0001370053-21-000041 | 10-Q | XBRL Viewer

Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Schedule of ROU Assets and Lease Liabilities

Our balance sheet includes our ROU assets and lease liabilities for the non-cancellable office lease as follows (in thousands):


Leases	Classification on the Balance Sheet	March 31, 2021		December 31, 2020
Operating ROU assets	Other long-term assets	$	218	$	344
Operating lease liabilities	Other current liabilities	197		342

Costs in Cash Flow Statement

The following non-cancellable office lease costs are included in our consolidated statements of cash flow (in thousands):


		Three Months Ended March 31,
Leases	Classification on the Cash Flow	2021		2020
Operating lease cost	Operating	$	133	$	220
Cash paid for amounts included in the measurement of lease liabilities	Operating	151		239

Schedule of Future Minimum Annual Obligations

At March 31, 2021, the future minimum annual obligations for the non-cancellable office lease are as follows (in thousands):


Years Ending December 31,
2021	$	201
2022	—
2023	—
2024	—
2025	—
Thereafter	—
Total minimum payments required	201
Less imputed interest	(4)
Total	$	197

At March 31, 2021, the future minimum annual obligations for the Lease Agreement in excess of one year are as follows (in thousands):


Years Ending December 31,
2021	$	568
2022	2,328
2023	2,397
2024	2,469
2025	2,543
Thereafter	15,420
Total minimum payments required	$	25,725

Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2021

Equity [Abstract]

Schedule of Common Stock Reserved for Future Issuance

Common stock reserved for future issuance upon the exercise, issuance or conversion of the respective equity instruments at March 31, 2021 are as follows:


Issued and Outstanding:
Stock options			3,824,494

Shares Reserved For:
2017 Equity Incentive Plan			3,164,750
2017 Employee Stock Purchase Plan			1,271,237
Total			8,260,481

Equity Incentive Plans - Allocation of Share-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	$ 3,315	$ 2,975
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	1,194	1,146
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	$ 2,121	$ 1,829

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Schedule of Outstanding Potentially Dilutive Securities Excluded in the Calculation of Diluted Net Loss Per Share

The following table sets forth the weighted-average outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because to do so would be anti-dilutive (in common stock equivalent shares):


	Three Months Ended March 31,
(in thousands)		2021	2020

Options to purchase common stock		3,445	3,021

Equity Incentive Plans - Option Activity (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($) $ / shares shares
Shares Subject to Options
Stock options outstanding, beginning balance (in shares) \| shares	2,920,700
Granted (in shares) \| shares	1,011,724
Exercises (in shares) \| shares	(11,780)
Forfeitures and cancellations (in shares) \| shares	(96,150)
Stock options outstanding, ending balance (in shares) \| shares	3,824,494
Stock options exercisable, ending balance (in shares) \| shares	1,715,491
Weighted-Average Exercise Price per Share
Stock options outstanding, beginning balance (in dollars per share) \| $ / shares	$ 26.67
Granted (in dollars per share) \| $ / shares	29.63
Exercises (in dollars per share) \| $ / shares	14.20
Forfeitures and cancellations (in dollars per share) \| $ / shares	27.24
Stock options outstanding, ending balance (in dollars per share) \| $ / shares	27.48
Stock options exercisable, ending balance (in dollars per share) \| $ / shares	$ 26.91
Weighted-Average Remaining Contractual Term and Aggregate Intrinsic Value
Weighted average remaining contractual term, options outstanding (in years)	7 years 8 months 1 day
Weighted average remaining contractual term, options exercisable (in years)	5 years 8 months 12 days
Aggregate intrinsic value, options outstanding \| $	$ 17,205
Aggregate intrinsic value, options exercisable \| $	$ 12,760

Commitments and Contingencies

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Operating Leases

On November 11, 2020, we entered into an agreement to terminate our sublease (the “Sublease Termination”) with Trex Enterprises Corporation, with respect to facilities in the building at 10455 Pacific Center Court in San Diego, California (the “10455 Building”). The terms of the original sublease with Trex provided for a November 12, 2021 lease expiration. Under the Sublease Termination, we agreed to terminate the sublease agreement on December 15, 2020 with no associated penalty. We recorded a non-cash gain of approximately $0.1 million as other income, in connection with the write-off of the lease liability and corresponding ROU asset. As of March 31, 2021, there was no lease liability and corresponding ROU asset related to the 10455 Building Lease.

As of March 31, 2021, we maintain the non-cancellable office lease for our facilities at 10421 Pacific Center Court in San Diego, California, which expires on August 31, 2021. Our lease payments are fixed, and we recognize lease expense for leases on a straight-line basis over the lease term. Operating lease ROU assets and lease liabilities are recorded based on the present value of the future minimum lease payments over the lease term at commencement date. As our leases do not provide an implicit rate, we used our incremental borrowing rate based on the information available at effective date of adoption in determining the present value of future payments. The weighted-average discount rate used was 8.59%.

Our balance sheet includes our ROU assets and lease liabilities for the non-cancellable office lease as follows (in thousands):


Leases	Classification on the Balance Sheet	March 31, 2021		December 31, 2020
Operating ROU assets	Other long-term assets	$	218	$	344
Operating lease liabilities	Other current liabilities	197		342

The following non-cancellable office lease costs are included in our consolidated statements of cash flow (in thousands):


		Three Months Ended March 31,
Leases	Classification on the Cash Flow	2021		2020
Operating lease cost	Operating	$	133	$	220
Cash paid for amounts included in the measurement of lease liabilities	Operating	151		239

At March 31, 2021, the future minimum annual obligations for the non-cancellable office lease are as follows (in thousands):


Years Ending December 31,
2021	$	201
2022	—
2023	—
2024	—
2025	—
Thereafter	—
Total minimum payments required	201
Less imputed interest	(4)
Total	$	197

On May 4, 2020, we entered into a lease agreement with Wateridge Property Owner, LP, with respect to facilities in the building at 10770 Wateridge Circle, San Diego, California 92121 (the “Lease Agreement”). Under the Lease Agreement, we agreed to lease approximately 45,000 square feet of space for a term of 124 months, beginning on April 5, 2021. The terms of the Lease Agreement provide us with an option to extend the term of the lease for an additional five years, as well as a one-time option to terminate the lease after seven years with the payment of a termination fee. The monthly base rent will be $4.20 per rentable square foot and will be increased by 3% annually. Under the Lease Agreement, we are also responsible for our pro rata share of real estate taxes, building insurance, maintenance, direct expenses, and utilities. As of March 31, 2021, we have recorded $0.3 million in prepaid rent and $0.3 million as a security deposit in accordance with the terms of the Lease Agreement.

At March 31, 2021, the future minimum annual obligations for the Lease Agreement in excess of one year are as follows (in thousands):


Years Ending December 31,
2021	$	568
2022	2,328
2023	2,397
2024	2,469
2025	2,543
Thereafter	15,420
Total minimum payments required	$	25,725

Shareholder Lawsuit

On March 25, 2020, a putative securities class action was filed in the United States District Court for the Southern District of California naming the Company and certain of its current or former officers as defendants. The complaint purports to assert claims under Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Exchange Act Rule 10b-5, and Section 20(a) of the Exchange Act, on behalf of persons and entities who acquired our common stock between October 10, 2017 and November 7, 2019 (the “Class Period”). An amended complaint was filed on September 30, 2020 alleging that, during the Class Period, the defendants made material misrepresentations or omissions regarding our etokimab product candidate that artificially inflated our stock price. The plaintiff seeks, among other things, damages in an unspecified amount, as well as costs and expenses. We believe that the plaintiff’s allegations are without merit and intend to vigorously defend against the claims. Because the Company is in the early stages of this litigation matter, we are unable to estimate a reasonably possible loss or range of loss, if any, that may result from these matters. On September 1, 2020, a related shareholder derivative complaint was filed in the same Court based on allegations substantially similar to those in the class action, and asserting claims against current or former officers and directors for contribution under Sections 10(b) and 21D of the Exchange Act, breach of fiduciary duty, unjust enrichment and corporate waste. On January 28, 2021, this derivative action was voluntarily dismissed without prejudice. On May 3, 2021, another shareholder derivative complaint was filed in the same Court based on allegations substantially similar to those in the class action, and purporting to assert claims on the Company’s behalf against current or former officers and directors for alleged violation of Sections 14(a) and 20(a) of the Exchange Act, breach of fiduciary duties, unjust enrichment, waste of corporate assets and insider selling.

Fair Value Measurements and Available for Sale Investments

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements and Available for Sale Investments

Fair Value Measurements and Available for Sale InvestmentsFair Value Measurements

Our financial instruments consist principally of cash, cash equivalents, restricted cash, short-term and long-term investments, receivables, accounts payable, and notes payable. Certain of our financial assets and liabilities have been recorded at fair value in the consolidated balance sheet in accordance with the accounting standards for fair value measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Accounting guidance also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

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 supported by little or no market activities, therefore requiring an entity to develop its own assumptions.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes our assets and liabilities that require fair value measurements on a recurring basis and their respective input levels based on the fair value hierarchy:


	Fair Value Measurements at End of Period Using:
(in thousands)	Fair Value		Quoted Market Prices for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
At March 31, 2021
Money market funds(1)	$	267,463	$	267,463	$	—	$	—
Mutual funds(1)	18,928		18,928		—		—
U.S. Treasury securities(2)	74,027		74,027		—		—
Certificates of deposit(2)	2,067		—		2,067		—
Agency securities(2)	11,164		—		11,164		—
Commercial and corporate obligations(2)	16,010		—		16,010		—

At December 31, 2020
Money market funds(1)	$	188,297	$	188,297	$	—	$	—
Mutual funds(1)	57,153		57,153		—		—
U.S. Treasury securities(2)	107,697		107,697		—		—
Certificates of deposit(2)	2,436		—		2,436		—
Agency securities(2)	21,169		—		21,169		—
Commercial and corporate obligations(2)	29,441		—		29,441		—

(1) Included in cash and cash equivalents or restricted cash in the accompanying consolidated balance sheets.

(2) Included in short-term or long-term investments in the accompanying consolidated balance sheets depending on the respective maturity date.

The following methods and assumptions were used to estimate the fair value of our financial instruments for which it is practicable to estimate that value:

Marketable Securities. For fair values determined by Level 1 inputs, which utilize quoted prices in active markets for identical assets, the level of judgment required to estimate fair value is relatively low. For fair values determined by Level 2 inputs, which utilize quoted prices in less active markets for similar assets, the level of judgment required to estimate fair value is also considered relatively low.

Fair Value of Other Financial Instruments

The carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts payable, and accrued expenses approximate fair value due to their short-term nature.

Available for Sale Investments

We invest our excess cash in agency securities, debt instruments of financial institutions and corporations, commercial obligations, and U.S. Treasury securities, which we classify as available-for-sale investments. These investments are carried at fair value and are included in the tables above. The aggregate market value, cost basis, and gross unrealized gains and losses of available-for-sale investments by security type, classified in cash equivalents, short-term and long-term investments as of March 31, 2021 are as follows:


(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Total Fair Value
Agency securities(1)	$	11,167	$	—	$	(3)	$	11,164

Certificates of deposit(2)	2,063		4		—		2,067
Commercial and corporate obligations(3)	16,008		4		(2)		16,010
U.S. Treasury securities(4)	73,935		92		—		74,027
Total available-for-sale investments	$	103,173	$	100	$	(5)	$	103,268

(1) Of our outstanding agency securities, $5.0 million have maturity dates of less than one year and $6.2 million have a maturity date of between one to two years as of March 31, 2021.

(2) Of our outstanding certificates of deposit, $1.2 million have maturity dates of less than one year and $0.9 million have a maturity date of between one to two years as of March 31, 2021.

(3) All of our outstanding commercial and corporate obligations have maturity dates of less than one year as of March 31, 2021.

(4) All of our outstanding U.S. Treasury securities have maturity dates of less than one year as of March 31, 2021.

The aggregate market value, cost basis, and gross unrealized gains and losses of available-for-sale investments by security type, classified in cash equivalents, short-term and long-term investments as of December 31, 2020 are as follows:


(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Total Fair Value
Agency securities(1)	$	21,169	$	1	$	(1)	$	21,169
Certificates of deposit(2)	2,427		9		—		2,436
Commercial and corporate obligations(3)	29,414		28		(1)		29,441
US Treasury securities(4)	107,530		170		(3)		107,697
Total available-for-sale investments	$	160,540	$	208	$	(5)	$	160,743

(1) Of our outstanding agency securities, $10.0 million have maturity dates of less than one year and $11.2 million have a maturity date of between one to two years as of December 31, 2020.

(2) Of our outstanding certificates of deposit, $1.1 million have a maturity date of less than one year and $1.3 million have a maturity date of between one to two years as of December 31, 2020.

(3) Of our outstanding commercial and corporate obligations, $29.4 million have maturity dates of less than one year and $0.0 million have a maturity date of between one to two years as of December 31, 2020.

(4) Of our outstanding U.S. Treasury securities, $102.7 million have maturity dates of less than one year and $5.0 million have a maturity date of between one to two years as of December 31, 2020.

The following tables present gross unrealized losses and fair values for those investments that were in an unrealized loss position as of March 31, 2021 and December 31, 2020, aggregated by investment category and the length of time that individual securities have been in a continuous loss position:


	March 31, 2021
	Less than 12 Months				12 Months or Greater				Total
(in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Agency securities	$	6,163	$	(3)	$	—	$	—	$	6,163	$	(3)
Commercial and corporate obligations	4,777		(2)		—		—		4,777		(2)

Total	$	10,940	$	(5)	$	—	$	—	$	10,940	$	(5)


	December 31, 2020
	Less than 12 Months				12 Months or Greater				Total
(in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Agency securities	$	4,999	$	(1)	$	—	$	—	$	4,999	$	(1)
Commercial and corporate obligations	6,503		(1)		2,399		—		8,902		(1)
US Treasury Securities	35,211		(3)		—		—		35,211		(3)
Total	$	46,713	$	(5)	$	2,399	$	—	$	49,112	$	(5)

As of March 31, 2021 and 2020, unrealized losses on available-for-sale investments were not material, and accordingly, no allowance for credit losses were recorded.

- 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

Fair Value Measurements and Available for Sale Investments - Schedule of Unrealized Loss and Fair Values in a Loss Position (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Debt Securities, Available-for-sale [Line Items]
Less than 12 Months, Fair Value	$ 10,940,000		$ 46,713,000
Less than 12 Months, Gross Unrealized Losses	(5,000)		(5,000)
12 Months or Greater, Fair Value	0		2,399,000
12 Months or Greater, Gross Unrealized Losses	0		0
Fair Value	10,940,000		49,112,000
Gross Unrealized Losses	(5,000)		(5,000)
Unrealized losses on available-for-sale	0	$ 0
Allowance for credit losses	0	$ 0
Agency securities
Debt Securities, Available-for-sale [Line Items]
Less than 12 Months, Fair Value	6,163,000		4,999,000
Less than 12 Months, Gross Unrealized Losses	(3,000)		(1,000)
12 Months or Greater, Fair Value	0		0
12 Months or Greater, Gross Unrealized Losses	0		0
Fair Value	6,163,000		4,999,000
Gross Unrealized Losses	(3,000)		(1,000)
Commercial and corporate obligations
Debt Securities, Available-for-sale [Line Items]
Less than 12 Months, Fair Value	4,777,000		6,503,000
Less than 12 Months, Gross Unrealized Losses	(2,000)		(1,000)
12 Months or Greater, Fair Value	0		2,399,000
12 Months or Greater, Gross Unrealized Losses	0		0
Fair Value	4,777,000		8,902,000
Gross Unrealized Losses	$ (2,000)		(1,000)
US Treasury Securities
Debt Securities, Available-for-sale [Line Items]
Less than 12 Months, Fair Value			35,211,000
Less than 12 Months, Gross Unrealized Losses			(3,000)
12 Months or Greater, Fair Value			0
12 Months or Greater, Gross Unrealized Losses			0
Fair Value			35,211,000
Gross Unrealized Losses			$ (3,000)

Equity Incentive Plans - Narrative (Details) - USD ($) $ in Millions			3 Months Ended
	Jan. 01, 2021	Jan. 01, 2018	Mar. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost			$ 40.6
Weighted average period remaining for amortization of unrecognized compensation cost (in years)			2 years 10 months 28 days
Options to purchase common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)			4 years
Award expiration period (in years)			10 years
Options to purchase common stock \| Director Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)			1 year
Award expiration period (in years)			10 years
2017 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual increase in number of shares available for issuance		4.00%
Capital shares reserved for future issuance, increase (in shares)	1,094,223
2017 Employee Stock Purchase Plan \| Employee stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual increase in number of shares available for issuance		1.00%
Capital shares reserved for future issuance, increase (in shares)	273,555

Balance Sheet Accounts and Supplemental Disclosures - Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Balance Sheet Related Disclosures [Abstract]
Accrued compensation and related expenses	$ 2,019	$ 3,688
Accrued professional fees	638	408
Accrued research, development and manufacturing expenses	8,976	10,936
Other	193	230
Total accrued expenses	$ 11,826	$ 15,262

Collaborative Research and Development Agreements

3 Months Ended

Mar. 31, 2021

Revenue Recognition [Abstract]

Collaborative Research and Development Agreements

GlaxoSmithKline Collaboration

In March 2014, we entered into a Collaboration and Exclusive License Agreement (the “GSK Agreement”) with TESARO, Inc. (“Tesaro”), an oncology-focused biopharmaceutical company now a part of GlaxoSmithKline (Tesaro and GlaxoSmithKline are hereinafter referred to, collectively, as “GSK”). Under the terms of the GSK Agreement, we agreed to perform certain discovery and early preclinical development of therapeutic antibodies with the goal of generating immunotherapy antibodies for subsequent preclinical, clinical, regulatory, and commercial development to be performed by GSK. Under the terms of the GSK Agreement, GSK paid an upfront license fee of $17.0 million in March 2014 and agreed to provide funding to us for research and development services related to antibody discovery programs for three specific targets. In November 2014, Amendment No. 1 to the GSK Agreement was agreed by both parties to add an antibody discovery program against an undisclosed fourth target for an upfront license fee of $2.0 million.

For each development program, we are eligible to receive milestone payments of up to $18.0 million if certain preclinical and clinical trial events are achieved by GSK, up to an additional $90.0 million if certain U.S. and European regulatory submissions and approvals in multiple indications are achieved, and up to an additional $165.0 million upon the achievement of specified levels of annual worldwide net sales. We will also be eligible to receive tiered single-digit royalties related to worldwide net sales of products developed under the collaboration. Unless earlier terminated by either party upon specified circumstances, the GSK Agreement will terminate, with respect to each specific developed product, upon the later of the 12th anniversary of the first commercial sale of the product or the expiration of the last to expire of any patent. Prior to the adoption of ASC 606, Revenue from Contracts with Customers, we determined that the upfront license fees and research funding under the GSK Agreement, as amended, should be accounted for as a single unit of accounting and that the upfront license fees should be deferred and recognized as revenue over the same period that the research and development services are performed. In February 2016, Amendment No. 2 to the GSK Agreement was agreed by both parties to define the effective dates of the development programs of the GSK Agreement. We determined that the research and development services would be extended through December 31, 2016. As a result, the period over which the unrecognized license fees and discovery milestones were recognized was extended through December 31, 2016 and have since been recognized in full.

We assessed these arrangements in accordance with ASC 606 and concluded that the contract counterparty, GSK, is a customer. We identified the following material promises under the GSK Agreement: (1) the licenses under certain patent rights relating to six discovery programs (four targets) and transfer of certain development and regulatory information, (2) research and development (“R&D”) services, and (3) joint steering committee meetings. We considered the research and discovery capabilities of GSK for these specific programs, GSK’s inability to sub-license, and the fact that the discovery and optimization of these antibodies is proprietary and could not, at the time of contract inception, be provided by other vendors, to conclude that the license does not have stand-alone functionality and is therefore not distinct. Additionally, we determined that the joint steering committee participation would not have been provided without the R&D services and license agreement. Based on these assessments, we identified all services to be interrelated and therefore concluded that the promises should be combined into a single performance obligation at the inception of the arrangement.

On October 23, 2020, Amendment No. 3 to the GSK Agreement (the “Amendment”) was agreed to by both parties to permit GSK to conduct development and commercialization of Zejula, an oral, once-daily poly (ADP-ribose) polymerase (PARP) inhibitor, which has received U.S. approval for the maintenance treatment of adult patients with advanced epithelial ovarian, fallopian tube, or primary peritoneal cancer who are in a complete or partial response to first-line platinum-based chemotherapy, and is under development for additional cancer indications. In addition, under the Amendment, we were granted increased royalties upon sales of JEMPERLI (dostarlimab), an anti-PD-1 antagonist antibody under development by GSK for multiple oncological disorders. The Amendment also provided for a one-time, non-refundable cash payment of $60.0 million that we received and recognized as revenue in the fourth quarter of 2020. GSK also agreed, starting January 1, 2021, to pay us a 1% royalty on all GSK net sales of Zejula. The $1.1 billion in cash milestone payments due under the GSK Agreement remain unchanged. Additionally, under the terms of the Amendment, GSK has agreed to certain diligence commitments with respect to the future development of JEMPERLI, and the parties have agreed to review such commitments under regular joint review committee meetings going forward.

We assessed this Amendment in accordance with ASC 606 and concluded the Amendment was a contract modification to the GSK Agreement. Based on our assessment, we identified the terms of the Amendment to be interrelated to the GSK Agreement’s single performance obligation, noting completion and delivery of terms under the Amendment were satisfied by both parties with the execution of the Amendment.

As of March 31, 2021, the transaction price for the GSK Agreement and Amendment includes the upfront payment, research reimbursement revenue, one-time payment associated with the Amendment, and milestones earned to date, which are allocated in their entirety to the single performance obligation.

We earned and recognized $1.2 million in royalty revenue during the three months ended March 31, 2021 related to GSK net sales of Zejula during the period based on estimates of GSK’s sales historical experience. GSK reports sales information to us on a one quarter lag and differences between actual and estimated royalty revenues will be adjusted in the following quarter.

We earned and recognized one clinical milestone for $10.0 million during the three months ended March 31, 2021. No other future clinical or regulatory milestones have been included in the transaction price, as all milestone amounts were subject to the revenue constraint. As part of the constraint evaluation, we considered numerous factors including the fact that the receipt of milestones is outside of our control and contingent upon success in future clinical trials, an outcome that is difficult to predict, and GSK’s efforts. Any consideration related to sales-based milestones, including royalties, will be recognized when the related sales occur as they were determined to relate predominantly to the intellectual property license granted to GSK and therefore have also been excluded from the transaction price. We will re-evaluate the variable transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

Milestones recognized through March 31, 2021 under the GSK Agreement are as follows:

Anti-PD-1

(JEMPERLI/Dostarlimab)

Anti-TIM-3

(GSK4069889A/Cobolimab)

Anti-LAG-3

(GSK40974386)

Milestone Event

Amount

Quarter Recognized

Amount

Quarter Recognized

Amount

Quarter Recognized

Initiated in vivo toxicology studies using good laboratory practices (GLPs)

$1.0M

Q2'15

$1.0M

Q4'15

$1.0M

Q3'16

IND clearance from the FDA

$4.0M

Q1'16

$4.0M

Q2'16

$4.0M

Q2'17

Phase 2 clinical trial initiation

$3.0M

Q2'17

$3.0M

Q4'17

$3.0M

Q4'19

Phase 3 clinical trial initiation - first indication

$5.0M

Q3'18

—

Phase 3 clinical trial initiation - second indication

$5.0M

Q2'19

—

Filing of the first BLA - first indication

$10.0M

Q1'20

—

Filing of the first MAA - first indication

$5.0M

Q1'20

—

Filing of the first BLA - second indication

$10.0M

Q1'21

—

Milestones achieved during the discovery period were recognized as revenue pro-rata through December 31, 2016. Milestones achieved during fiscal 2017 were recognized as revenue in the period earned, while milestones after December 31,

2017 are recognized upon determination that a significant reversal of revenue would not be probable. Cash is generally received within 30 days of milestone achievement.

We recognized $11.2 million and $15.0 million in revenue under the GSK Agreement during the three months ended March 31, 2021 and 2020, respectively.

Antibody Generation Agreement with Bristol-Myers Squibb

In December 2011, we entered into a license and collaboration agreement (the “BMS Agreement”) with Celgene, now a part of Bristol-Myers Squibb (Celgene and Bristol-Myers Squibb are hereinafter referred to, collectively, as “BMS”), to develop therapeutic antibodies against multiple targets. We granted BMS the option to obtain worldwide commercial rights to antibodies generated against each of the targets under the agreement, which option was triggered on a target-by-target basis by our delivery of antibodies meeting certain pre-specified parameters pertaining to each target under the agreement.

The BMS Agreement provided for an upfront payment of $6.0 million from BMS, which we received in 2011 and recognized through 2014, milestone payments of up to $53.0 million per target, low single-digit royalties on net sales of antibodies against each target, and reimbursement of specified research and development costs.

We assessed this arrangement in accordance with ASC Topic 606 and concluded that the contract counterparty, BMS, is a customer. We identified the following material promises under the BMS Agreement: (1) the licenses under certain patent rights relating to four targets and transfer of certain development and regulatory information, (2) R&D services, (3) a written report documenting findings, and (4) steering committee meetings. We considered the research and discovery capabilities of BMS, BMS’s inability to sub-license the four targets, and the fact that the discovery and optimization of these antibodies is proprietary and could not, at the time of contract inception, be provided by other vendors, to conclude that the license does not have stand-alone functionality and is therefore not distinct. Additionally, we determined that the report of findings and steering committee participation would not have been provided without the R&D services and license agreement. Based on these assessments, we identified all services to be interrelated, and therefore concluded that the promises should be combined into a single performance obligation at the inception the arrangement.

As of March 31, 2021, the transaction price of the BMS Agreement includes the upfront payment, success fees, expense reimbursement, and milestones earned to date, which are allocated in their entirety to the single performance obligation. None of the future clinical or regulatory milestones have been included in the transaction price, as all milestone amounts were subject to the revenue constraint. As part of the constraint evaluation, we considered numerous factors, including the fact that the receipt of milestones is outside of our control and contingent upon success in future clinical trials and BMS’s efforts. Any consideration related to sales-based milestones, including royalties, will be recognized when the related sales occur as they were determined to relate predominantly to the intellectual property license granted to BMS and therefore have also been excluded from the transaction price. We will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

Milestones achieved through March 31, 2021 under the BMS Agreement are as follows:


	Anti-PD-1 (CC-90006)
Milestone Event	Amount	Quarter Recognized
Completion of first in vivo toxicology studies using GLPs	$0.5M	Q2'16
Phase 1 clinical trial initiation	$1.0M	Q4'16

Revenue from future contingent milestone payments will be recognized when it is more likely than not that the revenue will not be reversed in future periods. Cash is generally received within 30 days of milestone achievement.

There was no revenue recognized under this agreement during the three months ended March 31, 2021 and 2020.

Equity Incentive Plans (Tables)

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Summary of Activity Related to Stock Option Awards

A summary of the activity related to stock option awards during the three months ended March 31, 2021 is as follows:


	Shares Subject to Options	Weighted-Average Exercise Price per Share		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2021	2,920,700	$	26.67
Granted	1,011,724	$	29.63
Exercises	(11,780)	$	14.20
Forfeitures and cancellations	(96,150)	$	27.24
Outstanding at March 31, 2021	3,824,494	$	27.48	7.67	$	17,205
Exercisable at March 31, 2021	1,715,491	$	26.91	5.70	$	12,760

Summary of Weighted Average Assumptions in Stock Option Valuations

The estimated fair values of stock option awards granted to employees were determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions:


	Three Months Ended March 31,

	2021			2020
Risk-free interest rate		0.7	%		1.7	%
Expected volatility		93.0	%		92.0	%
Expected dividend yield		—	%		—	%
Expected term (in years)		6.18			6.25
Weighted-average grant date fair value per share	$	22.47		$	11.25

Summary of Non-cash Stock-based Compensation Expense

Total non-cash stock-based compensation expense for all stock awards that was recognized in the consolidated statements of operations and comprehensive loss is as follows:


	Three Months Ended March 31,
(in thousands)		2021		2020
Research and development		$	1,194	$	1,146
General and administrative		2,121		1,829
Total		$	3,315	$	2,975

Commitments and Contingencies - Additional Information (Details) ft² in Thousands, $ in Millions	Dec. 15, 2020 USD ($)	May 04, 2020 ft² $ / ft²	Mar. 31, 2021 USD ($)
Operating Leased Assets [Line Items]
Loss on disposal of tenant improvements and certain equipment	$ 0.1
Weighted-average discount rate			8.59%
10770 Wateridge Circle, San Diego, California 92121
Operating Leased Assets [Line Items]
Area of leased property (sqft) \| ft²		45
Lease term		124 months
Lease renewal term		5 years
Lease termination term		7 years
Monthly base rate (usd per sqft) \| $ / ft²		4.20
Increase in annual rent		3.00%
Prepaid rent			$ 0.3
Security deposit			$ 0.3

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 284,148	$ 250,456
Receivable from collaborative partners	1,247	0
Short-term investments	96,212	143,197
Prepaid expenses and other current assets	5,464	2,908
Restricted cash	60	0
Total current assets	387,131	396,561
Property and equipment, net	1,754	1,783
Long-term investments	7,056	17,546
Other long-term assets	477	602
Restricted cash	0	60
Total assets	396,418	416,552
Current liabilities:
Accounts payable	2,452	4,217
Accrued expenses	11,826	15,262
Other current liabilities	197	342
Total current liabilities	14,475	19,821
Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000 shares authorized and no shares, issued or outstanding at March 31, 2021 and December 31, 2020, respectively	0	0
Common stock, $0.001 par value, 500,000 shares authorized, 27,367 shares and 27,356 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively	27	27
Additional paid in capital	664,147	660,665
Accumulated other comprehensive loss	(111)	(4)
Accumulated deficit	(282,120)	(263,957)
Total stockholders’ equity	381,943	396,731
Total liabilities and stockholders’ equity	$ 396,418	$ 416,552

Commitments and Contingencies - Classification on the Balance Sheet (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Operating ROU assets, Other long-term assets	$ 218	$ 344
Operating lease liabilities, Other current liabilities	$ 197	$ 342
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesCurrent	us-gaap:OtherLiabilitiesCurrent

Stockholders' Equity - Summary of Common Stock Reserved for Future Issuance (Details) - shares	Mar. 31, 2021	Dec. 31, 2020
Issued and Outstanding:
Stock options issued and outstanding (in shares)	3,824,494	2,920,700
Common stock, shares reserved for issuance (in shares)	8,260,481
2017 Equity Incentive Plan
Issued and Outstanding:
Shares reserved for future award grants (in shares)	3,164,750
2017 Employee Stock Purchase Plan
Issued and Outstanding:
Shares reserved for future award grants (in shares)	1,271,237

Fair Value Measurements and Available for Sale Investments (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities that Require Fair Value Measurements on a Recurring Basis

The following table summarizes our assets and liabilities that require fair value measurements on a recurring basis and their respective input levels based on the fair value hierarchy:


	Fair Value Measurements at End of Period Using:
(in thousands)	Fair Value		Quoted Market Prices for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
At March 31, 2021
Money market funds(1)	$	267,463	$	267,463	$	—	$	—
Mutual funds(1)	18,928		18,928		—		—
U.S. Treasury securities(2)	74,027		74,027		—		—
Certificates of deposit(2)	2,067		—		2,067		—
Agency securities(2)	11,164		—		11,164		—
Commercial and corporate obligations(2)	16,010		—		16,010		—

At December 31, 2020
Money market funds(1)	$	188,297	$	188,297	$	—	$	—
Mutual funds(1)	57,153		57,153		—		—
U.S. Treasury securities(2)	107,697		107,697		—		—
Certificates of deposit(2)	2,436		—		2,436		—
Agency securities(2)	21,169		—		21,169		—
Commercial and corporate obligations(2)	29,441		—		29,441		—

(1) Included in cash and cash equivalents or restricted cash in the accompanying consolidated balance sheets.

(2) Included in short-term or long-term investments in the accompanying consolidated balance sheets depending on the respective maturity date.

Available-for-sale Investments


(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Total Fair Value
Agency securities(1)	$	11,167	$	—	$	(3)	$	11,164

Certificates of deposit(2)	2,063		4		—		2,067
Commercial and corporate obligations(3)	16,008		4		(2)		16,010
U.S. Treasury securities(4)	73,935		92		—		74,027
Total available-for-sale investments	$	103,173	$	100	$	(5)	$	103,268

(1) Of our outstanding agency securities, $5.0 million have maturity dates of less than one year and $6.2 million have a maturity date of between one to two years as of March 31, 2021.

(2) Of our outstanding certificates of deposit, $1.2 million have maturity dates of less than one year and $0.9 million have a maturity date of between one to two years as of March 31, 2021.

(3) All of our outstanding commercial and corporate obligations have maturity dates of less than one year as of March 31, 2021.

(4) All of our outstanding U.S. Treasury securities have maturity dates of less than one year as of March 31, 2021.


(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Total Fair Value
Agency securities(1)	$	21,169	$	1	$	(1)	$	21,169
Certificates of deposit(2)	2,427		9		—		2,436
Commercial and corporate obligations(3)	29,414		28		(1)		29,441
US Treasury securities(4)	107,530		170		(3)		107,697
Total available-for-sale investments	$	160,540	$	208	$	(5)	$	160,743

(1) Of our outstanding agency securities, $10.0 million have maturity dates of less than one year and $11.2 million have a maturity date of between one to two years as of December 31, 2020.

(2) Of our outstanding certificates of deposit, $1.1 million have a maturity date of less than one year and $1.3 million have a maturity date of between one to two years as of December 31, 2020.

(4) Of our outstanding U.S. Treasury securities, $102.7 million have maturity dates of less than one year and $5.0 million have a maturity date of between one to two years as of December 31, 2020.

Schedule of Unrealized Loss and Fair Values in a Loss Position


	March 31, 2021
	Less than 12 Months				12 Months or Greater				Total
(in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Agency securities	$	6,163	$	(3)	$	—	$	—	$	6,163	$	(3)
Commercial and corporate obligations	4,777		(2)		—		—		4,777		(2)

Total	$	10,940	$	(5)	$	—	$	—	$	10,940	$	(5)


	December 31, 2020
	Less than 12 Months				12 Months or Greater				Total
(in thousands)	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Agency securities	$	4,999	$	(1)	$	—	$	—	$	4,999	$	(1)
Commercial and corporate obligations	6,503		(1)		2,399		—		8,902		(1)
US Treasury Securities	35,211		(3)		—		—		35,211		(3)
Total	$	46,713	$	(5)	$	2,399	$	—	$	49,112	$	(5)

Consolidated Statement of Stockholders’ Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income	Accumulated Deficit
Stockholders' Equity, Beginning Balance (in shares) at Dec. 31, 2019		27,255,000
Stockholders' Equity, Beginning Balance at Dec. 31, 2019	$ 405,008	$ 27	$ 648,669	$ 338	$ (244,026)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued under employee stock plans (in shares)		22,000
Shares issued under employee stock plans	36		36
Stock-based compensation	2,975		2,975
Comprehensive income (loss), net	807			807
Net loss	(8,262)				(8,262)
Stockholders' Equity, Ending Balance (in shares) at Mar. 31, 2020		27,277,000
Stockholders' Equity, Ending Balance at Mar. 31, 2020	400,564	$ 27	651,680	1,145	(252,288)
Stockholders' Equity, Beginning Balance (in shares) at Dec. 31, 2020		27,356,000
Stockholders' Equity, Beginning Balance at Dec. 31, 2020	$ 396,731	$ 27	660,665	(4)	(263,957)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued under employee stock plans (in shares)	11,780	11,000
Shares issued under employee stock plans	$ 167		167
Stock-based compensation	3,315		3,315
Comprehensive income (loss), net	(107)			(107)
Net loss	(18,163)				(18,163)
Stockholders' Equity, Ending Balance (in shares) at Mar. 31, 2021		27,367,000
Stockholders' Equity, Ending Balance at Mar. 31, 2021	$ 381,943	$ 27	$ 664,147	$ (111)	$ (282,120)

- Definition

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

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+ Details

- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

+ References

+ Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

Subsequent Event (Details) - Subsequent event - Anti-PD-1 - TESARO $ in Millions	1 Months Ended
	Apr. 30, 2021 USD ($)
FDA approval
Subsequent Event [Line Items]
Milestones achieved, amount	$ 20.0
EMA conditional marketing authorization
Subsequent Event [Line Items]
Milestones achieved, amount	$ 10.0

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	27,367,355	27,356,000
Common stock, shares outstanding (in shares)	27,367,355	27,356,000

Cover Page - shares	3 Months Ended
Cover Page - shares	Mar. 31, 2021	Apr. 30, 2021
Entity Addresses [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
Document Transition Report	false
Entity File Number	001-37985
Entity Registrant Name	ANAPTYSBIO, INC
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-3828755
Entity Address, Address Line One	10770 Wateridge Circle
Entity Address, Address Line Two	Suite 210
Entity Address, City or Town	San Diego
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92121
City Area Code	858
Local Phone Number	362-6295
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	ANAB
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		27,369,199
Entity Central Index Key	0001370053
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Amendment Flag	false
Former Address
Entity Addresses [Line Items]
Entity Address, Address Line One	10421 Pacific Center Court
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	San Diego
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92121

Equity Incentive Plans

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Equity Incentive Plans

2017 Equity Incentive Plan

On January 12, 2017, our board of directors and stockholders approved and adopted the 2017 Equity Incentive Plan (the “2017 Plan”). The 2017 Plan became effective upon the execution and delivery of the underwriting agreement for our initial public offering on January 26, 2017 and replaced our existing 2006 Equity Incentive Plan. Under the 2017 Plan, we may grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are then our employees, officers, directors or consultants. In addition, the number of shares of stock available for issuance under the 2017 Plan will be automatically increased each January 1, beginning on January 1, 2018, by 4% of the aggregate number of outstanding shares of our common stock as of the immediately preceding December 31 or such lesser number as determined by our board of directors. The 2017 Plan automatically increased by 1,094,223 shares as of January 1, 2021.

Employee Stock Purchase Plan

On January 12, 2017, our board of directors and stockholders approved and adopted the 2017 Employee Stock Purchase Plan or the ESPP. The ESPP became effective upon the execution and delivery of the underwriting agreement for our initial public offering on January 26, 2017. In addition, the number shares of stock available for issuance under the ESPP will be automatically increased each January 1, beginning on January 1, 2018, by 1% of the aggregate number of outstanding shares of our common stock as of the immediately preceding December 31 or such lesser number as determined by our board of directors. The ESPP automatically increased by 273,555 shares as of January 1, 2021.

Stock Options

Stock options granted to employees and non-employees generally vest over a four-year period while stock options granted to directors vest over a one year period. Each stock option award has a maximum term of 10 years from the date of grant, subject to earlier cancellation prior to vesting upon cessation of service to us. A summary of the activity related to stock option awards during the three months ended March 31, 2021 is as follows:


	Shares Subject to Options	Weighted-Average Exercise Price per Share		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2021	2,920,700	$	26.67
Granted	1,011,724	$	29.63
Exercises	(11,780)	$	14.20
Forfeitures and cancellations	(96,150)	$	27.24
Outstanding at March 31, 2021	3,824,494	$	27.48	7.67	$	17,205
Exercisable at March 31, 2021	1,715,491	$	26.91	5.70	$	12,760

Stock-Based Compensation Expense

We recognize stock-based compensation expense for awards issued to employees and non-employees over the requisite service period based on the estimated grant-date fair value of such awards. We record the expense for stock-based compensation awards subject to performance-based milestone vesting over the requisite service period when management determines that achievement of the milestone is probable. Management evaluates when the achievement of a performance-based milestone is probable based on the expected satisfaction of the performance conditions at each reporting date. The estimated fair values of stock option awards granted to employees were determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions:


	Three Months Ended March 31,

	2021			2020
Risk-free interest rate		0.7	%		1.7	%
Expected volatility		93.0	%		92.0	%
Expected dividend yield		—	%		—	%
Expected term (in years)		6.18			6.25
Weighted-average grant date fair value per share	$	22.47		$	11.25

We determine the appropriate risk-free interest rate, expected term for employee stock-based awards, contractual term for non-employee stock-based awards, and volatility assumptions. The weighted-average expected option term for employee and non-employee stock-based awards reflects the application of the simplified method, which defines the life as the average of the contractual term of the options and the weighted-average vesting period for all option tranches. Estimated volatility for 2021 incorporates the historical volatility of our stock price, and volatility for 2020 incorporates our stock price as well as similar entities whose share prices are publicly available. The risk-free interest rate is based upon U.S. Treasury securities with

remaining terms similar to the expected or contractual term of the stock-based payment awards. The assumed dividend yield is based on our expectation of not paying dividends in the foreseeable future.

Total non-cash stock-based compensation expense for all stock awards that was recognized in the consolidated statements of operations and comprehensive loss is as follows:


	Three Months Ended March 31,
(in thousands)		2021		2020
Research and development		$	1,194	$	1,146
General and administrative		2,121		1,829
Total		$	3,315	$	2,975

At March 31, 2021, there was $40.6 million of unrecognized compensation cost related to unvested stock option awards, which is expected to be recognized over a remaining weighted-average vesting period of 2.91 years.

Fair Value Measurements and Available for Sale Investments - Available-for-sale Investments (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 103,173	$ 160,540
Gross Unrealized Gains	100	208
Gross Unrealized Losses	(5)	(5)
Total Fair Value	103,268	160,743
Short-term investments	96,212	143,197
Long-term investments	7,056	17,546
Agency securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	11,167	21,169
Gross Unrealized Gains	0	1
Gross Unrealized Losses	(3)	(1)
Total Fair Value	11,164	21,169
Short-term investments	$ 5,000	10,000
Investments outstanding, maturity date range (in years)	1 year
Long-term investments	$ 6,200	$ 11,200
Agency securities \| Minimum
Debt Securities, Available-for-sale [Line Items]
Investments outstanding, maturity date range (in years)	1 year	1 year
Agency securities \| Maximum
Debt Securities, Available-for-sale [Line Items]
Investments outstanding, maturity date range (in years)	2 years	2 years
Certificates of deposit
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 2,063	$ 2,427
Gross Unrealized Gains	4	9
Gross Unrealized Losses	0	0
Total Fair Value	2,067	2,436
Short-term investments	$ 1,200	1,100
Investments outstanding, maturity date range (in years)	1 year
Long-term investments	$ 900	$ 1,300
Certificates of deposit \| Minimum
Debt Securities, Available-for-sale [Line Items]
Investments outstanding, maturity date range (in years)	1 year	1 year
Certificates of deposit \| Maximum
Debt Securities, Available-for-sale [Line Items]
Investments outstanding, maturity date range (in years)	2 years	2 years
Commercial and corporate obligations
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 16,008	$ 29,414
Gross Unrealized Gains	4	28
Gross Unrealized Losses	(2)	(1)
Total Fair Value	$ 16,010	29,441
Short-term investments		29,400
Long-term investments		$ 0
Commercial and corporate obligations \| Minimum
Debt Securities, Available-for-sale [Line Items]
Investments outstanding, maturity date range (in years)		1 year
Commercial and corporate obligations \| Maximum
Debt Securities, Available-for-sale [Line Items]
Investments outstanding, maturity date range (in years)	1 year	2 years
US Treasury Securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 73,935	$ 107,530
Gross Unrealized Gains	92	170
Gross Unrealized Losses	0	(3)
Total Fair Value	$ 74,027	107,697
Short-term investments		102,700
Long-term investments		$ 5,000
US Treasury Securities \| Minimum
Debt Securities, Available-for-sale [Line Items]
Investments outstanding, maturity date range (in years)		1 year
US Treasury Securities \| Maximum
Debt Securities, Available-for-sale [Line Items]
Investments outstanding, maturity date range (in years)		2 years

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Mar. 31, 2021
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been omitted. The accompanying unaudited consolidated financial statements include all known adjustments necessary for a fair presentation of the results of interim periods as required by U.S. GAAP. These adjustments consist primarily of normal recurring accruals and estimates that impact the carrying value of assets and liabilities. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. Interim results are not necessarily indicative of results for a full year, particularly in light of the novel coronavirus (“COVID-19”) pandemic, and its impact on domestic and global economies. To limit the spread of COVID-19, governments have taken various actions, including the issuance of stay-at-home orders and social distancing guidelines, which have resulted in some businesses suspending operations or experiencing a reduction in demand for many products from direct or ultimate customers. Accordingly, businesses have adjusted, reduced or suspended operating activities. The effects of the stay-at-home orders and our work-from-home policies may negatively impact productivity, disrupt our business, and delay our development programs and regulatory and commercialization timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course. Our future research and development expenses and general and administrative expenses may vary significantly if we experience an increased impact from the COVID-19 pandemic on the costs and timing associated with the conduct of our clinical trials and other related business activities, to date there has not been any material delays in clinical operations. The financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2020 included in our Annual Form 10-K.
Basis of Consolidation	Basis of ConsolidationThe accompanying consolidated financial statements include us and our wholly-owned Australian subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. We operate in one reportable segment, and our functional and reporting currency is the U.S. dollar.
Use of Estimates	Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with U.S. GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. We base our estimates and assumptions on historical experience when available and on various factors that we believe to be reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations, and financial condition, including expenses, reserves and allowances, manufacturing, clinical trials, research and development costs, and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, as well as the economic impact on local, regional, national and international markets. Our actual results could differ from these estimates under different assumptions or conditions.
Revenue	Revenue Recognition Revenue is recognized in accordance with revenue recognition accounting guidance, which utilizes five basic steps to determine whether revenue can be recognized and to what extent: (i) identify the contract with a customer; (ii) identify the performance obligation; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) determine the recognition period. Performance Obligations. We evaluate deliverables on a contract-by-contract basis to determine whether each deliverable represents a good or service that is distinct or has the same pattern of transfer as other deliverables. A deliverable is considered distinct if the customer can benefit from the good or service independently of other goods/services either in the contract or that can be obtained elsewhere, without regard to contract exclusivity, and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contact. If the deliverable is not considered distinct, we combine such deliverables and account for them as a single performance obligation. We allocate the consideration to each deliverable at the inception of the arrangement based on the transaction price. Our performance obligations may include the following: •License Arrangements. The performance obligations under our collaboration and license agreements generally include exclusive or nonexclusive licenses to one or more products generated using our technologies. Licenses for multiple antibodies within a single contract are generally combined as they have substantially the same pattern of transfer to the customer. Historically, our licenses have held no value to the customer, as the antibodies were in the discovery phase and required our expertise for further development. Accordingly, licenses are not considered distinct. •Research and Development Services. The performance obligations under our collaboration and license agreements generally include research and development services we perform on behalf of or with our collaborators. As discussed within license arrangements above, our licenses have historically held no value without the research and development services we provide. As we generally only provide research and development services for internally generated antibodies that require a license to be utilized by a third party, our research and development services are not considered distinct. •Steering Committee Meetings. The performance obligations under our collaboration and license agreements may also include our participation on steering committees, which allows us to direct the progression of our discovery programs. As these steering committees would not occur or benefit the customer without the use of our licenses, these are not considered distinct. We recognize consideration allocated to a performance obligation as the performance obligation is satisfied, and the determination as to whether consideration is recognized over time or at a point in time is made upon contract inception. For our collaboration agreements, this is generally over the period in which research and development services have been performed. Transaction Price. Our collaboration and license agreements generally include both fixed and variable consideration. Fixed payments, such as those for upfront fees are included in the transaction price at contract value, while variable consideration such as reimbursement for research and development services, milestone and royalty payments are estimated and then evaluated for constraints upon inception of the contract and evaluated on a quarterly basis thereafter. Research and development services are updated for actual invoices. Given the nature of our agreements, milestones are estimated using the most likely amount and are evaluated on a quarterly basis. Upon commercialization, royalty payments will be recognized in the period incurred. Royalty Revenue We receive royalty revenue on sales by our partners of products covered by patents or contract rights that we own and net sales of their approved drugs, where we have concluded the license is the predominant item to which the royalties relate. We do not have future performance obligations under these license arrangements. We generally satisfy our obligation to grant intellectual property rights on the effective date of the contract. However, we apply the royalty recognition constraint required under the guidance for sales-based royalties which requires a sales-based royalty to be recorded when the underlying sale occurs. Therefore, royalties on sales of products commercialized by our partners are recognized in the quarter the product is sold. Our partners generally report sales information to us on a one quarter lag. Thus, we estimate the expected royalty proceeds based on an analysis of our partners’ historical experience including their publicly announced sales. Differences between actual and estimated royalty revenues are adjusted for in the period in which they become known, typically the following quarter.
Net Loss Per Common Share	Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common equivalent shares outstanding for the period, as well as any dilutive effect from outstanding stock options and warrants using the treasury stock method. For each period presented, there is no difference in the number of shares used to calculate basic and diluted net loss per share.

- Definition

Disclosure of accounting policy for revenue from contract with customer.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 17
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130561-203045

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 20
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130566-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130563-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 20
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130566-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130563-203045

Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=84158767&loc=d3e18823-107790

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 20
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130566-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 19
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130564-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 20
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130566-203045

+ Details

Balance Sheet Accounts and Supplemental Disclosures - Property and Equipment, net (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 6,822	$ 6,728
Less: accumulated depreciation and amortization	(5,068)	(4,945)
Total property and equipment, net	1,754	1,783
Laboratory equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	5,226	5,225
Office furniture and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	976	976
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 620	$ 527

Collaborative Research and Development Agreements (Tables)

3 Months Ended

Mar. 31, 2021

Revenue Recognition [Abstract]

Schedule of Milestones Achieved

Milestones recognized through March 31, 2021 under the GSK Agreement are as follows:

Anti-PD-1

(JEMPERLI/Dostarlimab)

Anti-TIM-3

(GSK4069889A/Cobolimab)

Anti-LAG-3

(GSK40974386)

Milestone Event

Amount

Quarter Recognized

Amount

Quarter Recognized

Amount

Quarter Recognized

Initiated in vivo toxicology studies using good laboratory practices (GLPs)

$1.0M

Q2'15

$1.0M

Q4'15

$1.0M

Q3'16

IND clearance from the FDA

$4.0M

Q1'16

$4.0M

Q2'16

$4.0M

Q2'17

Phase 2 clinical trial initiation

$3.0M

Q2'17

$3.0M

Q4'17

$3.0M

Q4'19

Phase 3 clinical trial initiation - first indication

$5.0M

Q3'18

—

Phase 3 clinical trial initiation - second indication

$5.0M

Q2'19

—

Filing of the first BLA - first indication

$10.0M

Q1'20

—

Filing of the first MAA - first indication

$5.0M

Q1'20

—

Filing of the first BLA - second indication

$10.0M

Q1'21

—

Milestones achieved through March 31, 2021 under the BMS Agreement are as follows:


	Anti-PD-1 (CC-90006)
Milestone Event	Amount	Quarter Recognized
Completion of first in vivo toxicology studies using GLPs	$0.5M	Q2'16
Phase 1 clinical trial initiation	$1.0M	Q4'16

Summary of Significant Accounting Policies - Summary of Potentially Dilutive Securities (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Options to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive securities excluded from computation of net loss per share (in shares)	3,445	3,021

Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Statement [Abstract]
Collaboration revenue	$ 11,247	$ 15,000
Operating expenses:
Research and development	24,185	20,968
General and administrative	5,423	4,285
Total operating expenses	29,608	25,253
Loss from operations	(18,361)	(10,253)
Other income, net:
Interest income	195	1,897
Other income, net	3	94
Total other income, net	198	1,991
Net loss	(18,163)	(8,262)
Unrealized (loss) income on available for sale securities	(107)	807
Comprehensive loss	$ (18,270)	$ (7,455)
Net loss per common share:
Basic and diluted (in dollars per share)	$ (0.66)	$ (0.30)
Weighted-average number of shares outstanding:
Basic and diluted (in shares)	27,361	27,264

Description of the Business	3 Months Ended
Description of the Business	Mar. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of the Business	Description of the Business AnaptysBio, Inc. (“we,” “us,” “our,” or the “Company”) was incorporated in the state of Delaware in November 2005. We are a clinical-stage biotechnology company developing first-in-class immunology therapeutic product candidates focused on emerging immune control mechanisms applicable to inflammation and immuno-oncology indications. We develop our product candidates using our proprietary antibody discovery technology platform, which is based upon a breakthrough understanding of the natural process of antibody generation, known as somatic hypermutation, and replicates this natural process of antibody generation in vitro. We currently generate revenue from milestones achieved under our collaborative research and development arrangements. Since our inception, we have devoted our primary effort to research and development activities. Our financial support has been provided primarily from the sale of our common and preferred stock, as well as through funds received under our collaborative research and development agreements. Going forward, as we continue our expansion, we may seek additional financing and/or strategic investments. However, there can be no assurance that any additional financing or strategic investments will be available to us on acceptable terms, if at all. If events or circumstances occur such that we do not obtain additional funding, we will most likely be required to reduce our plans and/or certain discretionary spending, which could have a material adverse effect on our ability to achieve our intended business objectives. Our management believes our currently available resources will provide sufficient funds to enable us to meet our operating plans for at least the next twelve months. The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Commitments and Contingencies - Schedule of Future Minimum Annual Obligations (Details) $ in Thousands	Mar. 31, 2021 USD ($)
Finite-Lived Intangible Assets [Line Items]
2021	$ 201
2022	0
2023	0
2024	0
2025	0
Thereafter	0
Total minimum payments required	201
Less imputed interest	(4)
Total	197
10770 Wateridge Circle, San Diego, California 92121
Finite-Lived Intangible Assets [Line Items]
2021	568
2022	2,328
2023	2,397
2024	2,469
2025	2,543
Thereafter	15,420
Total minimum payments required	$ 25,725

Stockholders' Equity

3 Months Ended

Mar. 31, 2021

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Common Stock

Of the 500,000,000 shares of common stock authorized, 27,367,355 shares were issued and outstanding as of March 31, 2021. Common stock reserved for future issuance upon the exercise, issuance or conversion of the respective equity instruments at March 31, 2021 are as follows:


Issued and Outstanding:
Stock options			3,824,494

Shares Reserved For:
2017 Equity Incentive Plan			3,164,750
2017 Employee Stock Purchase Plan			1,271,237
Total			8,260,481

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been omitted. The accompanying unaudited consolidated financial statements include all known adjustments necessary for a fair presentation of the results of interim periods as required by U.S. GAAP. These adjustments consist primarily of normal recurring accruals and estimates that impact the carrying value of assets and liabilities. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. Interim results are not necessarily indicative of results for a full year, particularly in light of the novel coronavirus (“COVID-19”) pandemic, and its impact on domestic and global economies. To limit the spread of COVID-19, governments have taken various actions, including the issuance of stay-at-home orders and social distancing guidelines, which have resulted in some businesses suspending operations or experiencing a reduction in demand for many products from direct or ultimate customers. Accordingly, businesses have adjusted, reduced or suspended operating activities. The effects of the stay-at-home orders and our work-from-home policies may negatively impact productivity, disrupt our business, and delay our development programs and regulatory and commercialization timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course. Our future research and development expenses and general and administrative expenses may vary significantly if we experience an increased impact from the COVID-19 pandemic on the costs and timing associated with the conduct of our clinical trials and other related business activities, to date there has not been any material delays in clinical operations. The financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2020 included in our Annual Form 10-K.

Basis of Consolidation

The accompanying consolidated financial statements include us and our wholly-owned Australian subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. We operate in one reportable segment, and our functional and reporting currency is the U.S. dollar.

Use of Estimates

The preparation of the accompanying consolidated financial statements in conformity with U.S. GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. We base our estimates and assumptions on historical experience when available and on various factors that we believe to be reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations, and financial condition, including expenses, reserves and allowances, manufacturing, clinical trials, research and development costs, and employee-related amounts, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, as well as the economic impact on local, regional, national and international markets. Our actual results could differ from these estimates under different assumptions or conditions.

Revenue Recognition

Revenue is recognized in accordance with revenue recognition accounting guidance, which utilizes five basic steps to determine whether revenue can be recognized and to what extent: (i) identify the contract with a customer; (ii) identify the performance obligation; (iii) determine the transaction price; (iv) allocate the transaction price; and (v) determine the recognition period.

Performance Obligations. We evaluate deliverables on a contract-by-contract basis to determine whether each deliverable represents a good or service that is distinct or has the same pattern of transfer as other deliverables. A deliverable is considered distinct if the customer can benefit from the good or service independently of other goods/services either in the contract or that can be obtained elsewhere, without regard to contract exclusivity, and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contact. If the deliverable is not considered distinct, we combine such deliverables and account for them as a single performance obligation. We allocate the consideration to each deliverable at the inception of the arrangement based on the transaction price.

Our performance obligations may include the following:

•License Arrangements. The performance obligations under our collaboration and license agreements generally include exclusive or nonexclusive licenses to one or more products generated using our technologies. Licenses for multiple antibodies within a single contract are generally combined as they have substantially the same pattern of transfer to the customer. Historically, our licenses have held no value to the customer, as the antibodies were in the discovery phase and required our expertise for further development. Accordingly, licenses are not considered distinct.

•Research and Development Services. The performance obligations under our collaboration and license agreements generally include research and development services we perform on behalf of or with our collaborators. As discussed within license arrangements above, our licenses have historically held no value without the research and development services we provide. As we generally only provide research and development services for internally generated antibodies that require a license to be utilized by a third party, our research and development services are not considered distinct.

•Steering Committee Meetings. The performance obligations under our collaboration and license agreements may also include our participation on steering committees, which allows us to direct the progression of our discovery programs. As these steering committees would not occur or benefit the customer without the use of our licenses, these are not considered distinct.

We recognize consideration allocated to a performance obligation as the performance obligation is satisfied, and the determination as to whether consideration is recognized over time or at a point in time is made upon contract inception. For our collaboration agreements, this is generally over the period in which research and development services have been performed.

Transaction Price. Our collaboration and license agreements generally include both fixed and variable consideration. Fixed payments, such as those for upfront fees are included in the transaction price at contract value, while variable consideration such as reimbursement for research and development services, milestone and royalty payments are estimated and then evaluated for constraints upon inception of the contract and evaluated on a quarterly basis thereafter. Research and

development services are updated for actual invoices. Given the nature of our agreements, milestones are estimated using the most likely amount and are evaluated on a quarterly basis. Upon commercialization, royalty payments will be recognized in the period incurred.

Royalty Revenue

We receive royalty revenue on sales by our partners of products covered by patents or contract rights that we own and net sales of their approved drugs, where we have concluded the license is the predominant item to which the royalties relate. We do not have future performance obligations under these license arrangements. We generally satisfy our obligation to grant intellectual property rights on the effective date of the contract. However, we apply the royalty recognition constraint required under the guidance for sales-based royalties which requires a sales-based royalty to be recorded when the underlying sale occurs. Therefore, royalties on sales of products commercialized by our partners are recognized in the quarter the product is sold. Our partners generally report sales information to us on a one quarter lag. Thus, we estimate the expected royalty proceeds based on an analysis of our partners’ historical experience including their publicly announced sales. Differences between actual and estimated royalty revenues are adjusted for in the period in which they become known, typically the following quarter.

Net Loss Per Common Share

Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common equivalent shares outstanding for the period, as well as any dilutive effect from outstanding stock options and warrants using the treasury stock method. For each period presented, there is no difference in the number of shares used to calculate basic and diluted net loss per share.


	Three Months Ended March 31,
(in thousands)		2021	2020

Options to purchase common stock		3,445	3,021

Subsequent Events	3 Months Ended
Subsequent Events	Mar. 31, 2021
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events Milestone Revenue A Biologics License Application (“BLA”) for our most advanced partnered program, which is an anti-PD-1 antagonist antibody called JEMPERLI, was approved by the FDA in April 2021 for the treatment of advanced or recurrent deficient mismatch repair endometrial cancer (“dMMREC”). This is the first AnaptysBio-generated antibody, of eight currently under clinical development, to obtain FDA approval. We earned a $20.0 million milestone payment as a result of this FDA approval. In addition, in April 2021 the European Medicines Agency (“EMA”) granted conditional marketing authorization in the European Union (“EU”) for JEMPERLI for use in women with mismatch repair deficient (dMMR)/microsatellite instability-high (MSI-H) recurrent or advanced endometrial cancer who have progressed on or following prior treatment with a platinum containing regimen, which approval makes JEMPERLI the first anti-PD-1 therapy available for endometrial cancer in Europe. We earned a $10.0 million milestone payment as a result of this approval. Leases On April 5, 2021, the leasehold improvements were completed for the Lease Agreement and we took possession of the premises, see Note 8.

Balance Sheet Accounts and Supplemental Disclosures

3 Months Ended

Mar. 31, 2021

Balance Sheet Related Disclosures [Abstract]

Balance Sheet Accounts and Supplemental Disclosures

Property and Equipment, net

Property and equipment, net consist of the following:


(in thousands)	March 31, 2021		December 31, 2020
Laboratory equipment	$	5,226	$	5,225
Office furniture and equipment	976		976
Leasehold improvements	620		527
Property and equipment, gross	6,822		6,728
Less: accumulated depreciation and amortization	(5,068)		(4,945)
Total property and equipment, net	$	1,754	$	1,783

Accrued Expenses

Accrued expenses consist of the following:


(in thousands)	March 31, 2021		December 31, 2020
Accrued compensation and related expenses	$	2,019	$	3,688
Accrued professional fees	638		408
Accrued research, development and manufacturing expenses	8,976		10,936
Other	193		230
Total accrued expenses	$	11,826	$	15,262

Commitments and Contingencies - Costs Included in Cash Flow Statement (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Operating lease cost	$ 133	$ 220
Cash paid for amounts included in the measurement of lease liabilities	$ 151	$ 239

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (18,163)	$ (8,262)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	125	140
Stock-based compensation	3,315	2,975
Accretion/amortization of investments, net	167	(8)
Changes in operating assets and liabilities:
Receivable from collaborative partners	(1,247)	(5,000)
Prepaid expenses and other assets	(2,276)	233
Accounts payable and other liabilities	(5,125)	(5,190)
Net cash used in operating activities	(23,204)	(15,112)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of investments	(6,238)	(74,013)
Sales and maturities of investments	63,284	84,851
Purchases of property and equipment	(317)	(87)
Net cash provided by investing activities	56,729	10,751
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, upon the exercise of stock options	167	36
Payments on notes payable	0	(1,375)
Net cash provided by (used in) financing activities	167	(1,339)
Net increase (decrease) in cash, cash equivalents, and restricted cash	33,692	(5,700)
Cash, cash equivalents and restricted cash, beginning of period	250,516	171,077
Cash, cash equivalents and restricted cash, end of period	284,208	165,377
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid	0	4
Non-cash investing and financing activities:
Amounts accrued for property and equipment	$ 58	$ 86

Collaborative Research and Development Agreements (Details)		1 Months Ended		3 Months Ended														12 Months Ended
	Jan. 01, 2021	Nov. 30, 2014 USD ($) target	Mar. 31, 2014 USD ($) target	Mar. 31, 2021 USD ($) milestone	Dec. 31, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Jun. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Jun. 30, 2015 USD ($)	Dec. 31, 2011 USD ($)
Deferred Revenue Arrangement [Line Items]
Collaboration revenue				$ 11,247,000		$ 15,000,000
TESARO \| Collaborative Research And Development Agreement
Deferred Revenue Arrangement [Line Items]
Upfront license fee received		$ 2,000,000.0	$ 17,000,000.0
Number of outstanding research and development targets \| target		4	3
Milestone payments, contingent upon preclinical and clinical trial events (up to)		$ 18,000,000.0
Milestone payments, contingent upon certain U.S. and European regulatory submissions and approvals (up to)		90,000,000.0
Milestone payments, contingent upon achievement of specified levels of worldwide sales (up to)		$ 165,000,000.0
Agreement term following first commercial sale or expiration of the last to expire patent (in years)		12 years
Number of milestones achieved during period \| milestone				1
Collaboration revenue				$ 11,200,000		15,000,000.0
TESARO \| Initiated in vivo toxicology studies using good laboratory practices (GLPs) \| Anti-PD-1 (JEMPERLI/Dostarlimab)
Deferred Revenue Arrangement [Line Items]
Milestones achieved, amount																	$ 1,000,000.0
TESARO \| Initiated in vivo toxicology studies using good laboratory practices (GLPs) \| Anti-TIM-3 (GSK4069889A/Cobolimab)
Deferred Revenue Arrangement [Line Items]
Milestones achieved, amount																$ 1,000,000.0
TESARO \| Initiated in vivo toxicology studies using good laboratory practices (GLPs) \| Anti-LAG-3 (GSK40974386)
Deferred Revenue Arrangement [Line Items]
Milestones achieved, amount													$ 1,000,000.0
TESARO \| IND clearance from the FDA \| Anti-PD-1 (JEMPERLI/Dostarlimab)
Deferred Revenue Arrangement [Line Items]
Milestones achieved, amount															$ 4,000,000.0
TESARO \| IND clearance from the FDA \| Anti-TIM-3 (GSK4069889A/Cobolimab)
Deferred Revenue Arrangement [Line Items]
Milestones achieved, amount														$ 4,000,000.0
TESARO \| IND clearance from the FDA \| Anti-LAG-3 (GSK40974386)
Deferred Revenue Arrangement [Line Items]
Milestones achieved, amount											$ 4,000,000.0
TESARO \| Phase 2 clinical trial initiation \| Anti-PD-1 (JEMPERLI/Dostarlimab)
Deferred Revenue Arrangement [Line Items]
Milestones achieved, amount											$ 3,000,000.0
TESARO \| Phase 2 clinical trial initiation \| Anti-TIM-3 (GSK4069889A/Cobolimab)
Deferred Revenue Arrangement [Line Items]
Milestones achieved, amount										$ 3,000,000.0
TESARO \| Phase 2 clinical trial initiation \| Anti-LAG-3 (GSK40974386)
Deferred Revenue Arrangement [Line Items]
Milestones achieved, amount							$ 3,000,000.0
TESARO \| Phase 3 clinical trial initiation - first indication \| Anti-PD-1 (JEMPERLI/Dostarlimab)
Deferred Revenue Arrangement [Line Items]
Milestones achieved, amount				10,000,000.0					$ 5,000,000.0
TESARO \| Phase 3 clinical trial initiation - second indication \| Anti-PD-1 (JEMPERLI/Dostarlimab)
Deferred Revenue Arrangement [Line Items]
Milestones achieved, amount								$ 5,000,000.0
TESARO \| Filing of the first BLA - first indication \| Anti-PD-1 (JEMPERLI/Dostarlimab)
Deferred Revenue Arrangement [Line Items]
Milestones achieved, amount						10,000,000.0
TESARO \| Filing of the first MAA - first indication \| Anti-PD-1 (JEMPERLI/Dostarlimab)
Deferred Revenue Arrangement [Line Items]
Milestones achieved, amount						5,000,000.0
TESARO \| Filing of the first BLA - second indication \| Anti-PD-1 (JEMPERLI/Dostarlimab)
Deferred Revenue Arrangement [Line Items]
Milestones achieved, amount				10,000,000.0
TESARO \| Amendment \| Anti-PD-1 (JEMPERLI/Dostarlimab)
Deferred Revenue Arrangement [Line Items]
Revenue recognition multiple deliverable arrangements upfront fee receivable					$ 60,000,000.0
Milestones achieved, amount				1,100,000,000
TESARO \| Amendment \| AnaptysBio-generated Zejula
Deferred Revenue Arrangement [Line Items]
Royalty percent on net sales	1.00%
Collaboration revenue				1,200,000
Celgene Corporation \| Collaborative Research And Development Agreement
Deferred Revenue Arrangement [Line Items]
Upfront license fee received																		$ 6,000,000.0
Collaboration revenue				$ 0		$ 0
Maximum milestone payments per target																		$ 53,000,000.0
Celgene Corporation \| Initiated in vivo toxicology studies using good laboratory practices (GLPs) \| Anti-PD-1 (CC-90006)
Deferred Revenue Arrangement [Line Items]
Milestone payment earned														$ 500,000
Celgene Corporation \| Phase 1 clinical trial initiation \| Anti-PD-1 (CC-90006)
Deferred Revenue Arrangement [Line Items]
Milestone payment earned												$ 1,000,000.0

Summary of Significant Accounting Policies - Additional Information (Details)	3 Months Ended
	Mar. 31, 2021 segment
Accounting Policies [Abstract]
Number of reportable segments	1

Balance Sheet Accounts and Supplemental Disclosures (Tables)

3 Months Ended

Mar. 31, 2021

Balance Sheet Related Disclosures [Abstract]

Property and Equipment, net

Property and equipment, net consist of the following:


(in thousands)	March 31, 2021		December 31, 2020
Laboratory equipment	$	5,226	$	5,225
Office furniture and equipment	976		976
Leasehold improvements	620		527
Property and equipment, gross	6,822		6,728
Less: accumulated depreciation and amortization	(5,068)		(4,945)
Total property and equipment, net	$	1,754	$	1,783

Schedule of Accrued Expenses

Accrued expenses consist of the following:


(in thousands)	March 31, 2021		December 31, 2020
Accrued compensation and related expenses	$	2,019	$	3,688
Accrued professional fees	638		408
Accrued research, development and manufacturing expenses	8,976		10,936
Other	193		230
Total accrued expenses	$	11,826	$	15,262

Stockholders' Equity - Additional Information (Details) - shares	Mar. 31, 2021	Dec. 31, 2020
Equity [Abstract]
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	27,367,355	27,356,000
Common stock, shares outstanding (in shares)	27,367,355	27,356,000

Equity Incentive Plans - Option Fair Value Assumptions (Details) - Options to purchase common stock - $ / shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	0.70%	1.70%
Expected volatility	93.00%	92.00%
Expected dividend yield	0.00%	0.00%
Expected term (in years)	6 years 2 months 4 days	6 years 3 months
Weighted average grant date fair value per share (in dollars per share)	$ 22.47	$ 11.25

Fair Value Measurements and Available for Sale Investments - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	$ 103,268	$ 160,743
US Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	74,027	107,697
Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	2,067	2,436
Agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	11,164	21,169
Commercial and corporate obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	16,010	29,441
Fair Value, Measurements, Recurring \| US Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	74,027	107,697
Fair Value, Measurements, Recurring \| Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	2,067	2,436
Fair Value, Measurements, Recurring \| Agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	11,164	21,169
Fair Value, Measurements, Recurring \| Commercial and corporate obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	16,010	29,441
Fair Value, Measurements, Recurring \| Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments at fair value	267,463	188,297
Fair Value, Measurements, Recurring \| Mutual funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments at fair value	18,928	57,153
Fair Value, Measurements, Recurring \| Quoted Market Prices for Identical Assets (Level 1) \| US Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	74,027	107,697
Fair Value, Measurements, Recurring \| Quoted Market Prices for Identical Assets (Level 1) \| Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	0	0
Fair Value, Measurements, Recurring \| Quoted Market Prices for Identical Assets (Level 1) \| Agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	0	0
Fair Value, Measurements, Recurring \| Quoted Market Prices for Identical Assets (Level 1) \| Commercial and corporate obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	0	0
Fair Value, Measurements, Recurring \| Quoted Market Prices for Identical Assets (Level 1) \| Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments at fair value	267,463	188,297
Fair Value, Measurements, Recurring \| Quoted Market Prices for Identical Assets (Level 1) \| Mutual funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments at fair value	18,928	57,153
Fair Value, Measurements, Recurring \| Significant Other Observable Inputs (Level 2) \| US Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	0	0
Fair Value, Measurements, Recurring \| Significant Other Observable Inputs (Level 2) \| Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	2,067	2,436
Fair Value, Measurements, Recurring \| Significant Other Observable Inputs (Level 2) \| Agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	11,164	21,169
Fair Value, Measurements, Recurring \| Significant Other Observable Inputs (Level 2) \| Commercial and corporate obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	16,010	29,441
Fair Value, Measurements, Recurring \| Significant Other Observable Inputs (Level 2) \| Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments at fair value	0	0
Fair Value, Measurements, Recurring \| Significant Other Observable Inputs (Level 2) \| Mutual funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments at fair value	0	0
Fair Value, Measurements, Recurring \| Significant Unobservable Inputs (Level 3) \| US Treasury Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	0	0
Fair Value, Measurements, Recurring \| Significant Unobservable Inputs (Level 3) \| Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	0	0
Fair Value, Measurements, Recurring \| Significant Unobservable Inputs (Level 3) \| Agency securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	0	0
Fair Value, Measurements, Recurring \| Significant Unobservable Inputs (Level 3) \| Commercial and corporate obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, debt securities	0	0
Fair Value, Measurements, Recurring \| Significant Unobservable Inputs (Level 3) \| Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments at fair value	0	0
Fair Value, Measurements, Recurring \| Significant Unobservable Inputs (Level 3) \| Mutual funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments at fair value	$ 0	$ 0