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EX-32.2 - EX-32.2 - ChemoCentryx, Inc.ccxi-ex322_9.htm
EX-32.1 - EX-32.1 - ChemoCentryx, Inc.ccxi-ex321_10.htm
EX-31.2 - EX-31.2 - ChemoCentryx, Inc.ccxi-ex312_6.htm
EX-31.1 - EX-31.1 - ChemoCentryx, Inc.ccxi-ex311_7.htm
EX-10.3 - EX-10.3 - ChemoCentryx, Inc.ccxi-ex103_15.htm
EX-10.2 - EX-10.2 - ChemoCentryx, Inc.ccxi-ex102_16.htm
EX-10.1 - EX-10.1 - ChemoCentryx, Inc.ccxi-ex101_17.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

Form 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

 

Commission File Number: 001-35420

ChemoCentryx, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware

94-3254365

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

 

 

850 Maude Avenue

Mountain View, California

94043

(Address of Principal Executive Offices)

(Zip Code)

 

(650) 210-2900

(Registrant’s Telephone Number, Including Area Code)

 

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

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

CCXI

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒  No   

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    ☒  Yes      No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act.

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

The number of outstanding shares of the registrant’s common stock, par value $0.001 per share, as of April 30, 2020 was 61,854,015.

 

 

 


 

CHEMOCENTRYX, INC.

 

QUARTERLY REPORT ON FORM 10-Q

For the quarterly period ended March 31, 2020

Table of Contents

 

 

 

 

PART I. FINANCIAL INFORMATION

Page

 

 

 

Item 1.

Financial Statements (Unaudited)

3

 

 

 

 

Condensed Consolidated Balance Sheets – March 31, 2020 and December 31, 2019

3

 

 

 

 

Condensed Consolidated Statements of Operations – Three Months Ended March 31, 2020 and 2019

4

 

 

 

 

Condensed Consolidated Statements of Comprehensive Loss – Three Months Ended March 31, 2020 and 2019

5

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity – Three Months Ended March 31, 2020 and 2019

6

 

 

 

 

Condensed Consolidated Statements of Cash Flows – Three Months Ended March 31, 2020 and 2019

7

 

 

 

 

Notes to Condensed Consolidated Financial Statements

8

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

19

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

26

 

 

 

Item 4.

Controls and Procedures

27

 

 

PART II. OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

28

 

 

 

Item 1A.

Risk Factors

28

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

29

 

 

 

Item 3.

Defaults Upon Senior Securities

29

 

 

 

Item 4.

Mine Safety Disclosures

29

 

 

 

Item 5.

Other Information

29

 

 

 

Item 6.

Exhibits

29

 

 

EXHIBIT INDEX

30

 

 

SIGNATURES

31

 

2


 

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements

CHEMOCENTRYX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and par value data)

(unaudited)

 

 

 

March 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

59,436

 

 

$

39,179

 

Short-term investments

 

 

124,255

 

 

 

133,607

 

Accounts receivable, other

 

 

153

 

 

 

176

 

Accounts receivable from related party

 

 

15

 

 

 

 

Prepaid expenses and other current assets

 

 

2,810

 

 

 

1,400

 

Total current assets

 

 

186,669

 

 

 

174,362

 

Property and equipment, net

 

 

2,746

 

 

 

2,154

 

Long-term investments

 

 

5,140

 

 

 

29,454

 

Operating lease right-of-use assets

 

 

1,407

 

 

 

1,704

 

Other assets

 

 

1,340

 

 

 

1,409

 

Total assets

 

$

197,302

 

 

$

209,083

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,371

 

 

$

1,532

 

Accrued and other current liabilities

 

 

14,811

 

 

 

19,806

 

Deferred revenue from related party

 

 

40,764

 

 

 

37,742

 

Total current liabilities

 

 

57,946

 

 

 

59,080

 

Long-term debt, net

 

 

24,178

 

 

 

19,786

 

Non-current deferred revenue from related party

 

 

54,234

 

 

 

63,095

 

Other non-current liabilities

 

 

783

 

 

 

1,122

 

Total liabilities

 

 

137,141

 

 

 

143,083

 

Commitments (Note 7)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value, 10,000,000 shares authorized;

   no shares issued and outstanding

 

 

 

 

 

 

Common stock, $0.001 par value, 200,000,000 shares authorized;

  61,792,661 and 60,234,784 shares issued and outstanding at

  March 31, 2020 and December 31, 2019, respectively

 

 

62

 

 

 

60

 

Additional paid-in capital

 

 

511,571

 

 

 

495,624

 

Note receivable

 

 

(16

)

 

 

(16

)

Accumulated other comprehensive income

 

 

217

 

 

 

318

 

Accumulated deficit

 

 

(451,673

)

 

 

(429,986

)

Total stockholders’ equity

 

 

60,161

 

 

 

66,000

 

Total liabilities and stockholders’ equity

 

$

197,302

 

 

$

209,083

 

 

See accompanying notes.

3


 

CHEMOCENTRYX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

March 31,

 

 

 

2020

 

 

2019

 

Revenue:

 

 

 

 

 

 

 

 

Collaboration and license revenue from related party

 

$

5,855

 

 

$

8,327

 

Grant revenue

 

 

153

 

 

 

 

Total revenue

 

 

6,008

 

 

 

8,327

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

 

19,311

 

 

 

15,354

 

General and administrative

 

 

8,820

 

 

 

5,501

 

Total operating expenses

 

 

28,131

 

 

 

20,855

 

Loss from operations

 

 

(22,123

)

 

 

(12,528

)

Other income (expense):

 

 

 

 

 

 

 

 

Interest income

 

 

984

 

 

 

1,121

 

Interest expense

 

 

(548

)

 

 

(542

)

Total other income, net

 

 

436

 

 

 

579

 

Net loss

 

$

(21,687

)

 

$

(11,949

)

Basic and diluted net loss per common share

 

$

(0.35

)

 

$

(0.23

)

Shares used to compute basic and diluted net loss per

   common share

 

 

61,295

 

 

 

52,395

 

 

See accompanying notes.

4


 

CHEMOCENTRYX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

 

(in thousands)

(unaudited)

 

 

 

Three Months Ended

March 31,

 

 

 

2020

 

 

2019

 

Net loss

 

$

(21,687

)

 

$

(11,949

)

Unrealized gain (loss) on available-for-sale securities

 

 

(101

)

 

 

194

 

Comprehensive loss

 

$

(21,788

)

 

$

(11,755

)

 

See accompanying notes.

5


 

CHEMOCENTRYX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

 

(in thousands, except share data)

(unaudited)

 

 

 

Common Stock

 

 

 

 

Additional

Paid-In

 

 

 

 

Note

 

 

 

 

Accumulated

Other

Comprehensive

 

 

 

 

Accumulated

 

 

 

 

Total

Stockholders'

 

 

 

Shares

 

 

 

 

Amount

 

 

 

 

Capital

 

 

 

 

Receivable

 

 

 

 

Income (Loss)

 

 

 

 

Deficit

 

 

 

 

Equity

 

Balance as of December 31, 2019

 

 

60,234,784

 

 

 

 

$

60

 

 

 

 

$

495,624

 

 

 

 

$

(16

)

 

 

 

$

318

 

 

 

 

$

(429,986

)

 

 

 

$

66,000

 

Net loss

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

(21,687

)

 

 

 

 

(21,687

)

Unrealized loss on investments

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

(101

)

 

 

 

 

-

 

 

 

 

 

(101

)

Issuance of common stock under

    equity incentive plans

 

 

1,645,869

 

 

 

 

 

2

 

 

 

 

 

14,797

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

14,799

 

Repurchased shares upon vesting of

    restricted stock units for tax

    withholdings

 

 

(87,992

)

 

 

 

 

-

 

 

 

 

 

(3,480

)

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

(3,480

)

Employee stock-based compensation

 

 

-

 

 

 

 

 

-

 

 

 

 

 

4,374

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

4,374

 

Compensation expense related to

    options granted to consultants

 

 

-

 

 

 

 

 

-

 

 

 

 

 

256

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

256

 

Balance as of March 31, 2020

 

 

61,792,661

 

 

 

 

$

62

 

 

 

 

$

511,571

 

 

 

 

$

(16

)

 

 

 

$

217

 

 

 

 

$

(451,673

)

 

 

 

$

60,161

 

 

 

 

Common Stock

 

 

 

 

Additional

Paid-In

 

 

 

 

Note

 

 

 

 

Accumulated

Other

Comprehensive

 

 

 

 

Accumulated

 

 

 

 

Total

Stockholders'

 

 

 

Shares

 

 

 

 

Amount

 

 

 

 

Capital

 

 

 

 

Receivable

 

 

 

 

Income (Loss)

 

 

 

 

Deficit

 

 

 

 

Equity

 

Balance as of December 31, 2018

 

 

50,652,238

 

 

 

 

$

51

 

 

 

 

$

389,398

 

 

 

 

$

(16

)

 

 

 

$

(198

)

 

 

 

$

(374,497

)

 

 

 

$

14,738

 

Net loss

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

(11,949

)

 

 

 

 

(11,949

)

Unrealized gain on investments

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

194

 

 

 

 

 

-

 

 

 

 

 

194

 

Issuance of common stock

    through Equity Distribution

    Agreement, net of issuance costs

 

 

6,491,196

 

 

 

 

 

6

 

 

 

 

 

73,270

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

73,276

 

Issuance of common stock under

    equity incentive plans

 

 

690,100

 

 

 

 

 

1

 

 

 

 

 

2,851

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

2,852

 

Repurchased shares upon vesting of

    restricted stock units for tax

    withholdings

 

 

(107,619

)

 

 

 

 

-

 

 

 

 

 

(1,174

)

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

(1,174

)

Employee stock-based compensation

 

 

-

 

 

 

 

 

-

 

 

 

 

 

2,662

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

2,662

 

Compensation expense related to

    options granted to consultants

 

 

-

 

 

 

 

 

-

 

 

 

 

 

40

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

40

 

Balance as of March 31, 2019

 

 

57,725,915

 

 

 

 

$

58

 

 

 

 

$

467,047

 

 

 

 

$

(16

)

 

 

 

$

(4

)

 

 

 

$

(386,446

)

 

 

 

$

80,639

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes.

 

6


 

CHEMOCENTRYX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(in thousands)

(unaudited)

 

 

 

Three Months Ended

March 31,

 

 

 

2020

 

 

2019

 

Operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(21,687

)

 

$

(11,949

)

Adjustments to reconcile net loss to net cash used in

   operating activities:

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

4,630

 

 

 

2,702

 

Depreciation of property and equipment

 

 

143

 

 

 

141

 

Amortization of right-of-use assets

 

 

297

 

 

 

239

 

Non-cash interest income, net

 

 

155

 

 

 

(436

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, other

 

 

23

 

 

 

 

Accounts receivable due from related party

 

 

(15

)

 

 

1,891

 

Prepaids and other current assets

 

 

(754

)

 

 

(1,778

)

Other assets

 

 

69

 

 

 

180

 

Accounts payable

 

 

1,042

 

 

 

327

 

Other liabilities

 

 

(5,510

)

 

 

(1,443

)

Deferred revenue from related party

 

 

(5,839

)

 

 

(8,160

)

Net cash used in operating activities

 

 

(27,446

)

 

 

(18,286

)

Investing activities

 

 

 

 

 

 

 

 

Purchases of property and equipment, net

 

 

(868

)

 

 

(46

)

Purchases of investments

 

 

(11,434

)

 

 

(75,235

)

Sales of investments

 

 

 

 

 

4,967

 

Maturities of investments

 

 

44,330

 

 

 

65,170

 

Net cash provided by (used in) investing activities

 

 

32,028

 

 

 

(5,144

)

Financing activities

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

 

 

 

73,276

 

Proceeds from exercise of stock options

 

 

14,797

 

 

 

2,573

 

Employees' tax withheld and paid for restricted stock units

 

 

(3,480

)

 

 

(1,174

)

Borrowings under credit facility agreement, net of issuance costs

 

 

4,358

 

 

 

 

Net cash provided by financing activities

 

 

15,675

 

 

 

74,675

 

Net increase in cash, cash equivalents and restricted cash

 

 

20,257

 

 

 

51,245

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

40,259

 

 

 

28,088

 

Cash, cash equivalents and restricted cash at end of period

 

$

60,516

 

 

$

79,333

 

Supplemental disclosures of cash flow information

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

407

 

 

$

422

 

Right-of-use assets obtained in exchange for lease obligations (1)

 

$

 

 

$

1,301

 

Purchases of property and equipment, net recorded in

   accounts payable

 

$

(132

)

 

$

 

 

(1)

Amount for the three months ended March 31, 2019 include the transition adjustment of $1,301 for the adoption of Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842).

See accompanying notes.

7


 

CHEMOCENTRYX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2020

(unaudited)

1.

Description of Business

ChemoCentryx, Inc. (the Company) commenced operations in 1997. The Company is a biopharmaceutical company focused on the development and commercialization of new medications targeted at inflammatory disorders, autoimmune diseases and cancer.   The Company’s principal operations are in the United States and it operates in one segment.

Unaudited Interim Financial Information

The financial information filed is unaudited. The Condensed Consolidated Financial Statements included in this report reflect all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for the fair statement of the results of operations for the interim periods covered and of the financial condition of the Company at the date of the interim balance sheet. The December 31, 2019 Condensed Consolidated Balance Sheet was derived from audited financial statements. The results for interim periods are not necessarily indicative of the results for the entire year or any other interim period. The Condensed Consolidated Financial Statements should be read in conjunction with the Company’s financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on March 10, 2020.

2.

Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from these estimates.

Concentration of Credit Risk

The Company invests in a variety of financial instruments and, by its policy, limits the amount of credit exposure with any one issuer, industry or geographic area.

Accounts receivable are typically unsecured and are concentrated in the pharmaceutical industry and government sector. Accordingly, the Company may be exposed to credit risk generally associated with pharmaceutical companies and government funded entities. The Company has not historically experienced any significant losses due to concentration of credit risk.

Total accounts receivable consists of the following (in thousands):

 

 

 

March 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Vifor (International) Ltd., and/or its affiliates, or

   collectively, Vifor

 

$

15

 

 

$

 

U.S. Food and Drug Administration

 

 

153

 

 

 

176

 

 

 

$

168

 

 

$

176

 

 

Net Loss Per Share

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for common stock equivalents.  

8


 

Diluted net loss per share is computed by dividing net loss attributable to common stockholders by the sum of the weighted-average number of common shares outstanding and dilutive common stock equivalent shares outstanding for the period. The Company’s potentially dilutive common stock equivalent shares, which include incremental common shares issuable upon (i) the exercise of outstanding stock options and warrants, (ii) vesting of restricted stock units (RSUs) and restricted stock awards (RSAs), and (iii) the purchase from contributions to the 2012 Employee Stock Purchase Plan (the ESPP), (calculated based on the treasury stock method), are only included in the calculation of diluted net loss per share when their effect is dilutive.

For the three months ended March 31, 2020 and 2019, the following potentially dilutive securities were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect:

 

 

 

Three Months Ended

March 31,

 

 

 

2020

 

 

2019

 

Options to purchase common stock, including purchases

   from contributions to ESPP

 

 

8,466,444

 

 

 

11,073,806

 

Restricted stock units

 

 

419,409

 

 

 

374,352

 

Restricted stock awards

 

 

30,896

 

 

 

27,278

 

Warrants to purchase common stock

 

 

150,000

 

 

 

150,000

 

 

 

 

9,066,749

 

 

 

11,625,436

 

 

Comprehensive Loss

Comprehensive loss comprises net loss and other comprehensive income (loss). For the periods presented, other comprehensive income (loss) consists of unrealized gains and losses on the Company’s available-for-sale securities. For the three months ended March 31, 2020, there were no sales of investments and therefore there were no reclassifications of comprehensive loss. For the three months ended March 31, 2019, amounts reclassified from accumulated other comprehensive income (loss) to net loss for unrealized gains (losses) on available-for-sale securities were not significant, and were recorded as part of other income, net in the Condensed Consolidated Statements of Operations.  

Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standard Board issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments. The new standard replaces the incurred loss impairment methodology under the current standard with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The Company is required to use a forward-looking expected credit loss model for accounts receivable and other financial instruments. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. The new standard became effective for the Company on January 1, 2020. The Company’s adoption on January 1, 2020 did not have a material impact on the consolidated financial statements.

The Company has reviewed other recent accounting pronouncements and concluded they are either not applicable to the business or that no material effect is expected on the consolidated financial statements as a result of future adoption.

3.

Cash Equivalents, Restricted Cash and Investments

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash Flows (in thousands):

 

  

 

March 31,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Cash and cash equivalents

 

$

59,436

 

 

$

39,179

 

Restricted cash included in Other assets

 

 

1,080

 

 

 

1,080

 

Total cash, cash equivalents and restricted cash

 

$

60,516

 

 

$

40,259

 

9


 

 

Restricted cash as of March 31, 2020 was held as collateral for stand-by letters of credit issued by the Company to its landlord in connection with the lease of the Company’s facility in San Carlos, California. See “Note 7. Commitments” for additional information of this lease.

Cash Equivalents and Investments

The amortized cost and fair value of cash equivalents and investments at March 31, 2020 and December 31, 2019 were as follows (in thousands):

 

  

 

March 31, 2020

 

 

 

Amortized

 

 

Gross Unrealized

 

 

Fair

 

 

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

Money market fund

 

$

58,649

 

 

$

 

 

$

 

 

$

58,649

 

U.S. treasury securities

 

 

28,077

 

 

 

241

 

 

 

 

 

 

28,318

 

Commercial paper

 

 

15,915

 

 

 

 

 

 

 

 

 

15,915

 

Asset-backed securities

 

 

15,089

 

 

 

42

 

 

 

(4

)

 

 

15,127

 

Corporate debt securities

 

 

70,097

 

 

 

26

 

 

 

(88

)

 

 

70,035

 

Total available-for-sale securities

 

$

187,827

 

 

$

309

 

 

$

(92

)

 

$

188,044

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Classified as:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

$

58,649

 

Short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

124,255

 

Long-term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,140

 

Total available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

$

188,044

 

 

  

 

December 31, 2019

 

 

 

Amortized

 

 

Gross Unrealized

 

 

Fair

 

 

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

Money market fund

 

$

30,353

 

 

$

 

 

$

 

 

$

30,353

 

U.S. treasury securities

 

 

40,245

 

 

 

47

 

 

 

 

 

 

40,292

 

Commercial paper

 

 

12,429

 

 

 

 

 

 

 

 

 

12,429

 

Asset-backed securities

 

 

25,436

 

 

 

50

 

 

 

 

 

 

25,486

 

Corporate debt securities

 

 

84,605

 

 

 

225

 

 

 

(4

)

 

 

84,826

 

Total available-for-sale securities

 

$

193,068

 

 

$

322

 

 

$

(4

)

 

$

193,386

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Classified as:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

$

30,325

 

Short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

133,607

 

Long-term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

29,454

 

Total available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

$

193,386

 

 

Cash equivalents in the tables above exclude cash of $0.8 million and $8.9 million as of March 31, 2020 and December 31, 2019, respectively.  All available-for-sale securities held as of March 31, 2020 had contractual maturities of less than two years. There have been no significant realized gains or losses on available-for-sale securities for the periods presented. The Company applies the specific identification method to determine the cost basis of the securities sold. No significant available-for-sale securities held as of March 31, 2020 have been in a continuous unrealized loss position for more than 12 months. As of March 31, 2020, unrealized losses on available-for-sale investments are not attributed to credit risk. The Company believes that it is more-likely-than-not that investments in an unrealized loss position will be held until maturity or the recovery of the cost basis of the investment. The Company believes that an allowance for credit losses is unnecessary because the unrealized losses on certain of the Company’s marketable securities are due to market factors. To date, the Company has not recorded any impairment charges on marketable securities.

10


 

4.

Fair Value Measurements

The Company determines the fair value of financial assets and liabilities using three levels of inputs as follows:

Level 1—Inputs which include quoted prices in active markets for identical assets and liabilities.

Level 2—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—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Recurring Fair Value Measurements

The Company’s financial assets subject to fair value measurements on a recurring basis and the level of inputs used in such measurements were as follows as of March 31, 2020 and December 31, 2019 (in thousands):