Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2018	Aug. 01, 2018
Document and Entity Information
Entity Registrant Name	Xencor Inc
Entity Central Index Key	0001326732
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		55,826,112
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2

Balance Sheets $ in Thousands	Jun. 30, 2018 USD ($)
Current assets
Cash and cash equivalents	$ 35,292
Marketable securities	220,116
Accounts receivable	1,283
Income tax receivable	762
Prepaid expenses and other current assets	12,074
Total current assets	269,527
Property and equipment, net	9,401
Patents, licenses, and other intangible assets, net	11,531
Marketable securities - long term	299,971
Income tax receivable	762
Other assets	265
Total assets	591,457
Current liabilities
Accounts payable	4,916
Accrued expenses	5,923
Current portion of deferred rent	199
Deferred revenue	60,118
Total current liabilities	71,156
Deferred rent, less current portion	1,122
Total liabilities	72,278
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.01 par value: 10,000,000 authorized shares; -0- issued and outstanding shares at June 30, 2018 and December 31, 201
Common stock, $0.01 par value: 200,000,000 authorized shares at June 30, 2018 and December 31, 2017; 55,821,310 issued and outstanding at June 30, 2018 and 47,002,488 issued and outstanding at December 31, 2017	558
Additional paid-in capital	828,858
Accumulated other comprehensive loss	(2,008)
Accumulated deficit	(308,229)
Total stockholders' equity	519,179
Total liabilities and stockholders' equity	$ 591,457

Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Condensed Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	55,821,310	47,002,488
Common stock, shares outstanding	55,821,310	47,002,488

Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Statements of Comprehensive Loss - USD ($) $ in Thousands	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenue
Collaborations, licenses and milestones		$ 12,500		$ 16,000
Operating expenses
Research and development	$ 23,332	16,919	$ 49,418	31,967
General and administrative	4,958	4,091	9,520	8,903
Total operating expenses	28,290	21,010	58,938	40,870
Loss from operations	(28,290)	(8,510)	(58,938)	(24,870)
Other income (expenses)
Interest income	2,486	1,038	3,643	2,095
Interest expense	(3)	(3)	(6)	(5)
Other income (expense)	(62)	30	(60)	30
Total other income, net	2,421	1,065	3,577	2,120
Loss before income taxes	(25,869)	(7,445)	(55,361)	(22,750)
Income tax expense		280		450
Net loss	(25,869)	(7,725)	(55,361)	(23,200)
Other comprehensive loss
Net unrealized gain (loss) on marketable securities	193	(44)	(200)	201
Comprehensive loss	$ (25,676)	$ (7,769)	$ (55,561)	$ (22,999)
Net loss per share attributable to common shareholders:
Basic and diluted net loss (in dollars per share)	$ (0.46)	$ (0.17)	$ (1.07)	$ (0.50)
Weighted average shares used to compute net loss per share attributable to common stockholders:
Basic and diluted (in shares)	55,678,990	46,767,759	51,738,348	46,683,744

Statement of Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total
Balance (Scenario, Previously Reported) at Dec. 31, 2017	$ 470	$ 570,670	$ (1,808)	$ (287,286)	$ 282,046
Balance at Dec. 31, 2017	$ 470	570,670	(1,808)	(252,868)	316,464
Balance (in shares) (Scenario, Previously Reported) at Dec. 31, 2017	47,002,488
Balance (in shares) at Dec. 31, 2017	47,002,488
Increase (Decrease) in Stockholders' Equity
Adoption of ASC 606 \| ASU 2014-09				34,418	34,418
Balance, revised	$ 470	570,670	(1,808)	(252,868)	316,464
Sale of common stock, net of issuance cost	$ 84	245,420			245,504
Sale of common stock, net of issuance cost (in shares)	8,395,000
Issuance of common stock upon exercise of stock awards	$ 4	2,911			2,915
Issuance of common stock upon exercise of stock awards (in shares)	397,270
Issuance of common stock under the Employee Stock Purchase Plan		504			504
Issuance of common stock under the Employee Stock Purchase Plan (in shares)	26,552
Comprehensive loss			(200)	(55,361)	(55,561)
Stock-based compensation expense		9,353			9,353
Balance at Jun. 30, 2018	$ 558	$ 828,858	$ (2,008)	$ (308,229)	$ 519,179
Balance (in shares) at Jun. 30, 2018	55,821,310

Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
Statements of Cash Flows - USD ($) $ in Thousands	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities
Net loss	$ (55,361)	$ (23,200)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	1,552	864
Amortization of premium on marketable securities	406	1,356
Stock-based compensation	9,353	6,607
Abandonment of capitalized intangible assets	50	225
Changes in operating assets and liabilities:
Accounts receivable	(140)	(6,260)
Interest receivable	(595)	(158)
Prepaid expenses and other assets	(6,468)	(4,727)
Accounts payable	(1,953)	3,500
Accrued expenses	443	(2,708)
Income taxes	(157)	390
Deferred rent	206	(12)
Deferred revenue		701
Net cash used in operating activities	(52,664)	(23,422)
Cash flows from investing activities
Purchase of marketable securities	(285,809)	(33,440)
Purchase of intangible assets	(882)	(1,092)
Purchase of property and equipment	(3,416)	(1,256)
Proceeds from sale and maturities of marketable securities	112,526	53,866
Loan receivable	86	(86)
Net cash provided by (used in) investing activities	(177,495)	17,992
Cash flows from financing activities
Proceeds from issuance of common stock upon exercise of stock awards	2,915	1,680
Proceeds from issuance of common stock under the Employee Stock Purchase Plan	504	442
Proceeds from issuance of common stock	260,245
Common stock issuance cost	(14,741)
Net cash provided by financing activities	248,923	2,122
Net increase (decrease) in cash and cash equivalents	18,764	(3,308)
Cash and cash equivalents, beginning of period	16,528	14,528
Cash and cash equivalents, end of period	35,292	11,220
Cash paid during the period for:
Interest	6	5
Taxes	170	60
Supplemental disclosures of non-cash investing activities
Unrealized gain on marketable securities, net of tax	$ 200	$ 201

Summary of Significant Accounting Policies	6 Months Ended
Summary of Significant Accounting Policies	Jun. 30, 2018
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	1. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim financial statements for Xencor, Inc. (the Company) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. Certain amounts in the prior period financial statements have been revised to conform to the presentation of the current period financial statements. See “Recent Accounting Pronouncements – Pronouncements Adopted in 2018.” The financial statements include all adjustments (consisting only of normal recurring adjustments) that the management of the Company believes are necessary for a fair presentation of the periods presented. The preparation of interim financial statements requires the use of management’s estimates and assumptions that affect reported amounts of assets and liabilities at the date of the interim financial statements and the reported revenues and expenditures during the reported periods. These interim financial results are not necessarily indicative of the results expected for the full fiscal year or for any subsequent interim period. The accompanying unaudited interim financial statements and related notes should be read in conjunction with the audited financial statements and notes thereto included in the Company’s 2017 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 28, 2018. Use of Estimates The preparation of interim financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, other comprehensive gain (loss) and the related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to its accrued clinical trial and manufacturing development expenses, stock-based compensation expense, intangible assets and related amortization. Significant estimates in these interim financial statements include estimates made for accrued research and development expenses, stock-based compensation expenses, intangible assets and related amortization. Intangible Assets The Company maintains definite-lived intangible assets related to certain capitalized costs of acquired licenses and third-party costs incurred in establishing and maintaining its intellectual property rights to its platform technologies and development candidates. These assets are amortized over their useful lives, which are estimated to be the remaining patent life or the contractual term of the license. The straight-line method is used to record amortization expense. The Company assesses its intangible assets for impairment if indicators are present or changes in circumstances suggest that impairment may exist. There were no impaired intangible assets at June 30, 2018. Marketable Securities The Company has an investment policy that includes guidelines on acceptable investment securities, minimum credit quality, maturity parameters and concentration and diversification. The Company invests its excess cash primarily in marketable securities issued by investment grade institutions. The Company considers its marketable securities to be available-for-sale. These assets are carried at fair value and the unrealized gains and losses are included in accumulated other comprehensive income (loss). Accrued interest on marketable securities is included in marketable securities. If a decline in the value of a marketable security in the Company’s investment portfolio is deemed to be other-than-temporary, the Company writes down the security to its current fair value and recognizes a loss as a charge against income. The Company reviews its portfolio of marketable securities, using both quantitative and qualitative factors, to determine if declines in fair value below cost are other-than-temporary. Recent Accounting Pronouncements Pronouncements Adopted in 2018 Effective January 1, 2018, the Company adopted Accounting Standards Codification Topic 606 (ASC 606), Revenue from Contracts with Customers, using the full retrospective transition method. Under this method, the Company is presenting its financial statements for the years ended December 31, 2016 and 2017 and applicable interim periods within the year ended 2017 as if ASC 606 had been effective for those periods. Under ASC 606 an entity recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. A five-step model is used to achieve the core principle: (1) identify the customer contract, (2) identify the contract’s performance obligations, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations and (5) recognize revenue when or as a performance obligation is satisfied. The Company applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. The new guidance provides that revenue recognition for performance obligations related to delivery of certain goods or services occurs when control over the good or service is transferred to the customer. In addition, the timing of revenue recognition from licensing of our intellectual property that are functional and are distinct performance obligations changed from being recognized over the term of access to our license or technology to being recognized at a point in time. See Note 11 “Prior-Period Financial Statements” for a complete discussion of the impact of adopting the new standard. Effective January 1 2018, the Company adopted ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The adoption of this standard did not have an effect on its statements of cash flow. Effective January 1, 2018, the Company adopted ASU No. 2017-09, Compensation – Stock Compensation (Topic 718). The standard applies when a company changes the terms of a stock compensation award granted to an employee. The Company did not have any modifications upon adopting the new standard; therefore, adoption of the new standard had no effect on the Company’s financial statements. Pronouncements Not Yet Effective In February 2016, the FASB issued ASU 2016-02 Leases. The new guidance requires lessees to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term for all leases not considered short term. The new standard will be effective for reporting periods beginning after December 15, 2018. In July 2018, the FASB issued ASU 2018-11, Lease (Topic 842): Targeted Improvements, which provides an alternative transition method of adoption, permitting the recognition of cumulative-effect adjustment to retained earnings on the date of adoption. We are currently evaluating our leases which includes a review of our lease expenses, which are primarily operating lease arrangements for our facilities in Monrovia and San Diego. We intend to adopt the standard on the effective date but have not yet selected a transition method. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the guidance on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. The amendment is effective for fiscal years beginning after December 15, 2019 including interim periods within those fiscal years. The Company does not expect the adoption of this standard to have a material impact on its results of operations or financial position. In March 2017, the FASB issued ASU No. 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities, which amends the guidance on the amortization period of premiums on certain purchased callable debt securities. The amendment is effective for fiscal years beginning after December 31, 2018 with early adoption permitted. The Company will review the requirements of the standard but does not anticipate it will have a significant impact on its financial statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, an amendment which permits companies to reclassify the income tax effects of the 2017 Tax Cut and Jobs Act (TCJA) on items within accumulated other comprehensive income to retained earnings. The standard is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. The Company does not anticipate the new guidance will have a significant impact in its financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payments issued to nonemployees for goods and services. The standard is effective for fiscal years beginning after December 15, 2018 and interim periods within such fiscal year. The Company does not anticipate that the standard will have a significant impact on its financial statements. There have been no other material changes to the significant accounting policies previously disclosed in the Company’s 2017 Annual Report on Form 10-K.

Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2018

Fair Value of Financial Instruments

Fair Value of Financial Instruments

2. Fair Value of Financial Instruments

Financial instruments included in the financial statements include cash equivalents, marketable securities, accounts receivable, accounts payable and accrued expenses. Marketable securities and cash equivalents are carried at fair value. The fair value of the other financial instruments closely approximates their fair value due to their short term maturities.

The Company accounts for recurring and non-recurring fair value measurements in accordance with FASB Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value, establishes a fair value hierarchy for assets and liabilities measured at fair value, and requires expanded disclosure about fair value measurements. The ASC 820 hierarchy ranks the quality of reliable inputs, or assumptions, used in the determination of fair value and requires assets and liabilities carried at fair value to be classified and disclosed in one of the following three categories:

Level 1—Fair Value is determined by using unadjusted quoted prices that are available in active markets for identical assets or liabilities.

Level 2—Fair Value is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in markets that are not active. Related inputs can also include those used in valuation or other pricing models, such as interest rates and yield curves that can be corroborated by observable market data.

Level 3—Fair value is determined by inputs that are unobservable and not corroborated by market data. Use of these inputs involves significant and subjective judgments to be made by the reporting entity –e.g. determining an appropriate discount factor for illiquidity associated with a given security.

The Company measures the fair value of financial assets using the highest level of inputs that are reasonably available as of the measurement date. The assets recorded at fair value are classified within the hierarchy as follows for the periods reported (in thousands):


	June 30, 2018						December 31, 2017
	Total						Total
	Fair Value		Level 1		Level 2		Fair Value		Level 1		Level 2

Money Market Funds	$	31,144	$	31,144	$	—	$	5,175	$	5,175	$	—
Corporate Securities		96,102		—		96,102		123,270		—		123,270
Government Securities		423,985		—		423,985		223,530		—		223,530
	$	551,231	$	31,144	$	520,087	$	351,975	$	5,175	$	346,800

Our policy is to record transfers of assets between Level 1 and Level 2 at their fair values as of the end of each reporting period, consistent with the date of the determination of fair value. During the three and six months ended June 30, 2018 and 2017, there were no transfers between Level 1 and Level 2. The Company does not have any Level 3 assets or liabilities.

- 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

Net Loss Per Share

6 Months Ended

Jun. 30, 2018

Net Loss Per Share

Net Loss Per Share

3. Net Loss Per Share

We compute net loss per common share by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period without consideration of common stock equivalents. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common stock equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of the Company’s stock option grants. Potentially dilutive securities consisting of stock issuable under options and our 2013 Employee Stock Purchase Plan (ESPP) are not included in the diluted net loss per common share calculation where the inclusion of such shares would have had an antidilutive effect.

Basic and diluted net loss per common share is computed as follows (in thousands except share and per share data):


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2018			2017		2018		2017
			(As Revised)						(As Revised)
	(in thousands, except share
	and per share data)
Numerator:
Net loss attributable to common stockholders	$	(25,869)		$	(7,725)	$	(55,361)	$	(23,200)
Denominator:
Weighted-average common shares outstanding used in computing basic and diluted net loss		55,678,990			46,767,759		51,738,348		46,683,744
Basic and diluted net loss per common share	$	(0.46)		$	(0.17)	$	(1.07)	$	(0.50)

For each of the three and six months ended June 30, 2018 and 2017 all outstanding potentially dilutive securities have been excluded from the calculation of diluted net loss per common share as the effect of including such securities would have been antidilutive.

Comprehensive Income (Loss)	6 Months Ended
Comprehensive Income (Loss)	Jun. 30, 2018
Comprehensive Income (Loss)
Comprehensive Income (Loss)	4. Comprehensive Loss Comprehensive loss is comprised of net loss and other comprehensive loss. For the three and six months ended June 30, 2018 and 2017, the only component of other comprehensive loss is net unrealized gain (loss) on marketable securities. There were no material reclassifications out of accumulated other comprehensive loss during the three and six months ended June 30, 2018 and 2017.

Marketable Securities

6 Months Ended

Jun. 30, 2018

Marketable Securities

Marketable Securities

5. Marketable Securities

The Company’s marketable securities held as of June 30, 2018 and December 31, 2017 are summarized below:


			Gross		Gross
	Amortized		Unrealized		Unrealized
June 30, 2018	Cost		Gains		Losses		Fair Value
(in thousands)
Money Market Funds	$	31,144	$	—	$	—	$	31,144
Corporate Securities		96,756		—		(654)		96,102
Government Securities		425,329		21		(1,365)		423,985
	$	553,229	$	21	$	(2,019)	$	551,231

Reported as
Cash and cash equivalents							$	31,144
Marketable securities								520,087
Total investments							$	551,231



			Gross		Gross
	Amortized		Unrealized		Unrealized
December 31, 2017	Cost		Gains		Losses		Fair Value
(in thousands)
Money Market Funds	$	5,175	$	—	$	—	$	5,175
Corporate Securities		123,860		—		(590)		123,270
Government Securities		224,739		—		(1,209)		223,530
	$	353,774	$	—	$	(1,799)	$	351,975

Reported as
Cash and cash equivalents							$	5,175
Marketable securities								346,800
Total investments							$	351,975

The maturities of the Company’s marketable securities are as follows:


	Amortized		Estimated
June 30, 2018	Cost		Fair Value
(in thousands)
Mature in one year or less	$	221,286	$	220,116
Mature within two years		300,799		299,971
	$	522,085	$	520,087

The unrealized losses on available-for-sale investments and their related fair values as of June 30, 2018 and December 31, 2017 are as follows:


	Less than 12 months				12 months or greater
June 30, 2018		Fair value		Unrealized losses		Fair value		Unrealized losses
(in thousands)
Corporate Securities	$	63,850	$	(475)	$	32,252	$	(179)
Government Securities		156,266		(695)		267,719		(670)
	$	220,116	$	(1,170)	$	299,971	$	(849)



	Less than 12 months				12 months or greater
December 31, 2017		Fair value		Unrealized losses		Fair value		Unrealized losses
(in thousands)
Corporate Securities	$	79,290	$	(137)	$	43,980	$	(453)
Government Securities		128,313		(461)		95,217		(748)
	$	207,603	$	(598)	$	139,197	$	(1,201)

The unrealized losses from the listed securities are due to a change in the interest rate environment and not a change in the credit quality of the securities.

Stock-Based Compensation

6 Months Ended

Jun. 30, 2018

Stock-Based Compensation

Stock-Based Compensation

7. Stock Based Compensation

Our Board of Directors and the requisite stockholders previously approved the 2010 Equity Incentive Plan (the 2010 Plan). In October 2013, our Board of Directors approved the 2013 Equity Incentive Plan (the 2013 Plan) and in November 2013 our stockholders approved the 2013 Plan. The 2013 Plan became effective as of December 3, 2013, the date of the Company’s initial public offering (IPO). As of December 2, 2013, we suspended the 2010 Plan and no additional awards may be granted under the 2010 Plan. Any shares of common stock covered by awards granted under the 2010 Plan that terminate after December 2, 2013 by expiration, forfeiture, cancellation or other means without the issuance of such shares will be added to the 2013 Plan reserve.

As of June 30, 2018, the total number of shares of common stock available for issuance under the 2013 Plan is 10,009,294 which includes 2,684,456 shares of common stock that were available for issuance under the 2010 Plan as of the effective date of the 2013 Plan. Unless otherwise determined by the Board, beginning January 1, 2014, and continuing until the expiration of the 2013 Plan, the total number of shares of common stock available for issuance under the 2013 Plan will automatically increase annually on January 1 of each year by 4% of the total number of issued and outstanding shares of common stock as of December 31 of the immediate preceding year. Pursuant to approval by our board on January 1, 2018, the total number of shares of common stock available for issuance under the 2013 Plan was increased by 1,880,100 shares. As of June 30, 2018, a total of 6,498,750 options have been issued under the 2013 Plan.

In November 2013, our Board of Directors and stockholders approved the 2013 Employee Stock Purchase Plan (ESPP), which became effective as of December 5, 2013. We have reserved a total of 581,286 shares of common stock for issuance under the ESPP. Unless otherwise determined by our Board, beginning on January 1, 2014, and continuing until the expiration of the ESPP, the total number of shares of common stock available for issuance under the ESPP will automatically increase annually on January 1 by the lesser of (i) 1% of the total number of issued and outstanding shares of common stock as of December 31 of the immediately preceding year, or (ii) 621,814 shares of common stock. Pursuant to approval by our board, there was no increase in the number of authorized shares in the ESPP in 2018. As of June 30, 2018, we have issued a total of 318,945 shares of common stock under the ESPP.

During the six months ended June 30, 2018, the Company awarded 33,933 Restricted Stock Units (RSUs) to certain employees. Vesting of these awards will be in three equal annual installments and is contingent on continued employment terms. The fair value of these awards is determined based on the intrinsic value of the stock on the date of grant and will be recognized as stock-based compensation expense over the requisite service period.

Total employee, director and non-employee stock-based compensation expense recognized for the three and six months ended June 30, 2018 and 2017 are as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
General and administrative	$	1,688	$	1,416	$	3,305	$	2,884
Research and development		3,194		2,032		6,048		3,723
	$	4,882	$	3,448	$	9,353	$	6,607

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Stock options	$	4,614	$	3,319	$	8,891	$	6,358
ESPP		190		129		353		249
Restricted stock units		78		—		109		—
	$	4,882	$	3,448	$	9,353	$	6,607

The following table summarizes option activity under our stock plans and related information:


		Weighted		Weighted
		Average		Average
	Number of	Exercise		Remaining		Aggregate
	Shares subject	Price		Contractual		Intrinsic
	to outstanding	(Per		Term		Value
	options	Share)		(in years)		(in thousands)
Balances at December 31, 2017	5,093,442	$	15.32		7.62
Options granted	1,553,400	$	25.58
Options forfeited	(30,345)	$	21.90
Options exercised	(397,270)	$	7.34
Balance at June 30, 2018	6,219,227	$	18.36		7.90	$	116,282
Exercisable	2,941,950	$	13.76		6.79	$	68,393

We calculate the intrinsic value as the difference between the exercise price of the options and the closing price of common stock of $37.01 per share as of June 30, 2018.

Weighted average fair value of options granted during the six-month period ended June 30, 2018 and 2017 was $16.86 and $16.95 per share, respectively. There were 1,356,100 options granted during the six-month period ended June 30, 2017. We estimated the fair value of each stock option using the Black-Scholes option-pricing model based on the date of grant of such stock option with the following weighted average assumptions for the three and six months ended June 30, 2018 and 2017:


	Options				Options
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Expected term (years)	5.9		6.1		6.1		6.1
Expected volatility	72.9	%	88.9	%	73.1	%	89.2	%
Risk-free interest rate	2.77	%	1.91	%	2.53	%	2.04	%
Expected dividend yield	—	%	—	%	—	%	—	%


	ESPP				ESPP
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Expected term (years)	0.5 - 2.0		0.5 - 2.0		0.5 - 2.0		0.5 - 2.0
Expected volatility	61.2 - 71.4	%	67.8 - 79.8	%	61.2 - 71.4	%	67.8 - 79.8	%
Risk-free interest rate	1.47 - 2.41	%	.47 - 1.09	%	1.47 - 2.41	%	.47 - 1.09	%
Expected dividend yield	—	%	—	%	—	%	—	%

As of June 30, 2018, the unamortized compensation expense related to unvested stock options was $47.9 million. The remaining unamortized compensation expense will be recognized over the next three years. As of June 30, 2018, the unamortized compensation expense under our ESPP was $1.2 million. The remaining unamortized expense will be recognized over the next 1.4 years.

The following table summarizes the restricted stock unit activity for the six-month period ended June 30, 2018:


		Weighted
	Restricted	Average Grant
	Stock	Date Fair Value
	Units	(Per unit)

Unvested at December 31, 2017	—	$	—
Granted	33,933	$	27.64
Vested	—	$	—
Forfeited	—	$	—
Unvested at June 30, 2018	33,933	$	27.64

As of June 30, 2018, the unamortized compensation expense related to unvested restricted stock units was $0.8 million. The remaining unamortized expense will be recognized over the next 2.7 years.

Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies

Commitments and Contingencies

8. Commitments and Contingencies

Operating Leases

The Company leases office and laboratory space in Monrovia, CA through June 2020. In July 2017, the Company entered into an amended lease agreement for additional space in the same building. The amended lease has a 64-month term with an option to renew for an additional five years. The lease terms for the original space were not amended.

The Company also leases office space in San Diego, CA through June 2020. In June 2017, the Company entered into a new lease agreement for additional office space. The new lease has a 61-month term beginning from the date of occupancy and includes an option to renew for an additional five years. At June 30, 2018 the future minimum lease payments under the operating leases were as follows:



Years ending December 31,
For the remainder of the fiscal year	$	1,346
2019		2,752
2020		2,404
2021		1,980
2022		1,406

Rent expense for the six months ended June 30, 2018 and 2017 was $1.2 million and $453,000 respectively.

Contingencies

From time to time, the Company may be subject to various litigation and related matters arising in the ordinary course of business. The Company does not believe it is currently subject to any material matters where there is at least a reasonable possibility that a material loss may be incurred.

We are obligated to make future payments to third parties under in‑license agreements, including sublicense fees, royalties, and payments that become due and payable on the achievement of certain development and commercialization milestones. As the amount and timing of sublicense fees and the achievement and timing of these milestones are not probable and estimable, such commitments have not been included on our balance sheet. We have also entered into agreements with third party vendors which will require us to make future payments upon the delivery of goods and services in future periods.

Collaboration and Licensing Agreements

6 Months Ended

Jun. 30, 2018

Collaboration and Licensing Agreements

Collaboration and Licensing Agreements

9. Collaboration and Licensing Agreements

Following is a summary description of the material revenue arrangements, including arrangements that generated revenue in the six months ended June 30, 2018 and 2017. The revenue reported for each agreement has been adjusted to reflect the adoption of ASC 606 for each period presented.

Novartis

In June 2016, the Company entered into a Collaboration and License Agreement (the Novartis Agreement) with Novartis Institutes for BioMedical Research, Inc. (Novartis), to develop and commercialize bispecific and other Fc modulated antibody drug candidates using the Company’s proprietary XmAb® technologies and drug candidates. Pursuant to the Novartis Agreement:

The Company granted Novartis certain exclusive rights to research, develop and commercialize XmAb14045 and XmAb13676, two development stage products that incorporate the Company’s bispecific Fc technology,

The Company will apply its bispecific technology in up to four target pair antibodies identified by Novartis (each a Global Discovery Program), and

The Company will provide Novartis with a non-exclusive license to certain of its Fc technologies to apply against up to ten targets identified by Novartis.

The Company received a non-refundable upfront payment under the Novartis Agreement of $150 million in July 2016 and is eligible to receive up to $2.4 billion in future development, regulatory and sales milestones in total for all programs that could be developed under the Novartis Agreement.

The Company evaluated the Novartis Agreement under the new revenue recognition standard ASC 606 and concluded that Novartis is a customer. The Company identified the following performance obligations that it deemed to be distinct at the inception of the contract:

License to certain rights to Xencor’s XmAb14045 and XmAb13676;

Develop four bispecific drug candidates against four targets identified by Novartis (Global discovery program); and

License to Xencor’s Fc technologies for up to 10 targets identified and selected by Novartis.

The Company considered the licenses as functional intellectual property as Novartis has the right to access its technology and such technology is functional to Novartis at the time that it has access to it. Under the Novartis Agreement, Novartis has substitution rights under each discovery program provided it has not advanced to filing an investigational new drug (IND) application. The Company’s obligation to provide services related to the discovery programs, and Novartis’ right to substitute programs is limited to the five-year period from the date of the Novartis agreement.

The Company determined the transaction price at inception is the $150 million upfront payment to be allocated to the performance obligations. The Novartis agreement includes variable consideration for potential future milestones and royalties that were contingent on future success factors for development programs. The Company used the “most likely” method to determine the variable consideration. None of the development, regulatory or sales milestones or royalties were included in the transaction price. The Company will re-evaluate the transaction price in each reporting period as uncertain events are resolved or other changes in circumstances occur.

In allocating the transaction price determined at inception, the Company determined that ASC 606 provides the use of a standalone selling price which is comparable to the relative selling price methodology used in the original accounting treatment for the transaction.

The transaction price of $150 million was allocated to the performance obligations as follows:

$27.1 million to certain rights to the XmAb14045 Program,

$31.4 million to certain rights to the XmAb13676 Program,

$20.05 million to each of the four Global Discovery Programs, and

$11.3 million to the Fc licenses

Under historical accounting guidance, the Company recognized as licensing revenue the amount of the total allocable consideration allocated to the rights to the XmAb13676 and XmAb14045 programs upon delivery of the exclusive licenses to Novartis, both of which were transferred as of the effective date of the Novartis Agreement. For each Global Discovery Program accepted by Novartis, the Company will recognize collaboration revenue of $20.05 million. Since Novartis has substitution rights for up to four target pair antibodies, revenue recognition would be delayed until the earlier that Novartis has filed an IND for a delivered discovery Program or the right to substitute the target pair lapses. For the license to the Fc technology the Company was recognizing as licensing revenue the amount of the total consideration allocated to the Fc license over the five-year research term beginning from the effective date of the Agreement.

Under ASC 606, there was no change in the amount or timing of revenue recognized for the licenses for XmAb13676 and XmAb14045.

ASC 606 changed the timing of revenue being recognized for the Global Discovery Programs. Under historical accounting guidance, no revenue is recognized on initial delivery of a discovery program as Novartis has the right to substitute a program and revenue is delayed until such substitution rights are exercised or lapse. Under ASC 606, revenue is recognized at the time that the Company delivers the initial discovery program. Xencor delivered a discovery program to Novartis in 2017 and is recognizing $20.05 million of revenue in the period of delivery, the third quarter of 2017.

ASC 606 also changed the timing of revenue that is being recognized for the license to the Fc technology. Under historical accounting guidance, revenue was being recognized over the five-year research term and under ASC 606 the entire amount of revenue allocated to the license is being recognized at inception of the agreement, the second quarter of 2016. The change in revenue recognition resulted in a decrease in revenue of $0.6 million and $1.1 million for the three and six months ended June 30, 2017.

During the three and six months ended June 31, 2018, we did not recognize any revenue related to the Novartis agreement. As discussed above, we decreased the revenue for the three and six months ended June 30, 2017 by $0.6 million and $1.1 million, respectively pursuant to the adoption of ASC 606. As of June 30, 2018, there is $60.1 million in deferred revenue related to the arrangement.

Amgen, Inc.

In September 2015, the Company entered into a research and license agreement (the Amgen Agreement) with Amgen, Inc. (Amgen) to develop and commercialize bispecific antibody product candidates using the Company’s proprietary XmAb® bispecific Fc technology. Under the Amgen Agreement, the Company granted an exclusive license to Amgen to develop and commercialize bispecific drug candidates from the Company’s preclinical program that bind the CD38 antigen and the cytotoxic T-cell binding domain CD3 (the CD38 Program). The Company also agreed to apply its bispecific technology to five previously identified Amgen provided targets (each a Discovery Program). The Company received a $45.0 million upfront payment from Amgen and is eligible to receive up to $1.7 billion in future development, regulatory and sales milestones in total for all six programs and is eligible to receive royalties on any global net sales of products.

Under the Amgen Agreement, for each of the five Discovery Programs, the Company will apply its bispecific technology to antibody molecules provided by Amgen that bind Discovery Program Targets and return the bispecific product candidates to Amgen for further testing, development and commercialization. Amgen has the right to substitute up to three of the previously identified targets during the research term provided that Amgen has not initiated non-human primate studies with the Xencor-provided bispecific candidate. The initial research term is three years from the date of the agreement but Amgen, at its option, may request an extension of one year. In May 2018, Amgen notified the Company that it was electing to extend the term of the research term for one year. Pursuant to the Agreement, Amgen and the Company will agree upon a detailed plan for services to be provided by the Company during the extended research term. The Company will receive research funding for the additional services provided during the extended research term.

Amgen will assume full responsibility for development and commercialization of product candidates under each of the Discovery Programs.

The Company evaluated the Amgen Agreement under ASC 606 and determined that it is a customer and that the CD38 Program and each of the five Discovery Programs represent the performance obligations under the contract.

The Company determined the transaction price at inception is the $45 million upfront payment to be allocated to the performance obligations. The Amgen Agreement includes variable consideration for potential future milestones and royalties that were contingent on future success factors for development programs. The Company used the “most likely” method to determine the variable consideration. The Company included the $10 million development milestone that was received in the fourth quarter of 2017 in the transaction price as uncertainty associated with it has been resolved. No other development, regulatory or sales milestones or royalties were included in the transaction price. The Company will re-evaluate the transaction price in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

The transaction price of $55 million was allocated to the performance obligations as follows:

$23.75 million to the CD38 Program and

$6.25 million to each of the five Discovery Programs

Under historical accounting guidance, the Company recognized as collaboration revenue the amount of consideration allocated to the CD38 Programs upon delivery of the CD38 research material and data to Amgen in the fourth quarter of 2015. The Company recognized as milestone revenue $10 million in the fourth quarter of 2017 in connection with Amgen advancing a CD38 candidate to IND stage of development. During 2016, the Company recognized as collaboration revenue the amount of consideration for delivery of three Discovery Programs. The Company completed delivery of bispecific antibody candidates for all five Discovery Programs by September 15, 2016. Amgen elected to substitute one of the originally identified antibody candidates in the first quarter of 2016. Amgen exercised its option to substitute one of the originally identified candidates and its option to substitute a third candidate lapsed in September 2017; the Company recognized revenue related to a discovery program in the third quarter of 2017 upon the lapsing of the remaining substitution right. The Company completed delivery of the substituted discovery program in the first quarter of 2018.

Under ASC 606, there is no change to the timing or the amount of revenue recognized for the CD38 program; the amount of upfront proceeds allocated to the CD38 program is recognized at the inception of the contract and the $10 million milestone revenue is recognized in the period that the uncertainty regarding the event is resolved, i.e., when the milestone event occurred.

ASC 606 changed the timing of revenue recognized for the discovery programs. The Company’s performance obligation for the five discovery programs was fulfilled in 2016 when all five of the original discovery programs were delivered to Amgen. Under ASC 606 the substitution rights are not separate purchase obligations and do not delay recognition of revenue if control of the discovery program has been transferred. Accordingly, pursuant to ASC 606 the Company is recognizing $31.25 million of revenue for delivery of the five discovery programs in 2016.

Under ASC 606, the Company is not recognizing any revenue for each of the three and six months ended June 30, 2018 and 2017. There is no deferred revenue as of June 30, 2018 related to this arrangement.

Merck Sharp & Dohme Corporation

In July 2013, we entered into a license agreement (the Merck Agreement) with Merck Sharp & Dohme Corp (Merck). Under the terms of the agreement, we provided Merck with a non-exclusive commercial license to certain patent rights to our Fc domains to apply to one of their compounds. The Merck Agreement provided for an upfront payment of $1.0 million and annual maintenance fees totaling $0.5 million. We are also eligible to receive future milestones and royalties as Merck advances the compound into clinical development.

In February 2018, Merck notified the Company that it was terminating the Merck Agreement and all future obligations were terminated.

During each of the three and six months ended June 30, 2018 and 2017 there were no revenues recognized. There is no deferred revenue related to this arrangement at June 30, 2018.

Alexion Pharmaceuticals, Inc.

In January 2013, we entered into an option and license agreement with Alexion Pharmaceuticals, Inc. (Alexion). Under the terms of the agreement, we granted to Alexion an exclusive research license, with limited sublicensing rights, to make and use our Xtend technology to evaluate and advance compounds against six different target programs during a five-year research term under the agreement, up to completion of the first multi-dose human clinical trial for each target compound.

Under the agreement, we received an upfront payment of $3.0 million and four annual maintenance fees of $0.5 million during the research term. In addition, we are eligible to receive development, regulatory and commercial milestones. If licensed products are successfully commercialized, we are also entitled to receive royalties based on a percentage of net sales of such products sold by Alexion, its affiliates or its sub licensees, which percentage is in the low single digits. Alexion’s royalty obligations continue on a product‑by‑product and country‑by‑ country basis until the expiration of the last‑to‑expire valid claim in a licensed patent covering the applicable product in such country.

In the third quarter of 2014, Alexion achieved a Phase 1 milestone with ALXN1210, a compound that incorporates our Xtend technology. In the fourth quarter of 2015, Alexion exercised its option to take an exclusive commercial license to ALXN1210 and achieved a Phase 2 clinical development milestone for ALXN1210. In December 2016, Alexion achieved a Phase 3 clinical development milestone for ALXN1210.

Under historical accounting guidance, the upfront payment and the annual licensing fees were being recognized over the five-year research term and each of the option payment and clinical milestones were recognized as revenue in the period that each event occurred.

Under ASC 606, the Company determined Alexion to be a customer. The license of Xencor’s Xtend intellectual property is functional intellectual property, distinct and is the only performance obligation. The upfront fee, the net present value of the four $500,000 annual fees, the option exercise fee of $4 million and milestone payments of $8.5 million already received represent the total transaction price at inception. The $4 million option does not provide a discount on future services and does not grant a material right. The timing of revenue recognition for the option and milestones did not change under ASC 606 and have no effect on revised periods. Under ASC 606 the upfront payment and the present value of the annual licensing fees are recognized at inception of the agreement when Alexion was provided access to the technology. The adoption of ASC 606 resulted in a decrease in revenue of $250,000 and $500,000 for the three and six months ended June 30, 2017 respectively.

During each of the three and six months ended June 30, 2018 and 2017, no revenue was recognized under this arrangement. There is no deferred revenue related to this arrangement at June 30, 2018.

CSL Limited

In February 2009, we entered into a research license and commercialization agreement with CSL Limited (CSL). Under the agreement, we provided CSL with a research license to our Fc Cytotoxic technology and options to non-exclusive commercial licenses. CSL elected to exercise one commercial license for a compound, CSL362.

In 2013 CSL sublicensed CSL362 (now called talacotuzumab) to Janssen Biotech Inc. (Janssen Biotech). In March 2017, CSL, through its sub-licensee, Janssen Biotech, initiated a Phase 3 clinical trial for CSL362 and we received a milestone payment of $3.5 million.

There is no change to the timing or amount of revenue recognized under this arrangement for the periods presented as a result of adopting ASC 606.

During the three and six months ended June 31, 2018, there were no revenues recognized. During the three and six months ended June 30, 2017 we recognized zero and $3.5 million of revenue, respectively, under the arrangement. There is no deferred revenue related to this arrangement at June 30, 2018.

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2018
Income Taxes
Income Taxes	10. Income taxes There is no provision for income taxes for the three and six-month periods ended June 30, 2018 as the Company sustained a loss for both periods and no income tax benefit can be recognized currently due to uncertainty about the Company’s ability to generate taxable income in future periods. The provision for income taxes for the three and six months ended June 30, 2017 represents the interim period tax allocation of the federal and state alternative minimum tax based on the Company’s projected year-end effective income tax rates which cannot be offset by the Company’s net operating loss carryforwards. The Company has federal income tax receivable of $1.5 million at June 30, 2018 related to refundable alternative minimum tax credits. As of June 30, 2018, the Company’s deferred income tax assets, consisting primarily of net operating loss and tax credit carryforwards, have been fully offset by a valuation allowance.

Prior-Period Financial Statements

6 Months Ended

Jun. 30, 2018

Prior-Period Financial Statements

Prior-Period Financial Statements

11. Prior-Period Financial Statements

The Company adopted ASC 606 on January 1, 2018 using the full retrospective method and as a result the Company has revised its comparative financial statements for the prior period as if ASC 606 had been in effect for that period.

The most significant changes to revenue recognition under ASC 606 relate to the timing of revenue recognized for arrangements that include licensing of our technologies. Under ASC 606 revenue related to licensing of access to our technologies is recognized at inception of the agreement, generally the effective date of the agreement. For existing licensing arrangements, the effect of ASC 606 is to shift revenue to earlier periods. Approximately $11.3 million of licensing revenue that was being recognized over the five-year period 2016-2021 is being recognized in the second quarter of 2016.

The other significant change under ASC 606 relates to the timing of collaboration revenue when the Company completes its performance obligations for delivery of a drug candidate to its collaboration partners after applying its technologies. For existing collaborations, the effect of ASC 606 is to accelerate revenue recognition to earlier periods. Approximately $6.25 million of collaboration revenue recognized in 2017 and 2018 under historical accounting guidance is being recognized in 2016 under ASC 606. An additional $20.5 million of collaboration revenue that would be recognized in 2018 is being recognized in 2017. The following tables summarize the effects of adopting ASC topic 606 on our financial statements.


	As Reported December 31,		Effect of Adoption of		As Revised December 31,
	2017		ASC 606		2017

Assets
Current assets
Cash and cash equivalents	$	16,528	$	—	$	16,528
Marketable securities		207,603		—		207,603
Accounts receivable		1,142		—		1,142
Prepaid expenses and other current assets		5,606		—		5,606
Total current assets		230,879		—		230,879
Property and equipment, net		7,088		—		7,088
Patents, licenses, and other intangible assets, net		11,148		—		11,148
Marketable securities - long term		139,198		—		139,198
Income tax receivable		1,524		—		1,524
Loan receivable		—		86		86
Interest receivable		—		14		14
Other assets		265		—		265
Total assets	$	390,102	$	100	$	390,202
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	6,869	$	—	$	6,869
Accrued expenses		5,480		—		5,480
Current portion of deferred rent		26		—		26
Current portion of deferred revenue		88,813		(28,695)		60,118
Income taxes		157		—		157
Total current liabilities		101,345		(28,695)		72,650
Deferred rent, less current portion		1,088		—		1,088
Deferred revenue, less current portion		5,623		(5,623)		—
Total liabilities		108,056		(34,318)		73,738
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.01 par value: 10,000,000 authorized shares; -0- issued and outstanding shares at December 31, 2017		—		—		—
Common stock, $0.01 par value: 200,000,000 authorized shares at December 31, 2017; 47,002,488 issued and outstanding at December 31, 2017		470		—		470
Additional paid-in capital		570,670		—		570,670
Accumulated other comprehensive income loss		(1,808)		—		(1,808)
Accumulated deficit		(287,286)		34,418		(252,868)
Stockholders’ equity		282,046		34,418		316,464
Total liabilities and stockholders’ equity	$	390,102	$	100	$	390,202


	As Reported				As Revised
	Three Months Ended		Effect of		Three Months Ended
	June 30,		Adoption of		June 30,
	2017		ASC 606		2017

Revenue
Collaborations, licenses and milestones	$	13,340	$	(840)	$	12,500
Operating expenses
Research and development		16,919		—		16,919
General and administrative		4,091		—		4,091
Total operating expenses		21,010		—		21,010
Loss from operations		(7,670)		(840)		(8,510)
Other income (expenses)
Interest income		1,038		—		1,038
Interest expense		(3)		—		(3)
Other income		30		—		30
Total other income, net		1,065		—		1,065

Loss before income tax expense		(6,605)		(840)		(7,445)
Income tax expense		280		—		280
Net loss		(6,885)		(840)		(7,725)

Other comprehensive income (loss)
Net unrealized loss on marketable securities		(44)		—		(44)
Comprehensive loss	$	(6,929)	$	(840)	$	(7,769)

Basic and diluted net loss per common share	$	(0.15)	$	(0.02)	$	$ (0.17)


	As Reported				As Revised
	Six Months Ended		Effect of		Six Months Ended
	June 30,		Adoption of		June 30,
	2017		ASC 606		2017

Revenue
Collaborations, licenses and milestones	$	17,681	$	(1,681)	$	16,000
Operating expenses
Research and development		31,967		—		31,967
General and administrative		8,903		—		8,903
Total operating expenses		40,870		—		40,870
Loss from operations		(23,189)		(1,681)		(24,870)
Other income (expenses)
Interest income		2,095		—		2,095
Interest expense		(5)		—		(5)
Other income		30		—		30
Total other income, net		2,120		—		2,120

Loss before income tax expense		(21,069)		(1,681)		(22,750)
Income tax expense		450		—		450
Net loss		(21,519)		(1,681)		(23,200)

Other comprehensive income (loss)
Net unrealized gain on marketable securities		201		—		201
Comprehensive loss	$	(21,318)	$	(1,681)	$	(22,999)

Basic and diluted net loss per common share	$	(0.46)	$	(0.04)	$	$ (0.50)


						Accumulated
				Additional		Other				Total
	Common Stock			Paid		Comprehensive		Accumulated		Stockholders’
Stockholders’ Equity	Shares	Amount		in-Capital		Loss		Deficit		Equity
Balance, December 31, 2016 as originally reported	46,567,978	$	466	$	552,889	$	(1,441)	$	(237,960)	$	313,954
Adoption of ASU 2016-09	—		—		401		—		(401)		—
Adoption of ASC 606	—		—		—		—		23,979		23,979
Balance, December 31, 2016 as revised	46,567,978		466		553,290		(1,441)		(214,382)		337,933
Issuance of common stock upon exercise of stock awards	363,603		4		2,793		—		—		2,797
Issuance of common stock under the Employee Stock Purchase Plan	70,907		—		936		—		—		936
Comprehensive loss	—		—		—		(367)		(48,925)		(49,292)
Stock-based compensation	—		—		13,651		—		—		13,651
Balance, December 31, 2017	47,002,488	$	470	$	570,670	$	(1,808)	$	(263,307)	$	306,025
Adoption of ASC topic 606	—		—		—		—		10,439		10,439
Balance, December 31, 2017 as revised	47,002,488	$	470	$	570,670	$	(1,808)	$	(252,868)	$	316,464


	As Reported				As Revised
	Six Months Ended		Effect of		Six Months Ended
	June 30,		Adoption of		June 30,
	2017		ASC 606		2017
Cash flows from operating activities
Net loss	$	(21,519)	$	(1,681)	$	(23,200)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		864		—		864
Amortization of premium on marketable securities		1,356		—		1,356
Stock-based compensation		6,607		—		6,607
Abandonment of capitalized intangible assets		225		—		225
Changes in operating assets and liabilities:
Accounts receivable		(6,260)		—		(6,260)
Interest receivable		(144)		(14)		(158)
Prepaid expenses and other assets		(4,727)		—		(4,727)
Accounts payable		3,500		—		3,500
Accrued expenses		(2,708)		—		(2,708)
Income taxes		390		—		390
Deferred rent		(12)		—		(12)
Deferred revenue		(1,080)		1,781		701
Net cash used in operating activities		(23,508)		86		(23,422)
Cash flows from investing activities
Purchase of marketable securities		(33,440)		—		(33,440)
Purchase of intangible assets		(1,092)		—		(1,092)
Purchase of property and equipment		(1,256)		—		(1,256)
Proceeds from sale and maturities of marketable securities		53,866		—		53,866
Repayment of loan		—		(86)		(86)
Net cash provided by investing activities		18,078		(86)		17,992
Cash flows from financing activities
Proceeds from issuance of common stock upon exercise of stock awards		1,680		—		1,680
Proceeds from issuance of common stock under the Employee Stock Purchase Plan		442				442
Net cash provided by financing activities		2,122		—		2,122
Net decrease in cash and cash equivalents		(3,308)		—		(3,308)
Cash and cash equivalents, beginning of period		14,528		—		14,528
Cash and cash equivalents, end of period	$	11,220	$	—	$	11,220

Summary of Significant Accounting Policies (Polices)	6 Months Ended
Summary of Significant Accounting Policies (Polices)	Jun. 30, 2018
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The accompanying unaudited interim financial statements for Xencor, Inc. (the Company) have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. Certain amounts in the prior period financial statements have been revised to conform to the presentation of the current period financial statements. See “Recent Accounting Pronouncements – Pronouncements Adopted in 2018.” The financial statements include all adjustments (consisting only of normal recurring adjustments) that the management of the Company believes are necessary for a fair presentation of the periods presented. The preparation of interim financial statements requires the use of management’s estimates and assumptions that affect reported amounts of assets and liabilities at the date of the interim financial statements and the reported revenues and expenditures during the reported periods. These interim financial results are not necessarily indicative of the results expected for the full fiscal year or for any subsequent interim period. The accompanying unaudited interim financial statements and related notes should be read in conjunction with the audited financial statements and notes thereto included in the Company’s 2017 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 28, 2018.
Use of Estimates	Use of Estimates The preparation of interim financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, other comprehensive gain (loss) and the related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to its accrued clinical trial and manufacturing development expenses, stock-based compensation expense, intangible assets and related amortization. Significant estimates in these interim financial statements include estimates made for accrued research and development expenses, stock-based compensation expenses, intangible assets and related amortization.
Intangible Assets	Intangible Assets The Company maintains definite-lived intangible assets related to certain capitalized costs of acquired licenses and third-party costs incurred in establishing and maintaining its intellectual property rights to its platform technologies and development candidates. These assets are amortized over their useful lives, which are estimated to be the remaining patent life or the contractual term of the license. The straight-line method is used to record amortization expense. The Company assesses its intangible assets for impairment if indicators are present or changes in circumstances suggest that impairment may exist. There were no impaired intangible assets at June 30, 2018.
Marketable Securities	Marketable Securities The Company has an investment policy that includes guidelines on acceptable investment securities, minimum credit quality, maturity parameters and concentration and diversification. The Company invests its excess cash primarily in marketable securities issued by investment grade institutions. The Company considers its marketable securities to be available-for-sale. These assets are carried at fair value and the unrealized gains and losses are included in accumulated other comprehensive income (loss). Accrued interest on marketable securities is included in marketable securities. If a decline in the value of a marketable security in the Company’s investment portfolio is deemed to be other-than-temporary, the Company writes down the security to its current fair value and recognizes a loss as a charge against income. The Company reviews its portfolio of marketable securities, using both quantitative and qualitative factors, to determine if declines in fair value below cost are other-than-temporary.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Pronouncements Adopted in 2018 Effective January 1, 2018, the Company adopted Accounting Standards Codification Topic 606 (ASC 606), Revenue from Contracts with Customers, using the full retrospective transition method. Under this method, the Company is presenting its financial statements for the years ended December 31, 2016 and 2017 and applicable interim periods within the year ended 2017 as if ASC 606 had been effective for those periods. Under ASC 606 an entity recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. A five-step model is used to achieve the core principle: (1) identify the customer contract, (2) identify the contract’s performance obligations, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations and (5) recognize revenue when or as a performance obligation is satisfied. The Company applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. The new guidance provides that revenue recognition for performance obligations related to delivery of certain goods or services occurs when control over the good or service is transferred to the customer. In addition, the timing of revenue recognition from licensing of our intellectual property that are functional and are distinct performance obligations changed from being recognized over the term of access to our license or technology to being recognized at a point in time. See Note 11 “Prior-Period Financial Statements” for a complete discussion of the impact of adopting the new standard. Effective January 1 2018, the Company adopted ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The adoption of this standard did not have an effect on its statements of cash flow. Effective January 1, 2018, the Company adopted ASU No. 2017-09, Compensation – Stock Compensation (Topic 718). The standard applies when a company changes the terms of a stock compensation award granted to an employee. The Company did not have any modifications upon adopting the new standard; therefore, adoption of the new standard had no effect on the Company’s financial statements. Pronouncements Not Yet Effective In February 2016, the FASB issued ASU 2016-02 Leases. The new guidance requires lessees to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term for all leases not considered short term. The new standard will be effective for reporting periods beginning after December 15, 2018. In July 2018, the FASB issued ASU 2018-11, Lease (Topic 842): Targeted Improvements, which provides an alternative transition method of adoption, permitting the recognition of cumulative-effect adjustment to retained earnings on the date of adoption. We are currently evaluating our leases which includes a review of our lease expenses, which are primarily operating lease arrangements for our facilities in Monrovia and San Diego. We intend to adopt the standard on the effective date but have not yet selected a transition method. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the guidance on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. The amendment is effective for fiscal years beginning after December 15, 2019 including interim periods within those fiscal years. The Company does not expect the adoption of this standard to have a material impact on its results of operations or financial position. In March 2017, the FASB issued ASU No. 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities, which amends the guidance on the amortization period of premiums on certain purchased callable debt securities. The amendment is effective for fiscal years beginning after December 31, 2018 with early adoption permitted. The Company will review the requirements of the standard but does not anticipate it will have a significant impact on its financial statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, an amendment which permits companies to reclassify the income tax effects of the 2017 Tax Cut and Jobs Act (TCJA) on items within accumulated other comprehensive income to retained earnings. The standard is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. The Company does not anticipate the new guidance will have a significant impact in its financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payments issued to nonemployees for goods and services. The standard is effective for fiscal years beginning after December 15, 2018 and interim periods within such fiscal year. The Company does not anticipate that the standard will have a significant impact on its financial statements. There have been no other material changes to the significant accounting policies previously disclosed in the Company’s 2017 Annual Report on Form 10-K.

- Definition

Disclosure of accounting policy for investments in debt and equity securities that have readily determinable fair values (marketable securities). At a minimum, the disclosure might address accounting policies for investments classified as trading, available for sale, or held to maturity and may include how the entity determines whether impairments of available for sale or held to maturity investments are other than temporary, how the fair values of the entity's securities are determined, and the entity's accounting treatment for transfers between investment categories.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 210
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-03(6))
-URI http://asc.fasb.org/extlink&oid=6876686&loc=d3e534808-122878

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 210
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-03(a)(1))
-URI http://asc.fasb.org/extlink&oid=6879938&loc=d3e572229-122910

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 5.M)
-URI http://asc.fasb.org/extlink&oid=65877573&loc=d3e87990-122713

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(12))
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=84158767&loc=d3e18780-107790

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section S50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6381980&loc=d3e87707-122711

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 320
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=75019621&loc=d3e62652-112803

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(2))
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 210
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-03(5))
-URI http://asc.fasb.org/extlink&oid=6876686&loc=d3e534808-122878

+ Details

Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value of Financial Instruments

Schedule of assets recorded at fair value

The assets recorded at fair value are classified within the hierarchy as follows for the periods reported (in thousands):


	June 30, 2018						December 31, 2017
	Total						Total
	Fair Value		Level 1		Level 2		Fair Value		Level 1		Level 2

Money Market Funds	$	31,144	$	31,144	$	—	$	5,175	$	5,175	$	—
Corporate Securities		96,102		—		96,102		123,270		—		123,270
Government Securities		423,985		—		423,985		223,530		—		223,530
	$	551,231	$	31,144	$	520,087	$	351,975	$	5,175	$	346,800

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

Net Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2018

Net Loss Per Share

Schedule of basic and diluted net loss per common share

Basic and diluted net loss per common share is computed as follows (in thousands except share and per share data):


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2018			2017		2018		2017
			(As Revised)						(As Revised)
	(in thousands, except share
	and per share data)
Numerator:
Net loss attributable to common stockholders	$	(25,869)		$	(7,725)	$	(55,361)	$	(23,200)
Denominator:
Weighted-average common shares outstanding used in computing basic and diluted net loss		55,678,990			46,767,759		51,738,348		46,683,744
Basic and diluted net loss per common share	$	(0.46)		$	(0.17)	$	(1.07)	$	(0.50)

Marketable Securities (Tables)

6 Months Ended

Jun. 30, 2018

Marketable Securities

Schedule of marketable securities


			Gross		Gross
	Amortized		Unrealized		Unrealized
June 30, 2018	Cost		Gains		Losses		Fair Value
(in thousands)
Money Market Funds	$	31,144	$	—	$	—	$	31,144
Corporate Securities		96,756		—		(654)		96,102
Government Securities		425,329		21		(1,365)		423,985
	$	553,229	$	21	$	(2,019)	$	551,231

Reported as
Cash and cash equivalents							$	31,144
Marketable securities								520,087
Total investments							$	551,231



			Gross		Gross
	Amortized		Unrealized		Unrealized
December 31, 2017	Cost		Gains		Losses		Fair Value
(in thousands)
Money Market Funds	$	5,175	$	—	$	—	$	5,175
Corporate Securities		123,860		—		(590)		123,270
Government Securities		224,739		—		(1,209)		223,530
	$	353,774	$	—	$	(1,799)	$	351,975

Reported as
Cash and cash equivalents							$	5,175
Marketable securities								346,800
Total investments							$	351,975

Schedule of maturities of marketable securities


	Amortized		Estimated
June 30, 2018	Cost		Fair Value
(in thousands)
Mature in one year or less	$	221,286	$	220,116
Mature within two years		300,799		299,971
	$	522,085	$	520,087

Schedule of unrealized losses on available-for-sale investments

The unrealized losses on available-for-sale investments and their related fair values as of June 30, 2018 and December 31, 2017 are as follows:


	Less than 12 months				12 months or greater
June 30, 2018		Fair value		Unrealized losses		Fair value		Unrealized losses
(in thousands)
Corporate Securities	$	63,850	$	(475)	$	32,252	$	(179)
Government Securities		156,266		(695)		267,719		(670)
	$	220,116	$	(1,170)	$	299,971	$	(849)



	Less than 12 months				12 months or greater
December 31, 2017		Fair value		Unrealized losses		Fair value		Unrealized losses
(in thousands)
Corporate Securities	$	79,290	$	(137)	$	43,980	$	(453)
Government Securities		128,313		(461)		95,217		(748)
	$	207,603	$	(598)	$	139,197	$	(1,201)

Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2018

Stock-Based Compensation

Schedule of total employee, director and non-employee stock-based compensation expense recognized


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
General and administrative	$	1,688	$	1,416	$	3,305	$	2,884
Research and development		3,194		2,032		6,048		3,723
	$	4,882	$	3,448	$	9,353	$	6,607

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Stock options	$	4,614	$	3,319	$	8,891	$	6,358
ESPP		190		129		353		249
Restricted stock units		78		—		109		—
	$	4,882	$	3,448	$	9,353	$	6,607

Summary of stock option activity


		Weighted		Weighted
		Average		Average
	Number of	Exercise		Remaining		Aggregate
	Shares subject	Price		Contractual		Intrinsic
	to outstanding	(Per		Term		Value
	options	Share)		(in years)		(in thousands)
Balances at December 31, 2017	5,093,442	$	15.32		7.62
Options granted	1,553,400	$	25.58
Options forfeited	(30,345)	$	21.90
Options exercised	(397,270)	$	7.34
Balance at June 30, 2018	6,219,227	$	18.36		7.90	$	116,282
Exercisable	2,941,950	$	13.76		6.79	$	68,393

Schedule of weighted average assumptions used for estimation of fair value of stock options


	Options				Options
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Expected term (years)	5.9		6.1		6.1		6.1
Expected volatility	72.9	%	88.9	%	73.1	%	89.2	%
Risk-free interest rate	2.77	%	1.91	%	2.53	%	2.04	%
Expected dividend yield	—	%	—	%	—	%	—	%

Schedule of weighted average assumptions used for estimation of fair value of ESPP


	ESPP				ESPP
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Expected term (years)	0.5 - 2.0		0.5 - 2.0		0.5 - 2.0		0.5 - 2.0
Expected volatility	61.2 - 71.4	%	67.8 - 79.8	%	61.2 - 71.4	%	67.8 - 79.8	%
Risk-free interest rate	1.47 - 2.41	%	.47 - 1.09	%	1.47 - 2.41	%	.47 - 1.09	%
Expected dividend yield	—	%	—	%	—	%	—	%

Summary of restricted stock unity activity


		Weighted
	Restricted	Average Grant
	Stock	Date Fair Value
	Units	(Per unit)

Unvested at December 31, 2017	—	$	—
Granted	33,933	$	27.64
Vested	—	$	—
Forfeited	—	$	—
Unvested at June 30, 2018	33,933	$	27.64

Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies

Schedule of future minimum payments for non-cancellable operating leases



Years ending December 31,
For the remainder of the fiscal year	$	1,346
2019		2,752
2020		2,404
2021		1,980
2022		1,406

Prior-Period Financial Statements (Tables)

6 Months Ended

Jun. 30, 2018

ASU 2014-09

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Summary of effect of adopting new accounting pronouncement

The following tables summarize the effects of adopting ASC topic 606 on our financial statements.


	As Reported December 31,		Effect of Adoption of		As Revised December 31,
	2017		ASC 606		2017

Assets
Current assets
Cash and cash equivalents	$	16,528	$	—	$	16,528
Marketable securities		207,603		—		207,603
Accounts receivable		1,142		—		1,142
Prepaid expenses and other current assets		5,606		—		5,606
Total current assets		230,879		—		230,879
Property and equipment, net		7,088		—		7,088
Patents, licenses, and other intangible assets, net		11,148		—		11,148
Marketable securities - long term		139,198		—		139,198
Income tax receivable		1,524		—		1,524
Loan receivable		—		86		86
Interest receivable		—		14		14
Other assets		265		—		265
Total assets	$	390,102	$	100	$	390,202
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	6,869	$	—	$	6,869
Accrued expenses		5,480		—		5,480
Current portion of deferred rent		26		—		26
Current portion of deferred revenue		88,813		(28,695)		60,118
Income taxes		157		—		157
Total current liabilities		101,345		(28,695)		72,650
Deferred rent, less current portion		1,088		—		1,088
Deferred revenue, less current portion		5,623		(5,623)		—
Total liabilities		108,056		(34,318)		73,738
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.01 par value: 10,000,000 authorized shares; -0- issued and outstanding shares at December 31, 2017		—		—		—
Common stock, $0.01 par value: 200,000,000 authorized shares at December 31, 2017; 47,002,488 issued and outstanding at December 31, 2017		470		—		470
Additional paid-in capital		570,670		—		570,670
Accumulated other comprehensive income loss		(1,808)		—		(1,808)
Accumulated deficit		(287,286)		34,418		(252,868)
Stockholders’ equity		282,046		34,418		316,464
Total liabilities and stockholders’ equity	$	390,102	$	100	$	390,202


	As Reported				As Revised
	Three Months Ended		Effect of		Three Months Ended
	June 30,		Adoption of		June 30,
	2017		ASC 606		2017

Revenue
Collaborations, licenses and milestones	$	13,340	$	(840)	$	12,500
Operating expenses
Research and development		16,919		—		16,919
General and administrative		4,091		—		4,091
Total operating expenses		21,010		—		21,010
Loss from operations		(7,670)		(840)		(8,510)
Other income (expenses)
Interest income		1,038		—		1,038
Interest expense		(3)		—		(3)
Other income		30		—		30
Total other income, net		1,065		—		1,065

Loss before income tax expense		(6,605)		(840)		(7,445)
Income tax expense		280		—		280
Net loss		(6,885)		(840)		(7,725)

Other comprehensive income (loss)
Net unrealized loss on marketable securities		(44)		—		(44)
Comprehensive loss	$	(6,929)	$	(840)	$	(7,769)

Basic and diluted net loss per common share	$	(0.15)	$	(0.02)	$	$ (0.17)


	As Reported				As Revised
	Six Months Ended		Effect of		Six Months Ended
	June 30,		Adoption of		June 30,
	2017		ASC 606		2017

Revenue
Collaborations, licenses and milestones	$	17,681	$	(1,681)	$	16,000
Operating expenses
Research and development		31,967		—		31,967
General and administrative		8,903		—		8,903
Total operating expenses		40,870		—		40,870
Loss from operations		(23,189)		(1,681)		(24,870)
Other income (expenses)
Interest income		2,095		—		2,095
Interest expense		(5)		—		(5)
Other income		30		—		30
Total other income, net		2,120		—		2,120

Loss before income tax expense		(21,069)		(1,681)		(22,750)
Income tax expense		450		—		450
Net loss		(21,519)		(1,681)		(23,200)

Other comprehensive income (loss)
Net unrealized gain on marketable securities		201		—		201
Comprehensive loss	$	(21,318)	$	(1,681)	$	(22,999)

Basic and diluted net loss per common share	$	(0.46)	$	(0.04)	$	$ (0.50)


						Accumulated
				Additional		Other				Total
	Common Stock			Paid		Comprehensive		Accumulated		Stockholders’
Stockholders’ Equity	Shares	Amount		in-Capital		Loss		Deficit		Equity
Balance, December 31, 2016 as originally reported	46,567,978	$	466	$	552,889	$	(1,441)	$	(237,960)	$	313,954
Adoption of ASU 2016-09	—		—		401		—		(401)		—
Adoption of ASC 606	—		—		—		—		23,979		23,979
Balance, December 31, 2016 as revised	46,567,978		466		553,290		(1,441)		(214,382)		337,933
Issuance of common stock upon exercise of stock awards	363,603		4		2,793		—		—		2,797
Issuance of common stock under the Employee Stock Purchase Plan	70,907		—		936		—		—		936
Comprehensive loss	—		—		—		(367)		(48,925)		(49,292)
Stock-based compensation	—		—		13,651		—		—		13,651
Balance, December 31, 2017	47,002,488	$	470	$	570,670	$	(1,808)	$	(263,307)	$	306,025
Adoption of ASC topic 606	—		—		—		—		10,439		10,439
Balance, December 31, 2017 as revised	47,002,488	$	470	$	570,670	$	(1,808)	$	(252,868)	$	316,464


	As Reported				As Revised
	Six Months Ended		Effect of		Six Months Ended
	June 30,		Adoption of		June 30,
	2017		ASC 606		2017
Cash flows from operating activities
Net loss	$	(21,519)	$	(1,681)	$	(23,200)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		864		—		864
Amortization of premium on marketable securities		1,356		—		1,356
Stock-based compensation		6,607		—		6,607
Abandonment of capitalized intangible assets		225		—		225
Changes in operating assets and liabilities:
Accounts receivable		(6,260)		—		(6,260)
Interest receivable		(144)		(14)		(158)
Prepaid expenses and other assets		(4,727)		—		(4,727)
Accounts payable		3,500		—		3,500
Accrued expenses		(2,708)		—		(2,708)
Income taxes		390		—		390
Deferred rent		(12)		—		(12)
Deferred revenue		(1,080)		1,781		701
Net cash used in operating activities		(23,508)		86		(23,422)
Cash flows from investing activities
Purchase of marketable securities		(33,440)		—		(33,440)
Purchase of intangible assets		(1,092)		—		(1,092)
Purchase of property and equipment		(1,256)		—		(1,256)
Proceeds from sale and maturities of marketable securities		53,866		—		53,866
Repayment of loan		—		(86)		(86)
Net cash provided by investing activities		18,078		(86)		17,992
Cash flows from financing activities
Proceeds from issuance of common stock upon exercise of stock awards		1,680		—		1,680
Proceeds from issuance of common stock under the Employee Stock Purchase Plan		442				442
Net cash provided by financing activities		2,122		—		2,122
Net decrease in cash and cash equivalents		(3,308)		—		(3,308)
Cash and cash equivalents, beginning of period		14,528		—		14,528
Cash and cash equivalents, end of period	$	11,220	$	—	$	11,220

Summary of Significant Accounting Policies - Intangibles (Details)	6 Months Ended
	Jun. 30, 2018 USD ($)
Summary of Significant Accounting Policies
Intangible assets impaired	$ 0

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017
Fair Value of Financial Instruments
Money Market Funds	$ 35,292	$ 16,528
Total Fair Value	551,231	351,975
Transfers from level 1 to level 2	0		$ 0
Transfers from level 2 to level 1	0		$ 0
Money Market Funds
Fair Value of Financial Instruments
Money Market Funds	31,144	5,175
Corporate Securities
Fair Value of Financial Instruments
Securities	96,102	123,270
Government Securities
Fair Value of Financial Instruments
Securities	423,985	223,530
Level 1
Fair Value of Financial Instruments
Total Fair Value	31,144	5,175
Level 1 \| Money Market Funds
Fair Value of Financial Instruments
Money Market Funds	31,144	5,175
Level 2
Fair Value of Financial Instruments
Total Fair Value	520,087	346,800
Level 2 \| Corporate Securities
Fair Value of Financial Instruments
Securities	96,102	123,270
Level 2 \| Government Securities
Fair Value of Financial Instruments
Securities	$ 423,985	$ 223,530

Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Numerator:
Net loss attributable to common stockholders	$ (25,869)	$ (7,725)	$ (55,361)	$ (23,200)
Denominator:
Weighted-average common shares outstanding used in computing basic and diluted net loss	55,678,990	46,767,759	51,738,348	46,683,744
Basic and diluted net loss (in dollars per share)	$ (0.46)	$ (0.17)	$ (1.07)	$ (0.50)

Marketable Securities (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
Marketable Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Schedule of Available-for-sale Securities
Cash and cash equivalents	$ 35,292	$ 16,528
Investments, amortized cost	553,229	353,774
Investments	551,231	351,975
Total amortized cost	522,085
Gross unrealized gains	21
Gross unrealized losses	(2,019)	(1,799)
Securities	520,087
Marketable securities
Schedule of Available-for-sale Securities
Securities	520,087	346,800
Money Market Funds
Schedule of Available-for-sale Securities
Cash and cash equivalents	31,144	5,175
Corporate Securities
Schedule of Available-for-sale Securities
Total amortized cost	96,756	123,860
Gross unrealized losses	(654)	(590)
Securities	96,102	123,270
Government Securities
Schedule of Available-for-sale Securities
Total amortized cost	425,329	224,739
Gross unrealized gains	21
Gross unrealized losses	(1,365)	(1,209)
Securities	423,985	223,530
Cash and Cash Equivalents
Schedule of Available-for-sale Securities
Cash and cash equivalents	$ 31,144	$ 5,175

Marketable Securities - Maturities (Details) $ in Thousands	Jun. 30, 2018 USD ($)
Amortized Cost
Maturing in one year or less	$ 221,286
Maturing after one year	300,799
Total amortized cost	522,085
Estimate Fair Value
Maturing in one year or less	220,116
Maturing after one year	299,971
Total estimated fair value	$ 520,087

Marketable Securities - Unrealized losses (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Fair value
Fair value, less than 12 months	$ 220,116	$ 207,603
Fair value, 12 months or greater	299,971	139,197
Unrealized losses
Unrealized losses, Less than 12 months	(1,170)	(598)
Unrealized losses, 12 months or greater	(849)	(1,201)
Corporate Securities
Fair value
Fair value, less than 12 months	63,850	79,290
Fair value, 12 months or greater	32,252	43,980
Unrealized losses
Unrealized losses, Less than 12 months	(475)	(137)
Unrealized losses, 12 months or greater	(179)	(453)
Government Securities
Fair value
Fair value, less than 12 months	156,266	128,313
Fair value, 12 months or greater	267,719	95,217
Unrealized losses
Unrealized losses, Less than 12 months	(695)	(461)
Unrealized losses, 12 months or greater	$ (670)	$ (748)

Sale of Additional Common Stock (Details) - Common Stock - USD ($) $ in Millions	1 Months Ended	6 Months Ended
	Mar. 31, 2018	Jun. 30, 2018
Sale of common stock	8,395,000	8,395,000
Net proceeds	$ 245.5

Stock Based Compensation (Details) - shares		6 Months Ended
Stock Based Compensation (Details) - shares	Dec. 02, 2013	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Stock-based compensation
Common stock, shares issued		55,821,310		47,002,488
Employee stock options
Stock-based compensation
Options granted (in shares)		1,553,400	1,356,100
ESPP
Stock-based compensation
Total number of shares of common stock available for issuance		581,286
Awards issued under the plan (in shares)		318,945
Annual increase in shares of common stock available for issuance (in shares)		0
ESPP \| Maximum
Stock-based compensation
Annual percentage increase in shares of common stock available for issuance		1.00%
Annual increase in shares of common stock available for issuance (in shares)		621,814
Restricted stock units
Stock-based compensation
Vesting period		3 years
The 2013 Plan
Stock-based compensation
Total number of shares of common stock available for issuance		10,009,294
Annual percentage increase in shares of common stock available for issuance		4.00%
Awards issued under the plan (in shares)		6,498,750
Increase in shares of common stock available for issuance (in shares)		1,880,100
The 2010 Plan
Stock-based compensation
Total number of shares of common stock available for issuance		2,684,456
Options granted (in shares)	0

Stock-Based Compensation - Employee expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	$ 4,882	$ 3,448	$ 9,353	$ 6,607
Employee stock options
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	4,614	3,319	8,891	6,358
ESPP
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	190	129	353	249
Restricted stock units
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	78		109
General and administrative
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	1,688	1,416	3,305	2,884
Research and development
Stock-based compensation
Total employee, director and non-employee stock-based compensation expense	$ 3,194	$ 2,032	$ 6,048	$ 3,723

Stock-Based Compensation - Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands		6 Months Ended		12 Months Ended
	Dec. 02, 2013	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Employee stock options
Number of Shares subject to outstanding options
Balance at the beginning of the period (in shares)		5,093,442
Options granted (in shares)		1,553,400	1,356,100
Options forfeited (in shares)		(30,345)
Options exercised (in shares)		(397,270)
Balance at the end of the period (in shares)		6,219,227		5,093,442
Exercisable options (in shares)		2,941,950
Weighted Average Exercise Price (Per Share)
Balance at the beginning of the period (in dollars per share)		$ 15.32
Options granted (in dollars per share)		25.58
Options forfeited (in dollars per share)		21.90
Options exercised (in dollars per share)		7.34
Balance at the end of the period (in dollars per share)		18.36		$ 15.32
Exercisable (in dollars per share)		$ 13.76
Weighted-average remaining contractual life		7 years 10 months 24 days		7 years 7 months 13 days
Weighted-average remaining contractual life of awards exercisable		6 years 9 months 15 days
Aggregate intrinsic value of options outstanding		$ 116,282
Aggregate intrinsic value of options exercisable		$ 68,393
Closing price of common stock (in dollars per share)		$ 37.01
Weighted average fair value of options granted (in dollars per share)		$ 16.86	$ 16.95
The 2010 Plan
Number of Shares subject to outstanding options
Options granted (in shares)	0

Stock-Based Compensation - FV of employee stock options (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Employee stock options
Weighted average assumptions for estimated fair value of employee stock options
Expected volatility (as a percent)	72.90%	88.90%	73.10%	89.20%
Risk-free interest rate (as a percent)	2.77%	1.91%	2.53%	2.04%
Expected term (years)	5 years 10 months 24 days	6 years 1 month 6 days	6 years 1 month 6 days	6 years 1 month 6 days
Compensation expense
Unamortized compensation expense related to unvested options	$ 47.9		$ 47.9
Period to recognize unamortized compensation expense			3 years
ESPP
Weighted average assumptions for estimated fair value of employee stock options
Expected volatility, low end of range (as a percent)	61.20%	67.80%	61.20%	67.80%
Expected volatility, high end of range (as a percent)	71.40%	79.80%	71.40%	79.80%
Risk-free interest rate, low end of range (as a percent)	1.47%	0.47%	1.47%	0.47%
Risk-free interest rate, high end of range (as a percent)	2.41%	1.09%	2.41%	1.09%
Compensation expense
Unamortized compensation expense related to unvested options	$ 1.2		$ 1.2
Period to recognize unamortized compensation expense			1 year 4 months 24 days
ESPP \| Minimum
Weighted average assumptions for estimated fair value of employee stock options
Expected term (years)	6 months	6 months	6 months	6 months
ESPP \| Maximum
Weighted average assumptions for estimated fair value of employee stock options
Expected term (years)	2 years	2 years	2 years	2 years

Stock Based Compensation - Restricted Stock Units (Details) - Restricted stock units $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2018 USD ($) $ / shares shares
Stock-based compensation
Granted \| shares	33,933
Ending balance \| shares	33,933
Weighted Average Grant Date Fair Value, Granted \| $ / shares	$ 27.64
Weighted Average Grant Date Fair Value, Ending Balance \| $ / shares	$ 27.64
Compensation expense
Unamortized compensation expense related to unvested restricted stock units \| $	$ 0.8
Period to recognize unamortized compensation expense	2 years 8 months 12 days

Commitments and Contingencies (Details) - USD ($)	1 Months Ended		6 Months Ended
Commitments and Contingencies (Details) - USD ($)	Jul. 31, 2017	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Operating Leases
For the remainder of the fiscal year			$ 1,346,000
2019			2,752,000
2020			2,404,000
2021			1,980,000
2022			1,406,000
Net rent expense			$ 1,200,000	$ 453,000
Monrovia
Lease term	64 months
Renewal term	5 years
San Diego
Lease term		61 months
Renewal term		5 years

Collaboration and Licensing Agreements (Details)	1 Months Ended						3 Months Ended						6 Months Ended		9 Months Ended	12 Months Ended
Collaboration and Licensing Agreements (Details)	Jul. 31, 2016 USD ($)	Jun. 30, 2016 USD ($) product item	Sep. 30, 2015 USD ($) item	Jul. 31, 2013 USD ($) item	Jan. 31, 2013 USD ($) item	Feb. 28, 2009 item	Jun. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Sep. 30, 2016 item	Mar. 31, 2016 item	Jun. 30, 2018 USD ($) item	Jun. 30, 2017 USD ($)	Sep. 30, 2016 item	Dec. 31, 2016 USD ($)	Dec. 31, 2013 USD ($)
License Agreement \| Merck Sharp & Dohme Corp.
Collaboration research and licensing agreements
Nonrefundable upfront payment				$ 1,000,000
Revenue recognized							$ 0			$ 0			$ 0	$ 0
Annual maintenance fees				$ 500,000
Deferred revenue							0						0
Number of compounds \| item				1
Option and license agreement \| Alexion Pharmaceuticals, Inc.
Collaboration research and licensing agreements
Nonrefundable upfront payment					$ 3,000,000
Revenue recognized							0			0			0	0
Number of different target programs \| item					6
Research license term					5 years
Annual maintenance fees					$ 500,000
Number of annual maintenance fees \| item					4
Milestone payment received													8,500,000
Deferred revenue							0						0
Option fee													4,000,000
Option and license agreement \| Alexion Pharmaceuticals, Inc. \| ASU 2014-09
Collaboration research and licensing agreements
Revenue recognized										(250,000)				(500,000)
2009 Research License and Commercialization Agreement \| CSL Limited
Collaboration research and licensing agreements
Revenue recognized							0			0			0	3,500,000			$ 3,500,000
Deferred revenue							0						0
Number of commercial licenses \| item						1
Collaboration And License Agreement \| Novartis
Collaboration research and licensing agreements
Nonrefundable upfront payment	$ 150,000,000
Deferred revenue							60,100,000						60,100,000
Milestones or royalties in transaction price													0
Collaboration And License Agreement \| Novartis \| Maximum
Collaboration research and licensing agreements
Potential milestone payment							2,400,000,000						$ 2,400,000,000
Collaboration And License Agreement \| Novartis \| Bispecific FC Technologies
Collaboration research and licensing agreements
Number of development stage products \| product		2
Collaboration And License Agreement \| Novartis \| Bispecific FC Technologies \| XmAb14045
Collaboration research and licensing agreements
Allocation of consideration to deliverables		$ 27,100,000
Collaboration And License Agreement \| Novartis \| Bispecific FC Technologies \| XmAb13676
Collaboration research and licensing agreements
Allocation of consideration to deliverables		31,400,000
Collaboration And License Agreement \| Novartis \| Global Discovery Program
Collaboration research and licensing agreements
Number of bispecific drug candidates \| item													4
Allocation of consideration to deliverables		$ 20,050,000
Number of discovery programs \| item		4
Right to substitute identified target period													5 years
Number of substitution rights \| item													4
Collaboration And License Agreement \| Novartis \| Global Discovery Program \| ASU 2014-09
Collaboration research and licensing agreements
Revenue recognized									$ 20,050,000
Collaboration And License Agreement \| Novartis \| Global Discovery Program \| As Reported Before ASC Topic 606 \| ASU 2014-09
Collaboration research and licensing agreements
Revenue recognized													$ 0
Collaboration And License Agreement \| Novartis \| Global Discovery Program \| Maximum
Collaboration research and licensing agreements
Number of antibody targets for which bispecific technology applied \| item		4
Collaboration And License Agreement \| Novartis \| FC Licenses
Collaboration research and licensing agreements
Research license term													5 years
Allocation of consideration to deliverables		$ 11,300,000
Collaboration And License Agreement \| Novartis \| FC Licenses \| ASU 2014-09
Collaboration research and licensing agreements
Revenue recognized										$ (600,000)				$ (1,100,000)
Collaboration And License Agreement \| Novartis \| FC Licenses \| Maximum
Collaboration research and licensing agreements
Number of targets against which non-exclusive license is provided \| item		10
Research and License Agreement 2015 \| Amgen, Inc.
Collaboration research and licensing agreements
Nonrefundable upfront payment			$ 45,000,000
Potential milestone payment			$ 1,700,000,000
Revenue recognized								$ 10,000,000
Number of different target programs \| item			6
Allocation of consideration to deliverables							55,000,000						$ 55,000,000
Deferred revenue							0						0
Milestones or royalties in transaction price								$ 0
Research and License Agreement 2015 \| Amgen, Inc. \| CD38 Program
Collaboration research and licensing agreements
Allocation of consideration to deliverables							23,750,000						$ 23,750,000
Research and License Agreement 2015 \| Amgen, Inc. \| Discovery Program
Collaboration research and licensing agreements
Number of previously identified products \| item													3
Research license term													3 years
Number of bispecific product candidates delivered \| item											5				3
Allocation of consideration to deliverables							$ 6,250,000						$ 6,250,000
Number of discovery programs \| item													5
Exercised substitutions \| item												1
Additional research term													1 year
Previous targets which bispecific technology will be applied \| item			5
Research and License Agreement 2015 \| Amgen, Inc. \| Discovery Program \| ASU 2014-09
Collaboration research and licensing agreements
Revenue recognized																$ 31,250,000

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Jun. 30, 2017	Jun. 30, 2018
Reconciliation of federal statutory income tax to effective income tax
Income tax expense	$ 280	$ 450
Federal
Reconciliation of federal statutory income tax to effective income tax
Income tax receivable			$ 1,500

Prior-Period Financial Statementss - (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Revenue
Collaborations, licenses and milestones	$ 12,500			$ 16,000
ASU 2014-09 \| As Reported Before ASC Topic 606
Revenue
Collaborations, licenses and milestones	13,340			17,681
ASU 2014-09 \| Effect of Adoption of ASC Topic 606
Revenue
Collaborations, licenses and milestones	$ (840)			$ (1,681)
ASU 2014-09 \| Collaboration
Revenue
Collaborations, licenses and milestones					$ 20,500	$ 6,250
ASU 2014-09 \| License
Revenue
Period revenue recognized			5 years
Collaborations, licenses and milestones		$ 11,300

Prior-Period Financial Statements - Balance Sheet (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 35,292	$ 16,528
Marketable securities	220,116	207,603
Accounts receivable	1,283	1,142
Prepaid expenses and other current assets	12,074	5,606
Total current assets	269,527	230,879
Property and equipment, net	9,401	7,088
Patents, licenses, and other intangible assets, net	11,531	11,148
Marketable securities - long term	299,971	139,198
Income tax receivable	762	1,524
Loan receivable		86
Interest receivable		14
Other assets	265	265
Total assets	591,457	390,202
Current liabilities
Accounts payable	4,916	6,869
Accrued expenses	5,923	5,480
Current portion of deferred rent	199	26
Current portion of deferred revenue	60,118	60,118
Income taxes		157
Total current liabilities	71,156	72,650
Deferred rent, less current portion	1,122	1,088
Total liabilities	72,278	73,738
Commitments and contingencies
Preferred stock, $0.01 par value: 10,000,000 authorized shares; -0- issued and outstanding shares at December 31, 2017
Common stock, $0.01 par value: 200,000,000 authorized shares at December 31, 2017; 47,002,488 issued and outstanding at December 31, 2017	558	470
Additional paid-in capital	828,858	570,670
Accumulated other comprehensive loss	(2,008)	(1,808)
Accumulated deficit	(308,229)	(252,868)
Stockholders' equity	519,179	316,464
Total liabilities and stockholders' equity	$ 591,457	390,202
As Reported Before ASC Topic 606
Current liabilities
Stockholders' equity		306,025	$ 337,933
ASU 2014-09 \| As Reported Before ASC Topic 606
Current assets
Cash and cash equivalents		16,528
Marketable securities		207,603
Accounts receivable		1,142
Prepaid expenses and other current assets		5,606
Total current assets		230,879
Property and equipment, net		7,088
Patents, licenses, and other intangible assets, net		11,148
Marketable securities - long term		139,198
Income tax receivable		1,524
Other assets		265
Total assets		390,102
Current liabilities
Accounts payable		6,869
Accrued expenses		5,480
Current portion of deferred rent		26
Current portion of deferred revenue		88,813
Income taxes		157
Total current liabilities		101,345
Deferred rent, less current portion		1,088
Deferred revenue, less current portion		5,623
Total liabilities		108,056
Common stock, $0.01 par value: 200,000,000 authorized shares at December 31, 2017; 47,002,488 issued and outstanding at December 31, 2017		470
Additional paid-in capital		570,670
Accumulated other comprehensive loss		(1,808)
Accumulated deficit		(287,286)
Stockholders' equity		282,046
Total liabilities and stockholders' equity		390,102
ASU 2014-09 \| Effect of Adoption of ASC Topic 606
Current assets
Loan receivable		86
Interest receivable		14
Total assets		100
Current liabilities
Current portion of deferred revenue		(28,695)
Total current liabilities		(28,695)
Deferred revenue, less current portion		(5,623)
Total liabilities		(34,318)
Accumulated deficit		34,418
Stockholders' equity		34,418
Total liabilities and stockholders' equity		$ 100

Prior-Period Financial Statements - Balance Sheet Stock Information (Details) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Condensed Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	55,821,310	47,002,488
Common stock, shares outstanding	55,821,310	47,002,488

Prior-Period Financial Statements - Comprehensive Income (Loss) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Revenue
Collaborations, licenses and milestones		$ 12,500		$ 16,000
Operating expenses
Research and development	$ 23,332	16,919	$ 49,418	31,967
General and administrative	4,958	4,091	9,520	8,903
Total operating expenses	28,290	21,010	58,938	40,870
Loss from operations	(28,290)	(8,510)	(58,938)	(24,870)
Other income (expenses)
Interest income	2,486	1,038	3,643	2,095
Interest expense	(3)	(3)	(6)	(5)
Other income (expense)	(62)	30	(60)	30
Total other income, net	2,421	1,065	3,577	2,120
Loss before income taxes	(25,869)	(7,445)	(55,361)	(22,750)
Income tax expense		280		450
Net loss	(25,869)	(7,725)	(55,361)	(23,200)
Other comprehensive income
Net unrealized gain (loss) on marketable securities	193	(44)	(200)	201
Comprehensive loss	$ (25,676)	$ (7,769)	$ (55,561)	$ (22,999)
Basic and diluted net loss (in dollars per share)	$ (0.46)	$ (0.17)	$ (1.07)	$ (0.50)
As Reported Before ASC Topic 606
Other comprehensive income
Comprehensive loss					$ (49,292)
ASU 2014-09 \| As Reported Before ASC Topic 606
Revenue
Collaborations, licenses and milestones		$ 13,340		$ 17,681
Operating expenses
Research and development		16,919		31,967
General and administrative		4,091		8,903
Total operating expenses		21,010		40,870
Loss from operations		(7,670)		(23,189)
Other income (expenses)
Interest income		1,038		2,095
Interest expense		(3)		(5)
Other income (expense)		30		30
Total other income, net		1,065		2,120
Loss before income taxes		(6,605)		(21,069)
Income tax expense		280		450
Net loss		(6,885)		(21,519)
Other comprehensive income
Net unrealized gain (loss) on marketable securities		(44)		201
Comprehensive loss		$ (6,929)		$ (21,318)
Basic and diluted net loss (in dollars per share)		$ (0.15)		$ (0.46)
ASU 2014-09 \| Effect of Adoption of ASC Topic 606
Revenue
Collaborations, licenses and milestones		$ (840)		$ (1,681)
Operating expenses
Loss from operations		(840)		(1,681)
Other income (expenses)
Loss before income taxes		(840)		(1,681)
Net loss		(840)		(1,681)
Other comprehensive income
Comprehensive loss		$ (840)		$ (1,681)
Basic and diluted net loss (in dollars per share)		$ (0.02)		$ (0.04)

Prior-Period Financial Statements - Stockholders' Equity (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 31, 2018	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Increase (Decrease) in Stockholders' Equity
Balance				$ 316,464
Balance, revised						$ 316,464
Sale of common stock, net of issuance cost				245,504
Issuance of common stock upon exercise of stock awards				2,915
Issuance of common stock under the Employee Stock Purchase Plan				504
Comprehensive income (loss)		$ (25,676)	$ (7,769)	(55,561)	$ (22,999)
Stock-based compensation expense				9,353
Balance		519,179		519,179		316,464
As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance				306,025	337,933	337,933
Issuance of common stock upon exercise of stock awards						2,797
Issuance of common stock under the Employee Stock Purchase Plan						936
Comprehensive income (loss)						(49,292)
Stock-based compensation expense						13,651
Balance						306,025
Effect of Adoption of ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Adoption of ASC 606						10,439
ASU 2014-09
Increase (Decrease) in Stockholders' Equity
Adoption of ASC 606						34,418
ASU 2014-09 \| As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance				282,046
Adoption of ASC 606							$ 23,979
Comprehensive income (loss)			(6,929)		(21,318)
Balance						282,046
ASU 2014-09 \| Effect of Adoption of ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance				34,418
Comprehensive income (loss)			$ (840)		(1,681)
Balance						34,418
Common Stock
Increase (Decrease) in Stockholders' Equity
Balance				$ 470
Balance (in shares)				47,002,488
Balance, revised						470
Sale of common stock, net of issuance cost				$ 84
Sale of common stock, net of issuance cost (in shares)	8,395,000			8,395,000
Issuance of common stock upon exercise of stock awards				$ 4
Issuance of common stock upon exercise of stock awards (in shares)				397,270
Issuance of common stock under the Employee Stock Purchase Plan (in shares)				26,552
Balance		$ 558		$ 558		$ 470
Balance (in shares)		55,821,310		55,821,310		47,002,488
Common Stock \| As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance				$ 470	$ 466	$ 466
Balance (in shares)				47,002,488	46,567,978	46,567,978
Issuance of common stock upon exercise of stock awards						$ 4
Issuance of common stock upon exercise of stock awards (in shares)						363,603
Issuance of common stock under the Employee Stock Purchase Plan (in shares)						70,907
Balance						$ 470
Balance (in shares)						47,002,488
Additional Paid-in Capital
Increase (Decrease) in Stockholders' Equity
Balance				$ 570,670
Balance, revised						$ 570,670
Sale of common stock, net of issuance cost				245,420
Issuance of common stock upon exercise of stock awards				2,911
Issuance of common stock under the Employee Stock Purchase Plan				504
Stock-based compensation expense				9,353
Balance		$ 828,858		828,858		570,670
Additional Paid-in Capital \| As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance				570,670	$ 553,290	553,290
Issuance of common stock upon exercise of stock awards						2,793
Issuance of common stock under the Employee Stock Purchase Plan						936
Stock-based compensation expense						13,651
Balance						570,670
Additional Paid-in Capital \| ASU 2016-09 \| As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Adoption of ASC 606							401
Accumulated Other Comprehensive Loss
Increase (Decrease) in Stockholders' Equity
Balance				(1,808)
Balance, revised						(1,808)
Comprehensive income (loss)				(200)
Balance		(2,008)		(2,008)		(1,808)
Accumulated Other Comprehensive Loss \| As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance				(1,808)	(1,441)	(1,441)
Comprehensive income (loss)						(367)
Balance						(1,808)
Accumulated Deficit
Increase (Decrease) in Stockholders' Equity
Balance				(252,868)
Balance, revised						(252,868)
Comprehensive income (loss)				(55,361)
Balance		$ (308,229)		(308,229)		(252,868)
Accumulated Deficit \| As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance				(263,307)	(214,382)	(214,382)
Comprehensive income (loss)						(48,925)
Balance						(263,307)
Accumulated Deficit \| Effect of Adoption of ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Adoption of ASC 606						10,439
Accumulated Deficit \| ASU 2016-09 \| As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Adoption of ASC 606							(401)
Accumulated Deficit \| ASU 2014-09
Increase (Decrease) in Stockholders' Equity
Adoption of ASC 606						34,418
Accumulated Deficit \| ASU 2014-09 \| As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Adoption of ASC 606							$ 23,979
Scenario, Previously Reported
Increase (Decrease) in Stockholders' Equity
Balance				282,046
Balance						282,046
Scenario, Previously Reported \| As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance					313,954	313,954
Scenario, Previously Reported \| Common Stock
Increase (Decrease) in Stockholders' Equity
Balance				$ 470
Balance (in shares)				47,002,488
Balance						$ 470
Balance (in shares)						47,002,488
Scenario, Previously Reported \| Common Stock \| As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance					$ 466	$ 466
Balance (in shares)					46,567,978	46,567,978
Scenario, Previously Reported \| Additional Paid-in Capital
Increase (Decrease) in Stockholders' Equity
Balance				$ 570,670
Balance						$ 570,670
Scenario, Previously Reported \| Additional Paid-in Capital \| As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance					$ 552,889	552,889
Scenario, Previously Reported \| Accumulated Other Comprehensive Loss
Increase (Decrease) in Stockholders' Equity
Balance				(1,808)
Balance						(1,808)
Scenario, Previously Reported \| Accumulated Other Comprehensive Loss \| As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance					(1,441)	(1,441)
Scenario, Previously Reported \| Accumulated Deficit
Increase (Decrease) in Stockholders' Equity
Balance				$ (287,286)
Balance						(287,286)
Scenario, Previously Reported \| Accumulated Deficit \| As Reported Before ASC Topic 606
Increase (Decrease) in Stockholders' Equity
Balance					$ (237,960)	$ (237,960)

Prior-Period Financial Statements - Cash Flows (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities
Net loss	$ (55,361)	$ (23,200)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	1,552	864
Amortization of premium on marketable securities	406	1,356
Stock-based compensation	9,353	6,607
Abandonment of capitalized intangible assets	50	225
Changes in operating assets and liabilities:
Accounts receivable	(140)	(6,260)
Interest receivable	(595)	(158)
Prepaid expenses and other assets	(6,468)	(4,727)
Accounts payable	(1,953)	3,500
Accrued expenses	443	(2,708)
Income taxes	(157)	390
Deferred rent	206	(12)
Deferred revenue		701
Net cash used in operating activities	(52,664)	(23,422)
Cash flows from investing activities
Purchase of marketable securities	(285,809)	(33,440)
Purchase of intangible assets	(882)	(1,092)
Purchase of property and equipment	(3,416)	(1,256)
Proceeds from sale and maturities of marketable securities	112,526	53,866
Repayments of loan	86	(86)
Net cash provided by (used in) investing activities	(177,495)	17,992
Cash flows from financing activities
Proceeds from issuance of common stock upon exercise of stock awards	2,915	1,680
Proceeds from issuance of common stock under the Employee Stock Purchase Plan	504	442
Proceeds from issuance of common stock	260,245
Common stock issuance cost	(14,741)
Net cash provided by financing activities	248,923	2,122
Net increase (decrease) in cash and cash equivalents	18,764	(3,308)
Cash and cash equivalents, beginning of period	16,528	14,528
Cash and cash equivalents, end of period	$ 35,292	11,220
ASU 2014-09 \| As Reported Before ASC Topic 606
Cash flows from operating activities
Net loss		(21,519)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		864
Amortization of premium on marketable securities		1,356
Stock-based compensation		6,607
Abandonment of capitalized intangible assets		225
Changes in operating assets and liabilities:
Accounts receivable		(6,260)
Interest receivable		(144)
Prepaid expenses and other assets		(4,727)
Accounts payable		3,500
Accrued expenses		(2,708)
Income taxes		390
Deferred rent		(12)
Deferred revenue		(1,080)
Net cash used in operating activities		(23,508)
Cash flows from investing activities
Purchase of marketable securities		(33,440)
Purchase of intangible assets		(1,092)
Purchase of property and equipment		(1,256)
Proceeds from sale and maturities of marketable securities		53,866
Net cash provided by (used in) investing activities		18,078
Cash flows from financing activities
Proceeds from issuance of common stock upon exercise of stock awards		1,680
Proceeds from issuance of common stock under the Employee Stock Purchase Plan		442
Net cash provided by financing activities		2,122
Net increase (decrease) in cash and cash equivalents		(3,308)
Cash and cash equivalents, beginning of period		14,528
Cash and cash equivalents, end of period		11,220
ASU 2014-09 \| Effect of Adoption of ASC Topic 606
Cash flows from operating activities
Net loss		(1,681)
Changes in operating assets and liabilities:
Interest receivable		(14)
Deferred revenue		1,781
Net cash used in operating activities		86
Cash flows from investing activities
Repayments of loan		(86)
Net cash provided by (used in) investing activities		$ (86)

Sale of Additional Common Stock	6 Months Ended
Sale of Additional Common Stock	Jun. 30, 2018
Sale of Additional Common Stock
Sale of Additional Common Stock	6. Sale of Additional Common Stock In March 2018, we completed the sale of 8,395,000 shares of common stock which included shares issued pursuant to our underwriters’ exercise of their over-allotment option pursuant to a follow-on financing. We received net proceeds of $245.5 million after underwriting discounts, commissions and offering expenses.