering [Member]
Subsidiary, Sale of Stock [Line Items]
Maximum aggregate offering price				$ 100,000,000

Net Loss Per Share - Computation of Basic and Diluted Loss Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Numerator:
Net loss	$ (18,108)	$ (23,539)	$ (65,437)	$ (75,150)
Denominator:
Weighted average common shares outstanding - basic and diluted	89,365,798	62,828,513	89,109,772	62,676,591
Net loss per share - basic and diluted	$ (0.20)	$ (0.37)	$ (0.73)	$ (1.20)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Net Loss Per Share - Additional Information (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Net Loss Per Share
Anti-dilutive securities not included in computation of diluted net loss per share attributable to common stockholders	9.6	10.5	10.4	10.2

Collaboration and Licensing Agreements - Additional Information (Details)	1 Months Ended					3 Months Ended		9 Months Ended		12 Months Ended	35 Months Ended
	Nov. 30, 2019 USD ($) item	Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Nov. 30, 2017 USD ($)	Jun. 30, 2015 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue						$ 2,713,000	$ 3,013,000	$ 5,762,000	$ 3,031,000
Unbilled revenue						750,000		750,000			$ 750,000	$ 750,000
Cost of revenue							600,000	141,000	600,000
Other
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue						1,357,000	13,000	1,400,000	31,000
Astra Zeneca
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Cost of revenue						0	100,000	100,000	100,000
Cost of revenue, aggregate amount recognized						10,600,000		10,600,000			10,600,000
Cost of revenue, Amount Paid								10,600,000
Astra Zeneca \| Maximum
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Payment per termination agreement					$ 75,000,000.0			75,000,000.0
2019 KKC Agreement \| Kyowa Kirin Co. Ltd
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Number of pre-clinical study-ready compounds \| item	2
Number of compounds inhibiting the first undisclosed target \| item	1
Upfront payment recognized	$ 10,000,000.0
License fee receivable, first installment	$ 5,000,000.0
Term of payment of license fee, first installment	30 days
License fee receivable, Second instalment	$ 5,000,000.0
Term of agreement	2 years
Initial transaction price	$ 10,000,000.0
Revenue						1,400,000		3,700,000
Change in estimates						0		0
Transaction price allocated to partially unsatisfied performance obligations						5,900,000		5,900,000			5,900,000
Uncharged license fees						900,000		900,000			900,000
2019 KKC Agreement \| Kyowa Kirin Co. Ltd \| Minimum
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Number of development candidates \| item	1
Number of separate collaborative agreements \| item	1
2017 KKC Agreement \| Kyowa Kirin Co. Ltd
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Upfront payment recognized				$ 30,000,000.0
Uncharged license fees												1,000,000.0
Upfront payment received				30,000,000.0
Unbilled revenue												$ 5,000,000.0
Development milestones received											$ 5,000,000.0
Commercialization milestones				80,400,000
2017 KKC Agreement \| Kyowa Kirin Co. Ltd \| Maximum
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Development milestones				$ 55,000,000.0
2017 KKC Agreement \| Kyowa Kirin Co. Ltd \| Other
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue						1,400,000	13,000,000	1,400,000	31,000,000
XuanZhu Agreement \| XuanZhu
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue								0
Upfront payment received	$ 750,000
License fee recognized	1,500,000
Second milestone payment	$ 750,000
Fosun Agreement \| Fosun Pharma
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Upfront payment recognized			$ 12,000,000.0							$ 12,000,000.0
Revenue						0	300,000.0	0	300,000.0
Future development milestones										$ 110,000,000.0
Fosun Agreement \| Fosun Pharma \| Maximum
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Threshold percentage of net sales for tiered royalties			20.00%
Knight Agreement \| Knight
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue						$ 0	$ 0	$ 700,000	$ 0
Upfront payment received		$ 2,300,000
Knight Agreement \| Knight \| Maximum
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Future development milestones		$ 16,400,000
Development and Commercialization \| Astra Zeneca
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percentage of royalty revenue (as a percent)					10.00%
Percentage of non royalty revenue (as a percent)					20.00%

Collaboration and Licensing Agreements - Schedule of Changes in Deferred Revenue (Details) - 2019 KKC Agreement $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($)
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Balance at December 31, 2019	$ 4,541
Decreases due to revenue recognized in the period for which cash has been received	(1,828)
Decreases due to revenue recognized in the period for which cash has not been received	(1,828)
Balance at September 30, 2020	$ 885

Contingencies - Additional Information (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019
Contingencies
Contingent liabilities	$ 0	$ 0

Subsequent Events - Additional Information (Details) - Subsequent Event [Member] - USD ($)	Oct. 09, 2020	Oct. 08, 2020
Subsequent Event [Line Items]
Prepayment fee (as a percent)	4.95%	3.95%
Amendment fee	$ 125,000
LIBOR \| Minimum
Subsequent Event [Line Items]
Floating interest rate (as a percent)	0.25%