Quarterly Report (10-q)

Date : 05/09/2019 @ 10:07PM
Source : Edgar (US Regulatory)
Stock : Calithera Biosciences, Inc. (CALA)
Quote : 4.08  -0.06 (-1.45%) @ 1:00AM

Quarterly Report (10-q)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

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

For the quarterly period ended March 31, 2019

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: 001-36644

 

CALITHERA BIOSCIENCES, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

27-2366329

(State or other jurisdiction

of incorporation or organization)

 

(I.R.S. Employer

Identification No.)

343 Oyster Point Blvd., Suite 200

South San Francisco, CA 94080

(Address of principal executive offices including zip code)

Registrant’s telephone number, including area code: (650) 870-1000

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

 

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 (§232.405 of this chapter) 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  

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, 0.0001 par value

 

CALA

 

The Nasdaq Global Select Market

As of May 3, 2019, the registrant had 39,240,931 shares of common stock, $0.0001 par value per share, outstanding.

 

 


Calithera Biosciences, Inc.

Quarterly Report on Form 10-Q

For the Quarter Ended March 31, 2019

INDEX

 

 

  

Page

PART I. FINANCIAL INFORMATION  

  

3

 

 

 

Item 1.

 

Financial Statements (Unaudited)

  

3

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets at March 31, 2019, and December 31, 2018

 

3

 

 

Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2019 and 2018 

 

4

 

 

Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2019 and 2018

 

5

 

 

Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2019 and 2018

 

6

 

 

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018

 

7

 

 

Notes to Condensed Consolidated Financial Statements 

  

8

 

 

 

 

 

Item 2.

 

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

  

18

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk 

  

26

 

 

 

 

 

Item 4.

 

Controls and Procedures 

  

26

 

 

 

 

 

PART II. OTHER INFORMATION 

  

27

 

 

 

Item 1.

 

Legal Proceedings

  

27

 

 

 

 

 

Item 1A.

 

Risk Factors

  

27

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

  

51

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

  

51

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

  

51

 

 

 

 

 

Item 5.

 

Other Information

  

51

 

 

 

 

 

Item 6.

 

Exhibits

  

52

 

 

 

 

 

SIGNATURES

  

53

 

 

 

 

 

2


PART I. – FINANC IAL INFORMATION

Item 1. Financial Statements

 

Calithera Biosciences, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except per share amounts)

 

 

March 31, 2019

 

 

December 31, 2018

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

40,584

 

 

$

51,058

 

Short-term investments

 

76,415

 

 

 

85,095

 

Receivables from collaborations

 

2,513

 

 

 

1,997

 

Prepaid expenses and other current assets

 

1,686

 

 

 

2,102

 

Total current assets

 

121,198

 

 

 

140,252

 

Other assets

 

632

 

 

 

569

 

Restricted cash

 

440

 

 

 

440

 

Property and equipment, net

 

1,339

 

 

 

1,464

 

Operating lease right-of-use asset

 

8,297

 

 

 

 

Total assets

$

131,906

 

 

$

142,725

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

$

1,612

 

 

$

1,247

 

Accrued liabilities

 

16,332

 

 

 

13,634

 

Total current liabilities

 

17,944

 

 

 

14,881

 

Noncurrent operating lease liability

 

7,988

 

 

 

 

Deferred rent

 

 

 

 

1,130

 

Total liabilities

 

25,932

 

 

 

16,011

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

Common stock, $0.0001 par value, 200,000 shares authorized

    as of March 31, 2019, and December 31, 2018;

    39,083 and 38,834 shares issued and outstanding as

    of March 31, 2019, and December 31, 2018, respectively

 

4

 

 

 

4

 

Additional paid-in capital

 

325,905

 

 

 

322,993

 

Accumulated deficit

 

(219,928

)

 

 

(196,170

)

Accumulated other comprehensive loss

 

(7

)

 

 

(113

)

Total stockholders’ equity

 

105,974

 

 

 

126,714

 

Total liabilities and stock and stockholders’ equity

$

131,906

 

 

$

142,725

 

 

 

 

 

 

 

 

 

 

See accompanying notes.

 

 

 

3


Calithera Biosciences, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)

 

 

Three Months Ended March 31,

 

 

2019

 

 

2018

 

Revenue:

 

 

 

 

 

 

 

Collaboration revenue

$

 

 

$

5,189

 

Total revenue

 

 

 

 

5,189

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

20,239

 

 

 

15,493

 

General and administrative

 

4,164

 

 

 

3,508

 

Total operating expenses

 

24,403

 

 

 

19,001

 

Loss from operations

 

(24,403

)

 

 

(13,812

)

Interest income, net

 

716

 

 

 

606

 

Net loss

$

(23,687

)

 

$

(13,206

)

Net loss per share, basic and diluted

$

(0.61

)

 

$

(0.37

)

Weighted average common shares used to compute net loss per share, basic and diluted

 

38,866

 

 

 

35,779

 

 

See accompanying notes.

 

4


Calithera Biosciences, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

(In thousands)

 

 

Three Months Ended March 31,

 

 

2019

 

 

2018

 

Net loss

$

(23,687

)

 

$

(13,206

)

Other comprehensive gain (loss):

 

 

 

 

 

 

 

Net unrealized gain (loss) on available-for-sale securities

 

106

 

 

 

(56

)

Total comprehensive loss

$

(23,581

)

 

$

(13,262

)

 

See accompanying notes.

 

 

5


Calithera Biosciences, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(In thousands)

 

 

 

Three Months Ended March 31, 2019

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional

Paid-In

Capital

 

 

Accumulated

Deficit

 

 

Accumulated

Other

Comprehensive

Loss

 

 

Total

Stockholders'

Equity

 

Balance at December 31, 2018

 

 

38,834

 

 

$

4

 

 

$

322,993

 

 

$

(196,170

)

 

$

(113

)

 

$

126,714

 

Issuance of common stock in connection with

   at-the-market offering, net of underwriting

   commissions and issuance costs

 

 

243

 

 

 

 

 

 

1,150

 

 

 

 

 

 

 

 

 

1,150

 

Exercise of stock options

 

 

6

 

 

 

 

 

 

8

 

 

 

 

 

 

 

 

 

8

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

1,683

 

 

 

 

 

 

 

 

 

1,683

 

Cumulative-effect adjustment from adoption

   of ASU 2018-07 accounting standard on

   stock compensation

 

 

 

 

 

 

 

 

71

 

 

 

(71

)

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(23,687

)

 

 

 

 

 

(23,687

)

Unrealized gain on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

106

 

 

 

106

 

Balance at March 31, 2019

 

 

39,083

 

 

$

4

 

 

$

325,905

 

 

$

(219,928

)

 

$

(7

)

 

$

105,974

 

 

 

 

Three Months Ended March 31, 2018

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Additional

Paid-In

Capital

 

 

Accumulated

Deficit

 

 

Accumulated

Other

Comprehensive

Loss

 

 

Total

Stockholders'

Equity

 

Balance at December 31, 2017

 

 

35,759

 

 

$

4

 

 

$

300,906

 

 

$

(150,333

)

 

$

(270

)

 

$

150,307

 

Exercise of stock options

 

 

69

 

 

 

 

 

 

150

 

 

 

 

 

 

 

 

 

150

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

1,881

 

 

 

 

 

 

 

 

 

1,881

 

Cumulative-effect adjustment from adoption

   of ASC 606 accounting standard on revenue

   recognition

 

 

 

 

 

 

 

 

 

 

 

8,791

 

 

 

 

 

 

8,791

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(13,206

)

 

 

 

 

 

(13,206

)

Unrealized loss on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(56

)

 

 

(56

)

Balance at March 31, 2018

 

 

35,828

 

 

$

4

 

 

$

302,937

 

 

$

(154,748

)

 

$

(326

)

 

$

147,867

 

 

 

See accompanying notes.

 

6


Calithera Biosciences, I nc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

 

Three Months Ended March 31,

 

 

2019

 

 

2018

 

Cash Flows Used In Operating Activities

 

 

 

 

 

 

 

Net loss

$

(23,687

)

 

$

(13,206

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

Depreciation

 

125

 

 

 

124

 

Amortization of premiums (discounts) on investments

 

(210

)

 

 

36

 

Stock-based compensation

 

1,683

 

 

 

1,881

 

Non-cash lease expense

 

329

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Receivables from collaborations

 

(516

)

 

 

(682

)

Prepaid expenses and other current assets

 

241

 

 

 

(234

)

Other assets

 

(63

)

 

 

(174

)

Accounts payable

 

365

 

 

 

1,092

 

Accrued liabilities

 

1,461

 

 

 

1,366

 

Lease liability

 

(352

)

 

 

 

Deferred revenue

 

 

 

 

(5,189

)

Deferred rent, non-current

 

 

 

 

34

 

Net cash used in operating activities

 

(20,624

)

 

 

(14,952

)

 

 

 

 

 

 

 

 

Cash Flows Provided by Investing Activities

 

 

 

 

 

 

 

Purchases of investments

 

(14,104

)

 

 

(16,832

)

Proceeds from maturity of investments

 

23,100

 

 

 

38,026

 

Purchases of property and equipment

 

 

 

 

(26

)

Net cash provided by investing activities

 

8,996

 

 

 

21,168

 

 

 

 

 

 

 

 

 

Cash Flows Provided By Financing Activities

 

 

 

 

 

 

 

Proceeds from issuance of common stock through an at-the-market offering, net

 

1,146

 

 

 

 

Proceeds from stock option exercises

 

8

 

 

 

150

 

Net cash provided by financing activities

 

1,154

 

 

 

150

 

 

 

 

 

 

 

 

 

Net (decrease) increase in cash, cash equivalents, and restricted cash

 

(10,474

)

 

 

6,366

 

Cash, cash equivalents, and restricted cash at beginning of period

 

51,498

 

 

 

48,915

 

Cash, cash equivalents, and restricted cash at end of period

$

41,024

 

 

$

55,281

 

 

 

 

 

 

 

 

 

Supplemental Disclosure of Non-Cash Activities:

 

 

 

 

 

 

 

Unpaid amounts related to stock issuance and deferred financing costs

$

29

 

 

$

58

 

 

 

 

See accompanying notes.

 

 

7


Calithera Biosciences, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

 

 

1. Organization and Basis of Presentation

Organization

Calithera Biosciences, Inc., or the Company, was incorporated in the State of Delaware on March 9, 2010. The Company is a clinical-stage biopharmaceutical company focused on discovering and developing small molecule drugs that target novel and critical metabolic pathways in tumor and cancer-fighting immune cells. The Company’s principal operations are based in South San Francisco, California, and it operates in one segment.

Presentation

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Calithera Biosciences UK Limited and Calithera Biosciences Ireland Limited. All significant intercompany accounts and transactions have been eliminated from the condensed consolidated financial statements.

2. Summary of Significant Accounting Policies

Unaudited Interim Financial Information

The interim condensed consolidated balance sheet as of March 31, 2019, the statements of operations and comprehensive loss for the three months ended March 31, 2019 and 2018, the statements of stockholders’ equity for the three months ended March 31, 2019 and 2018, and the statements of cash flows for the three months ended March 31, 2019 and 2018, are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair presentation of the Company’s condensed consolidated financial statements included in this report. The financial data and the other information disclosed in these notes to the condensed consolidated financial statements related to the three-month periods are also unaudited. The results of operations for the three months ended March 31, 2019, are not necessarily indicative of the results to be expected for the year ending December 31, 2019, or for any other future annual or interim period. The balance sheet as of December 31, 2018, included herein was derived from the audited consolidated financial statements as of that date. These condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements included in the Company’s Form 10-K as filed with the Securities and Exchange Commission, or SEC.

Use of Estimates

The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including those related to clinical trial accrued liabilities, revenue recognition, fair value of marketable securities, 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 differ from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Cash equivalents, which consist primarily of amounts invested in money market accounts, are stated at fair value.

 

Investments

All investments have been classified as “available-for-sale” and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its investments at the time of purchase and reevaluates such designation as of each balance sheet date. Unrealized gains and losses are excluded from earnings and are reported as a component of comprehensive loss. Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in interest income, net. The cost of securities sold is based on the specific-identification method. Interest on marketable securities is included in interest income, net.

8


Restricted Cash

Restricted cash consists of money market funds held by the Company’s financial institution as collateral for the Company’s obligations under its facility lease for the Company’s corporate headquarters in South San Francisco, California.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, investments and restricted cash. The Company invests in a variety of financial instruments and, by its policy, limits these financial instruments to high credit quality securities issued by the U.S. government, U.S. government-sponsored agencies and highly rated banks and corporations, subject to certain concentration limits. The Company’s cash, cash equivalents, investments and restricted cash are held by financial institutions in the United States that management believes are of high credit quality. Amounts on deposit may at times exceed federally insured limits.

All of the Company’s collaboration revenue and the majority of the Company’s receivables from collaborations are derived from its collaboration and license agreement with Incyte Corporation, or Incyte, as described in Note 10, Collaboration and Licensing Agreements - Incyte Collaboration and License Agreement .

Revenue Recognition

The Company records revenue in accordance with Accounting Standards Codification, or ASC No. 2014-09,  Revenue from Contracts with Customers (Topic 606), or ASC 606.  Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.  

The Company has a collaboration and license agreement with Incyte, or the Incyte Collaboration Agreement, that is within the scope of ASC 606, under which it licenses certain rights to one of its product candidates to Incyte Corporation. The terms of this arrangement include payment to the Company of a non-refundable, upfront license fee, and potential development, regulatory and sales milestones, and sales royalties. Each of these payments results in collaboration revenues, except for revenues from royalties on net sales of licensed products, which would be classified as royalty revenues.

In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under its agreement, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. 

Licenses of Intellectual Property:   If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, upfront fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promised goods or services, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, upfront fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

9


Milestone Payments:   At the inception of each arrangement that includes development, regulatory or commercial milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be i ncluded in the transaction price using the most likely amount method. If it is probable that a significant reversal of cumulative revenue would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received or the underlying activity has been completed . The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluate s the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collab oration revenue in the period of adjustment. 

Royalties:   For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from any of its licensing arrangements.

 

Contract Balances

Upfront payments and fees are recorded as deferred revenue upon receipt or when due, and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts payable to the Company are recorded as accounts receivable when the Company’s right to consideration is unconditional.

The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the licensees and the transfer of the promised goods or services to the licensees will be one year or less.

The Company had no contract assets or liabilities as of March 31, 2019, and had no changes in contract assets and liabilities during the three months ended March 31, 2019.

Accrued Research and Development Costs

The Company records accrued liabilities for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of preclinical and clinical studies, and contract manufacturing activities. The Company records the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced, and includes these costs in accrued liabilities in the consolidated balance sheets and within research and development expense in the consolidated statements of operations. These costs are a significant component of the Company’s research and development expenses. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers under the service agreements. The Company makes significant judgments and estimates in determining the accrued liabilities balance in each reporting period. As actual costs become known, the Company adjusts its accrued liabilities. The Company has not experienced any material differences between accrued costs and actual costs incurred. However, the status and timing of actual services performed, number of patients enrolled, and the rate of patient enrollments may vary from the Company’s estimates, resulting in adjustments to expense in future periods. Changes in these estimates that result in material changes to the Company’s accruals could materially affect the Company’s results of operations.

Leases

Effective January 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842), or ASU 842. Operating lease right-of-use, or ROU, assets and lease liabilities are recognized at commencement and are recorded for leases with durations greater than 12 months.

10


ROU assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will e xercise that option. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company estimates an incremental borrowing rate based on the information available at commencement date, in determining the present value of lease payments. The operating lease ROU asset also includes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company elected to not separate lease compone nts and non-lease components for its long-term facility lease. Variable lease payments include lease operating expenses.

Net Loss Per Share

Basic net loss per share is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding during the period without consideration of common stock equivalents. Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods as the inclusion of all potential common shares outstanding would have been anti-dilutive.  

Recent Accounting Pronouncements

In 2016, the Financial Accounting Standards Board, or FASB, issued ASU 842, which is aimed at making leasing activities more transparent, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability. The ASU was previously required to be applied with a modified retrospective approach to each prior reporting period presented. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842) : Targeted Improvements, or ASU No. 2018-11. In issuing ASU No. 2018-11, the FASB is permitting another transition method for ASU 2016-02, which allows the transition to the new lease standard by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted the ASU on January 1, 2019, using a modified retrospective approach, and elected the transition method, which allowed the Company to record a cumulative adjustment to its accumulated deficit upon adoption. The condensed consolidated financial statements for the three-month period ended March 31, 2019, are presented under the new standard, while previous periods are not adjusted and continue to be reported in accordance with the Company’s historical accounting policy. The Company elected the practical expedients upon transition to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs. The Company also elected the practical expedient for lessees to combine lease and non-lease components for all asset classes, and elected the practical expedient to use hindsight in determining the lease term and in assessing impairment of the Company’s right-of-use assets. Upon adoption, the Company recognized in the condensed consolidated balance sheet an operating lease right-of-use asset and lease liability of approximately $8.6 million and $9.7 million, respectively, and eliminated the previously recorded deferred rent of $1.2 million, related to its facility lease. There was no impact to accumulated deficit upon adoption. Refer to Note 6, Leases, for more information.

In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation ( Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, or ASU 2018-07. The ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees. The ASU also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Revenue from Contracts with Customers (Topic 606). The Company adopted the ASU on January 1, 2019. Upon adoption, the Company recorded a cumulative-effect adjustment of $71,000 to accumulated deficit in the condensed consolidated statement of stockholders’ equity.

In August 2018, the FASB issued ASU 2018-13 , Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement , which modifies the disclosure requirements on fair value measurements. This guidance is effective for fiscal years beginning after December 15, 2019, and interim periods therein. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this new standard on its related disclosures.

In August 2018, the SEC adopted amendments to certain disclosure requirements in Securities Act Release No. 33-10532, Disclosure Update and Simplification . These amendments eliminate, modify, or integrate into other SEC requirements certain disclosure rules. Among the amendments is the requirement to present an analysis of changes in stockholders’ equity in the interim financial statements included in quarterly reports on Form 10-Q. The analysis, which can be presented as a footnote or separate statement, is required for the current and comparative quarter and year-to-date interim periods. The amendments are effective for all filings made on or after November 5, 2018. The Company adopted this new guidance and included this information in its condensed consolidated statements of stockholders’ equity in this Quarterly Report on Form 10-Q.

11


In November 2018, the FASB issued ASU 2018-18— Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606, or ASU 2018-18. This standard provides guidance on the interaction between Revenue Recognition (Topic 606) and Collaborative Arrangements (Topic 808) by aligning the unit of account guidance between the two topics and clarifying whether certain transactions between collaborative participants should be acc ounted for as revenue under Topic 606. ASU 2018-18 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company plans to adopt this new standard on January 1, 2020, and is currently evaluating the impact ASU 2018-18 will have on its financial statements and related disclosures.

In June 2016, the FASB issued ASU No. 2016-13,  Financial Instruments-Credit Losses (Topic 326): Measurement   of Credit Losses on Financial Instruments, or ASU 2016-13 The updated accounting guidance requires changes to the recognition of credit losses on financial instruments not accounted for at fair value through net income. The guidance is effective for interim and annual periods beginning after December 15, 2019. The guidance will be applied using a modified retrospective approach with the cumulative effect recognized as an adjustment to retained earnings. A prospective transition approach is required for debt securities that have recognized an other-than-temporary impairment prior to the effective date. The Company is currently evaluating the effect the guidance will have on its financial statements and related disclosures.

3. Fair Value Measurements

Fair value accounting is applied for all financial assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring basis (at least annually). Financial instruments include cash and cash equivalents, investments, receivables from collaborations, accounts payable, accrued liabilities and the current portion of deferred revenue that approximate fair value due to their relatively short maturities.

Assets and liabilities recorded at fair value on a recurring basis in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The authoritative guidance on fair value measurements establishes a three tier fair value hierarchy for disclosure of fair value measurements as follows:

Level 1 —Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2 —Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities 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 related assets or liabilities; and

Level 3 —Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Where quoted prices are available in an active market, securities are classified as Level 1. The Company classifies money market funds as Level 1. When quoted market prices are not available for the specific security, then the Company estimates fair value by using quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs obtained from various third party data providers, including but not limited to, benchmark yields, interest rate curves, reported trades, broker/dealer quotes and market reference data. The Company classifies its corporate notes and U.S. government agency securities as Level 2. Level 2 inputs for the valuations are limited to quoted prices for similar assets or liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability. There were no transfers between Level 1 and Level 2 during the periods presented.

12


The following table sets forth the fair value of our financial assets and liabilities, allocated into Level 1, Level 2 and Level 3, that was measured on a recurring basis (in thousands):

 

 

 

March 31, 2019

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Financial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

12,047

 

 

$

 

 

$

 

 

$

12,047

 

Corporate notes and commercial paper

 

 

 

 

 

63,812

 

 

 

 

 

 

63,812

 

U.S. treasury securities

 

 

 

 

 

22,410

 

 

 

 

 

 

22,410

 

U.S. government agency securities

 

 

 

 

 

18,453

 

 

 

 

 

 

18,453

 

Total financial assets

 

$

12,047

 

 

$

104,675

 

 

$

 

 

$

116,722

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Financial Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

14,077

 

 

$

 

 

$

 

 

$

14,077

 

Corporate notes and commercial paper

 

 

 

 

 

73,733

 

 

 

 

 

 

73,733

 

U.S. treasury securities

 

 

 

 

 

20,334

 

 

 

 

 

 

20,334

 

U.S. government agency securities

 

 

 

 

 

28,072

 

 

 

 

 

 

28,072

 

Total financial assets

 

$

14,077

 

 

$

122,139

 

 

$

 

 

$

136,216

 

 

4. Financial Instruments

Cash equivalents and investments, all of which are classified as available-for-sale securities and restricted cash, consisted of the following (in thousands):

 

 

March 31, 2019

 

 

December 31, 2018

 

 

Cost

 

 

Unrealized

Gain

 

 

Unrealized

(Loss)

 

 

Estimated

Fair Value

 

 

Cost

 

 

Unrealized

Gain

 

 

Unrealized

(Loss)

 

 

Estimated

Fair Value

 

Money market funds

$

12,047

 

 

$

 

 

$

 

 

$

12,047

 

 

 

$

14,077

 

 

$

 

 

$

 

 

$

14,077

 

Corporate notes and

     commercial paper

 

63,817

 

 

 

8

 

 

 

(13

)

 

 

63,812

 

 

 

 

73,769

 

 

 

 

 

 

(36

)

 

 

73,733

 

U.S. treasury securities

 

22,392

 

 

 

18

 

 

 

 

 

 

22,410

 

 

 

 

20,334

 

 

 

4

 

 

 

(4

)

 

 

20,334

 

U.S. government agency

     securities

 

18,473

 

 

 

 

 

 

(20

)

 

 

18,453

 

 

 

 

28,149

 

 

 

 

 

 

(77

)

 

 

28,072

 

 

$

116,729

 

 

$

26

 

 

$

(33

)

 

$

116,722

 

 

 

$

136,329

 

 

$

4

 

 

$

(117

)

 

$

136,216

 

Classified as:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

$

39,867

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

50,681

 

Short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

76,415

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

85,095

 

Restricted cash

 

 

 

 

 

 

 

 

 

 

 

 

 

440

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

440

 

Total cash equivalents,

   restricted cash and

   investments

 

 

 

 

 

 

 

 

 

 

 

 

$

116,722

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

136,216

 

 

At March 31, 2019, the remaining contractual maturities of available-for-sale securities were less than one year. There have been no significant realized gains or losses on available-for-sale securities for the periods presented. As of March 31, 2019, unrealized losses on cash equivalents and investments were $33,000 and the losses were deemed to be temporary. The gross unrealized loss that had been in a continuous loss position for 12 months or longer was $22,000 and $59,000 as of March 31, 2019, and December 31, 2018, respectively.  The Company had unrealized losses of $22,000 on investments with an aggregate fair value of $20.5 million that were in a continuous loss position for 12 months or longer as of March 31, 2019. The Company does not intend to sell its securities that are in an unrealized loss position, and it is unlikely that the Company will be required to sell its securities before recovery of their amortized cost basis, which may be maturity. Factors considered in determining whether a loss is temporary include the length of time and extent to which the fair value has been less than the amortized cost basis and whether the Company intends to sell the security or whether it is more likely than not that the Company would be required to sell the security before recovery of the amortized cost basis. As of March 31, 2019, the Company had a total of $117.4 million in cash, cash equivalents, restricted cash and short-term investments, which includes $0.7 million in cash and $116.7 million in cash equivalents, restricted cash and investments.

 

13


5. Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

 

 

March 31, 2019

 

 

December 31, 2018

 

Accrued clinical and manufacturing expenses

$

9,115

 

 

$

6,316

 

Accrued payroll and related expenses

 

2,390

 

 

 

3,529

 

Collaboration reimbursement advances

 

2,327

 

 

 

2,467

 

Current portion of lease liability

 

1,325

 

 

 

 

Other

 

1,175

 

 

 

1,322

 

Total accrued liabilities

$

16,332

 

 

$

13,634

 

 

6. Leases

On January 1, 2019, the Company adopted ASU 842, which requires leases with a duration greater than twelve months to be recognized on the balance sheet. We adopted the standard using the modified retrospective approach with an effective date as of the beginning the Company’s fiscal year, January 1, 2019. Prior period financial information was not recast under the new standard, and therefore, those amounts are not presented below. The Company elected the package of transition provisions available for expired or existing contracts, which allowed it to carryforward its historical assessments of 1) whether contracts are or contain leases, 2) lease classification and 3) initial direct costs. The Company also elected the hindsight practical expedient, and elected to not separate lease and non-lease components.

The Company has a non-cancelable facility lease agreement, or the Lease, for office and laboratory facilities in South San Francisco, California, with a remaining lease term of 4.84 years, through January 2024, and a two-year renewal option prior to expiration. The renewal option to extend the Lease was not considered in the determination of the right-of-use asset or the lease liability for the Lease as the Company did not consider it reasonably certain that it would exercise any such option. The Lease provides that the Company is obligated to pay certain variable costs, including taxes and operating expenses. The Lease is classified as an operating lease.  In addition, the Company has a non-cancelable sublease agreement for a portion of its facilities through February 2020. The sublease agreement provides that the subtenant is obligated to pay its share of the variable costs under the Lease. The Company has measured the present value of its lease liability using an estimated incremental borrowing rate of 9%.

The components of net operating lease costs included in the condensed consolidated statement of operations for the three months ended March 31, 2019, were as follows (in thousands):

 

Lease Costs

 

 

 

 

Straight-line rent expense related to facility operating lease

 

$

544

 

Variable rent expense related to operating lease

 

 

347

 

Sublease income

 

 

(275

)

Variable sublease income

 

 

(133

)

Net operating lease costs

 

$

483

 

 

Cash paid for amounts included in the measurement of the lease liabilities for the three months ended March 31, 2019 was $0.6 million and was included in net cash used in operating activities in the Company’s condensed consolidated statements of cash flows.

 

Supplemental balance sheet information related to the Company’s operating lease as of March 31, 2019, was as follows (in thousands):

 

Classification

 

 

 

 

Assets:

 

 

 

 

Operating lease right-of-use asset

 

$

8,297

 

Current Liabilities:

 

 

 

 

Current portion included in accrued liabilities

 

$

1,325

 

Noncurrent Liabilities:

 

 

 

 

Noncurrent operating lease liability

 

$

7,988

 

 

14


The maturities of the Company’s lease liability as of March 31, 2019, was as follows (in thousands):

 

Year ending December 31:

 

 

 

 

2019 (excluding the three months ended March 31, 2019)

 

$

1,518

 

2020

 

 

2,342

 

2021

 

 

2,413

 

2022

 

 

2,485

 

2023

 

 

2,560

 

2024

 

 

219

 

Total lease payments

 

 

11,537

 

Less: interest

 

 

(2,224

)

Present value of lease liability

 

$

9,313

 

 

7. Stockholders’ Equity

At-the-Market Offering

In August 2017, the Company entered into a sales agreement with Cowen and Company LLC, or Cowen, as sales agent and underwriter, pursuant to which the Company could issue and sell shares of its common stock with an aggregate maximum offering price of $50.0 million under an at-the-market offering program (“ATM program”). The Company will pay Cowen up to 3% of gross proceeds for any common stock sold through the sales agreement. During the three months ended March 31, 2019, the Company sold an aggregate of 242,840 shares at an average price of approximately $6.60 per share for gross proceeds of $1.6 million, resulting in net proceeds of $1.6 million after underwriting fees and offering expenses. As of March 31, 2019, $0.4 million in proceeds was receivable from unsettled trades and reflected as a reduction in additional-paid-in-capital, and $32.6 million of common stock remained available for sale under the ATM program.

 

8. Stock Based Compensation

A summary of stock option activity was as follows (in thousands, except weighted-average exercise price and contractual term amounts):

 

 

Options Outstanding

 

 

Number of

Shares

Underlying

Outstanding

Options

 

 

Weighted-

Average

Exercise

Price

 

 

Weighted-

Average

Remaining

Contractual

Term

(Years)

 

 

Aggregate

Value

Intrinsic

 

Outstanding — December 31, 2018

 

4,669

 

 

$

7.86

 

 

 

 

 

 

 

 

 

Options granted

 

1,869

 

 

$

4.72

 

 

 

 

 

 

 

 

 

Options exercised

 

(6

)

 

$

4.08

 

 

 

 

 

 

 

 

 

Options cancelled

 

(43

)

 

$

9.44

 

 

 

 

 

 

 

 

 

Outstanding — March 31, 2019

 

6,489

 

 

$

6.95

 

 

 

7.69

 

 

$

10,165

 

Exercisable — March 31, 2019

 

3,045

 

 

$

7.97

 

 

 

6.23

 

 

$

4,692

 

 

Total stock-based compensation expense related to the Company’s 2010 Equity Incentive Plan, 2014 Equity Incentive Plan and the 2014 Employee Stock Purchase Plan was as follows (in thousands):

 

 

Three Months Ended March 31,

 

 

2019

 

 

2018

 

Research and development

$

779

 

 

$

983

 

General and administrative

 

904

 

 

 

898

 

Total stock-based compensation

$

1,683

 

 

$

1,881

 

 

15


9. Net Loss per Share

Since the Company was in a loss position for all periods presented, diluted net loss per share is the same as basic net loss per share for all periods as the inclusion of all potential common shares outstanding would have been anti-dilutive.

Potentially dilutive securities that were not included in the diluted net loss per share calculations because they would be anti-dilutive were as follows (in thousands):

 

 

March 31,

 

 

2019

 

 

2018

 

Options to purchase common stock

 

6,489

 

 

 

4,516

 

Employee stock plan purchases

 

68

 

 

 

115

 

Total

 

6,557

 

 

 

4,631

 

 

 

10. Collaboration and Licensing Agreements

Incyte Collaboration and License Agreement

On January 27, 2017, the Company entered into a collaboration and license agreement with Incyte, or the Incyte Collaboration Agreement. Under the terms of the Incyte Collaboration Agreement, the Company granted Incyte an exclusive, worldwide license to develop and commercialize its small molecule arginase inhibitors for hematology and oncology indications. The parties are collaborating on and co-funding the development of the licensed products, with Incyte bearing 70% and the Company bearing 30% of global development costs. The parties will share profits and losses in the United States, with 60% to Incyte and 40% to the Company. The Company will have the right to co-detail the licensed products in the United States, and Incyte will pay the Company tiered royalties ranging from the low to mid-double digits on net sales of licensed products outside the United States. The Company may opt out of its co-funding obligation, in which case the United States profit sharing will no longer be in effect, and Incyte will pay the Company tiered royalties ranging from the low to mid-double digits on net sales of licensed products both in the United States and outside the United States, and additional royalties to reimburse the Company for previously incurred development costs.

Under the Incyte Collaboration Agreement, the Company received an upfront payment of $45.0 million in February 2017. In March 2017, the Company achieved a development milestone of $12.0 million, for which the Company received payment in May of 2017. The Company is also eligible to receive up to an additional $418.0 million in potential development, regulatory and sales milestones. Incyte and the Company will share in any future United States net profits and losses, with the Company bearing 40% and Incyte bearing 60%, respectively, and outside the United States the Company will be eligible to receive from Incyte tiered royalties, with rates in the low to mid-teens of sales.

The Incyte Collaboration Agreement also provides that the Company may choose to opt out of its co-funding obligations at any time. In this scenario, the potential development, regulatory and commercialization milestones from Incyte will be up to an additional $738.0 million. The Company would no longer be eligible to receive future United States profits and losses but would be eligible to receive tiered royalty payments on future global sales, including United States sales. In addition, if the Company opts out, the Company will receive an incremental 3% royalty on annual net sales in the United States of such licensed product until such incremental royalty equals 120% of previous development expenditures incurred by the Company.

The Incyte Collaboration Agreement is considered to be under the scope of FASB Topic 808, Collaborative Arrangements . The Company has concluded that the research and development co-funding activities were not representative of a customer relationship and this unit of account is accounted for as an increase to or reduction of research and development expenses, rather than as revenue. In addition, the Company has analogized to ASC 606 for other aspects of the arrangement. The performance obligations under the Incyte Collaboration Agreement consist of intellectual property licenses and the performance of certain manufacturing and manufacturing technology transfer services. The Company determined that the license is not distinct from the associated manufacturing and technology transfer services to be performed under the agreement. Specifically, the Company believes the license is not capable of being distinct, as Incyte did not have the know-how to manufacture the collaboration product without Calithera’s assistance until completion of the manufacturing technology transfer process, and no other third parties could perform such assistance due to the early stage nature of the licensed intellectual property as well as Calithera’s propriety knowledge with respect to the licensed intellectual property.

Subsequent to the adoption of ASC 606 on January 1, 2018, the Company determined the transaction price to be $57.0 million, representing the $45.0 million upfront payment and the $12.0 million developmental milestone payment from Incyte that was earned in March 2017. The $57.0 million transaction price was recognized over the performance period, based on the measure of progress toward completion for the combined performance obligation. The measure of progress towards completion was based on the effort of certain employees within the Company who dedicated time to complete the manufacturing services and technology transfer to Incyte. As of June 30, 2018, the manufacturing services and technology transfer to Incyte was completed. For the three months ended March 31, 2019 and 2018, the Company recognized revenue from its collaboration with Incyte totaling $0 and $5.2 million, respectively, related to the completion of the combined performance obligation.

16


Net costs associated with co-development activities performed under the agreement are included in research and development expens es in the accompanying unaudited condensed consolidated statements of operations, with any reimbursement of costs by Incyte reflected as a reduction of such expenses. For the three months ended March 31, 2019, and March 2018, net costs reimbursable by Incy te were $0.8 million and $1.1 million, respectively. As of March 31, 2019, and December 31, 2018, the receivable due from Incyte was $2.5 million and $2.0 million, respectively.

Bristol-Myers Squibb and Pfizer Collaboration Agreements

In December 2016, the Company entered into a clinical trial collaboration and supply agreement with Bristol-Myers Squibb, or BMS, to evaluate BMS’s PD-1 inhibitor nivolumab (OPDIVO®) in combination with telaglenastat. In November 2017, the agreement was expanded such that certain development costs would be shared.

In October 2018, the Company entered into a clinical trial collaboration and supply agreement with Pfizer to evaluate Pfizer’s PARP inhibitor talazoparib (Talzenna) and CDK4/6 inhibitor palbociclib (Ibrance), each in combination with telaglenastat.  

Under the terms of the clinical collaborations, BMS and Pfizer each provide reimbursement of certain development costs. Costs associated with development activities performed under the clinical collaborations are included in research and development expenses in the accompanying consolidated statements of operations, with any reimbursements of costs reflected as a reduction of such expenses. For the three months ended March 31, 2019, and March 2018, net costs reimbursed and reimbursable by BMS and Pfizer were not material to the condensed consolidated financial statements.

 

Symbioscience License Agreement

In December 2014, the Company entered into an exclusive license agreement with Mars, Inc., by and through its Mars Symbioscience division, or Symbioscience, under which the Company has been granted the exclusive, worldwide license to develop and commercialize Symbioscience’s portfolio of arginase inhibitors for use in human healthcare, or the Symbioscience License Agreement. There were no expenses related to its licensing arrangement with Mars Symbioscience recorded in the three months ended March 31, 2019 and 2018.

The Company may make future payments of up to $23.6 million contingent upon attainment of various development and regulatory miles